In this issue
OCTANE-The Octaphi Newsletter Volume 04, Issue 01, January, 2015
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Student Articles Puzzle Fact and figures Feedback Corner
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“Logistics is the ball and chain of armored warfare” ~ Heinz Guderian
Deliver the future of IT operations today Enterprise IT operations teams are struggling to keep pace with the business. Many are still using outdated tools and processes to manage complex heterogeneous environments. They are also trying to cope with new technology trends, such as mobile and cloud service delivery. At the same time, end users are demanding improved quality of service and no longer tolerate outages and slow response times. Thus, IT operations staff and managers spend most of their time each day battling issues rather than driving the business forward. Enterprise IT needs new solutions for operations management, one that allows them to gain critical business insight, modernize the user experience, and deliver the future of IT operations today. A number of Operations Management Software companies deliver a comprehensive integrated solution that can seamlessly monitor and analyse complex IT environments while supporting business priorities and service-level objectives. They address past events through root cause analysis, present activities through real-time analytics, and future needs through integration and planning. They combine event management, service impact management, performance monitoring and data analytics in a single seamless solution for physical, virtual and cloud environments. These software solutions gives IT operations staff the intelligence and efficiency they need to drive business success. By lowering Mean Time to Repair (MTTR), increasing time between failures and proactively preventing service issues, they can improve availability and deliver enhanced service level agreements (SLAs). It increases productivity by preserving trouble-shooting techniques, prioritizing issues for service desk staff, and consolidating data and event reporting to reduce administration time and effort. It helps bridge organizational silos by providing continuous information among teams, and keeps IT staff proactively informed of how well services are meeting the needs of customers and the business. With these tools IT receives benefits that translate to real business value. They can lower the total cost of managing their infrastructure and increase the productivity of existing resources. New Operations Management Software Tools
deliver the future of IT today by providing unique value in the following areas: • Comprehensive Visibility– IT operations teams receive end-to-end visibility across infrastructure, apps, middleware and business services. • Intelligent Troubleshooting– Analyticsdriven troubleshooting helps IT find patterns and identify service issues before they happen. • Empowered IT– Operations teams can accumulate and share knowledge enabling non-experts to quickly find information and achieve a faster MTTR. • Business Driven– Real-time analytics allows IT to measure, baseline and predict end-user experience to determine business impact of performance issues and respond according to business priorities. • Seamless Integration– IT seamlessly integrates Operations Management tools with other systems and services. • Future Ready- Support new technologies and the ability to integrate new products and services gives IT the tools and confidence to innovate. ~ Saurabh Sao, 14JGBS FACTS Supplier Quality is a relative thing: all
suppliers have some level of quality. The more of the following characteristics that a supplier has, the more serious it is about quality. The supplier can measures its quality performance can use parts-per-million (ppm) as its quality unit of measure has quality performance goals has a documented record of continuous quality improvement over several years efforts are focused on preventing defective items from being produced rather than detecting defective items knows its standard deviation can demonstrate how it uses tools to determine whether or not its processes are in control has a quality-related certification like ISO9001 has implemented a program like Lean or Six Sigma or Lean Six Sigma has won a prestigious quality award.
3D Negotiation Negotiation is an important element in all deals of a business – be it the procurement of raw materials, machinery, spares, technology or services. The process of negotiation can be highly dynamic and complex and therefore the supply and procurement managers need to be decidedly competent on negotiation skills. Most of the negotiators focus on a single dimension of bargaining process viz. Tactics. These one-dimensional negotiators believe on what is happening on the table; hence requires preparation and tactics. However this approach is inadequate for tough negotiations that not only includes more parties but is tricky due to internal and external negotiations. So, the need is to follow a different approach. The 3D Negotiation approach is based on three dimensions - Tactics, Deal Design and Setup. Negotiators using Tactics as the negotiating tool concentrate on a face-to-face negotiation. But in 3D Negotiation, while Tactics approach concentrates on the negotiations happening on the bargaining table, the second dimension Deal Design includes negotiation beyond the face-to-face negotiation as they are able to recognize the economic and non-economic value of the contract. To uncover these values, negotiators create and design structured agreements. The third important dimension Setup focuses on all actions performed away from the table to give a competitive advantage to the negotiator as it reshapes the situation. The negotiators set up the most favourable situation for them. They make sure that right parties are approached at an appropriate time with right expectations and also identify the consequences of walking away if there is no deal at all. Thus, 3D negotiation paves the way to a successful deal. ~ Prashant Dwivedi, 13JGBS F I G U R E S
One in every 15 people working in the U.S. is employed in the trucking industry Trucks deliver 70% of all freight transported annually in US 94% of 3PLs and 88% of shippers believe that communication, flexibility and openness makes them successful
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OCTANE-The Octaphi Newsletter Is Logistics Outsourcing right or wrong for the Company?
~ Sandou Keita, 13JGBS Editorial Board: Saurabh Sao, Karishma Wadhwa, Saroj Koul (JGBS) Contact: octaphi@jgu.edu.in
Puzzle Corner
Submission by :- 1 February, 2015 to octaphi@jgu.edu.in DOWN 1. A product or a set of products referenced by the manufacturer by a unique part number. Abbreviated SKU. 2. The commercial entity responsible for deliveries of shipment to the customer. 3. Two words. An internal company order to move inventory from one part of the company to another. 5. Two Words. A customer's order is known as an outbound order. 6. Congestion or significant slowdown at an area due to an inefficient resource or process. 7. The company that provides materials for production or resale. 9. Three Words. Buyer pays carrier the price of goods when they are delivered. 10. Maintaining an orderly environment for preventing errors and contamination in the warehousing process. 11. Abbreviated for the worldwide federation of national STANARDS bodies from more than 140 countries. This standards organization was established in 1947 and has many published and recognized standards. 12. Anything in which articles are packed. A standardized box used to transport merchandise. 14. Shipments to be shipped. 15. Two words. An order that is still open. ACROSS 4. The physical goods received at the receiving dock and received against a receiving report. 8. Abbreviation for End of Year 9. The individual or organization that buys the product or service from the company. 13. A business that is in the middle of a supply channel. These entities buy and sell finished goods. They may alter, assemble, combine, or otherwise add value to the goods. 16. The task to refill a picking location. 17. A structured storage system (single-level or multi-level) that is used to support high stacking.
Answers for Vol 3, Issue 4 crosswords: 4 inventory 1 kaizen 11 3PL 5 Buffer 7 vendor 3 Logistics 6 flowchart 12 transit 14 inspection 8 Manufacture 9 Scheduling 2 Codification
Companies today face increased competition and many challenges in meeting customers’ requirements. Along with factors such as globalization and continuous improvement, managers are facing tremendous pressures in meeting the priority of reducing costs and increasing efficiencies. To build a state-of-the-art and a dynamic supply chain there is greater need for innovation and strategic outsourcing that adapts to changes is required to provide the company with a competitive advantage. Following are some common factors that can motivate companies to consider outsourcing some or all of their logistics: Necessity of reducing costs: Saving costs are a competitive necessity for almost all companies. The impact of transportation costs on most firms has been often considered as a sunk cost. In fact it is a priority for CFOs and CEOs today to target these costs for important savings. Companies have realized that aggressive costs cutting and costs avoidance through process improvement and visibility is critical for long term sustainability and growth. Third Party Logistics (3PLs) providers can enable organizations to get benefitted from important costs reduction strategies and help the company focus on its core operations. When logistics is essential to brand reputation but technology and resources are insufficient to gain a competitive advantageThis could be one of the most important factor that leads a company to outsource part or all of its operations to 3PLs providers. If the outsource provider has the reputation of best practices and expertise at its disposal, it can add specific capabilities and the skillsets to the company’s own way of doing its business, particularly if the outsource provider has faced and solved many logistics-oriented challenges. When going for merger and/or acquisition, launching new products or entering new markets which requires scalable and agile supply chain solution- As the existing distribution networks change or merge into one, inefficiencies and poor customer satisfaction can result. Outsourcing to a 3PL provider with an extensive network, global technology and worldwide network of capacity can effectively help new organizations come under a unified infrastructure together. When company’s business requires best-in-class technology, but cannot afford it because of financial constraints- Because of significant outlay involved in acquiring new cutting edge technology, many companies cannot avail them. 3PL providers can provide, maintain and effectively manage Transportation Management System (TMS) at lower cost and thereby eliminate the need for the company to invest further in maintenance or upgrades, hardware and software, etc. Scarcity of supply chain talents- According to Logistics Research, only 1% of the fulltime faculty in US is devoted to supply chain management, transportation, and logistics. Again, according to the same study, only few university graduates are able to tackle the challenges of global supply chain management. For these reasons many companies tend to outsource, rather than hire their own employees. To summarize, several factors and objectives including all the above factors help deciding whether to outsource or not.
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~ Saurabh Sao, 14JGBS Corporate Feedback Corner “Octane provides me quick insight about the latest happening in Operations. I like its crispiness, variety and quality. I strongly recommend this magazine.” ~ Deepika Mishra, Kotak Mahindra
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