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OPRESCIENCE March Edition –2012

OPUS NEWSLETTER– THE INAUGURAL EDITION

Inside this issue: Flexibility– A strategic requisite in global supply Chain

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Apple with new I-Pad

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Tata Motor– JLR offtake

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Play Beer Distribution! Its not just a game though! Twist for Amazon

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Quiz for you

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OPRESCIENCE

Flexibility- A strategic prerequisite in global supply chain 

Globalisation has created a world without boundaries. The new business environment is characterised by informed customers, customized products, short product life cycle, and short lead-time. These factors have led to fierce competition in global operations of manufacturing and logistics.

The impact of failure of one entity in the supply chain can lead to a number of entities closing down and in some instances the whole supply chain shuts down. Recent events like huricane in New Orleans or earthquakes in Japan have demonstrated that risk events are inevitable and that they are even more likely to affect today’s supply chain with their increasing global stretch and complexity. One such example is a fire at a single source supplier for Ericsson, which led to loss of sales of $400 million, culminating in Ericsson’s exit from that part of business.

Flexibility refers to the maintenance of the customer service levels by adapting to disturbances in supply and sudden changes in demand.

Global supply chain categorizes the entire supply chain into five flexibility perspectives – product development flexibility, manufacturing flexibility, sourcing flexibility, logistics flexibility, and information systems flexibility.

"When you do the common things in life in an uncommon way, you will command the attention of the world."

Supply chain practices 

Hedging is a supply side risk management strategy that keeps an organization flexible to serve during currency fluctuations or a natural disaster. Hedging is undertaken by having a globally dispersed portfolio of suppliers, thus creating multiple options for decision variables, that provides protection against risk of quality, quantity, disruption, price, variability in performance, and opportunism. Supply Chain structure

Integration increases the ability of a member to control processes, systems, methods and decisions. Toyota was first company that introduced flexibility in its entire business system. Toyota’s “lean philosophy” incorporated suppliers into their production program, ensuring better exchange of information improving the quality level of products and services to their customers.


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Disintegration helps an organization to respond easily to environmental changes. The firms are going for outsourcing of non core activities while focusing on core competencies.

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A knowledgeable third-party provider with global expertise that can offer network design and optimization, primary and secondary packaging support, campus-based warehouse and transportation solutions, labour management, flexibility and value needed to remain competitive in any market.

Credited toMohit Talwar & Anubhav Kumar (NITIE),


OPRESCIENCE

Apple looks to tighten tablet market grip with new iPad 

"First they

Apple will be looking to tighten its grip on the tablet market on Friday with the release of its newest iPad, increasing pressure on Google to make rival Android device s more enticing. A week later the new iPads will be available in nearly 30 more countries. It has become standard to see long queues at

Apple shops on release dates, and a flood of orders for iPads at the California firm's online. 

A key upgrade to the new iPad is eye-grabbing screen resolution on par with that of an iPhone 4S .

The new iPad also boasts a more powerful processor and the ability to connect to the lat-

est 4G LTE telecom networks that move data faster than their predecessors. 

Makers of tablets powered by Google-backed Android software have produced impressive hardware, but lack the "ecosystem" of applications, movies, and music available for iPads.

ignore you, then they

Tata Motors: Russia, China prove key to JLR offtake

laugh at you,

then they fight you, then you win." - Mahatma Gandhi

A 41-per-cent yearon-year growth in net sales at Jaguar Land Rover (JLR) has been the driving force behind the 44-per-cent consolidated top line growth (Rs 45,260 crore) recorded by Tata Motors in the third quarter.

models, the Jaguar XF and the Range Rover Evoque. 

The second reason is a favourable market mix. With growth slowing down in the US, UK and Europe, its traditional markets, JLR saw its focus on Russia and China paying off. China brought in 17 per cent of the total volumes this quarter compared with 13 per cent a year ago.

One reason for the strong performance at JLR is the robust volume growth of 37 per cent to about 86,300 vehicles.

FAVOURABLE PRODUCT, MARKET MIX

The third reason is favourable exchange rates.

This growth has been aided predominantly by two

For JLR, while the US markets have shown signs of

recovery, uncertainty remains for UK and the rest of Europe. 

On the domestic front, increased marketing spends in the highly competitive passenger vehicles market have started bringing in desired results.

These, along with stabilisation in commodity costs and likely cut in interest rates should boost growth.


OPRESCIENCE

Play Beer Distribution !It isn't just fun though! 

The Beer Distribution Game (The Beer Game) is a simulation game created by a group of professors at MIT Sloan School of Management in early 1960s to demonstrate a number of key principles of supply chain management. The game is played by teams of at least four players, often in heated competition, and takes from one to one and a half hours to complete. The purpose of the game is to meet customer demand for cases of beer through a multi-

stage supply chain with minimal expenditure on back orders and inventory. Players can see each other's inventory but only one player sees actual customer demand. Verbal communication between players is against the rules so feelings of confusion and disappointment are common. Players look to one another within their supply chain frantically trying to figure out where things are going wrong.

Players wonder whether someone in their team did not understand the game or assume customer demand is following a very erratic pattern as backlogs mount and/ or massive inventories accumulate. During the debriefing, it is explained that these feelings are common and that reactions based on these feelings within supply chains create the bullwhip effect.

Try not to become a man of success, but rather a man of value. - Albert Einstein

Twist in Amazon 

The news about sales taxes for online retailers, such as Amazon, has usually been about how states were struggling, to pull that ebusiness into the sales tax net. In a new twist, Amazon is working on a deal to forego the tax in return of creating 1500 jobs for the state. Under a 1992 Supreme Court ruling, online retailers do not have to collect state sales taxes unless they have a physical presence in a state. So, with Amazon considering opening distribution facilities in New Jersey, it

would be required to collect sales taxes on online sales to residents. Amazon is working to cut a work-around deal to delay any tax collection until next summer in return for creating those 1,500 jobs and investing $130 million. Lower priced goods favor the consumers but brickand mortar retailers, naturally object to special treatment meted out to their online competitors. Online retailers, get a significant tax advantage of 4% to 9%. Lower tax receipts also

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hurts the state and city officials reeling under poor economy and other factors. The tax exemptions also mean brick-and-mortar retailers are less likely to expand or hire more workers. Amazon destroys more small business sales jobs than the number of warehouse and shipping jobs it creates. That’s what economies of scale and operational efficiencies do. The real question is whether or not online businesses should be exempt from sales taxes at all.


QUIZ FOR YOU 1.

This company was formed in 1965 as a joint venture between Government of India and Bechtel with a paid-up capital of 2,500,000. Its baseline is “Delivering excellence through people�. Identify.

2.

Identify the Brand.

3. What is the significance of this picture.

4. Connect the following and interpret which company it is referring to:

Send you entries at : opus.imtg@gmail.com First two correct entries will be published in next issue of Oprescience.

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Edited By: Abhishek Garg Charu Agarwal


Oprescience Mar '12