January 2020 | Volume 1
Digital Transformation Opportunities and Challenges
Product Development of Complex Engineered Products
How Design Thinking Can Accelerate Digital Transformation
Making Lemonade from Lemons
Healthcare Supply Chain in Perspective
OPCENTUATE OPERATIONS CLUB DMS, IIT DELHI
ABOUT DMS Department of Management Studies launched MBA programmes in 1997.The department currently runs a two-year full-time MBA programme with focus on Management Systems, a twoyear full-time MBA with focus on Telecommunication Systems Management under the aegis of Bharti School of Telecom Technology and Management and a three-year part-time MBA programme with focus on Technology Management. Apart from the specialised compulsory courses in the focus area, the students have choice for functional area specialization in finance, marketing, operations, information technology, HR etc. MBA program in IIT- Delhi is designed keeping in mind the changes in business environment and the need of the industry. The Department of Management Studies IIT Delhi was ranked eighth among management schools in India by the National Institutional Ranking Framework (NIRF) in 2018, 19 by Business Today's "India's best B-schools 2016â€? and 14 in India by Outlook India's "Top 100 Management Schools" of 2016.
ABOUT OPCENTUATE Opcentuate, Operations Club of DMS IIT Delhi is a group of students who have interest in the field of Operations Management and Supply Chain Management. It aims to enlighten its members by mutual knowledge sharing of the current trends in the industry. It conducts case studies, panel discussion, guest lectures and quizzes.
DMS OPERATIONS DEPARTMENT
Message from HOD
Prof. Seema Sharma (Ph.D., IIT/D) (Professor & Head of Dept.)
DMS has been recognized for its excellence in management education. For last several years, it has been rated amongst the Top Business Schools of the country. Our MBA programme prepares students to become management leaders in future as academic curriculum is combined with rigorous research inputs by our outstanding faculty. Businesses nowadays are facing more and more competition in the data driven environment. Our curriculum with heavy emphasis on data analytics, offers a perfect programme with industry relevant curriculum. As we are a part of IIT system, it adds to our strengths. Our students get unique opportunity to learn in technological and multidisciplinary environment. The department currently runs a full time MBA programme, an Executive MBA Programme for working professionals and a rigorous PhD programme offering research opportunities in various areas of management. OPCENTUATE - The Operations Club of DMS, IIT Delhi is a completely student-driven club that is focussed on training students on the grounds of theory, to implement the best of modern technology in the domain of Operation and Supply Chain Management. It seeks to enhance the operational mastermind in the students. OPURENT is the semi-annual magazine of the Operations Club of DMS, IIT Delhi that contains articles from MBA students, faculties, DMS Alumni, and business leaders in several domains of operations and supply chain management. It also showcases the quality of our education and the relationship we hold with our alumni and the corporates.
Message from Faculty Chair
Prof. Surya Prakash Singh (Ph.D., IIT/K; PDF, NUS-MIT Alliance)
"It is a great moment to pen down the message for ‘OPURENT’ the newly launched magazine from the Operations Club of DMS, IIT Delhi. Academic excellence along with extra cocurricular activities completes the management education. ‘OPURENT’ is a platform for not only operations & supply chain focused management students but also others to express their creative thoughts about the current and future corporate world. The magazine reflects creative thoughts of management students from Operations Club.
The Operations Club has always played a pivotal role in shaping the competencies of students in the domain on Operations and Supply Chain Management through multiple events, knowledge sessions, and case-study competitions. The Club in its unique way thus plays a major part in preparing students for placement interviews and related events. The launch of the first edition of their magazine is indeed a ground-breaking event for the department as well as the Club. I wish them great success. "
Best wishes, S P Singh
Message from Coordinator
Mayuresh Huchche (Class of 2020)
Greetings of the New Year on behalf of Opcentuate, the Operations Club of DMS, IIT Delhi. New Year marks the perfect occasion for new beginnings be it in terms of resolutions, hopes, aspirations and initiatives. And what better occasion to launch our very first magazine dedicated to the world of Operations and Supply Chain. Hence, we are very proud and excited to present OPURENT to you all. This Magazine aims to bring in articles from Industry experts, Academicians and Students on the latest and the trending happenings in the Industry along with viewpoints for what the future holds. It also covers the various events which took place in the past semester at DMS, IIT Delhi showing the vibrant contours of our college. The theme for the very first edition is Digital Transformation(DT). For some this brings about a solution to the problem of Quantifying and Optimizing process, for others it is a portal which opens more pathways. Today we stand at the cusp of the transformation as DT is expected to affect almost all industries and in turn our daily lives. Hence, we begin our journey with the most awaited and impending change which is already upon us. I would also like to appreciate the efforts of the club members whose work went into the successful publication of OPURENT. It was solely due to their passion and eagerness for the club which led to this endeavor being a successful one. Happy Reading!!
Product Development of Complex Engineered Products
Making Lemon into Lemonade
Digital Transformation: Opportunities and Challenges
Healthcare Supply Chain in perspective
How Design Thinking can Accelerate Digital Transformation
Opera 19: Annual Operations Conclave
Surge Price in Cab Aggregation Service
Is Design Thinking replacing 6 Sigma
Supply Chain 4.0 and the Future Ahead
Role of Industry 4.0 in Disaster Management
Dristikone 1.1: Case Study Competition
ON THE COVER Digital
predominant buzz word used in business
everyone wants to advise on DT, everyone has something to sell for DT, and surely all are here to talk about DT for themselves and others.
PRODUCT DEVELOPMENT OF COMPLEX ENGINEERED PRODUCTS? With ever-changing customer preferences over product features, it is very important for an organization to keep up in satisfying customerâ€™s requirements through its products by incorporating necessary and innovative features. This feature addition has to be done without compromising on quality in the shortest time possible so as to efficiently capture the market. This process though seems very easy to put in words, is actually very complex and difficult when the organization deals with products that are high in technical and manufacturing complexity.
About the Author Prof. Prasanna R. is an Assistant Professor in Operations area at the Department of Management Studies in Indian Institute of Technology Delhi.
The inherent complexity of such products is due to the interactions of various components in the product and a failure of one single component can result in either a partial failure of a feature or a total failure of the product. Examples of these kinds of products include: Automobiles, Satellites, Rockets, Heavy machinery etc. One can easily see that in at least some of the products even a partial failure is not admissible. Also, another complexity associated with these products is the interactions between different disciplines of engineering involved in its development which brings complexities of integration. The issues listed above just shows that producing a product that has to satisfy the customer requirements while at the same time maintaining quality & reliability is a difficult proposition at best. However, we also see that there are still rockets and aircrafts where even a one in a lakh possibility of failure is eliminated. The answer to this puzzle lies in employing efficient design methods in the development process coupled with an efficient manufacturing system that can produce a product that is reliable and robust. There are several methodologies which help designers to achieve this, one such is the Axiomatic design (AD) of which we will be seeing in detail.
OPURENT | VOLUME 1 Axiomatic Design: Axiomatic design3,4,5 was invented by Prof. Nam Pyo Suh, a mechanical engineering professor from MIT. The methodology aims to achieve a robust design for any particular product. The following figure2 gives a schematic representation of information flow in the product design phase.
Minimize the independence of functional requirements (FRs) Information axiom: Minimize the information content of the design . Independence axiom: In a product Functional requirement (FRs) can be mapped with Design Parameters (DPs) by a matrix notation. [FR] = [A] X [DP]. Where, both FR and DP are column matrices whereas A is a square matrix which denotes interdependencies between the functional requirements. To see what this means, let us see by an example of designing a faucet2. Two designs are considered and each of them is evaluated with respect to ADâ€™s independence axiom.
Out of the four domains, customer needs are received from the marketing department. Functional requirements and design parameters are specified by the R&D team, while there is a joint effort by R&D and Manufacturing team in deciding the process variables. In these four domains, AD is typically used in identifying the last two, namely design parameters and process variables. â€˘ My vehicle should be the first
CR FR DP
to move out of the traffic leaving others behind when the light falls.
Faucet Design (a)
â€˘ Good acceleration. â€˘ Throttle response.
â€˘ Gear ratio â€˘ Throttle position sensor
A typical AD diagram for a motor bike. (Illustrative purposes only)
Faucet Design (b) The Axioms of Axiomatic design: Axiomatic design (AD) employs two axioms, which serves us a guide for designers when designing a new product. Typically, these axioms are used in FR -> DP phase and DP -> PP phase. Independence axiom:
These faucets are designed to satisfy two functional requirements: đ??šđ?‘…1 : Control the flow of water đ??šđ?‘…2 : Control the flow of temperature. These functional requirements are satisfied by: đ??ˇđ?‘ƒ1 : Angle (ÎŚ1) đ??ˇđ?‘ƒ2: Angle (ÎŚ2)
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Now for design (a) the AD matrix looks like:
More elaboration is needed in explaining the matrix A. A non-zero entry on element a11 signifies that đ??šđ?‘…1 is satisfied by đ??ˇđ?‘ƒ1 . A non-zero entry on element a12 signifies that đ??šđ?‘…1 is influenced by đ??ˇđ?‘ƒ2 . A non-zero entry on element a21 signifies that đ??šđ?‘…2 is influenced by đ??ˇđ?‘ƒ1 . A non-zero entry on element a22 signifies that đ??šđ?‘…2 is satisfied by đ??ˇđ?‘ƒ2 . In this design, the flow and temperature are controlled by two different knobs in the same faucet. To get water of certain temperature the user has to experiment with different permutations of angles (ÎŚ1 and ÎŚ2). Also, there will be a wide variation in output water temperature. In short, this is a bad design. Let us see, how AD quantifies this. As per independence axiom we want the interactions between (đ??šđ?‘…1, đ??ˇđ?‘ƒ2 ) and (đ??šđ?‘…2, đ??ˇđ?‘ƒ1 ) to be nil. Such a matrix in which only the upper diagonal matrix is of non-zero elements is called uncoupled matrix. In the case given above, the matrix is coupled as there are interactions between (đ??šđ?‘…1, đ??ˇđ?‘ƒ2) and (đ??šđ?‘…2, đ??ˇđ?‘ƒ1) and hence the design does not satisfy the independence axiom. In design (b) the functional requirements and design parameter are: đ??šđ?‘…1: Control the flow of water đ??šđ?‘…2: Control the temperature. đ??ˇđ?‘ƒ1 : Height(Y) đ??ˇđ?‘ƒ2 : Angle (ÎŚ) In this case this design equation looks like:
In this case the temperature is controlled by the angle(ÎŚ) whereas the flow is controlled by the
height (Y). The user can choose between these combinations without employing another hand. Another benefit of this design is that he can reach desired temperature and flow in the shortest possible time. This is also reflected in the uncoupled design matrix and therefore this is a good design. Information axiom: After several uncoupled designs are generated, information axiom is used to choose the best design amongst all. The information content of a design is defined by, âˆ‘ đ??ź where, đ??ź = log 1. đ?‘–đ?‘–
Where p, is the probability of đ??ˇđ?‘ƒđ?‘–satisfying đ??šđ?‘…đ?‘–. Here, the reciprocal of p is used to make the larger probability have very lesser information. Log function is used to enhance additivity and base 2 is used to exhibit the result in bits. At the end of the process, the design which has the minimum information content is chosen as the best design. Managerially, this design is the one that satisfies both independence axiom and each individual đ??ˇđ?‘ƒđ?‘–s satisfies their đ??šđ?‘…đ?‘–s with very high probability. Epilogue Axiomatic design is used in a myriad of applications ranging from product development to portfolio design. For a wider treatment and literature on AD methodologies readers are advised to go through the links in the references page. Though this method has been in and around for over 20 years, the author in his industrial experience has found this being applied in international auto majors like, GM, Ford etc., while none of the homegrown firms seems to use it. The main advantage of this method over other ad-hoc design processes is that this is more relevant from a feature flow perspective. Another advantage is that it can be easily integrated with DFX and DFSS methodologies1. It is the authorâ€™s hope that, the promotion and awareness of new design procedures like this can help a firm rethink about its design process and produce excellent products.
Further reading: http://web.mit.edu/pccs/ http://axiomaticdesign.com References: 1. 2. 3. 4. 5.
El-Haik (2005), Axiomatic Quality, Wiley. G.J. Park (2007), Analytic methods of design practice, Springer Science & Business media. Suh (1990), The Principles of Design, Oxford University Press. Suh (2001). Axiomatic Design: Advances and Applications, Oxford University Press. Suh (2005). Complexity: Theory and Applications, Oxford University Press
MAKING LEMON INTO LEMONADE Problems are as much a part of any organisation as problem solving. There are different approaches to problem solving: analytical, logical, rational, creative, positive and absolute. Out of these problem-solving approaches, design thinking is a creative approach that stands at the intersection of viability, desirability, and feasibility. It is a human centred approach to solving problems that integrates the needs of people, possibilities of technology, and the requirements for business success.
The broader framework of design thinking includes immersion, ideation, and implementation which rolls out into five stages: empathising, defining (the problem), ideating, prototyping, and testing. Investing in design thinking is a proven strategy in areas of engineering, product innovation, and user experience enhancement. However, the burning question is in the face of emerging technologies, how design thinking approach is going to help us in future. It is quite evident that artificial intelligence (AI) is going to invade our organisations. This traction with AI will present a lot of opportunities in design thinking domain. Two direct consequences of AI invasion will be data availability to organisations and free time on the part of users. Therefore, there is enough scope for creating an eclectic base of design thinkers equipped with AI tools and techniques. Organisations can innovatively read the data to trace the user inconvenience. User journey mapping which play a critical role in conceiving a design thinking solution will be a lot easier with the advent of AI tools and techniques. Educational institutions can spring into accentuating the AI revolution by imparting short term vocational courses on AI enabled design thinking approaches. However, like every other revolution in past, this revolution may also bring about many disadvantages if we are unprepared. For example, products and services are going to be consumed and experienced in unimaginable ways by the users in future. Organisations have to catch up to these ways of consumption in order to achieve customer satisfaction. Similarly, users’ expectation for customisation is going to be a lot more as compared to today. This expectation management can be challenging for organisations. One plausible direction to tackle this could be building the “Do It Yourself” (DIY) component into products and services. There can be a plethora of DIY techniques which can be fun and enjoyed by the users. These easily doable hacks can be either be taught or encouraged to be devised by the users with AI enabled tools. This is possible to achieve only when organisations are in sync with the user expectations regarding the organisations’ capability. The call for how much to be automated and how much to be done by the users is going to be an important decision on the part of organisations. Else, many products in today’s market might turn into “lemons” in the market of future. The challenge of making “lemons into lemonade” can be seemingly smoothened with the help of design thinking adoption by both organisations and users. We have to overcome our inner conservativeness regarding the way we think about problems and solutions.
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About the Author Prof. Biswajita Parida is an assistant professor in marketing area at the Department of Management Studies in Indian Institute of Technology Delhi.
DIGITAL TRANSFORMATION: OPPORTUNITIES AND CHALLENGES Digital Transformation (DT) is a predominant buzz word used in business context. It is like everyone wants to do it, everyone wants to advise on DT, everyone has something to sell for DT, and surely all are here to talk about DT for themselves and others. Digital-led Business Transformation, Adoption of Modern-day’s Digital platform & tools for stakeholder’s engagements, Digital literacy, Digital Innovation are among the DT initiatives and conversations.
About the Author Mr. Sudhir Aggarwal is an eminent business leader with over 34 years of industry experience in several established multinational companies. He started his career with HCL Infosystems Ltd and then held distinguished positions as General Manager in Oracle, Vice President and Head Government Relations in Thomson Reuters South Asia Pvt Ltd, Chief Strategy Officer in Silver Touch, and Founding Partner of IB Platforms LLP.
Lately, DT has become like inevitable for two key reasons: a) People and organization who genuinely want to do it for themselves to achieve natural and transformational benefits of DT b)To remain relevant & engaged with ecosystem meaningfully. The level and degree of DT may vary as the case may be. In a real sense, any meaningful and useful DT means 3600 impacts on organization, internally and externally. DT journey needs to be Visionary, Disruptive, and Programmatic to execute like a top-down plan. In real DT journey, anything and everything internally & externally needs to be seen through critically and more of Outside-Inside view. Identification of people & process includes: (a)‘Not Adding Value’ (b) ‘Counter-productive,’ and (c) ‘Holding back organization’ which are among the Critical Success Factors (CSF) in the DT journey. Through Outside-Inside glasses, understand what the World is doing & how changing trends, future directions, aspirations & expectations of internal & external stakeholders will build compelling DT storyline. A word of caution makes a impost ‘what is right for me’ @ a given point of time and internalize appropriately. ‘One shoe doesn’t fit all’ applies for more than many reasons, especially in DT context. Digital journey starts from simple digital initiatives to the real digital transformational program. The purpose and objective of DT can be different from a different organization at different point of time. Real Digital Transformational in nature & spirit ought to be BIG BANG approach. The transformational journey cannot be incremental and ‘Revolutionary, but Evolutionary.’ There are two key perspectives in DT such as: (a) Internal and (b) External. For now, look at some of the aspects of internal perspective.
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What does DT mean? DT means, Think Digital, Walk Digital, Talk Digital, Imagine and Dream Digital, Engage Digital, Believe-in Digital, Act Digital, It is about “Digital Digital & Digital”
Change Walk Power
DT: Key to Success: A Comprehensive Disruptive Vision at the Top with absolute Commitment is the beginning of DT. • Non-negotiable Believe-in-Belief in doing digital • Focus on ‘Value minus, and not Cost -Plus’ • Challenge the ‘Status Quo’ 3600 is among the top success factor. • Shake people internally across levels and get them out of ‘Comfort Zone.’ • Let the concerned stakeholders, internally and externally, be aware of DT with an idea of what does it mean for them. • Agile DT Strategy with Built-in provisions to tweak DT continuously as Digital Disruptions around would happen faster than ever and faster than expected/ imagination. One should not be building ‘Future-proof’ organization on ‘Yesteryears thinking & environment’. • Have checkpoints for effective review with a focus on course correction and embrace new ways of doing things. Have checkpoints for effective review with a focus on course correction and embrace new ways of doing things. DT Challenges: 6|P a g e
Fear of Exposure People across functions and levels will experience fear of exposure entirely in more than one manner. People’s role will come under question; what people do and how they will be exposed through DT implementation
Youngsters Vs. Old Timers Every organization will have all kind of people including, not limited to, old-timers across levels and doing specific tasks in a given manner. DT will question anything and everything differently. New kids on the block across levels, across functions, will emerge as new champions and will lead initiatives. All in a system you need to develop an attitude of ‘Mutual Trust – Mutual Respect.’ It will become extremely difficult and challenging to achieve. Hierarchical Vs. Flat/ Virtual/ Task-based teams DT may evolve very new work culture. The organization would typically be flatter than multiple layers across. People will be expected to work with virtual teams and achieve results objectively. Transparency as never before Automation across the globe brought a certain level of transparency, and people have accepted by far. However, DT will bring a very different level of openness all over. People won’t even know that the newer technologies & processes will be monitoring throw results to whomever it belongs to. There will be
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practically no scope for hiding behind any process and anything for that matter. Accountability as never before Liability will be absolute with lots of accurate data and information. Anything and everything will be monitored regularly and predictively to keep everyone stay vigilant on top of the affairs. The new DT systems and processes will keep throwing Red, Yellow, and Green symptoms like Traffic Signal methodology will concern in the virtual world. Highest level of Objectivity One of the significant achievements of DT is the ability of the organization to set the highest degree of measurable objectivity. Data is seen as New Oil and New Currency, Data-driven role definition and performance measurement will make overall system more objective than ever. Absolute Measurement (Data-led)
Live-Data led business planning, reviews, and discussions. Under DT, anything and everything is all around data. Data-centricity drives all conversations and helps to enhance integration across the organization. Losing Power: DT mainly focuses on technology-led processdriven over people-centric, this typically causes discomfort among people. People tend to feel losing power for many reasons: a) Enhanced focus on systems with transparency & visibility of affairs b) Clear definition of measurable objectives & deliverables leaving little scope for ambiguity & manipulations c) Other natural DT factors. Digital Transformation is long-term perspectives that minimize People’sdependency in anything & everything. DT is inevitable.
With molecular level detailing @ fingertips and system’s phenomenal ability & capability, through DT, to produce predictive data – the results will speak for itself than too much scope for English and Covering Strategies. Routine work booted out to Technologies like AI. Automation moved lots of donkey’s work to the system to relieve people for better things to do. Now, technologies like AI (Artificial Intelligence & others) will even free people from doing repeated jobs and continue to let people do better things. With People-Machine continuous engagements, systems will have the ability & capability to learn continuously. This will have a two-fold impact: a) Systems will free people for better things b) System will predict more intuitive Intuitive Dashboards, what is coming your way, through technologies like AI. Collaborative, enhanced, and self-regulated Security through Blockchain technologies. The entire Regulatory and Security regime is undergoing transformation and creating challenges for Regulatory & Statutory organization to stay relevant. Real-time Data-led Performance Management with little scope for favouritism. DT focuses extensively on objectivity supported by data to make it compelling.
Some of the suggested Strategies that organization shall focus to manage successful implementation and rollout of DT effectively: • Lead from Front, Top-led by Example. The initiative/ program needs to be led from the top with conviction and by being an integral part of DT is among the Single most success criteria. • Campaign-led program. DT shall be run like a festival within the organization. It is critical to conceive various actionable programs to engage anyone and everyone in the program. • Education, Education, and Education Learnability. A massive investment is required in educating people about change in letter and spirit. The focus should be on learnability to ensure everyone understands the change and adapt during the education program. 7|P a g e
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• Communication, Communication, Communication. All kind of possible communication channels should help in creating an internal momentum and make the program inclusive. It is essential that everyone must be an integral part of DT program and own something or other. • Change Management through hand-holding. This is among the genuine ‘easier said than done.’ Change Management can be among the critical success factors. It can make or break. Change Management would need extensive, comprehensive, and careful handholding. • Capacity Management through Gamification. People and processes need to graduate to post DT scenario. Understanding and driving change among people is tough. Gamification techniques should bring key strategies to hand-hold people for DT. • Celebrate quick successes with select champions. There is nothing better than success, even the smallest and low-hanging. Reward and Recognise people appropriately to sustain and grow the motivation level & mood. Communicating and celebrating the victory makes the difference. • Policy of Zero Tolerance through a roadmap During DT journey, certain areas of transformations have to be declared Zero Tolerance Zone starting from the top. Any deviation and leeway can disrupt the success expensively. • Insecurity Management. Everyone in the organization would go through change with all kind of possible system, behavior, and other changes. Some of the insecurities like losing a job, losing power centers, equations, enhanced transparency, and measurable system in organization would need to learn the science & art of it. Everyone and everything will be good for all; however, things can be better if people understand the concept of Insecurity well and start managing them systematically. • Unlearn. Old habits die hard. With DT, understanding & learning the ‘Digital’ and relating to transformation is not that easy. People have lived in the comfort zone and performed their task. Some of it is just not going to work anymore. People won’t have a choice, but to learn new ways of doing by unlearning an earlier way of doing. Among many, business reviews basis CRM (Customer Relationship Management) data in the system over traditional excel sheet 8|P a g e
base review shakes the entire organization. • Culture of ‘Mutual Trust and Mutual Respect.’ As the organization is expected to observe all kind of changes like oldies would need to give way to youngsters, people would need to give control, people in the organization would need to learn and adopt ‘Mutual Trust Mutual Respect.’ • Continuous effective feedback system, Crowdsourcing, Listen-Listen-Listen. DT has to be Top-down program with leadership leading by example; however, keeping ears to the ground realities would be no less critical. Some of the bottom-up feedback would be very crucial to tweak the system and change. To summarise and reiterate, DT is like a change in the way of doing business in life and to get succeed with • Clear Vision and Measurable Objectives • Absolute non-negotiable Commitment with focus on accountability, starting from Top • Inclusive by taking all stakeholders together through Change Management • Appropriate all-round Investments • Regular reviews, health check, appropriate course correction, and Tough decisions • Drive anything and everything like a journey
DT is among the most exciting things happening around. DT impacts all of us in one or more manner, by choice or otherwise. Natural benefits of DT: Natural benefits of DT in traditional manners are like less paper, process automation with built-in checks & balances, single source of truth, backup and business continuity, one can access it anytime from anywhere as it has role-based access.
HEALTHCARE SUPPLY CHAIN IN PERSPECTIVE: CHALLENGES & OPPORTUNITIES The healthcare industry supply chain is someway unique to the supply chain in other industry verticals. As a commonality, it does involve monitoring the acquisition of products and their path from origin to final destination, however, different in a way that many of these supplies can be a matter of life and death. On top of this, managing the supply chain creates a significant expense for healthcare providers. In fact, a recent survey found that it is the second biggest expense that providers have. When prescription drugs, medical devices, and other medical supplies fall into an optimized supply chain, healthcare providers see their costs lowered, their revenues enhanced, and, most importantly, their quality of care improved.
About the Author Dr. Girish Joshi, GM -South Asia, Medline, is a Healthcare Industry Professional & ISCEA Global Mentor. “International Supply Chain Education Alliance-ISCEA is creating a talent pool trained in contemporary skills by offering relevant education, training, certification and recognition in Operations and Supply Chain domain.
To optimize the supply chain, providers need to address the biggest challenges that they face: • Misaligned stakeholder goals • Vertical internal structures causing supplies and supply data silos with information fragmentation. • Poor Workflow Design • Physician Preferences • Human supply chain links failing to communicate cohesively and productively • Industry resistance to adopting technologies To understand things in perspective, compared to two decades ago, healthcare service providers, overall continue to function pretty much the same way, as there is lack of innovation. This is may sound surprising when you consider the fact that this space has some of the smartest and welleducated people in the entire world. However, saying that no innovations have been adopted in the medical field is also a wrong assumption to make. Just look at, how much the average life expectancy has increased, thanks to advanced medicines & technologies. So, we will need to dig a little deeper to understand “lack of innovation”. Up on deep dive, we will notice that this space is rife with vertical innovation, however, it always lags when it comes to horizontal innovation. So, what do we mean by vertical and horizontal innovation? 9|P a g e
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Vertical innovation is innovation that is done specifically in a particular field while horizontal innovation is something that can be adopted by everyone. Let’s take an example to make this clearer: Penicillin, Polio vaccine, and sophisticated operating methods are all examples of vertical innovations since they are specific only to a particular field. Electricity, Internet, and Cloud Computing, on the other hand, are horizontal innovations which have been adopted by multiples fields and industries to make their functionality more efficient. The fact that most hospitals still use papers and files to do their records goes to show that they lag far behind when it comes to horizontal innovation. Blockchain one of the much-talked technologies in horizontal innovations that has been put into use across industries like logistics (FedEx), Food (Burger king) Technology (IBM, Microsoft, Huawei), Finance (MasterCard, BOA). Blockchain offers huge potential to disrupt the healthcare supply chain in particular and overall healthcare industry in the future. Supply chain management is one of the most promising areas of emerging block chain application. Proposed benefits for healthcare may be seen in areas such as in pharmaceuticals, global health donations, medical devices and durable goods and include: • Accountability in shipping, tracking, and transfer of goods. • Reduce counterfeiting and theft and also help well manage inventory and prevent stock-outs, expirations and misuse The Chief Science Officer at IBM Watson Health sees four use-cases for blockchain that are well suited for the pharmaceutical supply chain:
• • • •
Identify and trace prescription drugs distribution. Controlled substance monitoring. Cold chain monitoring. Monitoring the source and provenance of active pharmaceutical ingredients.
It is a very reasonable question to ask what advantages blockchain solutions offer over the current tools in use. • Records in centralised databases usually managed by system administrators can be edited or deleted where block chains have immutability. • Block chains are kept synchronised through consensus mechanisms so that a single ‘state’ is replicated across all participants rather than a third party needing to reconcile databases and transactions after the fact. • Invalid transactions are not permitted thus trust is managed at the agreed protocol level. • Depending on the specific blockchain protocol employed and its accompanying features, the timestamping and immutable nature of blockchain could enhance data integrity, thereby reducing the load on data stewardship functions. Western countries have started piloting the use of block chain in supply chain in healthcare setups. The recent FDA guidelines have suggested piloting of blockchain technologies in healthcare supply chain to ensure the requirements of the Drug Supply Chain Security Act (DSCSA) and have adopted a 10-year framework.
The following areas have been identified for block chain applicability in healthcare supply chains
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Companies have started exploring blockchain technologies for healthcare supply chain management
The purported benefits of blockchain technology for enhancing management of the supply chain for hospitals include: • Aligning stakeholder goals • Work in synergy across teams given the challenges • Enhanced workflow designs • Optimising efficiencies • Improving inventory management, • Reduced Costs and add value However, when we look at the industry, the challenges at large, are very complex. When you
look at what does exist, it’s multiple intermediaries. It's an industry where we don't have manufacturer dealing directly with healthcare providers. We have intermediaries present across supply chain. Distributors, Preferred Vendors, TPA, GPOs, Govt sponsored Insurance Schemes etc. It’s not case where true costs are apparent to either of the industry players or the consumers. Healthcare Provider preferences is another angle. Having said this, there is a huge scope and opportunity for disruption using horizontal innovation in this segment and industry stake holders look forward to have newer developments happening to add value to customers and patients.
References: 1. A Study of Supply Chain Management in Healthcare and the Opportunities that arise with Blockchain Enabled Solutions. Melichovich, G., Southey, S., & Zarrebini, M. 2. https://revcycleintelligence.com/news/why-executives-are-demanding-supply-chainmanagement-value 3. https://spendmatters.com/2019/04/29/healthcare-supply-chain-has-its-own-needs-challengesan-insiders-view/ 4. https://scholar.harvard.edu/files/cutler/files/jsc130008_hospitals_market_share_and_consolidat ion.pdf 5. https://www.beckershospitalreview.com/supply-chain/survey-top-healthcare-supply-chainpriorities-in-2018.html 6. https://www.pwc.com/us/en/industries/health-industries/health-researchinstitute/blockchain-in-healthcare.html 7. https://www.attainia.com/blog/challenges-facing-healthcare-supply-chain/ 11 | P a g e
HOW DESIGN THINKING CAN ACCELERATE DIGITAL TRANSFORMATION What is Digital Transformation Digital Transformation marks a radical rethinking of usage of technology, people and processes by an organization to fundamentally change business performance as defined by George Westerman, author of Leading Digital: Turning Technology into Business Transformation and principal research scientist at MIT Digital transformation. In Other words: Digital Transformation is an organizational change using digital technologies to improve business performance. This journey must be navigated mindfully. The roots of Digital Transformation trace back to 1995 book Being Digital, authored by MIT Media Lab founder Nicholas Negroponte. In this book author explored the substitutability of bits and atoms which was the basis of the early growth of e-commerce. It also saw a widespread deployment in more traditional industries of information systems, e.g. shipment tracking by FedEx, inventory management at Walmart etc.
Digital Transformation Drivers Some of the key drivers for Digital Transformation initiatives undertaken by organizations are: • Be Relevant: Companies often embark on digital transformations, due to the fear of being outflanked by more nimble competitors. Hence companies seek to accelerate innovation, experimenting with new digital services to enhance existing offerings or to get into adjacent markets. • Ever rising Customer Expectations: What customer wants keeps getting reset to a higher level and hence the need for incumbents to embrace Transformation to match customer expectations around their products and services. • Speed of Business Transformation: Sweeping Transformational changes are typically undertaken when organization pursues new business models or new revenue streams in a shorter span of time. With technology changing so rapidly, speed is the key.
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About the Author Mr. Balpreet Singh is assistant vice president at Reliance Industries Limited and is an ISCEA global mentor. “International Supply Chain Education Alliance-ISCEA is creating a talent pool trained in contemporary skills by offering relevant education, training, certification and recognition in Operations and Supply Chain domain.
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Digital Transformation Examples Here are few examples of successful Digital Transformations: 1)
Uber / Ola have a new take on the taxi / transportation sector which leverages on technology and attempts to make rider / customer experience better. This forced everyone from incumbent taxi operators to car rental firms to automakers to figure out how they need to reinvent their business models. It made them incorporate similar ridesharing or other on-demand services.
2) Restaurant chains such as TGI Fridays and IHOP, to counter more tech-savvy boutique brands, started experimenting with virtual assistants to facilitate mobile ordering. 3) Albertsons, American grocery company founded and headquartered in Boise, Idaho, has embarked on initiatives like personalized product deals, one-touch payments for customers at gas station and robots that move product around its warehouses to remain relevant. 4) BMO Harris Bank, United States bank based in Chicago, Illinois has accelerated the loan origination process which made it a preferred digital destination for consumers. In earlier times, their bankers took up to an hour to draft the loan applications while customers waited. This wasn’t a good user experience. With the transformed process using digital solution, consumer could complete applications in minutes anytime, anywhere. As a result, online mortgage and home equity application volume at BMO Harris bank has rose 275 percent year on year. It led to more than 80 percent of mortgage and home equity applications submitted via their new digital platform. This transformation enabled BMO Harris’ bankers spend more time serving customers rather than filing paperwork.
What is Design Thinking? Design Thinking is a creative problem-solving process or technique. The origins of design thinking can be linked to the development of creativity techniques in the 1950s. Using an iterative process, Design Thinking methodology challenges set assumptions and attempts to redefine problems, to identify alternative ideas and solutions that might not be obvious in an initial level of understanding. To gain insights about user’s needs and wants, design thinking practitioners observe and analyse user behaviour. Unlike traditional scientific and engineering approaches, which address a task from the view of technical solvability, user needs and requirements as well as user-oriented invention are central to the process of Design Thinking. These observations are then used to create products and services that helps organizations / teams solve the problem at hand. Invention of the term “design thinking” has often been attributed to IDEO, the design agency started in 1978 by David Kelly. A Stanford professor, Kelley in 2004 led the creation of the Hasso Plattner Institute of Design at Stanford University, known as the “d.school” Why Design Thinking Transformation?
The Design Thinking methodology can be used to solve problems that require innovative thoughts. It’s a powerful tool for tasks / problems that are unfamiliar or have never been done before. Design thinking can help to conceptualize the tasks involved. It helps understand all the hidden loopholes and comes up with some measurable assessment while approaching a big project. It is a framework that challenges the scope and narrowness of thought process that normally is a part of classical problem-solving methodology. This can be said as a key to transformation itself, and the basis upon which Digital Transformation strategies can be constructed. 13 | P a g e
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Traditional analytical methods aren’t fully able to cater to such needs, hence the focus on methods like design thinking. It does not provide a solution upfront but examines multiple point of views keeping user at its centre, considers both present and future conditions and parameters of the problem to explore alternative solutions.
Image Source: https://hpi-academy.de/en/designthinking/what-is-design-thinking.html Another aspect of Design Thinking is that innovation that it proposed is a meeting point of three key aspects as depicted in the picture below: 1)
2) Technology Feasibility 3) Business Viability It is this “sweet spot” that is a Must for Digital Transformation and hence makes the case for usage of Design Thinking in such initiatives. How Design Thinking Can Boost Digital Transformation Since the Industrial Revolution, analytical thinking helped to solve many complicated problems. There was an underlying commonality for most of these challenges. They were linear and well defined, typically arising over a long period of time. However, in today’s world we see frequent changes to technologies which are often disruptive, changing customer behavior and shifting economic landscape. Hence the complexities of problem that we encounter now are more unpredictable, non-linear, chaotic, ill-defined and with short timeframes. And to solve them requires a vastly different approach. The need is innovative and nimble solutions that are not business-as-usual. 14 | P a g e
Design Thinking methodology requires intensive quantitative and qualitative research on the problem statement that focuses on the “why”, rather than the “how.” By observing the users to find out what they do, rather than what they say, organizations can understand problems better, anticipate future road blocks, find out unarticulated needs and align these to their business. This helps organizations identify real issues that they never knew existed and leads to innovative solutions (digital and non-digital) never imagined. Successful Applications of Design Thinking in Digital Transformation 1)
SAP: Enterprise software company SAP has been among the pioneers in using a human-centric approach to drive innovation. In fact, in 2003, Hasso Plattner, the cofounder of SAP, helped launch the Hasso Plattner Institute of Design (d.school) at Stanford University. He also got his leadership team to attend sessions at d.school to get the mindset change top down in the organization.
2) Coca-Cola: Coca- Cola as we all know is one of the most recognized global brands. However, for an organization that spans across 200 countries has a lot of internal challenges to manage operations in wide range of markets. In the early 2000s, Coca-Cola strategically decided to use design thinking methodology to transform itself into a nimble organization with a seamless brand experience throughout a global portfolio. One key takeaway was a digital visual identity system that transformed the creation and marketing of products. The digital transformation of their own internal systems helped Coca-Cola come up with
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localized products across different geographies that still communicate a single global brand. Design Thinking is Not a Magic Wand for Digital Transformation Organizations, when confronted by a diverse Transformation need which needs multiple possible solutions, design thinking can be immensely helpful. However powerful methodology Design thinking may be, but some organizations that implement it may still fail at the transformation if they don’t get their acts right. Here are a few pointers to be taken into consideration: Right Skillset: Design thinking needs to be deployed by experienced team to ensure that things right problem definition to ideation and forward the end user perspective is considered as the central element. If not done by experienced hand, the transformation expected might not become a reality Cross-Functional Approach: The design thinking team needs to have people with diverse approaches, those who can nurture a wide range of possible solutions and are open to new ideas and possibilities. Creativity: For Transformation to be achieved in an organization, more we focus on creativity the better it is for the outcome. What’s lacking in some of the organizations is culture of imagination and creativity — the ability to do things differently. Right Perspective of Problem Definition: At time organizations fail in design thinking when they view problems through the wrong lens. This might be organizational or technological or data driven.
Work Cohesively: A lot of times, the different parts of an organization don’t work together cohesively. In any project and more so in Design Thinking based Transformation programs, it takes strong collaboration to define the set of problems and develop a successful solution around them. Stake Holder Buy-in: Successful Digital Transformation programs -- with design thinking or any other framework -- will only deliver results when there is a buy-In from all key stakeholders. That means considering different perspectives on the set of issues and then finding solution. Conclusion In today’s world, adoption of digital transformation by organizations across business practices is a necessity rather than a choice. And design thinking methodology, can be a good tool set to tackle the problems faced during transformation programs. However, design thinking can become just a buzzword if its’ not used in the effective way to focus on the right problem first and deliver viable and functional solutions supported by traditional business metrics. As it’s said, “Art is never finished, only abandoned.” In the same way, the quest for improving the customer experience is never complete. In this journey to improve customer experience as an outcome of digital transformation, organizations need to continuously ideate and optimize to come up with new ideas. There might be pitfalls, but the journey needs to go on.
Bibliography: 1. Harvard Business Article September–October 2018 Issue Article Name: Why Design Thinking Works 2. https://blog.hypeinnovation.com/an-introduction-to-design-thinking-for-innovation-managers 3. https://hpi-academy.de/en/design-thinking/what-is-design-thinking.html 4. https://www.cio.com/article/3183552/how-design-thinking-can-boost-digitaltransformation.html 15 | P a g e
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ROADMAP TO LEAN INDUSTRY 4.0 On 9 November 2019, Department of Management Studies, IIT Delhi hosted Opera’19, the annual Operations conclave. The afternoon session focused on the topic, ‘Roadmap to Lean Industry 4.0.’ The session consisted of seven eminent business leaders from some of the best multinational corporations. The Operations Club of DMS, IIT Delhi, has covered the minutes of the panel discussion, and the essential ideas have been presented.
The eminent panelists who participated in the discussion (from the left of the photo): Mr. Sudeep Jain (Group Head – Strategic Sourcing, Bennett Coleman & Co.), Mr. Mohit Grover (Director – Industry 4.0 Consulting, Nagarro), Mr. Nilekh Kumar (Chief Digital Operations, Nokia), Mr. Nitin Kochchar (COO, Hero Electronix), Mr. Parvez Siraj (Manufacturing Excellence Leader – India, Target), Ms. Prabh Preet Pammi (Director – Operations, AIG), Mr. Shantanu Kodesia (Head Operations, Sun Life Financial)
For many decades, manufacturers have applied lean principles and techniques to decrease cost, increase productivity, and reduce complexities by reducing waste and other non-value-adding activities throughout a value chain. With technology advancement, a new approach industry 4.0 has emerged. In this, multiple components along a value chain like sensors, workpieces, machines, and IT systems are integrated extending beyond a single enterprise that can interact and analyze data to predict failure, reconfigure themselves, and adapt to change.
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The discussion thus had to be an enriching one as the arguments and explanations to both Lean and Industry 4.0 may vary significantly. A brief overview of the discussion is as follows. The panel chair, Mr. Sudeep Jain (Group HeadStrategic Sourcing, Bennett Coleman & Co), initiated the discussion by telling the students that Industry 4.0 is changing the perspective of people about their industries. Later in the discussion, he added that consumers would have more power in Industry 4.0, and companies need to make critical decisions by involving every stakeholder.
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Mr. Mohit Grover (Director Industry 4.0 Consulting, Nagarro) said that Industry 4.0 would require the services, products, and workers to become smart. The evolution of Industry 4.0 has generated the need for the companies to look after the ‘Have Nots.’ He also emphasized on keeping faith in Industry 4.0. Mr. Nilekh Kumar (Chief Digital Operations, Nokia) talked about how Industry 4.0 will generate the power of time and make the industrial processes efficient. He spoke about how industries need to find their solutions to their problems. He also gave glimpses of 5G technologies and how it will change the telecommunication industry. Mr. Nitin Kochchar (COO, Hero Electronix) told the students that the advancement in technology is taking us close to the truth of nature. However, this advancement will require a lot of effort and investment in R&D sections, and he emphasized the fact that India, as a country, should start taking these efforts very seriously. Mr. Parvez Siraj (Manufacturing Excellence Leader - India, Target) briefed the students about the four revolutions of industries that took place in history. He told the students that Industry 4.0 is more than just automation. The technology and infrastructure are playing an important role but picking up the technology suitable for business is necessary.
Prabh Preet Pammi (Director Operations, AIG) started by giving examples about how meanings and definitions of technology change depending upon the
Industry. She gave a very illustrative example of how robots will reduce the costs of processing in the industry. Later, she cautioned the future managers of DMS about looking at the negative implications that a technology change might bring in. Mr. Shantanu Kodesia (Head Operations, Sun Life Financial) introduced the MESS strategy where MESS is abbreviated for ‘Mindset, End Goal, Strategy, and Sponsorship.’ He mentioned that in the world of Blockchain, Robotics, and newer technologies, Technology Security had become an essential factor to consider, and firms should take it seriously. The moderator concluded the discussion by summarizing all the points mentioned in the talks. Then the stage was opened for the students for interaction with the panel and got their doubts solved related to the discussion. To summarize, it was evident from the discussion that both industry 4.0 and lean can go hand-in-hand coupled with one another. According to a study, when either of the approaches is applied alone- cost reduction is only made by about 15%. Nevertheless, together, they can reduce the costs by about 40% and go a long way in optimizing integrated processes. However, the process to couple Lean with Industry 4.0 can be flexible and may lie at the discretion of organizations as per their needs. The students of DMS, IIT Delhi, extend their gratitude towards the panellists by thanking them for such an informative session on the topic.
Did you know that Bill Smith is considered to be the father of Six Sigma Six Sigma is a set of techniques and tools for process improvement. It is a process that seeks to achieve one defect in a million of opportunities. It was introduced by American engineer Bill Smith in 1980 while he was working for Motorola and in the process helped Motorola to be the first company to receive the prestigious Malcolm Baldridge National Quality Award in the year 1988. Jack Welch who was also working in the Six Sigma project for Motorola under Bill Smith made it central to his business strategy at General Electric in 1995 after he switched to General Electric.
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OUTLOOK FOR FUTURE SUPPLY CHAIN On 9 November 2019, Department of Management Studies, IIT Delhi hosted Opera’19, the annual Operations conclave. The morning session focused on the topic, ‘Outlook for Future Supply Chain: Agility and Resilience.’ The session consisted of nine eminent business leaders from some of the best multinational corporations. The Operations Club of DMS, IIT Delhi, has covered the minutes of the panel discussion, and the essential ideas have been presented below.
The eminent panelists who participated in the discussion (from the left of the photo): Mr. Sandeep Bhargava (COO and VP – OLA Skilling), Mr. Amit Sinha (COO, Richemont), Mr. Ashish Agarwal (President, Welspun), Mr. Firoze Zia Hussain (CSO, Delhivery), Mr. Sanjay Gupta (VP, DS Group), Mr. Sanjeev Duggal (COO, Bruce Clay), Mr. Sridhar Kulkarni (Senior Director, PepsiCo), Mr. Vinay Kumar (Director – Operations, Grofers), Mr. Vipul Aggarwal (Head – Supply Chain, Havells)
The panelists talked about how agility and resilience in the supply chain can bring about a positive outlook towards the future of the industry and help in quickly adapting to requirements. The eminent speakers from various domains of the industry gave valuable insights on how the dynamics of the supply chain have changed over time with changing demand and expectations of customers. In the era of intense competition and companies struggling to stand out, 18 | P a g e
providing an efficient supply chain through a combination of owned or hired or contracted means can help you stand out. Nowadays, the supply chain is not just about delivering the right products at the right time, at the right price but also fulfilling the ever-changing and immediate needs of the customers by accurate demand forecasting. For this, not only the internal environment but also the external variables like legislation, the economic climate of the country, the socio-economic
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environment, etc. should be considered. One should know one's vendors and vendors’ vendors and customers’ customers. At the same time, a company must change its entire supply chain to suit the cost, time and availability requirements of the customers. One simple example is how cheap products of China have become due to trade war and how one can take advantage of this socio-political paradigm shift. Logistics was the one thing that stood out in the supply chain, and the most essential learning perhaps was that if you want customers by your side, you need agility, i.e., you must innovate and do it quickly. What stands out tall in the Indian context is the ever-changing political mood, which gives rise to new regulations every now and then. Resilience in such an ecosystem is instrumental in adaptation — for example, the ban of single-use plastics. Although the ban was enforced recently, there were talks for years, and an excellent resilient supply chain would plan for it in advance, which was done by one of the DS Group represented by one of our panelists.
Many innovations are just around the corner, waiting to be garnered like the implementation of Blockchain technology. Corporations must be forward in outlook to be resilient. Take, for example, how Bajaj auto bounced back after years of being out of the market and look at how companies in Kerala dealt with their supply chain. Take another example, how difficult is it to design a supply chain for luxury goods. Parts are costly and can lead to huge inventory cost, but the premium paid by users dictate fast services and innovations (like 3D printing at each site) can be one of the solutions, such hyperlocal supply chain fulfillment is the kind of innovation people look to achieve. Hence resilience must be built into the system as the condition demand to stay relevant. Last but not least is the availability of cash. While it applies to every facet of the business, but the innovation and resilient behavior in an organization needs quick decisions to be ahead, and only cash can guarantee that your breathtaking idea pulls you forward.
Did you Know that the UPS drivers never take a left turn UPS is one of the world’s largest logistics company. From Operations standpoint, they have to solve a vehicle routing problem to deliver maximum number of packages using minimal resources. The vehicle routing problem has been existing for over 50 years and scientists are still looking for new ways to tackle the problem. UPS have moved away from trying to find the shortest route and now look at other criteria to optimise the journey. One of their methods is to try and avoid turning through oncoming traffic at a junction. Although this might be going in the opposite direction of the final destination, it reduces the chances of an accident and cuts delays caused by waiting for a gap in the traffic, which would also waste fuel. As a result, the company claims it uses 10m gallons less fuel, emits 20,000 tonnes less carbon dioxide and delivers 350,000 more packages every year.
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SURGE PRICING IN CAB AGGREGATION SERVICES Cab Aggregators claim that surge pricing is a tool to match demand and supply for taxi rides during the days. Technology allows these changes in a dynamic environment based on complex algorithms. Surge price is used to reduce the demand by offering high prices, thereby increasing cab availability for the commuters who are ready to pay the surge price.
The time is 11:30 PM. Your favorite band has just ended their jamming session and you wish to go back to your home, sleeping upon one of the best memories of your life. You opened the Uber app and saw what you have feared in the back of your mind. There is surge pricing with a multiplier of 2.5x. The rise in the ‘sharing’ or ‘gig’ economy has led to a shift from the traditional work culture with fixed working hours. One prominent example of this ‘gig economy’ is ride-sharing apps like Uber and Ola. Uber helps in connecting riders with the drivers while setting fare for the ride based on the distance covered and the total time taken to complete the trip. In case of high demand, Uber applies a ‘surge’ pricing to its fare, which has been controversial since the introduction of features. As per the Uber website, the surge pricing works in 3 steps: 1. Due to weather conditions, special events, or due to rush hour, a higher number of people may request an Uber ride than usual. This will cause a supply-demand imbalance. 2. To ensure that people who need the ride most, get it, Uber increases the fares. 3. Riders pay for the ride or wait till the fares revert to regular price. The Surge pricing is calculated by using an algorithm which comes into action when demand outstrips supply in a fixed geographical area. The secret algorithm calculates the surge multiplier, which is then used to calculate the final fare. This multiplier is shown to both driver and rider before the rider confirms the ride. Since Uber works on the ‘Self-scheduling’ model where drivers have the full freedom to decide when to work, the decision of an Uber driver to drive in Uber is affected by his expectation of earning more and chances of getting rides. At the same time, rider side demand has high fluctuations, which make ‘Surge’ pricing necessary to balance both sides. ‘Surge’ pricing rewards drivers and at the same time, efficiently allocates the limited resource, i.e., Uber ride to those who value it most. The absence of such a mechanism can lead to an unprecedented level of demand in a rush-hour, causing the waiting period to be so high that it limits 20 | P a g e
About the Author Shubham Dixit is currently pursuing his full-time MBA in General Management from the Department of Management Studies, IIT Delhi. He is now in his final year and is an active member of the Operations Club. Before MBA, Shubham worked as an Assistant Manager in Maruti Suzuki India Ltd. He is a graduate of IIT (ISM) Dhanbad with a B.Tech in Electrical Engineering.
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the user from using the service of Uber. Castillo, Knoepfle & Weyl have argued that the absence of a regulatory mechanism like ‘Surge’ pricing can lead to an over-burdened system. This will lead to drivers being thinly spread throughout the city on a wild goose chase, thus adding their pickup time and reducing their earning potential. But surge pricing has been a contentious issue for the customers. A survey of 20,000 people on Local Circles found that 64% of the respondents were not happy with the dynamic and surge pricing. The regular price of the same Uber ride acts as a lower reference point, which makes ‘Surge’ pricing look unreasonable. Further, due to its very nature, the ‘Surge’ pricing kicks in when the customers are in a big hurry to leave the geographical area. The uncertainty around the timings of ‘Surge’ pricing and value of Surge Multiplier also does not help. There have been instances of ‘Surge Clubs’ being uncovered wherein drivers were coordinating with each other to trigger the ‘Surge’ pricing. They would do so by simultaneously turning their app off and on again. Recently one of the RSS affiliates has asked Road Transport & Highways Minister Nitin Gadkari to fix surge-pricing limits for taxi aggregators under the Motor Vehicle Act 2019.
So, can the Surge pricing be fixed so that all the three stakeholders be happy with it – Riders, Drivers, and Uber? As per Professor Utpal Dholakia of Jones Graduate School of Business, the surge pricing has a significant image problem. He suggests the following four actions to improve it, Reducing the variability of price fluctuation – so that it does not change every 5 minutes 1. Capping the maximum surge multiplier (It can be as high as 50x) and communicating it. Preferably, the cap should be 5x. 2.
Communicate the benefits of using the Uber service compared to conventional sources of transportation.
Rebrand the surge pricing like much negative connotation has been attached to it. Some alternatives can be convenience pricing, certainty pricing, etc.
Uber’s pricing algorithm works for the betterment of both riders and drivers, but to gain the mindshare, they need to make the ‘surge’ pricing more open and rider-friendly.
References 1. 2.
3. 4. 5.
6. 7. 8.
How surge pricing works. (2019). Retrieved 19 September 2019, from https://www.uber.com/in/en/drive/partner-app/how-surge-works/ Gérard P. Cachon, Kaitlin M. Daniels, Ruben Lobel (2017) The Role of Surge Pricing on a Service Platform with Self-Scheduling Capacity. Manufacturing & Service Operations Management 19(3):368-384. https://doi.org/10.1287/msom.2017.0618 Chen, M., & Sheldon, M. (2015). Dynamic Pricing in a Labor Market: Surge Pricing and Flexible Work on the Uber Platform. Hall, J., Kendrick, C., & Nosko, C. (2019). The Effects of Uber’s Surge Pricing. Juan Camilo Castillo, Dan Knoepƒe, and Glen Weyl. 2017. Surge Pricing Solves the Wild Goose Chase. ACM Transactions on Economics and Computation 1, 1, Article 1 (January 2017), 2 pages. DOI: http://dx.doi.org/10.1145/3033274.3085098 Zha, L., Yin, Y., & Du, Y. (2017). Surge Pricing and Labor Supply in the Ride-Sourcing Market. Transportation Research Procedia, 23, 2-21. DOI: 10.1016/j.trpro.2017.05.002 Why Do Consumers Hate Uber’s Surge Pricing?. (2019). Retrieved 19 September 2019, from https://kinder.rice.edu/2016/01/27/uberhatesurgepricing/#.Vqkf5_krLct Uber drivers are reportedly colluding to trigger 'surge' prices because they say the company is not paying them enough. (2019). Retrieved 19 September 2019, from https://www.businessinsider.in/Uber-drivers-are-reportedly-colluding-to-trigger-surgeprices-because-they-say-the-company-is-not-paying-themenough/articleshow/69790042.cms
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IS DESIGN THINKING ALL SET TO REPLACE SIX SIGMA? Standing at the crossroads of Industrial 4.0, Design Thinking has started to grasp huge public attention. Unlike Six Sigma, which is focused on maintaining consistency in processes and reducing waste, Design Thinking is entirely focused on innovation. It is more about the subject rather than the object. The ultimate goal of Design Thinking is to co-create with the customer rather than shoving a ‘great’ product down her throat.
About the Author Kapileswar Mallick is currently pursuing his full-time MBA in General Management from the Department of Management Studies, IIT Delhi. He is currently in his 1st Year, and his primary interest lies in Operations Management. Prior to MBA, he worked as a System Engineer with Tata Consultancy Services Ltd.
Six Sigma as a quality control technique lies right at the heart of operations management since Motorola first introduced it in 1986. It brought about a new data-driven way to minimize defects and errors in a process to maximize efficiency. At its core, Six Sigma requires minimum innovation. Instead, there is a given set of rules which you are expected to follow strictly, and this automatically fetches improved results. It is entirely process oriented. So the lesser you apply your brain, the better. Standing at the crossroads of the Industrial 4.0, a relatively newer term called Design Thinking has started to catch more and more public attention. Unlike Six Sigma, which is focused on maintaining consistency in processes and reducing waste, Design Thinking is utterly focused on innovation. Although it started with a target towards product innovation, it is no longer limited to a product or a process. Instead, Design Thinking today is more about the subject rather than the object. The ultimate goal is to co-create with the customer, which is achieved even at the length of changing the product itself if needed. Similarities: Six Sigma and Design Thinking Six Sigma consists of two methodologies – DMAIC and DMADV. DMAIC is implemented while improving an existing process, whereas DMADV is preferred while working with a new process. Both of them are five-step processes: DMAIC – Define, Measure, Analyze, Improve and Control in that particular order; DMADV – Define, Measure, Analyze, Design and Verify. These steps are expected to be executed iteratively, thereby reducing waste and improving the efficiency of the concerned process. 22 | P a g e
Figure 1: The DMAIC and DMADV Cycle
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Design Thinking also follows a similar kind of iterative execution. As per the popular Stanford School model, it consists of 5 stages – Empathize, Define, Ideate, Prototype, and Test. These steps are executed one after the other, similar to what is followed in the case of Six Sigma.
can be thought of as a set of instructions that must be followed flawlessly and unquestionably. This approach might be suitable in the manufacturing setup where process optimization is our key objective, but it is certainly not the right path to follow if we are thinking about creating disruptions.
Differences: Six Sigma and Design Thinking
On the other hand, Design Thinking carries the message – it is okay to be wrong the first few times. The learnings from these initial mistakes are more important than the mistakes themselves. These errors are not treated as failures but are instead considered as stepping stones towards success. However, from a psychological point of view, this is much easier said than done. It takes much courage to be ‘willing to fail.’ This is perhaps one of the reasons why Design Thinking is not as popularly adopted as Six Sigma to date. Instead, it has remained as an area of curiosity or a talking-point.
The first significant difference is the area of focus of the two methodologies. In the case of Six Sigma, the focus is on product/process improvement and maximizing efficiency, whereas Design Thinking focuses on the purpose/customer pain-point. For example, let us imagine a case where a customer uses a vacuum cleaner to clean his/her room daily. From the Six Sigma standpoint, we would be trying to improve the performance of the existing vacuum cleaner or the process by which the vacuum cleaner is being manufactured. However, in the case of Design Thinking, we are no longer concerned with the vacuum cleaner or how it is manufactured. Instead, our focus is on serving the purpose of the customer, i.e., cleaning his/her room as efficiently as possible. For this, if we need to shift from the vacuum cleaner to an even more sophisticated machine, it is entirely acceptable so far as the end-goal is achieved. The second differentiating factor is the willingness to take risks. The very funda of the Six Sigma movement is firmly attached to the typical management dictum of ‘being right with the first attempt.’ There is no scope for error or mistakes here. Eliminating errors is what we strive to do through Six Sigma. Thus, Six Sigma
On the other hand, Design Thinking carries the message – it is okay to be wrong the first few times. The learnings from these initial mistakes are more important than the mistakes themselves. These errors are not treated as failures but are instead considered as stepping stones towards success. However, from a psychological point of view, this is much easier said than done. It takes much courage to be ‘willing to fail.’ This is perhaps one of the reasons why Design Thinking is not as popularly adopted as Six Sigma to date. Instead, it has remained as an area of curiosity or a talking-point. The third difference is customer-centricity. To explain in simple terms, Six Sigma focuses on product or process optimization, thereby
Figure 2: The Design Thinking Process
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‘solving a problem for the customer.’ However, Design Thinking is concerned with ‘solving a problem with the customer,’ or in other words, co-creating with the customer. Instead of coming up with a solution and then asking for the customer’s opinion, Design Thinking is all about taking the customer on board throughout the journey. The customer is engaged at all the stages, be it empathizing, prototyping, or testing. In this way, the customer is no longer a passive recipient but an active participant in the entire process. Does the rise of Design Thinking equate to the end of Six Sigma? Not really. Although Six Sigma and Design Thinking are two very different approaches, they can still go hand-in-hand or co-exist together. There are broadly 2 schools of thought in this respect. The first school believes that one methodology cannot be encompassed in the other; instead, these 2 tools should be used in an additive manner. The second school feels that the two methodologies can arrive at a confluence, and their synergy/integration is only a matter of time now. First, let us try to realize the idea the first school is trying to propagate. The purpose of Design Thinking is to bring about radical changes, whereas that of Six Sigma is to ensure consistency and stability. Let us try to understand this concept with a modern-day billion-dollar tech startup. Today’s tech startups are all about creating disruptions in the way we live and work. This is where Design Thinking can play a crucial role. Design Thinking is primarily concerned with the exploration of problems and coming up with creative solutions. It is an extremely flexible approach and has got a ‘human touch’ to it. This again gives a Design Thinking practitioner a lot of freedom and creative thinking opportunities, which are some of the critical ingredients for causing disruptions. Thus, in the early growth stages of a business, Design Thinking can prove to be really handy. Now, let us imagine that 5 years have passed by, and our hypothetical tech startup has grown into a large corporation. It has to handle a large set of complex operations/processes currently. The firm has now achieved some stability and is no longer in disruption mode. This is where applying Six Sigma can be very useful for the company as consistency in processes and 24 | P a g e
eliminating defects and errors from these processes are what one should look for in stable business operations. The above example illustrates how Design Thinking and Six Sigma are not used simultaneously but are applied one after the other. However, according to the second school of thought, this is not a necessity. Instead, these two methodologies can be easily clubbed together despite their conflicting nature. For instance, applying Design Thinking within Six Sigma would add a human element to the latter and would help to complement its purely datadriven approach. This would give rise to statistical/technical as well as human-oriented solutions. Similarly, applying Six Sigma processes in Design Thinking would make the latter technically sounder and data-centric. It is worth remembering that Design Thinking is most suitable when working closely with the customer or co-creating with the customer. To come up with innovative solutions for apparently severe problems, Design Thinking approach can prove to be a boon for us. We can then follow it up with the Six Sigma approach to ensure efficient and optimal delivery of the solution. Conclusion Both Six Sigma and Design Thinking methodologies have come a long way since their inception. Although they are generally perceived to be contrasting/opposite, they can still co-exist together. Moreover, we should keep in mind that both these methodologies are continually evolving. What we understand by Design Thinking today might not be the same; it would be 10 years down the line. For instance, Motorola originally came up with the concept of Six Sigma. This then led to Lean Six Sigma, which again evolved to Design for Lean Six Sigma (DfLSS). We then came across DMEDI, which is an exploratory component regarding DfLSS and can be somewhat related to modern-day Design Thinking. These kinds of evolutions are going to take place in the future as well. It is in our best interest to work out a harmonious relationship between Design Thinking and Six Sigma and leverage the maximum potential out of each of these approaches. This will have a profoundly positive impact on future business processes and humankind in general.
SUPPLY CHAIN 4.0 AND THE FUTURE AHEAD Digital Supply Chain or Supply Chain 4.0 is an emerging trend that is going to influence and transform the supply chain that we see today. With several firms backing up this concept, it is clear that the transformation into a digital view will help the industries to stand out and get the maximum benefit of it.
About the Author Muvendra Kumar Singh is currently pursuing MBA from the Department of Management Studies, Indian Institute of Technology, Delhi. He holds a bachelorâ€™s degree in Electrical Engineering. He has co-authored a research article in a leading electrical technology magazine focusing on upcoming trends in electrical technology.
Introduction Digital Supply Chain is not a pathbreaking innovation. The impact and subsequent changes that it is going to be influenced by Supply Chain 4.0 are what is more inspiring. Industry 4.0 had made firms revolutionize their existing supply chain, thus making it more advanced in the form of digital supply chain. Although Industry 4.0 has affected many sectors and looking at the outcome, these sectors have innovated themselves so that they can be parallelly as disruptive as Industry 4.0. The best examples are the digital supply chain and the introduction of blockchain in different sectors of business. Supply Chain 4.0 Supply Chain 4.0 is about restructuring and organizing the supply chain following Industry 4.0. This covers several critical aspects like design, distribution, planning, production, and reverse logistics. Although they were already a part of the supply chain, yet they need to be revamped to make it innovative. These innovative ideas are already being implemented in major industries, and subsequently being adopted by small and medium scale industries as well. It will soon be widely accepted, but the onset of this technology for different companies may depend on their dependency on the pre-existing supply chain and their flexibility to adopt 4.0. Now we can see that not every industry has adopted Supply Chain 4.0. Although it is being rapidly adopted, the major industries are electronics or pre-established major logistics players in the market. For small and medium scale industries, which are not much used to advanced supply chain processes, it has been observed that they may be the late adopters as they work on the cost-benefit factors.
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Advantages of Supply Chain 4.0 1. It will generate job opportunities According to data from Occupational Employment Statistics of the Bureau of Labor Statistics showed that from 2011, employment in the supply chain has increased. It mainly covers sectors like warehousing and storage. The main argument is that if the supply chain is getting digitalized and more software-driven, then it must be reducing the job opportunities in this case. But the actual scenario is that it has increased employment in material moving occupations and transportations sectors. Supply Chain 4.0 is making things faster and timesaving but substituting that it requires that much amount of workforce too. 2. Making supply chain customer-driven Supply Chain 4.0 will make the supply chain more customer-driven. It involves Internet of Things(IoT), Big Data Analytics, and several other automation technologies that make it more customer-oriented by transforming into a linear model.
3. Transforming overall operation It will provide improvements to the pre-existing supply chains by enhancing performance and effectiveness. If effectiveness increases, then ultimately, productivity will increase. It is believed that the Supply Chain 4.0 will help in achieving the following: • Operational effectiveness • Transform the supply chain • Leverage the emerging and advanced supply chain business • Introducing new supply chain models
Digital Supply Chain & Risks It is seen that the introduction of new technologies like blockchain, IoT, machine learning, etc., can help to transform the existing supply chain into the digital supply chain. Transforming the supply chain will require making every process to be managed digitally.
Supply Chain 1960s
Supply Chain 1980s
Supply Chain 2000s
Supply Chain 4.0
The earlier supply chain was segmented into a lot of different parts. Some of them were: • Warehousing • Packaging • Inventory • Transportation • Order Processing • Forecasting • Planning
Later some of these parts were grouped so that the complexity of the supply chain may decrease as most of them were inter-related and could be handled by only a single department. E.g. • Distribution Sector • Warehousing • Materials Management
Later the supply chain was comprised of Logistics.
With introduction of automation, IoT, and blockchain which led to Industry 4.0, the supply chain was also transformed into the Digital Supply chain or Supply Chain 4.0
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The popular subject called Supply Chain Management was introduced
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This can happen by using digital technologies, which will further require using robotics, sensors, and automated solutions that will regulate most of the tasks. The operators and the workforce will handle all this transformation. Cybersecurity is one of the crucial things to be taken into consideration if the supply chain is to be digitally transformed. Third-party can hinder the performance of a company’s supply chain through malware, worms, etc.
Conclusion Digital Supply Chain/Supply Chain 4.0 is about managing the supply chain in a new manner, which is promisingly effective and helps in ensuring an efficient supply chain. It is seen that mostly the capability of the company and the environment of its operation will lead to a better outcome when they adopt Supply Chain 4.0. 4.0 will eventually make the organization fast, efficient, and flexible, and along with that, the focus should also be on minimizing risks that are accompanied by it.
References: 1. “What is Digital Supply Chain Management?”, Kim Johnson, Bit Sight, January 29, 2019 2. “Understanding Supply Chain 4.0 and its potential impact on global value chains”, Michael J. Ferrantino (World Bank Group) and Emine Elcin Koten (World Bank Group), Technological innovation, supply chain trade, and workers in a globalized world, GVC_dev_report_2019
Did you know about the Origin of Operations Research Operations Research as a field came into the existence during the Second World War when the US army joined hands with Britain’s army in an attempt to derail the German onslaught. Later on, it emerged as an important means of assisting civilian and military leaders in making scientifically sound improvements in the design and performance of weapons and equipment. OR techniques were soon extended to address questions of tactics and strategy during the war and, after the war, to matters of high-level political and economic policy.
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ROLE OF INDUSTRY 4.0 IN DISASTER MANAGEMENT With increasing technological innovation, the role of supply chain assumes greater significance than ever before. Supply chains need to be more agile and more responsive in the face of new challenges. Only then, a genuine end-to-end supply chain visibility can be achieved. Business experts believe that Industry 4.0 can play a significant role in dealing with disaster.
About the Author Sameer Ranjan Das is a 1st-year student who is pursuing his fulltime MBA in General Management from the Department of Management Studies, IIT Delhi. His primary interest lies in Operations Management and Consulting. He is also an active member of the Operations Club. Before that, he was employed with Tata Consultancy Services Ltd as an Assistant System Engineer.
Understanding the digital supply chain According to Hans-Georg Kaltenbrunner, VP of Industry Strategy for Manufacturing, EMEA at JDA software, the digital supply chain extends the scope of traditional supply chains. It involves the Internet of Things, devices, track and trace of goods, data sources, big data, etc. And then, one has to derive the meaning out of these data in the context of business and supply chain. The vast amount of information makes it challenging to filter out the essential data from the noise. As far as supply chain visibility is concerned, Kaltenbrunner believes that things have become more dynamic now. A potential disruption can be anticipated nowadays due to increased visibility and counter-measures can be taken accordingly if needed. Industry 4.0 Industry 4.0 will enable flexibility and agility with the digital supply chain. Kaltenbrunner gives an example of a piece of metal that will eventually turn into a car body or a part of a car body. That piece of metal can negotiate its way through the factory and find the operation center that can do the job required. The piece of metal will tell a robot about the car model it is supposed to become and the subsequent operation that needs to be done. On the transportation side, metal sheets are formed into the right shape for that particular car model, and then the metal negotiates with the truck or lorry or vessel or air freighter and tells them about its destination and asks if there is a better option. The whole supply chain then eventually becomes self-steering and self-optimizing. Even though it has some similarities with Swarm Thinking, Industry 4.0 shifts this process from mass production to a position of ultimate flexibility where everything can be different.
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Tapishnu Samanta is currently pursuing his full-time MBA in General Management from the Department of Management Studies, IIT Delhi. He is currently in 1st year and is a member of the Operations Club. Prior to that, he was employed with Tata Consultancy Services Ltd as a System Engineer.
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Dealing with disasters Real-time visibility will help in coping with disasters. The three main areas to consider here are: preparing for a natural disaster, predicting it, and then managing risk within the supply chain. JDA, along with its partner TransVoyant, uses advanced analytics on real-time big data curated from sensors, radar, smartphones, satellites, GPS, video cameras, and other devices to produce live and predictive insights to transform supply chain performance. Data streams are provided by TransVoyant. Owing to its knowledge of where things ought to be, JDA can steer the operator or logistics planner towards those things. JDA uses predictive mechanisms and algorithms to predict possible interruptions affecting any particular shipment. One can
predict storms that could potentially disrupt the harbor operation or the supply to a specific factory. Accordingly, the vessel can be redirected to a different port. Possessing such critical information will lead to a more intelligent supply chain. Early visibility of potential disruptions will allow businesses and organizations to plan production and distribution more effectively. Kaltenbrunner acknowledges that the magnitude of available information is more than ever before. New technologies such as machine learning and AI will be able to pick up a particular event and suggest what the best reaction towards any situation should be. We can then take precautions in preparing the most likely course of action, and the operation needed to approve the action will be just one simple click.
Reference 1. 2.
The Impact of Industry 4.0, Future Trends and dealing with Natural Disasters (2018). Retrieved 15 April 2018, from https://www.supplychaindigital.com/technology/feature-impact-industry-40-future-trendsand-dealing-natural-disasters
Did you know that Strategic, Tactical and Operational are the three major types of forecasts used by business organizations? Organizations use Strategic Forecasting to support decisions about their future business and marketing strategy. Strategic forecasting uses historical data on sales of a product or service, and makes predictions about the trend of future sales to create an estimate of future demand. The goal of tactical forecasting is to estimate demand in the relatively short term â€“ a few weeks or months. They are used to ensure that customer lead time expectations and other criteria related to the availability of products and services are met. Operational Forecasting is a short-term forecasting at a detailed level used to drive production scheduling, transfer of goods in the distribution network, procurement of materials required to meet schedules, etc.
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Dristikone 1.1 Zuckerberg: Guilty or Innocent Problem Statement: Facebook CEO Mark Zuckerberg was scolded US President and the members of Congress and was asked questions related to Data Privacy, Facebook’s future and transparency in political advertisements. One of the most outspoken critics of Facebook, Senator Josh Hawley was also present at the meeting. He tweeted challenging Zuckerberg to do two things to show FB is serious about bias, privacy and competition, first was to sell WhatsApp and Instagram and second was to submit to an independent, third party audit on censorship. Many senators suggested that Zuckerberg should be jailed for violating privacy. So, the question is “Do you agree with them?”. #Your Opinion The Winner Solution: Facebook has over 500 million active users. It is currently the most successful venture in personal marketing space that makes Mark Zuckerberg a business tycoon. It had a revenue of $55 billion and a net income of $22 billion in 2018. The Cambridge Analytica case was a major political scandal in early 2018 when it was revealed that Cambridge Analytica had harvested the personal data of millions of peoples' Facebook profiles without their consent and used it for political advertising purposes. On the backdrop of the Cambridge Analytica Scandal, Mark was called to testify before the congress and was scrutinized by the senators over issues related to data privacy of user. During the testimony, Mark Zuckerberg publicly apologized for the breach of private data: “It was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here.” So, should he be held responsible for the allegations raised on him and should he be jailed for violating privacy of the users? Facebook’s claims: Despite several accusations, there are several instances that proves that Facebook’s vision is privacy focused. Along with that it can be observed that despite several cases and campaigns against Facebook, it has not observed any major fall off which is the evidence of people’s trust in the company. Development of WhatsApp after acquisition is such that shows Facebook is very serious about privacy, where it focused on the most fundamental and private use case i.e. messaging and make it as secure as possible. WhatsApp’s platform is built around the principles like Private Interactions (provides confidence that no one else can access what a user share), End to End Encryption, Reducing Permanence and Safety. Facebook is also 30 | P a g e
accused of being a Monopoly among other allegations, but the certainty is that there are several other popular ways to digitally communicate with friends and to stay connected with people ranging from text to E-mail. An average American uses 8 different apps to do so. Also from recent communications from CEO Mark Zuckerberg, it is evident that Facebook believes that the future of Communication is going to be private and therefore, the company is committed to develop the platforms where people can be assured what they say to one another stays protected and their messages and content won't be shared without their proper permissions. Allegations: At times, Facebook is continuously surrounded with several allegations regarding privacy breach, which became the reason of its defamation. Some of the major allegations on Facebook and Mark Zuckerberg were: In April 2018, Facebook was alleged on giving control to personal information to Mark Zuckerberg and other officials, that was not available to the normal users. Later The New York times in their report, dated 3rd June 2018, exposed data sharing partnerships between Facebook and mobile device manufacturers like Apple, Samsung etc, under which Facebook was sharing personal information of the user and their Facebook friends, even if the users have configured their privacy settings otherwise. Adding to list, according to a CNBC report published on July 2018, A privacy loophole was discovered due to which a chrome plugin, “Grouply.io” was able to allow the users to access the list of members for private FB groups. As a result of these exposures, daily active user counts for Facebook had fallen in Europe, and growth had stagnated in US and Canada. Next
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day, Market value of Facebook dropped by $120 billion, or 19%, as shown in Graph . Joseph Chancellor, co-director of Global Science Research was no longer employed by Facebook, as indicated by a spokesperson on September 2018. Chancellor’s firm improperly provided user data to Cambridge Analytica which later exposed Facebook. Special data sharing agreements of Facebook were also reported by The New York Times. These agreements exempted its business partners from its usual privacy rules and allowed them to access data including friend lists and private messages. It was claimed by FB that it was not done without the user consent.
Our Take: On July 12, 2019, a media report said that The US Federal Trade Commission imposed a fine of about $5 billion on Facebook over its probe into Facebook’s privacy violations. It’s the largest FTC fine in the history of the country that represents basically a month of Facebook’s revenue. Despite being the largest, it is a proportionately modest fine for Facebook. It is evident from the fact that Facebook stocks went up after this. [Graph 2] Facebook has been violating the law again and again since its inception. Being a tech giant and having over 500 million active users, such breaches have put the personal information of these users at stake. Acquisitions of WhatsApp and Instagram has increased the amount of data owned by Facebook to much more extent, making the situation more critical. Adding further, no action is observed to be taken by Facebook to avoid further violations. According to us, Facebook should be forced to submit to third party audit on censorship. Based on the results, the amount of fine levied on Facebook should be substantial and a final warning should be given stating that repetition of such activities will result into the imprisonment of Mark Zuckerberg.
Graph 2 References: https://economictimes.indiatimes.com/articles how/70201346.cms?from=mdr&utm_source=co ntentofinterest&utm_medium=text&utm_camp aign=cppst https://finance.yahoo.com/chart/FB https://www.techrepublic.com/googleamp/article/facebook-data-privacy-scandal-acheat-sheet/
Sarthak Gupta 31 | P a g e
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Opurent, the Operations Magazine of DMS IIT Delhi with contributions from ISCEA Mentors Dr. Girish Joshi and Mr. Balpreet Singh
Published on Jan 16, 2020
Opurent, the Operations Magazine of DMS IIT Delhi with contributions from ISCEA Mentors Dr. Girish Joshi and Mr. Balpreet Singh