OPSESSION
Volume 2|Issue 5
4
Cover Story: Omnichain: The Futuristic Approach
Foxconn’s India Move: It’s Impact on Electronics Manufacturing Sector
____ X-Ops conducts Aarohan
Opsession October Issue This is the fifth issue from volume two of Opsession, the monthly newsletter of X-Ops. The newsletter was introduced last year by X-Ops with the intention of covering all the activities and events that took place during the span of a month.
Around the World with Operations Management
Xavier Institute of Management, Bhubaneswar Volume#2
OPSESSION | Volume 2 | Issue 5
2
Around the world with Operations and Supply Chain Management Amazing
Logistics
of
Amazon
With the "Great Indian Festival" analysts say e-commerce firms in India could make as much as a quarter of their annual sales during this period, with the global experience, logistics network and deep pockets of Amazon putting it in a good position to grab customers from local market leader Flipkart and smaller firm Snapdeal. Amazon’s India website was now ranked the 6th most visited website locally Amazon offered shoppers nextmorning delivery for late-night orders and the chance to win a kg (35 ounces) of gold every day for five days in a country that is a voracious consumer of the precious metal.
GM recalls cars over fire risk General Motors issued a recall for 1.4 million older cars in North America over the risk that they could catch fire from leaking oil that led to about 124 deaths. The recall, the third for the same problem, covers cars with 3.8-liter V6 engines from the model years 1997-2004,
and includes the Pontiac Grand Prix; the Chevrolet Impala, Lumina and Monte Carlo; the Oldsmobile Intrigue and the Buick Regal.
Walmart to reduce SKU Walmart's stock fell 10% in a single day and is on pace for its worst year since 1973. So, Walmart is already on cost cutting spree .It will open 135-155 new US stores next year, well down from most years. But it also now has its sights on reducing inventory levels and complexity. The retail giant has already cut back on the number of in-store displays it manages by about 15% over the past year. The number of SKUs in the average Walmart supercenter is also down from about 2500 to around 120,000, with much additional pruning yet to come.
Flipkart eyes national logistic network Realising that logistics being the major differentiating factor, Flipkart is planning to invest about $2.5 bn over the next few years to establish a countrywide network of back-end infrastructure. It has formally opened its biggest warehouse, spanning 220,000 sq. ft., near Hyderabad. With a capacity to process 120,000 units a day, it is the company’s first automated fulfilment centre. The fulfilment centre will have automated sorters with the ability to separate shipments based on pin-codes.
Walmart to go the Amazon way with drone delivery In order to establish a more efficient connection between the network of stores and distribution centers, Walmart is seeking the help of drone delivery. It has sought the permission of the Federal Aviation Administration in US to test the drone delivery model for home delivery and connecting the distribution centers with its stores. With this move, it is set to join the likes of Amazon and Google who have tested this model and are waiting for the widespread commercialization of this model. If approved, drone delivery is definitely poised to bring a radical change in the way supply chains function.
OPSESSION
Volume 2|Issue 5
4
Omnichain – The Futuristic Approach
T
he priority of manufacturers today is, undoubtedly, the customer. The biggest contributor to this customer-centric approach is the ever increasing complex environment of doing business. Companies need to meet the standard expected by their customers in all the aspects may it be quality of product, speed of delivery or availability? At the manufacturing end, the supply chain maintains both – intricacy and a reach throughout the globe that is layered with multiple partners. To meet the demands of the customers consistently, accessing the visibility and exerting control over the supply chain is imperative. The issue that manufacturers are hindered with is restriction from gaining benefits of total control and transparency in their realtime supply chain management systems. Thus the organizations may not be getting a complete and accurate picture of what goes on in the data the supply chain generates from, which they can forecast and make long and short-term plans. A solution to this impediment is omnichain, which helps the manufacturers in re-imagining the supply chain. As a substitute to the union of different links, omnichain is a single cloudbased solution built upon a data set, unified and fully integrated that brings together all the processes of the supply chain immaterial of where they occur. Omnichain will provide all the interested parties access to the processes within the entire supply chain, dispensing relevant real-time data to all the stakeholders. The omnichain is a chain that can coordinate various demands by being able to identify all the components individually within the location and manage them with a differentiated approach.
Since cloud based applications are agile, flexible and scalable at their core, they are suited for supporting the omnichain. Cloud applications are easily customizable. Software-as-a-service (SAAS) supply chain management applications have begun to achieve functional parity with the on premise SCM software. As per Gartner, cloud application services supply chain management market is growing at a CAGR of 18.1% and is about to be a 4.2 billion market. Manufacturers implementing the cloud enabled omnichain have their own reasons. The following are some of the benefits provided by this technology:
Reliable, single data truth source: The omnichain provides the manufacturers with accurate real time data. Flexibility in using data: The omnichain supply processes can be tailored according to the needs of the individual company rather than establishing a new process from the scratch. Complete control irrespective of location: Omnichain enables the manufacturers to manage the supply chain operations without having to worry about the locations. With the manufacturers and suppliers working more closely with more information being shared, third
party logistics providers and other partners are becoming a virtual part of the manufacturers’ organization. Impetus for innovation: Since manufacturers in this competitive environment need to stay one step ahead, continuous improvement in technology is a requisite. Omnichain provides this flexibility by customizing the supply chain. Manufacturers can change the business model and focus on the ondemand need and vogue technologies.
Omnichain is a single cloud-based solution built upon a data set, unified and fully integrated that brings together all the processes of the supply chain immaterial of where they occur.
Adopting an omnichain approach empowers the manufactures to be proactive rather than being reactive to small as well as large scale changes. We live in a world with access to relevant real-time information from anywhere at any time. We should be able to apply this idea in manufacturing as well. An omnichain gives us this license.
OPSESSION
Volume 2|Issue 5
4
FOXCONN’S INDIA MOVE: IT’S IMPACT ON THE ELECTRONICS MANUFACTURING SECTOR
A
fter losing the edge in large scale electronics contract manufacturing to China, India is planning to capture this segment through a number of initiatives such as the Make in India campaign. These efforts seem to have paid off and India is about to emerge as the next big destination for OEMs looking for a low cost high skilled production centre in order to gain a competitive advantage over their rivals. Foxconn, the largest contract Foxconn, with revenue of more than $100 seems to fit the bill. Other factors that manufacturer of electronic goods, is the billion annually, can definitely emerge as may contribute to this change are latest company that has shown interest one of the biggest manufacturers and increased focus on production in investing heavily in the manufacturing employers in India. Foxconn endorsing diversification in order to avoid systemic sector in India. The company is planning India as the biggest manufacturing risks, poor intellectual property rights in to set up 12 new factories in India as centre will create a ripple effect in the China, and recent focus by the Chinese stated by the company chairman Mr. entire electronics supply chain. Government on local enterprises. Terry Guo in his recent visit to India. He also stated his belief With its large middle class in India’s potential in the population, emerging and The company is planning to set up 12 new factories in India manufacturing sector. well educated youth India is as stated by the company chairman Mr. Terry Guo in his Furthermore, he also poised to become not just a recent visit to India. He also stated his belief in India’s promised to invest in Indian competitive manufacturer potential in the manufacturing sector. technology startups. but also an influential Foxconn, with revenue of more than $100 billion annually, consumer. The long promised can definitely emerge as one of the biggest manufacturers Foxconn being the largest reforms in government rules and employers in India. manufacturer in its category and regulations are finally will surely cause a ripple taking shape under the able effect that will lead to the leadership of Prime Minister entry of other players in its Narendra Modi. But this does Without the support of large OEMs such supply chain such as semiconductor not mean that India will replace China in as Foxconn it will be difficult for India to suppliers and other component vendors. the near future because of the former’s succeed in the electronics manufacturing Also, Foxconn’s strategy to source locally command on the entire electronics sector. In the first wave of contract will surely give a boost to the local supply chain. What India can become in manufacturing the developed world gave manufacturers as they can help the the short run is another major alternative India a pass for China and other smaller company in reducing its production costs in low cost electronics manufacturing Asian countries. This situation may be substantially. After all, it was competitive sector. about to change. With labor costs rising pricing that made Foxconn the top choice in these countries OEMs in the EMS for clients such as Apple, Amazon and sector are actively looking for low cost Acer. production centers and this time India
OPSESSION | Volume 2 | Issue 5
5
Aarohan – Rise from the Shadows 2015 “Don’t Limit your Challenges, Challenge your Limits”. X-Ops, the operations committee of Xavier Institute of Management has always assayed for better learning opportunities’ for students and encouraging them to tax their brains. X-Ops recently conducted its flagship case study based event ‘Aarohan 2015’ challenging the budding business minds at XIMB. Aarohan is a multiround event that tests the analytical and problem solving skills of the participant and at the same time gives them a taste of the real world problems in operations management. Aarohan aims at inciting the astuteness of the participants. Aarohan is an intracollege case based event for the 1st years alone that stimulates their interest in operations management. It exposes the students to methods of analytical case based approach for problem solving. When the students were yet to get into the groove of XIMB, Aarohan prelims was conducted on July 12. The event required a two member team .The first round of the event was an online quiz which was based on general knowledge and current affairs with no negative marking. It was
miscellanea of questions on leading companies from retail and entertainment
The event was judged by the esteemed members of faculty of XIMB. The first round was a surprise Treasure Hunt that the participants enjoyed it a lot. All the six teams showed great enthusiasm in the fun filled event which lasted for around 2 hours.
industry, major sports events and important personalities of India and world. The event attracted a large number of participants, more than 200 students. There was intense competition. It boiled down to final top six teams, who proceeded to the second round. The teams were OpsCops, Kaizen, X-Cats, MaxOps, The Linchpins and Cyclops. The final round was more exciting and brain wrecking .It was conducted on 11th, October. It had two subsequent rounds.
The second and final round involved a case study on operations management. It was required by the teams to provide solutions to a simulated business case. The solutions were presented before a panel of esteemed judges. The case study was based on contemporary issues and challenges pertaining to operations and supply chain management. The six teams were judged on their analytical and problem solving skills. The teams awarded were the ones with unique and feasible solution. The participating teams of ‘Aarohan 2015’ were evaluated based on their performance in the treasure hunt and case study round. With yet another successful event like Aarohan 2015, XOps has added another feather to its cap in its endeavour to promote interest in Operations Management among the students at XIMB through exciting events.
OPSESSION | Volume 2 | Issue 5
6
Editorial Board: EDITOR:
ABINASH MALLICK
DESIGN:
ABHINEET SUDHENDRA PUNYASLOK GURU
COORDINATOR: P H PRUDHVI
TEAM:
Opsession Monthly
XIM, Bhubaneswar
ANUJA VERMA RAKSHA ARYA SAMPAT PADHI DIVYA PRAKASH SWETA DAS