| | reyansh | | DMS IIT Delhi
ISSUE 01 January 2012
this issue Untapped fortune in rural India P.2 Money: It’s still black & white P.3 Viral marketing P.4 World In Motion P.4 Spirituality & Management P.5 Cricket Ka Kurukshetra P.5 The Modern Supply Chains P.6 The Making of Parivartan P.7
Message from the H.O.D
the ray of light
The sun, the moon and the rain, they all remind us of someone, someone who binds us all, who runs around us as an invisible force and envelopes us together. Yes, I talk about mother nature, which gives me the light and the energy to move forward. I strive to learn more and explore the hidden terrains of not only the world but also my mind. I believe in experiencing everything by myself, I believe in touching all the milestones and I also believe in tasting all the spices. I have emerged from the sinking suns and I have dived in the rising oceans. My experience has been growing and I like it to grow, this is my strength, the hidden key to my will to explore the terra incognita. I like challenges, I like them not because they are fun but they give me the chance to test myself with the very laws that define nature. My mortal existence runs through various spheres of life, it lives in forms so many and colors so plenty. I change forms and I change them frequently, I can be serious yet I would shower fun, I can be daring and yet I would be humble, I can be working yet I would have the jovial quotient in me. I take lessons in defeat and I take criticism in victory. I come from various parts of the country, but yet all my forms are similar in nature, they are always connected, they are always bonded. I speak different languages but I communicate the same thing. Who am I? I am the urge to learn, the crave to know and the curiosity to explore.
It gives me immense pleasure to present to you the first-ever edition of the e-Mouthpiece of Management Systems Society ‘Reyansh’ on the occasion of its annual Management Festival, Parivartan'12. DMS has always had students from varied backgrounds who brought their own set of knowledge and experiences and hence, here the learning happens as much outside the classrooms as inside. Reyansh would be the perfect avenue to bring these perspectives on a common platform. The name Reyansh symbolizes a ray of light, and also personifies the dissemination of knowledge and learning. The first issue of Reyansh features the Students' Speak on contemporary management issues, words of industry know-how from the alumni as well as other contributions. I sincerely hope that ‘Reyansh’ spreads the rays of knowledge to the farthest ends of the planet in an inclusive manner. I wish all success to this effort of our students. Prof. Sudhir K. Jain
Untapped fortune in rural India Sajal Agarwal MBA FT 2013 FMCG sector in rural areas is expected to grow by 40% as against 25% in urban areas. Maruti Suzuki generates 10% of its sales from rural sales, amounting to 32,000 cars. The rural retail market is currently estimated at $112 billion, or around 40% of the $280 billion retail market. The success story of ‘bottom of the pyramid’ theory reminds me of the story of the honest, hardworking farmer which was wooed simultaneously by the angel and the devil. The angel gave the farmer a loving and caring wife and the devil gave him wine. Obviously, a caring wife was no match for wine. I am not suggesting that the Indian consumer goods industry is any devil but the Indian rural consumers have certainly tasted wine. They can buy this wine mainly because now, more than ever they have cash at their disposal. Due to the recent government measures like waiver of loans, national rural employment guarantee scheme and increasing minimum support price, disposable income in rural India has been rapidly increasing. The 66th round of the National Sample Survey showed that monthly per capita expenditure (MPCE) in rural India was Rs 953.05 (US$ 20.69) in 2009-10, an increase of 64.6 per cent from 2004-05. In a game where stakes involve cashing in on the 70% of the population of India, reaching there first is everything and companies have realized this across industries. Companies are employing innovative strategies like HUL’s Project Shakti in which 45,000 Ammas cover 100,000+ villages across 15 states reaching 3 million homes to milk the consumers at the ‘bottom of the pyramid’. DCM Shriram Consolidated Limited (DSCL), which operates 270 stores of Hariyali Kisaan Bazaar (one of the largest national rural retail chains of India), plans to open 20 more outlets by the end of 2011 and ITC’s ‘Chaupal Sagar’ offers huge variety of FMCG products in villages. The race is not limited to the brutally competitive FMCG sector. Mobile handset companies like Micromax, Lawow and G'Five
are dolling out cheap handsets while Tata and MTS battle it out for the price sensitive rural market share. Hyundai Motors plans to have 1000 rural outlets selling cheaper smaller cars. Indian banks are also using tactics like Mobile ATMs just to increase their presence in rural India and with RBI putting up tough conditions on new entrants in the banking industry which includes mandatory operations in rural areas, the credit flow will increase and with that the purchasing power of rural consumers. It is not as though that the rural markets are an easy piece of cake to bite into, it has a plethora of problems associated with it like poor infrastructure, dispersed settlements, lack of education and a virtually non-existent medium for communication. Furthermore, retailers cannot be present in all the centers as many of them are so small that it makes them economically unfeasible. Also the attitude of rural consumers is vastly different in the sense that they have a product price mapping firmly etched in their psyche. For example, the rural consumer will not hesitate to buy a washing machine worth INR 8,000 but there is practically no chance that he will spend the same amount on a wrist watch. In other words, brands are still irrelevant to the rural consumer. For him, the retailer is the brand. The rural consumer buys a product of a retailer rather than of a company or a brand. The biggest challenge in front of companies is to instill brand loyalty among rural consumers and this will be the next big game changer. Still rural India seems to be the place to be at the moment. As internet penetrates the rural India and the rural consumer becomes more aware and aspirational it will be very hard for them to reject the lure of powerful brands. The devil is here and the wine will slowly start filtering down and then there will be the realization of the fortune at the ‘bottom of the pyramid’.
The tracks ain’t that beautiful I am a very big fan of this guy called Aldous Huxley. He wrote something about travelling being a waste of time, money and energy. One doesn’t find guys or articles like this. Believe me, if you happen to meet me, you will have the other person whose views resonate with Huxley's. I hate travelling. I hate it and I am never ashamed to admit it. It is not that I don’t like visiting different places and getting lost in the beauty. I just hate commuting to that place and packing all my stuff just for a small tryst with so called beauty. People like it because I think they have a good amount of practice in talking to themselves or getting lost in deep thoughts and imagining their future which might be what they are looking for. Well in that case I am not the kind. Some like reading, some like listening to music, but admit it, it is just a way to kill time while one travels. And I am not blaming it on the mode of long distance transport. Train, bus and the metallic bird, all are culprits. And to the reader who is reading this piece of mine I present thou my points of justification. You waste time in travelling. You will be exhausted even if you visit a utopia of your imagination. Home will be sweetest, at the end. Crowded buses, waitlisted tickets, airport check-ins and bad food, aren’t these the real pictures of your travelling? P.S: This idea popped out in my mind because of my playlist - Highway to hell and last train home, back to back. -Pranav Baj MBA FT 2013
Whilst Art Thou Far Nishant Kumar MBA FT 2013 Whilst thou art far from my lone painful heart, Time doth dilate in its lengthy wheeling cart.
Money: It’s still Black & White
The joys of a spring elate me no more, The flowers, the wind, the grains, all sour. By Amit Rander MBA FT 2012
Black Money can almost be called (TERMED)
begging for tax-payers money. But, the In-
the Achilles-heel of the Indian economy as it
dian banking system, although not shielded
has been a thorn in its growth for the past 3
clean, was somewhat averse to the crisis.
decades. Although the exact amount cannot
The credit for the same has been given to
be verified, it has been estimated to the
conservative norms of the RBI. Did the huge
tune of $600bn - $1.4tn for the year ending
parallel economy of black money have any
December 2010. A research done by Global
role to play in it? In my personal opinion, the
Financial Integrity, a Washington-based anti-
huge quantum of black money could be
corruption watchdog, concluded that the
looked upon as a growth opportunity in our
size of India’s black money economy was
current state. As of September 2011, India
nearly half its gross domestic product
had an external debt of $326.6bn. Assuming
($600bn). It analyzed data to suggest that
the mean of the estimates, at least $1tn of
72% of the illicit money generated in India
our money is unaccounted. If the govern-
since independence had been stashed
ment can recover the normal tax amount i.e.
abroad. But the rest, a staggering $180bn is
$333bn, we can easily become debt free. But
still in India, mostly in real estate.
the question is that even if we manage to
The days art not bright Darkest is the night, Water quencheth my throat Not the thirst of my sight. Dreaded more my dreams art so whence, layeth a man in the shadow of thy hair, Playeth with thy curls, the rose of thy lips.
My dreams art not true, My dreams art not fair. Whilst thou art near my cheerful lively heart, The clock rip-eth away past and present apart.
bring back THE BLACK do we have a system Real Estate has been a reserved parking lot
to ensure that it is optimally utilized.
for most of the illicit money generated in the country. And everyone amongst us who has ever been involved in the purchase or sale of anything remotely related to land has experienced that. However much we loathe the dark side of black money, the fact remains that we all have sometimes used it as a means to achieve the desired end. The Great Recession gave us a chance to view the impact of black money in the system from a different perspective. The seed behind the Global Recession of 2007-09 (In fact it is still far from over) was the real estate bubble in the US. The crash in the property prices in 2007 snowballed into a huge credit crisis which left the bigwigs of the US banking system either bankrupt or
Fortnight Numero Uno @ DMS, IIT Delhi I set my first foot on the campus a good two days before the orientation . A huge campus with the plethora of facilities that it has to offer to the students while their academic wings are still sprouting lured us into having more than one look around. Fast forward a couple of days to the act where we were sitting in the department appreciating the calmness unaware of the fact that it was only the silence before the storm. ‘Welcome to DMS!’ - These words from the wisest wazir marked the beginning of the Induction program, a new dark age which bestowed plenty of sleepless nights & fat fines upon one & all. Assignments & then penalty assignments made life seem extraordinarily tough. But as they say, ‘Life’s sweet while it’s tough’. We had some of the finest experiences of all time during this period. Creative exercises like ‘Street Selling’ & ‘Treasure hunt’ brought out the best in the students. Again, it was here that we learnt effective usage of a number of quintessential management tools like PowerPoint & Excel. A fruitful interaction with the seniors & our batch mates was also facilitated by this meticulously worked out plan which did do a world of good to everyone. To sum it all I am going to cherish the first two weeks at this illustrious institute for the rest of my life for all that it had to offer-the immaculate knowledge, the indelible experiences & the boundless fun! - Ayshwar Pandey MBA FT 2013
Viral Marketing – Of, For and By the people Adithya Rajaraman MBA FT 2013 In a world trending; individualism over collectivist ideology, social networking and the advent of mobile technologies have kept humans physically apart, yet virtually together. While there is seen the need and search to create one’s own identity, we have also felt the need to find like-minded people whoever they maybe. This is what information and communication technologies have enabled today. A (digital) world which is literally a stage for any and everyone to put on display, to critique and to observe (information) ideas, emotions, activities and thoughts through (mainly) words, pictures and videos. Common MBA lore validates through both common sense and research that word of mouth is the most effective channel of advertising. The match point of social media is that it offers a plausible word of mouth media virtually free of cost (pun intended). If I were to suggest that cost was the major factor for its fame amongst marketers in the recent years, I would be fooling myself into believing that companies are actually cutting their marketing budgets. Yes Social media is the new Godsend, but it still has all the challenges in unleashing a successful word of mouth campaign. "Viral marketing" is not a strategy, but a wish. Something goes "Viral", largely by people choice and not by design. The positive or negative outcome is completely not in the marketer’s control. Hence the logical conclusion: "Social" / "People" are the more important part of Social media marketing. Identify people (opinion makers) with enough say on the web and make them sing your song for you. This is done by hiring people or by inviting them for "special" product demos/previews. These methods though undoubtedly effective, have some very serious pitfalls in the social sense. If an "opinion" maker is seen as a "paid" promoter of a brand, he loses his credibility as an expert with a probable backlash on your brand. The issue with e-writers, reporters
even bloggers, is that they are journalists. There is the advantage of the target group of readers and spillover reach of their writings into e-social circles, but there is no “direct” viral marketing. As a proponent of electronic social networks, I see 2 types of popular shares: One with good content and another with significant personal information of the sharing user. The most "liked" or “socially" promoted happen to be a hybrid of the two. These posts are also rare because of the low probability of simultaneous occurrence of "good content", "personal information" and "technical skill” required to shape the content into a social acceptable format. I see however, that there is an opportunity here for marketers to make use of this deficiency and bridge the gaps by investing to make up for the deficiencies in return for brand association. Let’s look at some numbers, if we were to achieve close to 10000 “postable” interactions through our road shows etc which are shared by the respective customers who have an average of 50 unique contacts each, we would have over 5 Lakh direct audience not counting re-shares and comments. This form of social media marketing is designed on 3 pillar initiatives: Pre-designed nonelectronic content, powerful expert editing, & easy access for the customer to the edited individual content on an electronic platform/ web site. The primary task here is giving the brand promoted as much quality airtime as the customer. We star customers in creative content linked to our brand through real world interactions and give them access to our content online thereby promoting themselves and our brand to the world. Statistically there are bound to be videos that go viral within macro groups though not with the kind of efficiency that is aimed at by companies presently.
World In Motion With more than 70 million vehicles sold last year, Automobile Industry is one of the key Industries in the world. The most essential domain for this industry is in its operational processes. Operations management in Automobile industry covers almost 80% of the industry’s functions. It includes a Production team, Process Engineering team, Quality Team and SCM team. Even though the operational process looks like an interior function, it also requires market knowledge for demand forecasting and supply planning which plays an important role in controlling inventory. These operational functions are supported by other verticals like Marketing, Finance and HR. Operations in Automobile industry can be broadly attributed to two ways of thinking one of Western and Japanese. They have a contradicting approach of which neither one can be selected as the best. But the new concern area for Automobile industry is Environmental factor. Considered as one of the major causes of air pollution, Automobile emission laws are becoming more and more stringent which increases the demand for technology to reduce emissions from vehicles. As per reports, Automobile industry sales are expected to grow in double digit for next coming years. So for any industries or operation managers, auto industries provide a platform for observing the best available operation practices. - Dharun Prasad R, MBA FT 2013
Spirituality and Management Sanjay Anand MBA FT 1997 Are spirituality and management at odds with each other? Does a spiritual outlook and method aid or enhance managerial performance? These are typical questions that come to mind when we are exploring this confluence. As a practicing business owner, manager and an Art of Living teacher, I can go as far as saying that bringing spiritual principles into management are in fact taking management principles to their greatest height.
Organizations are also sometimes tied down by the need to justify such programs in ROI terms. It is indeed difficult to show a clear cut ROI on programs such as these. Research on organizational productivity through adoption of spiritual techniques is inadequate and these programs are, by their very nature, long term. However, feedback from participants from previous courses and tracking their effectiveness as individuals can go a long way in assuaging these concerns.
Do you require a calm and clear mind for making effective decisions? Does one require high energy levels for better management? Does taking more responsibility at the individual level make you a better manager? Do better working relationships aid in making organizations more effective? Do lower ego levels demonstrated too often by powerful managers help or retard organizations?
There is also sometimes a lack of sensitivity to corporate needs on the part of the spiritual organizations which do not have structured teams with adequate exposure to the corporate environment. To address this issue, within the Art of Living movement, there is an APEX program to look after inculcation of spiritual and human values for the corporate sector, A Government Executive program for the government area and a SME program to look after the needs of India’s huge small and medium sector. There are special courses structured specifically for the areas. Delivery is handled by specialist faculty who has deep understanding of the needs of these sectors. Other well known organizations are moving towards specialized corporate courses, but there is a lot still to be done .
The answers to these questions are, in most cases, obvious. Hence it becomes clear that inculcation of spiritual values and techniques which greatly assist in the above mentioned areas can be of help in improving organizations and taking managerial effectiveness to an entirely different level. The question then becomes: why are organizations still going slow in adopting any of the many paths available for standardizing across organizations? The answers are many and some of them have validity. For example, there is still a strong concern about not being seen as propagating a single religion and / or belief system. The very controversy associated with religious thought sometimes acts as a barrier for organizations exploring what is, to a large extent, still uncharted territory. e.g. A large IT organization has explicitly banned professional development courses form any spiritual organization headed by a spiritual Guru. This greatly reduces the opportunities for gaining from the breadth of such knowledge.
To sum up, bringing spiritual values into organizations is of the utmost essence for broad performance improvement in organizations. The growing acceptance of spirituality in modern society presents a unique opportunity for business and other organizations to take advantage of this huge productivity enhancement technique. Future leaders will be those who quickly understand this unique opportunity and take full advantage of the same. A deeper partnership between commercial organizations and organizations with a strong core of spiritual knowledge is the burning need of the hour. The benefits in both profitability and in human terms across Industry can be incalculable.
Cricket ka Kurukshetra A tryst with destiny, for a batch in deep slumber. Numb, toiling away, facing the daily grind. A breath of fresh air, an invigorating motivation, for both the heart and the mind. Where friends become foes, and foes become allies; wherein the genuine test of wits and strength lies. Welcome to Cricket ka Kurukshetra. Our very own cricket league where DMSites fight it out on the field. It all starts with a star-studded auction, complete with calculating team owners, sought-after iconic players and quick-witted auctioneers. It is an event in itself, as every new batch goes for all out hunt scrounging for the best talent at the best price. Bidding and faking, spending and raking, notions and tantrums – all against the perfect setting of Hans Zimmer and the heart-pounding beats of drums. A befitting start that sets the mood, and gives us a taste of the brewing storm. So the field is set, and you can come place a bet. With 7 teams up in arms, and an 8 man army each side. Pride and Honor at stake, winning so many hearts isn’t a piece of cake. Here spirits come together and hearts unite, team owners and team members alike. Kurukshetra it is, but we’re a family after all. Though we may seem to forget, when confronted by a bat and ball. A way to belong, an occasion to throng; a heady blood rush, we can rely only on us; a spell binding fray, where we swear and we pray. - Salona Chandna, MBA FT 2013
The Modern Supply Chains Aneesh Dubey MBA FT 2012 The only competitive advantage companies have today is the efficiency of their supply chain. Products are replicable, customers are willing to shift brands, quality is almost a constant – it all boils down to getting your product to the customer when he needs it, before others do. Supply chains have grown global, with raw material coming from one continent, being processed in another to be sold in a third – this only adds to the increasing complexity of customer demand making efficient management of supply parameters imperative. To combat these challenges, supply chains have evolved from standard source-produce-warehouse and sell models to concepts like vendor managed inventories, cross-docking, real time inventory management and lean supply chains. How have supply chains changed? The traditional approach to supply chains earlier used to be based on backward information flow from the distributor to the manufacturer. The distributor, using his experience and market data used to place an order with the manufacturer who from his warehouse fulfilled the order and also put in a new manufacture order to refill the warehouse. The way it happens today is startlingly different. With the sale of a single unit at the retailer, the checkout counter computer updates the distributor’s database who in turn ships the new order to the retailer and at the same time adds the item to its order list, which at a threshold is automatically ordered at the manufacturer. Vendor Managed Inventories VMI is a practice that has evolved fast with retail stores. A traditional large format retailer will at a time have a multitude of products on its shelves, all of which come from different suppliers and producers. In the old format, the retailer was supposed to place orders to refill its shelves but not anymore. The producers and suppliers are taking control of managing their inventory in the store, benefiting both the parties. The retailer just
has to share the sales data with the vendors, which happens real time, and the vendors keep track of inventory levels at the store, decide reorder points and replenish stocks based on their forecasts. Cross-docking The older large warehouse models, as the companies have increasingly realized are costly affairs. And with increasing sizes of product portfolios warehouse management has been becoming complex. This limitation was the progenitor of the Cross-docking warehouse. A warehouse that does not store, it only unpacks repacks and ships. The cross docking centre is a conveniently located facility at the confluence of incoming loads from the suppliers and the outgoing orders to distributors. Full truck loads from suppliers, meant for more than one distributor arrive at the cross-docking centre, where they are unpacked into LTL loads. But the truck is not sent out just with one supplier’s orders, the rest of the truck is filled up with similar LTL loads from other suppliers the distributor ordered from. This solves the basic problem of having LTL deliveries, and it also integrates order fulfillment. Technology Focus Innovative ideas to reduce cost and lead time have been perennial in supply chain management, but a recent technology focus has helped these ideas be implemented faster and much more efficiently. Supply chains are now fully digitized and it is literally possible to track one single bottle of beverage from the point it was manufactured to the moment it was drunk and even further to when the glass bottle got back to processing. In essence, companies today need to evolve every day. The demand for products has never been so varied, and competition never as hard as it is today. It is innovations and methodologies like the ones mentioned that help companies stay abreast with the fast changing, fast consuming world.
When the legs crashed but the heart refreshed I remember a marketing student from an MBA college coming for market research to our home, and my mom curtly replying that she was very busy and had no time. I sympathized with him then and I empathize with him now. As a part of the induction program in DMS, IIT Delhi we were assigned a street selling exercise. The moment we hear the word street selling, we would imagine some neatly dressed guys with tucked-in shirts selling dolls alongside the road. Our task was similar, but in the place of dolls, we had some stationery items from an NGO. We had to sell the stationery, make profit and come back, all under 4 hours. The rules of the game were, not to carry mobile phones and wallets and 100 rupees given for our expenditure. We decided not to use the hundred rupees which were given to us so that we can show more profit. So, no travelling on vehicles, walking all the way, drinking water in shops under the disguise of looking their products and so on were few of our strategies. The brand of IIT D and NGO helped us in selling the products. Imagine the plight of normal salesmen and hawkers who don’t have either of these benefits. A salute to the people of Delhi who bought the products we were selling to contribute their share for charity. - Vadivel Palaniappan, MBA FT 2013
Parivartan ’12 – The making of Kamath Karan MBA FT 2013
As I checked into the Jwalamukhi hostel on a rather cold Delhi afternoon for the second semester, I was greeted by a single batch mate and a passage of locked doors. Not one of the more cheerful welcomes one can get, but quite accidentally I got a gist of the hard work being put in by Team Parivartan. With close to half of the Parivartan organizers residing along that passage way, the fact that Parivartan’12 was round the corner became obvious in the next couple of days. Animated and high decibel discussions, impassioned speeches backing a point of view around 3 am or thereabouts left no illusions about how serious the team was about Parivartan. This passion and commitment was infectious and within a few days I gathered enough courage to enter the hallowed “War room” alias “the inner sanctum” of the Coordinator Sudhanshu Shekhar. The first thing that hits you about the war room is that is reminiscent of a typical battleground. A focused group of men busy trouble shooting, ideating, sending important communications and wounded soldiers (the sleep deprived junta) resting completed the picture. Amidst such chaos, I managed to get hold of Sudhanshu for a little chat to get his perspective on Parivartan’12: Q.1 What is your vision for Parivartan’12? How is it going to be different from previous editions? Ans: We looked at previous editions of Parivartan and realized that it was focused on formal events like case studies and
B – plans. “Corporate Roadies” was one such informal event which garnered good response in the previous edition. Taking a cue from this, we decided that Parivartan’12 would be a management – cum – cultural festival. This time around, we have increased the no. of events from 7 to 12 including informal events like “Nukkad Natak”, “Aadhaar” and “B- School’s Got talent” as well as a photography and Salsa workshop. This will be a more well – rounded festival.
test would be on 28-29th January, the scheduled days for Parivartan’12. If we can pull it off without any glitches, it would be the Parivartan we promised. Q.4 What are your expectations from this edition of Parivartan with regard to outside participation? Ans: Outside participation has increased three fold with participants even from Mumbai, Kharagpur and Bengaluru. People are curious about the workshops being conducted. This year’s DJ night has an international performer who has performed in Bali on behalf of ESPN & is a resident DJ at the Maurya Sheraton, Delhi. The entire Sunday will be a fun day; People will get a flavor of DMS with several extra-curricular and workshops planned for this day. Q.5 What has been the perception of Parivartan’12 inside DMS?
Q.2 What are the most challenging aspects in organizing Parivartan’12? Ans: Sponsorships are a key issue with any festival. With the markets down and corporate not willing to spend too much at this time of the year it was a big challenge. Hence, we focused on more sponsors and smaller sponsorship deals. The IIT Delhi brand name is powerful and it certainly helps convincing top talents to come here and perform. With the Parivartan’12 official website having a huge reach and it being a well-known B-school fest among the MBA circles, companies saw the light of sponsoring Parivartan. Q.3 Are you satisfied with the end result? Ans: I am satisfied with what we have done up to now. However, the true
Ans: Our seniors have appreciated our work. We have had critics about the management – cum – cultural festival concept, but we went ahead with it and are hoping to answer critics with the success of the event.
The Team Pranav Baj, Kushal Agarwal Gadu Sneha, Sajal Agarwal Mayank Sharma, Charu Jha, Ayswar Pandey, Shruti Bathia Kamath Karan, Salona Chandna Richa Chnadra, Bunny Kaur, Darshana Galande, Nitesh Goyal
reyansh ISSUE 01 JAN 2012
Editorial Board Department Of Management Studies Indian Institute Of Technology, Delhi firstname.lastname@example.org