Designing Supply Chains for India

“FDI in Retail” has generated a huge controversy in India.

While retail deals with the direct interface with customers, it is the adoption of healthy integrated supply chain practices that brings gains to all the collaborative partners. B-Schools often showcase examples similar to P&G and Walmart while discussing win-win outcomes for both the partners. The challenge, however, lies in taking these practices beyond organized retail.  It is important to see that these concepts are imbibed by the myriad small players who have various roles in bringing the produce to the consumer by partnering effectively in the supply chain of their choice. The government has a key role in bringing good e-governance mechanisms to help India develop viable domestic supply chains. Some suggestions are presented in this document titled “A Productive Supply Chain for the Sericulture Industry of Orissa” (2008).

Though Indian academics have been trying to bring these concepts to the industry, somewhere there is a misunderstanding with regard to the scope of the subject on Supply Chain Management (SCM). As is often the case, courses such as TQM and SCM are restricted within functional silos. This detracts the students from designing and participating in effective supply chains. Good programs will ensure team-teaching of these concepts to help the upcoming Indian manager in meeting the challenges faced in our domestic sector.

According to one easy-to-understand view often cited in literature, a supply chain is a network of entities that starts with the suppliers’ suppliers and ends with the customers’ customers for production and delivery of goods and services. Further, here is an excerpt from a text book on SCM by Handfield and Nichols (1999).

(Quote) Three major developments in global markets and technologies which have brought SCM to the forefront:

1.       The information revolution

2.       Customer demands in areas of product and service cost, quality, delivery, technology, and cycle time brought about by increased global competition

3.       The emergence of new forms of inter-organizational relationships

[Source: “Introduction to Supply Chain Management” by Robert B. Handfield and Ernest L. Nichols, Jr; Prentice Hall, 1999] (Unquote)

This emphasizes the focus on organizational integration and flow coordination. The flow of material, information and finance are interdependent in nature. It is, therefore, expected that organizations break inter departmental boundaries and look for opportunities in collaborating beyond organizational boundaries.  The Indian B-Schools need to take a lead role in first overcoming such limitations. Industry will follow with its own best practices.

Update (6 Dec 12): Instead of India being divided on the issue of FDI, it is important to learn the best practices for the benefit of stakeholders. Hence, it is important to develop consensus on such matters while ensuring development of viable supply chains that are not exploitative. States (such as Odisha), in the meantime, should be developing their own domestic and healthy supply chains before they face the competition.

Other recent reports (Thrust to Outsourcing in Hind Aeronautics Recast, 27 Nov 2012, Tue, TNIE) indicate how state-owned HAL is planning to become a larger systems integrator by establishing tiered supply chain for its requirements [as a part of the Chaturvedi panel recommendations]. This is a late though welcome step. Similar recommendations have been forwarded since more than a decade to most of the PSUs in Odisha for taking their Vendor Development Initiatives to higher levels. [Related links: Use Brainpower in Manufacturing; TQM for Small & Medium Enterprise]

Designing Makers

This refers to one news report I came across yesterday titled “IIT BBS in Expansion Mode” (TNIE, Sunday, 11-11-2012). The report says:

“The Indian Institute of Technology, Bhubaneswar (IIT-BBS) is planning to open a one of its kind new department, ‘School of Design and Creative Arts’ in the next few years. A process initiated by IIT-BBS Director Madhusudhan Chakravarthy, the new department aims at encompassing anything and everything related to the field of designing.”

Later in the day I chanced upon one interesting book in a local book store at PAL Heights, Bhubaneswar. It is titled “Makers – The New Industrial Revolution” (by Chris Anderson). Late in the evening, again by chance, I came across the same book title in the recommended reading section of the Sunday Economic Times (Nov 11-17, 2012). An excerpt:

“Marx would sound like a strange four-letter word to be invoked when one talks about future — and cutting-edge at that. Yet, that's what Chris Anderson does in his brave effort to predict The New Industrial Revolution. If the first industrial revolution shifted production from your home to the factory, thus letting factory owners dictate the terms — Marx alert: "Power belongs to those who control the means of production" — the coming one will return it to your computer screens.”

The above events that went through me were “intelligently designed” (definition beyond the scope of this post), as though, prompting me to post this blog titled “Designing Makers”.

While the book is futuristic and talks of design technology supporting makers (of all kinds), my focus here is on designing makers (who are undergoing formal education). By that I mean designing the process for developing the makers who are undergoing formal technical education.

Note the word design being used as a verb in the above news report on IIT-BBS. This projects the importance of having design methods governed by design thinking in our higher technical education system. As rightly stated, “it aims at encompassing anything and everything related to designing”. It is, therefore, more important now to adopt this very method in first designing the appropriate agenda for this upcoming school.

In line with the governing philosophy of design thinking, it would be appropriate for the new school to first have a cross functional team (with other important stakeholders) involving arts, humanities, sciences and engineering in shaping the design curriculum and then subsequently implementing the same with as much commitment. In doing so, it would be a good learning experience if the existing batches of students (irrespective of their discipline) are exposed to design theory and methodology at the earliest possible point in time.

Most of the older IITs will have the difficulty in creating this cross-disciplinary culture. Here is one excerpt from an article titled “A New School of Design with implications for the National Science Foundation” by Richard N. Taylor and Michael P. Clark (University of California, Irvine; Written sometime after fall 2000 when UCI embarked on a process of creating a new School of Design).

“…. Creating an interdisciplinary vision requires, however, the constituent older disciplines to abandon claim to exclusive and constricted control over the term “design” – a painful and incomplete process on our own campus.”

{Though the School of Design could not be established at UCI, the 188 page proposal dated November 2002 is made available in Professor Richard Taylor’s homepage as a vision document for the design research community. Visit: http://www.ics.uci.edu/~taylor/ }

The new IITs need not undergo such painful transformations as there is enormous scope to adopt clean slate curriculum designs appropriate for India’s developmental and inclusive growth challenges. They need to just think differently and act expediently by putting design up front in the concept design stages to meet the downstream challenges.

A mineral rich state like Odisha can find it rewarding if IIT BBS takes examples from the history of Harvey Mudd College – A School established in the name of Harvey S. Mudd – An accomplished mining engineer who wanted to overcome many of the shortcomings of traditional, narrow technical training of his day {About HMC}. Click this link to know more about the Center for Design Education directed by Professor Clive L. Dym – who actively promotes design thinking in engineering education.

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Processes and Education Governance

This refers to today’s article by S, Vaidhyasubramaniam titled “Values in family business” (TNIE, Saturday, 10^th Nov 2012, print version).  Excerpts:

[Quote] “……Despite SOX and the hyped corporate governance standards the number of corporate fraud pending cases saw a 37 per cent increase in the last five years……. These frauds involve [among other things] reckless board-member decisions, etc…….

….Travelling back in corporate history, the scams that have made huge sound and substance are from the board rooms or CEOs of listed companies that have many ‘outside experts’ as [board] directors.……..Recent policy moves in critical social sectors to usurp control and power from privately held entities are disturbing.……...There is no disagreement on the need for transparency and governance in privately held companies.……..Policy-makers should prescribe qualifications to become board members and ensure that promoters adhere to high standards of governance. The government should constantly monitor the same and take action against erring entities. It is unfortunate that protagonists of such neo-reform models are wiping out the apple farm instead of removing the rotten apples. They should be mindful of the fact that quality of governance is of paramount importance than the insignificant issue of family members being on board. In short, family members are not governance outcastes.” [Unquote]

Here is another report from yesterday’s paper titled “Take concrete steps to create sporting culture: Rahul Dravid” (TNIE, Friday, 9^th Nov 2012). Excerpts:

[Quote] ….“We are obsessed with results and satisfied with mediocre ones. For top performers results are merely consequences of processes, incidental to their quests for self-perfection,” the batting legend said.…..”According to him, educational institutions are among the best locales to incubate talent, whether the mental sort or the physical. He added that they are often far more adept at dealing with issues occupying the consciousness of young boys and girls than any sports federation could possibly be.”….[Unquote]

With reference to the first article, be it outside experts or family members, one cannot deny the importance of transparency and governance in privately held businesses. [See one related blog post: Ensuring Transparency in the Private Sector ]

With reference to the second one, note the important shift in focus from results to processes. As rightly observed by the cricketing legend, taking the focus away from results can produce better outcomes.  

Bottom line: Both the above articles relate to Indian educational set ups where transparent processes can foster healthy multidisciplinary interactions. Design thinking promotes this culture. [Related post on higher education]