Thursday, March 29, 2018

Top unchallenged cost and value innovation happening in India ..

Is Jio part of a Blue Ocean strategy or different ??
Innovation is the future. Innovation is the key to continued growth and relevance in the market place - iridiamedical.com
Indian academics are jumping head over heels to publish and research western world innovation but woefully lack in highlighting and projecting great innovation that happens here in India itself.

The JIO low cost high value telecom revolution initiated by Reliance Industries run by Mukesh Ambani is unparalleled and has not been touched or challenged by any country or telecom operator across the world. Is it a Blue Ocean strategy as some say. Experts differ and have their own opinion.
Value innovation is a key principle of "blue ocean strategy," a business approach that focuses on creating new market spaces instead of fighting competitors existing market share
Heavy infrastructure investment
Did Jio create new marketspace in low cost telecom in India ? By offering low-cost telecom, it did not displace or dislodge any existing telecom majors in India initially. Considering the low cost telecom benefits, customers started migrating from competitors to Jio and this created the unsettling issue in the telecom sector. Established players started running helter skelter, crying foul against Jio, but to no success. The damage had already been done.

Is this Jio success story borne out of creative Indian ingenuity to make it a unique and unparalleled exercise that could be applied to any part of the world ?

Is this a transient phenomenon ?
How foreign telecom players in the country have been outplayed :

Jio invested about $23 billion in improving indigenous telecom infrastructure since 2010, not resorted to by any major player worth the salt in the world. 

Even the foreign telecom players within India like Vodafone of UK, Telenor of Norway and Docomo with Tata felt the heat increase and had to run for cover. While Vodafone joined with the Birla IDEA to survive in the Indian market, Telenor and Docomo exited disgracefully from the country. Other global telecom players were smart enough to forecast the ultra heavy competition in the Indian market and played safe keeping off. A highly corrupted telecom environment in the country became a highly competitive one in about fifteen years time.

Even the low-cost leaders of the world, the world's largest, Chinese telecom majors eg. China mobile, were no worthy competitors for Jio. The scenario in China is very different from that in India.  In India there are no heavy state controlled policies as in China and Chinese bulldozing techniques would not work in India. (shamefully for China and to its own detriment and destruction, all the large Chinese companies are state controlled, doctored and manipulated !!) The Chinese prowess as we see now, is it a mirage ?
Offering 28 days of totally FREE local and long-distance telecom access to the citizens of India at just $0.75 (for 28 days), the JIO offer of low-cost high value innovation is unparalleled anywhere in the world and has left the world shocked and stunned at how an Indian telecom operator could offer high quality top notch telecom operations at such cheap rates.
US, Japan, China and Europe would save themselves from a total ruin unless they show the eagerness and sincerity in understanding the Indian prowess and indigenous capability in low cost innovation combining with value innovation.

Also this is a time for our competent and qualified Professors from top academic institutes within the country to shed their pro-west stances and shed off the gown of total subservience to external influence and start looking at their own strengths and capabilities, believing in themselves, holding their head straight and high !!

Why does Management Innovation matter - a 2006 Gary Hammel HBR article ..

George Easaw

Tuesday, March 27, 2018

Amrita Devi Bishnoi and the Chipko movement ..

Chipko movement heroines hugging trees, 26 March 1973,
courtesy The Hindu 
It was in 1730 AD that Amrita Devi Bishnoi along with her three daughters embraced trees and were killed by the soldiers of King Ajay Singh who was ruling the Jodhpur area in Rajasthan.

It was the first environmental protection agitation in recorded history in India. Later on this agitation spread across India and in 1973 reflected as the Chipko movement started by Sunderlal Bahuguna, a known Gandhian, which  started in Uttar Pradesh.

Google Doodle, 26 March 2018
The landslides around the area in Northern UP were recognised as due to massive cutting of trees upstream in the valley.

To prevent the trees from being cut, village women embraced trees in the Alakananda valley, now Uttarakhand, to prevent them from being cut down by contractors who wanted to clear the forest to enable rapid industrialisation of the country post independence.

The heroics of the women of Bishnoi village in Rajasthan in 1730 AD and from the Alakananda valley in UP in 1973 April, led to the GOI formulating the environment policy. 

The country now as of 2017, can boast of an effective forest cover of about 21.5% of land area, thanks to the selfless service of these women from 200 years back and as late as 45 years back who gave their lives to protect the environment. Let us not forget that these women were ready to give their lives when the people were not properly informed and educated of the significance of trees in helping the eco-system to survive and prosper. 

On this day 45 years back in UP and 300 years back in Rajasthan, let us not forget the heroics of our ancestors to protect trees. We inherit such a great environment protection reputation and let us preserve it with our whole might and soul.

george (photo credits to The Hindu and google.com

Saturday, March 24, 2018

Kitty Hawk Cora

Kitty Hawk Cora, image courtesy  Kittyhawk..
Kitty Hawk Cora - the latest flying taxi service plane to hit the global market. There are 12 rotors (electric fans), six on either side, three in front of the wing and three behind the wing, all independent and one propeller in this pilotless VTOL aircraft. It can fly at an altitude of 914 metres This 11 m wingspan autonomous flying taxi is promoted by Alphabet CEO Larry Page and Google VP Sebstian Thrun who is also the CEO of KittyHawk..

Click here for the original youtube video ..

Cora is assigned by Google to be classified as an air-taxi service. It can carry two passengers , is pilotless, and can travel at speeds of upto 150 kms per hour and travel distances of 100 kms.

KittyHawk's frustration with the US Federal Aviation Authority (FAA) resulted in Kittyhawk making its first flight in New Zealand which was more than willing to test this innovative pilotless two seater all electric plane.

Cora in the air, courtesy Guardian.
The 4.7 milion population New Zealand has now become the new Kittyhawk. The original Kittyhawk in North Carolina was where Wright Brothers made the maiden flight of their small aircraft,the Wright Flyer in 1903, the 12 m span plane whichn could fly at max 48 km/h speed and worked on reciprocating engines.

Autonomous flying taxis would revolutionise small distance travel around the world on land or across islands but not across large seas and oceans.  Being able to hail an airtaxi ride using a Uber like app by 2020 would redefine air travel around the world.

Friday, March 23, 2018

6 Commandments on looking for Continuous Improvement .. (Kaizen)

Continuous Improvement is never ending !!


Continuous improvement is an ongoing effort to improve products, services or processes. These efforts can seek "incremental" improvement over time or "breakthrough" improvement all at once. - asq.org

The 6 principles of Continuous Improvement is summarised here ..
They are

1. How and where to  start : Go for small improvements, not paradigm shifts, radical innovations or inventions
courtesy Leankit ..
2. Who will give ideas ? : Continuous Improvement ideas almost always come from employees
3. Is it expensive ? : Incremental improvements are inexpensive to implement
4. Whom to motivate and engage ? : By engaging the staff continuously in the Continuous Improvement model, the onus is shifted from managers to the frontline employees, to bring in ideas for change (and they are the people rally capable of doing it , being in touch with the problem almost directly)
5. Is it a long drawnout process ? : Continuous Improvement is reflective and happens on short, quick and effective feedback loops
6. Is improvement quantifiable ? : Any Continuous Improvement must be measurable and potentially repeatable.
In the 5S cycle, Continuous Improvement (CI) comes in the Sustain phase - how do you ensure the momento is maintained ..
How can one look out for continuous improvement opportunities ?
1. Problems have opportunities, so look out for problemmatic areas.
2. At all potential problem areas, ask WHY five times, it exposes lot of opportunities for CI
3. Try to re-evaluate fixed ideas
4. Choose a simple solution, not the perfect one ..
5. Correct mistakes immediately, once and for ever !
6. Use one's craftiness, not cash !!
7. CI possibilities are endless - there is no end to CI ..
As one of the most valuable and effective Lean Tools for value creation and wastage reduction in the long run, I am sure Continuous Improvement has the greatest potential to make the world a better place.

george..

The majestic Jackfruit and it's seeds ..

Kerala govt declares jackfruit as the official fruit ..
The jack of all fruits !!!
Origin: The jackfruit is believed indigenous to the rain forests of the Western Ghats of India. It spread early on to other parts of India, southeast Asia, the East Indies and ultimately the Philippines. It is often planted in central and eastern Africa and is fairly popular in Brazil and Surinam.
South India is blessed by the monsoons and only South India can claim to be the real and original growing place of the great jackfruit.

No wonder the state government of Kerala was quick to understand the great benefits of this fruit and quickly name it the state fruit of Kera-la. Wonder when they will change its name from Kera-la (land of coconut) to chakka-la (land of jackfruit) ..

Click here to read about the benefits of Jackfruit ..

Get to know everything about the jackfruit here.

From mid-March to mid-July, four months, Jackfruit grows aplenty in Kerala and Karnataka. 

Let us not anymore look down upon the jackfruit and it's protein-rich tasty crispy seeds .. It could be your natural cancer saviour too.  

The jackfruit seeds have lot of benefits too .. Click to read about it here ..

My father used to jokingly call the jackfruit seeds shathrukkuru (ശത്രുക്കുരു ) enemy seeds as, being highly protein rich, it can cause indigestion in a sensitive stomach and leave a trail of gases in your digestive system. These gases when released can leave lot of frowns and suspectful looks on your friend's and colleagues' faces ..

Being highly nutritious, a heavy consumption of Jackfruit could cause stomach upset (commonly called loose motion or വയറിളക്കം), as the stomach chemistry cannot digest all the goodness of the fruit. My mother used to say ചക്കക്കു ചക്കക്കുരു തന്നെ മരുന്ന് , in other words, the best medicine for a heavy consumption of Jackfruit is one raw peeled jackfruit seed. And being a heavy food guzzler, especially the jackfruit, I am myself a living witness to this raw truth about the Jackfruit (have had many a loose motion and many a stomach upset ..)

Jackfruits usually come in three varieties or tastes,
  • thenvarikka (തേൻവരിക്ക or honey varikka), the finest and royal ones, is the rarest, gives the feel of the jackfruit peels dipped in honey, so tasty and drooping with the juices
  • varikka (വരിക്ക), is also rare, really tasty, the aristocratic variety and 
  • koozha (കൂഴ), the more common variety, though awkward in outward shape is very tasty and has a unique capability of upsetting your stomach quickly
Both the honey varikka and varikka have an orderly oval shape for the big jackfruit. All of them taste too good and give a special out of the world experience !!

As old timers say, അധികമായാൽ അമൃതും വിഷം, anything in excess is bad, moderate consumption of Jackfruit can be a life changer for you !! It is a supreme gift from nature for you and family, use it with great moderation and respect. Do not gorge on it !

In Kerala, jackfruit is preserved by preparing its concentrate, by boiling and dehyrating it to be used as a fruit jam with chappathi, as bread spread, steamed rice flour (puttu), steamed and mixed with rice flour as an evening snack and mostly in jackfruit porridges or payasams on special occasions..

May the goodness of jackfruit continue to provide you with a healthy sound diet and give you good health.

George ..

Sunday, March 18, 2018

TDS and drinking water quality in Bangalore ..

Total Dissolved Solids (TDS) in drinking water is very crucial to keeping good health and healthy bones. We get our drinking water from many sources.
Total Dissolved Solids (TDS) are the total amount of mobile charged ions, including metals minerals or salts dissolved water, generally expressed in units of mg per unit volume of water (mg/L), also referred to as parts per million (ppm). - Bracton.com

Parts per million (ppm) and milligrams per litre (mg/l) mean the same as the density of potable water at NTP is 1000 kg/cu.m or 1 kg/litre...

As per WHO standards, our drinking water should have the following levels of TDS -
  • upto 300 mgpl or ppm is excellent.  
  • between 300 and 600 ppm is good. 
  • between 600 and 900 ppm is fair. 
  • between 900 - 1200 ppm is poor 
  • above 1200 ppm is unacceptable and dangerous to health.

Click here for a WHO document on the permissible levels of Total Dissolved Solids (TDS) in drinking water ..

In Bangalore we are dependent on Cauvery river for drinking water which has its origin in Talakkavery in Kodagu district at 1270 m above MSL. The Cauvery water is yet to reach major parts of Bangalore with the result that people have drilled borewells for water, both for drinking and washing and other purposes.

A TDS meter is a small electric contraption which I bought off Amazon, as an Amazon choice for less than Rs 500/-. It works on the electrical conductivity principle. Higher the TDS, more the dissolved solids, ions and conductivity and hence higher the current that passes. For industrial purposes, we need water with practically zero or near zero TDS. But for drinking purposes, we have water with varying degrees of TDS depending on the source from which we get it.

In the industry, when I was in the Utilities department in the MRF factory in Goa, we used to get upset when the TDS in the distilled and specially treated water used in the industrial process for generating steam, hot water etc used to go beyond even 10 ppm. More dissolved solids in the water in the form of ions, greater inefficiency of heat transfer as the pipes used to be clogged with scales.. 

I did a causal TDS checking of water in my house at 12 noon on 17 March 2018. I have water from three sources being used at home. One is from the river Cauvery (A), this Cauvery water is collected in  TATA Swach water filter which helps remove suspended solids (measured by Total Suspended solids) and is boiled for drinking water purposes (B) and the third source is the borewell water (C) used for washing, watering, bathing and cleaning purposes.

After collecting a couple of samples, took the measurement at least five to six times, and after some statistical analysis of data (through an interesting Android smartphone statistics app called SIGMA), got the following average values of TDS.

A - 213 mg/l  - Cauvery water was found to have TDS of 213 mg/l (ppm)
B - 210 mg/l  - Cauvery water after being filtered through a TATA SWATCH filter and
C - 405 mg/l  - Borewell water collected from a depth of about 300 ft.

At depths of 950 ft and 1500 ft in Electronic city area, the borewell water is found to have TDS of about 660 ppm.

Click here for a  Bangalore mirror report of the declining water quality in different parts of Bangalore.

Water is an essential input in our life and one of nature's most desired, available and needed resource after sunlight. Let us use it with great care and caution, so that our future generations too will get to use it at the same level at which we use it now.

George

Saturday, March 17, 2018

Zero Mass - water harvesting from Air ..

With the recent revelation by an American media company and verified by WHO, that bottled water across the world have micro plastic particles in it ranging from 20 micro particles per litre to as much as 3000 micro particles per litre, the situation is really serious and needs urgent attention from water specialists and public health officials from around the world.

Can you use a solar panel in combination with material science technology to absorb water from air  ?

Well that is Prof. Cody's invention,  from Material Science Dept of Arizona State University.

He has developed this panel, named SOURCE,  that costs about $2000 and can harvest about 2-5 litres of water daily from air.

By using a combination of water absorbing chemicals that absorb water from the atmosphere and harvesting this water out of the chemicals and suitably mineralising it, Prof. Cody is able to bring potable water from thin air.

Click here for the news item from The Verge ..

Click here for the youtube video ..

Presently the panels are deployed in water starved areas in South America and Syria and in some affluent homes on an experimental basis..

This invention / innovation has the capability of solving the water crisis  of the world. If the technology is made more accessible for the people across the world and the technology is patented and handed over to innovators, we can definitely see great cost reduction and wide spread usage for this technology to solve the drinking water crisis of the world.

Some questions we look forward to getting answered  in the coming years or even months..
1. Can this technology be scaled up to extract thousands or millions of litres of water from moist air ? 
2. What will be the final cost per litre of water then ? 
3. Can suitable technology be developed across the world that can help generate even non-potable water in large volumes to meet the common needs of humans and industries ?
Lets hope the coming years will help see an end to the water crisis across the world.

George..

Sunday, March 11, 2018

Starling Murmurations ..

You will be amazed at how these Rosy Starlings murmurations happen in the evening sky ..

They are a group of migratory birds from Europe who come on an annual basis to perform this "dance sequence" at a place near Baramati in Maharashtra in the evening. Thousands come to watch this spectacular visual symphony in the sky !!!

These noisy Rosy starlings over Baramati sky, from Europe are extremely quick, agile with very fast response time .. Wonder how they communicate and prevent collision up there in the evening sky ...  Here is another NG video ..


Researching more, found that the Starlings Murmurations move in groups of virtual seven (the seven may change every now and then) following just these  three simple rules ..

1. as you fly, stay towards each other
2. when anyone turns, you also turn and
3. don't crowd, keep proper distance between neighbours .. 

This continuous decision making is done in millionths of a second creating the visual symphony in the evening sky ..

Wonderful isin't it ? 🙏🙏 Looks like they really enjoy straining their brains for hours together ..  

courtesy BBC .. 🙂

The science behind the starling murmurations ..
https://www.mnn.com/earth-matters/animals/stories/the-incredible-science-behind-starling-murmurations

George

Saturday, March 10, 2018

TESLA and competitors in electric trucks ..

Electric energy based transportation gaining traction .... 

Can you imagine an electric truck
  • carrying a 26 T cargo
  • traveling at average 105 kmph
  • a full battery charge covering 805 km, (30 mins charge covering 630 kms), 
  • picking up from 0-97 kmph in 20 secs flat on full load (0-97 kmph in 5 secs under no-load) and 
  • running at 70% cheaper costs than comparable Diesel trucks  ??

Welcome TESLA semi-heavy duty electric truck on American roads by 2020 ... (other notable competitors with less capability in terms of distance covered in single charge and acceleration are  also given) ..

TESLA is already doing successful test runs between the TESLA Giga battery factory in Nevada desert and Tesla factory in California !! 👍

The competition from Thor trucks, (click here for the website) ET-1, which  can carry upto 40T load and travel 500 kms on a single charge is an excellent competitor to TESLA semi heavy truck. While TESLA will build the truck all by itself, Thor on the other hand has only proprietary battery technology. It will be outsourcing the manufacture of the trucks to other automobile manufacturers.

With the entry of electric trucks, the benefits are manifold :
1. lower transportation costs by upto 70%
2. ensure economy of costs due to large volumes being transported
3. ensure long life for the trucks with less moving parts
4. ensure low maintenance costs with less moving parts
5. ensure less environmental emissions, thus being environmentally sustainable
Thor ET-1
can totally change the logistics scenario across the world.

The transportation sector is getting excited and heated up with the entry of e-trucks and very soon in the next couple of years we can really look at more powerful and efficient vehicles in this area, with autonomous (driver-less) functionality, resulting in lowering of transportation costs by as much as 30-40% (conservative estimates) ..

Can terrestrial transportation with the entry of electric vehicle be much cheaper than sea-based transportation ? We have to wait and see.

George

Thursday, March 08, 2018

Ecommerce warehousing - what happens in the warehouse .. ..

We have heard that suppliers deliver articles at the warehouse and the e-commerce company sorts the items and arranges them on the shelves in the warehouse. Later these items are picked up for shipping as and when orders are placed.

But do we know how the quality of the items are assessed, how the items are coded and stocked, and retrieved manually from the racks ? Here we are able through these videos able to understand how manual picking happens in one of the country's largest warehouses of the e-commerce provider Snapdeal in Gurgaon, Haryana, near to Delhi. The operations at this 2 million sq ft warehouse of Vulcan Logistics working for Snapdeal are mainly manual.

Click here for a video of Vulcan logistics warehouse of Snapdeal, the ecommerce giant in Gurgaon ..

Another CNN IBM video of the Snapdeal warehouse at Gurgaon ..

Contrast this with Amazon warehouse at one of it largest facilities. Amazon, in adition also uses robot to move things in the warehouse. Click here to see how it happens ..

Basics of warehousing management ..

Modern challenges of warehousing ..Click here ..

george..

Drinking water crisis in Bengaluru ..

Is Bangalore staring at a grave fresh drinking water crisis soon ?

Indicators of water pollution in Bangalore -

Salinity - more than acceptable limits of 3000 micro mhos/cm
Nitrate - more than the acceptable limits of 45 mg/litre
Flouride - more than acceptable limits of 1.5 mg/litre
Total Dissolved Solids -  660 parts per million (ppm) (acceptable limits 60 ppm)

High levels of nitrate and salinity in water cause depletion of Oxygen levels in human blood leading 
to cancer and the Blue baby syndrome (believed to be caused by nitrate contamination in 
groundwater resulting in decreased oxygen carrying capacity of haemoglobin in babies leading 
to death).

Groundwater Pollution

On a Central Ground Water Board (CGWB) study based on 3000 samples taken from  800 sq km 
area in Bangalore city, groundwater Pollution basically emanates from 2 sources.

Geogenic - deep borewell drilling (more than 1500 ft or 500m) brings groundwater rich in minerals
 and metals to the surface for human consumption, damaging human health, leading to  kidney 
damage, necessitating dialysis

Anthropogenic - (man made cuases) sewage water entering borewells going 1500 ft deep, polluting 
ground fresh water resources making ng it unfit for human consumption. It is pollution of ground 
water resources by unscientific handling of sewage.

Immediate damage to the population of Bengaluru

* Kidney-failure increased from 1 in 1 lakh to 1 in 500 related ailments

* Fluorosis affecting the gums and teeth besides triggering deposition of yellowish salts on teeth enamel.

* Contaminants get inside body through water and feeding on vegetables, fruits grown downstream of 
polluted water bodies.

A counter to the claim is published in the Newsminute website of 5 March 2018 .. 
Please read it here .. 

Good news keep coming as rays of hope for the city of Bangalore. Here is the story of how Hebbal 
lake has been rejuvenated and has been brought back to l;ife, bringing birds to the lake.

Reference :
    • Bangalore Mirror, TOI, 5 April, 2017.
    Click here for the link ..

    george ..

    Wednesday, March 07, 2018

    Why Bangalore is facing acute water crisis ?

    BBC shocked the world some months back releasing the list of cities that is going to face water shortage soon.  Cape Town is South Africa is facing an acute water crisis which is said to aggravate in April, leading to civil strife and even fight between communities for drinking water.

    The other day I was discussing the water issues of Bangalore with some of the younger members of the population and I was startled to see their awareness of the problem and some simple remedies which they suggested to solve it.

    The catchment area of Vrishbavathi river, which waters most of Bangalore before joining with Akravathi river, gets almost 5 million litres of waste water daily. Drinking water scarcity is the natural result of all this damage being done to our drinking water resources.

    The more important reasons for this threat on our drinking water resources pointed out by them were,

    1. Government inaction in responding to the civil needs of the public, corruption in such infrastructure projects and in laying of pipes and usage of inferior quality pipes, which ruptures during summer or on application of a heavy lead, further accentuating the problem.

    2. Unrestricted waste disposal : Industrial and domestic wastes being dumped into fresh water resources leads to poisoning of the existing water resources, thus making the resource unfit for human consumption

    3. Too much bore wells in the city : The water table in Bangalore is at an alarming depth of 950 m plus, ie. to arrive at water one has to give for as deep as a kilometer. The lowering of the water table has been accelerated by unrestricted borewell digging, licensed and unlicensed.

    4. Wanton filling of lakes : Bangalore was once upon a time full of lakes, but now the pressures of urbanisation and the greed of real estate dealers has resulted in many of these lakes being filled up giving way to newer and newer housing societies and residential apartments, in flagrant violation of housing and land development rules.

    5. Poor Rainwater harvesting : Bangalore does not have a strict rain water harvesting policy, even though of late the corporation has mandated that all new buildings and high rises should have rain water harvesting systems, the old buildings still do not collect the flowing rainwater and instead depend on corporation water for all daily needs including washing and toilet needs

    6. Improper or lack of proper waste water treatment plants : except for some residential properties that have excellent water water treatment plants, most of the residential buildings and industries in and around Bangalore, dump their unprocessed water into potable sources polluting the water and putting the population depending on that source at great risk.

    7. Badly maintained waste treatment plants : even the waste treatment plants which are working are badly maintained resulting in occasional release of waste water into potable water resources.

    8. Badly maintained piping system : the pipes in the city are not maintained properly resulting in occasional cracks, leakages resulting in huge well treated potable accounted water getting wasted.

    9. Mixing of drinking water with effluents : Most of the poor quality pipes that were installed have been damaged and they allow effluents and waste water running in parallel pipes or through the vicinity to mix causing untold health hazards

    10. Poor investment in public infrastructure - the poor investment in public infrastructure combined with the disease of corruption, leads to a society which has got no hope for the future.

    It is up to our young population to find out ways to come out of this problem and help the nation to go forward and prosper.

    Ge..

    Beer distribution game from MIT played in Alliance Business School .. March 2018

    Sem 4 and Sem 2 MBA Operations 2016-18, 2017-19,
    It was great to be playing once again the Beer distribution game developed by Massachusetts Institute of Technology (MIT) at Alliance School of Business, Bangalore, reinforcing the relationship between two great Institutions and working to strengthen their relationship.

    The beer game was played by MBA students in the subject of supply chain management of Alliance School of business sem 4 and sem 2, Operations stream in March '18 at AU. This is the sixth continuous year, the game is being played in the University.

    The game was played in the seminar hall by dividing the students into six teams of ten members each. The session was in full swing with all the entities extending full support. After giving time for discussion and contemplation and thinking, the students assembled the following day to discuss the nitty gritty of the game like the impact of improper or magnified information flow, the order variance amplification effect - commonly called the Bullwhip effect etc.

    The game was played by analysing two important aspects, costs and orders placed.

    Cost structure in the chain
    Higher costs naturally have an impact on the profitability of the supply chain and higher order variance in the supply chain result in higher magnitude orders being placed. The higher inventory stock at different stages in the supply chain again increased the costs, affecting the profitability negatively.

    A. SUPPLY CHAIN COSTS

    Supply chain costs, though inevitable, are a pain for any supply chain manager.  Shortage, excess holding and obsolescence are inevitable in any supply chain. But the realization that the customer is not ready to incur these costs due to the suboptimal performance of the different SC entities like retailer, wholesaler, distributor, manufacturer in the distribution side is very revealing and new information to the students.

    Entity
    A
    B
    C
    D
    E
    F
    Retailer 1 / 2
    440/480
    740/780
    480/460
    360/540
    820/550
    700/780
    Wholsaler
    1770
    1640
    2160
    1940
    5750
    2860
    Distributor
    1450
    690
    3870
    1500
    6320
    3570
    Manufacturer
    1300
    2910
    1810
    1000
    1650
    1780
    Total
    5440
    6760
    8180
    5340
    15090
    9690
    Profit/Loss (-)
    +2560
    +1240
    (-180)
    +2620
    (-7090)
    (-1690)

    (Blue colour signals profits and red colour signals losses.)

    The supply chain costs realised while playing the game by all the six teams is given here. 

    These SC costs are taking away from the SC profits which the SC entities would otherwise have earned had they stocked enough and played the game intelligently. But the uncertainties and the selfish objectives of stocking more to prevent shortages in future led to the stocks at the entities varying considerably, leading to excessive costs of holding, shortage and at the end of period, obsolescence costs.

    These costs, though some are inevitable, have eaten into the profits of the total
    supply chain as a whole.

    This game has demonstrated why managing the supply chain well is critical to improving the profitability of the organization as a whole .. Most important learning from the game.

    B. On variance Amplification of orders placed and Bullwhip Effect  :

    While analysing the mean and standard deviation of orders placed by the downstream entities on the upstream entities right from the retailer to whole saler, wholesaler to distributor, distributor to manufacturer and finally manufacturer to supplier, it was found that irrespective of the supply chain, there was amplification of the orders placed and amplification of the variance of the orders placed - this is the phenomenon, most commonly referred to as Bullwhip Effect.

    Observations of Mean (mhu) and Standard deviation (sigma) of orders placed by each entity on the upstream entity

    ENTITIES/TEAMS
    Mean (mhu) and
     Std dev. (sigma) of
     orders placed
    TEAM A
    TEAM B
    TEAM C
    TEAM D
    TEAM E
    TEAM F
    RETAILER I / II
    4.1,1.9 /
     3.9,2.1
     (2.83)
    3.6,1.85 / 
    3.4,2.17 
    (2.85)
    3.5,1.8 / 
    3.9,2.13 
    (2.79)
    3.8,1.48 / 
    3.5,2.01 
    (2.5)
    3.9,1.3 / 
    3.9,1.3 
    (1.84)
    4.6,3.13 / 
    3.9,2.13 
    (3.79)
    WHOLESALER
    8.6, 4.03
    7, 5.03
    8.44, 5.83
    7.4, 5.0
    14.3, 11.4
    6.9, 6.4
    DISTRIBUTOR
    8.8, 4.9
    5.7, 6.3
    9.7, 14.69
    6.6, 6.6
    10.6, 9.7
    9.2, 10.4
    MANUFACTURER
    8.0, 7.3
    6.8, 7.7
    8.6, 14.52
    7.6, 9.3
    9.9, 9.34
    9.7, 11.3

    Green teams display Bullwhip effect in its entirety
    Blue teams display Bullwhip effect partially

    We discussed the many reasons for the bullwhip effect like,
    • incorrect forecasts, 
    • batching and pricing phenomenon, 
    • rational thinking of behalf of the players and 
    • selfish behaviour of the entities to optimise their costs compromising the overall supply chain profitability
    An interesting aspect was regarding risk pooling aspects. Risk Pooling of the downstream entities like retailers, wholesalers, distributors etc, by centralising the inventories, instead of having decentralised inventories, would have reduced the variance amplification in the orders placed. Lateral pooling of inventories would have thus helped in mitigating the bullwhip effect to some extent.

    Overall the Beer Distribution Game played had great learning inputs for the students. In addition, in a practical setup, they understood how in spite of noble objectives of the entities to keep supply chain costs low, any one entity aiming local optima in the system could disrupt all the entities costs very much and topple the apple cart ..
    Thanks once again to Massachusetts Institute of Technology (MIT) at Boston for providing such a great idea through the game to understand the dynamics of variation of supply chain costs ..
    George ..

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