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Inside a Retail Supply Chain: How did ‘Maha’ DeshMart Survive the Economic Slowdown and Thrive

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Wal-Mart Hermosillo
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‘Maha’ DeshMart is a large (fictional) supermarket chain with a pan-India presence. Amit Paranjape, our resident expert on Supply Chain Management, discusses some of their management strategies and best practices. Special emphasis is put on the importance of ‘Information Technology’ and how it enables ‘Maha’ DeshMart to run one of the most efficient Supply Chain & Operations. Benchmarking is also done with global industry leaders such as Wal-Mart. 2008 represented a challenging year and we will take a look at how specific Supply Chain Processes and the other aspects of Retail Operations react to the global economic challenges, and can still deliver on the overall goals and objectives of the company. This fictional story about the fictional ‘Maha’ DeshMart is in continuation to our series of articles on Supply Chain Management.

‘Maha’ DeshMart

‘Maha’ DeshMart as the name suggests stands for everything ‘large’ (‘Maha’ in Hindi / Marathi / Sanskrit = ‘Large’ or Huge’). Some say ‘Maha’ also stands for ‘Maharashtra’ the home state of the founder, Raj Deshpande. ‘Desh’ comes from the founder’s last name. This chain is also often referred to as simply ‘DeshMart’. Ever since opening its first store in Pune about 15 years back, it has gone through a rapid expansion and now had a presence in every major Tier 1 and Tier 2 city in India, with aggressive plans to expand to Tier 3 cities as well. DeshMart’s vision is to be the most preferred shopping destination for the Indian consumer; period. To achieve this, they want to have the widest choices, the best prices, and the most comfortable shopping experience for their consumers.

It is no secret that the DeshMart founder was inspired by world leader in retail, Wal-Mart, and its philosophy of scale and constantly driving down costs. The Wal-Mart business model is actively pursued here in their Pune headquarters, as well as in all their stores and throughout their supply chain. The management team though has taken a series of strategic decisions to ‘Indianize’ the model to suit the local context. For example, while ‘ELDP’ (Every Day Low Prices, as opposed to Promotions) was the generally preferred strategy, some key exceptions were made based on local preferences. The other one is to enshrine a ‘Neighborhood Kirana Store’ owner type mentality into the Store Manager and his team. In India, the small neighborhood ‘Kirana’ (or grocery) store is run by a family with the patriarch serving as the CEO, Head of Operations, and all other roles combined. The rest of family fills up various other support roles. One thing this model provides is an ‘amazing’ ownership of the business and the consumer. DeshMart wanted its Store Managers to think and act, like the Kirana Store Owner. Metrics have been suitably adjusted to encourage the right behavior; however the core difference has been through intense focus on Hiring & Recruitment. Extraordinary importance is put on finding the right talent for these critical positions.

The Importance of Information Technology

Another key Wal-Mart strategy that has been espoused by DeshMart is focus on Information Technology. At DeshMart, IT is considered to be one of their biggest strategic differentiators. They don’t want to rely on any one or even a few different application software vendors for their business process applications. Instead, they have followed the example of Wal-Mart, Dell, FedEx, and Toyota and have taken complete ownership of their IT Applications & Infrastructure. These great companies have supported their unique business processes by designing and developing their own IT solutions where necessary. Here again, DeshMart put lot of emphasis on hiring the right CIO (Chief Information Officer). In fact in the early 1990s, when this position was virtually unknown in India and in many other places around the world – they had a CIO and his senior team in place.

The IT Department’s mission is to deliver the requisite data and decision making capabilities at the disposal of every DeshMart employee throughout the organization, in order to deliver on the overall goals & objectives of the company. Organizationally, IT was aligned along with the business process teams in such a way that for every project there was no ‘IT vs. Business’ division. The combined team had the singular goal to achieve the necessary process improvement metric.

The 2008 Global Economic Slowdown

The 2008 Global Economic Slowdown was not predicted by even the top experts on Wall Street. Thus, even the best of the supply chain leaders didn’t have any ability to accurately forecast the impending shortfall in demand. The only way for a company to react to something like this was through some rapid adjustments to their plans, and execute as efficiently as possible. The first signs of the slowdown were visible too late for planning the 2008 season. In the following sections, we will look at how DeshMart’s IT and Business Processes reacted to this challenge.

Merchandizing & Assortment Planning

Let us take a step back here and understand how large multi-product category retailers worldwide do their long term planning. For many retailers, especially for those heavily weighted towards fashion segment, the holiday season (last 5-6 weeks of the year, in the US – from Thanksgiving weekend to Christmas/New Year) could account for anywhere from 20% to even 50% of their annual revenues. In India, the holiday season traditionally runs from Diwali (The Festival of Lights), in October/November to the December End wedding season. Similar holiday season spikes are also observed in the Indian market.

To react to this end of the year demand, retailers start planning a year in advance. The overall merchandizing decisions (deciding what products to buy and position in the stores) are the first step. This process is called as ‘Merchandize Planning’. A ‘top down view’ is often a starting point, where a revenue forecast is broken down across different product groups (commonly referred to as ‘categories’) and then finally to the individual product (e.g. a pair of pants). Similarly, a geographic top down view is taken where the global revenue number is broken down by regions and eventually down to the store level. A ‘bottom up’ view can be taken based on actual product level forecasts. Often times, ‘middle-out’ view is also done at one of the intermediate points in the hierarchies. All these views are synchronized closely before arriving at final numbers and targets. This process sounds straight forward, but is complicated by the sheer size of the retail problem. Imagine doing these aggregations for 100,000 products! (A typical Wal-Mart stocks well over 200,000 products). Now add the store dimension (Major US chains have 1000s of stores), and you will get the idea of the scale problem. As a result, merchandize planning drives some challenging scalability requirements for databases and servers.

Table 1: Retail SCM & Operations – Business Processes & IT Drivers
Business Process Focus Key IT Drivers
Merchandise Planning Selecting the right products to purchase for the season/year, based on corporate objectives and setting sales targets Scalability Multi-level aggregation/dis-aggregation
Assortment Planning Grouping stores based on similar characteristics. Selecting what store groups have what products Optimization Algorithms for identifying the right store groups (clusters).
Transportation Planning & Logistics Delivering the product to the stores while minimizing transportation cost. Transaction Management for handling large volume of shipment orders
Optimization Algorithms for truck load building and route planning
Replenishment & Inventory Management Getting the right amount of the product to the store, while minimizing excesses and reducing out of stocks situations Scalability
‘Fast’ algorithms for calculating replenishments and inventory targets
Store Operations Presenting the products appropriately
Collecting POS data
Managing customer loyalty		 Scalability POS Data Collection Systems
Business Intelligence & Data Mining
Algorithms for ‘Planograms’

In case of DeshMart, the problem is not as massive as Wal-Mart, but still quite big. At present, DeshMart has over 500 stores with anywhere from 10,000 to 50,000 products in a given store. Initially, at the beginning of the year, they had done the merchandize planning assuming a specific forecast value for the end of the year period. Now, they need to alter it, and propagate it down the hierarchy. This adjusts the forecast for individual products. This will in turn affect the purchasing decisions. In some cases (as it turned in DeshMart’s case…) it is too late to do this, since long lead time items are already on order. In such cases, various promotions/ discounting strategies are worked out to push the excess merchandize out. Note that given DeshMart’s unique customer loyalty and cost advantages, a down market can also be an opportunity. For example, Wal-Mart actually had more sales compared to previous quarters in the 2008 slowdown since the cost conscious consumer from other competing stores increasingly moved their shopping to Wal-Mart. Hence while adjusting the merchandize, DeshMart also considered this aspect as an input.

Once the product level forecast is available, the next challenge in a multi-store retail environment is deciding what stores carry what products. Not all DeshMart stores are the same. They differ by types of cities, as well as location of stores within cities. The typical product mix of a store in Central Deccan Gymkhana area of Pune is different from that in the Hadapsar suburb. A Mumbai store would differ in its product selection than say, a store in Indore. These product selections are referred to as ‘Assortments’ and planning them is called as ‘Assortment Planning’. Here too, scale is a big issue. Various algorithms are used to group stores based on their commonalities into groups or ‘clusters’. Then assortment decisions are made at the cluster level.

When the economic down turn hit, not only did the merchandizing decisions change, but also certain assortments by stores. To give an example stores in up market areas were now stocked with certain products normally allocated to more middle income areas. DeshMart was able to make these changes quickly by redoing certain clustering and changing allocations.

In both merchandizing and assortment planning IT plays a key role in providing the planners with a key capability to make fast and accurate decisions, while dealing with a huge amount of data. Handling large volumes of data, large scale aggregations and dis-aggregations, scenario planning &  what-ifs are also important IT requirements for these business processes.

Logistics & Transportation

If ‘Supply Chain Management‘ is loosely defined as ‘Getting the right product at the right place, at the right time’; then ‘Logistics & Transportation’ is one of the core execution pillars of realizing this. Logistics deals with the overall handling, distribution and shipment of products through the supply chain, while transportation is focused more on the physical shipment of goods and products. In a sense transportation can be considered as a subset of logistics, but often times these two terms are used interchangeably.

For large global retailers, the transportation problem typically begins at their warehouses. Product manufacturers are responsible for shipping material into these warehouses. (Note there are some exceptions such as Vendor Managed Inventory & Direct Store Shipments, but we will not discuss those here…).

The primary goal of efficient logistics & transportation planning is to get the product to the store at the right time, while minimizing cost. Warehouse management – ensuring smooth and efficient inflow and outflow of products is the first step. One relatively new technology that is being used in some places is ‘RFID’ (Radio Frequency ID). These are small tags (like a semiconductor chip) that are attached to stocking pallets, cases or other products that need tracking. A radio frequency based reader then ‘reads’ from this tag. This helps in easy tracking, sorting and distribution of products in a warehouse, while minimizing manual intervention. Some of these warehouses span many acres and have 1000s of pallets, miles of conveyor belt and typically handle over 100,000 individual products. Hence automated tracking is very important. RFID systems also need efficient large scale data acquisition and storage systems to handle this high volume data.

Truck load planning and truck routing are two important pieces of transportation planning. The challenge in truck load planning is filling up the truck to a full truck load with multiple products, while minimizing excessive shipments to the store (Note – It is always easy to ship a full truck load, if ‘stuffing’ it with unnecessary excess stuff is allowed…). The challenge comes in when this restriction of not shipping too much excess products comes in. Remember, excess product takes up excess space, as well as locks-up excess capital. This is bad for the overall financial performance. Various optimization based approaches that trade-off between cost of shipping early, vs. sending partial truck loads (thus trading off between excess inventory carrying costs vs. excess transportation costs…) are used to figure out the right loading mix inside a truck. In case full truck loads are not possible, then smaller shipments are loaded in, to be delivered to different destinations (typically different stores). This is called as ‘LTL Shipments’ (LTL = Less Than Truck Load). Here the challenge is to come up with a efficient truck route so as to minimize the distance traveled.

Hence if the DeshMart warehouse in Vashi, New Mumbai is shipping LTL shipments to the suburban stores in Bandra, Andheri and Mulund, the optimized route could consist of Vashi-Mulund-Andheri-Bandra. This seems relatively straight forward, but there are a lot of other constraints in the real world. There are some loading constraints, precedence constraints, traffic constraints, regulatory constraints that can influence the most optimal route on a map. Also, for a large retailer like Wal-Mart this process has to be done for 1000s of trucks every day. The IT systems have to deal with managing these whole sets of transactions as well as the decision making processes. They need efficient data integration with the IT systems of external logistics providers as well as suppliers.

In DeshMart’s case, there are also a series of local constraints that are peculiar to the Indian market. Shipping times in India can be fairly non-standard as compared to that in the US. Most truck operators are not organized into big companies. Regulatory requirements like Octroi (a local city tax) can add delays to the process. Enforcement of driving standards/time can also be a problem. Hence similar to Wal-Mart, DeshMart had made a strategic decision to own a private fleet of trucks for their transportation needs. This enables them with greater control over the whole process.

As we saw earlier, the impact of the economic slowdown led to last minute adjustments in assortments. Such changes, as well as those coming from sudden surges in demand can be better handled with a private fleet. DeshMart’s trucks also use the latest GPS based navigation and logging technology that enable the logistics master controller to keep exact track of each shipment in real time.

IT enabled dynamic logistics & transportation business processes helped DeshMart to better respond to the challenges of the ‘real’, ‘unplanned’ world, while keeping transportation costs at minimum.

Store Level Replenishment & Inventory Management

Store Level Replenishment & Inventory Management deals with calculating the right levels of products that are maintained at the individual stores. Too few and you run the risk of running out of stock, often resulting in lost sales and unhappy customers. Too many, and you take up excess space as well as occupy excess working capital.

Specialized replenishment and inventory management IT systems can react to daily fluctuations in the demand signals and pre-calculated forecasts at the store level and identify the right quantity of each product that needs to be shipped to the store. A variety of algorithms are used to do this, and like all other retail problems – scale is a big challenge. Imagine planning 100,000 products across 1,000 stores. The number of products-stores combination goes into millions! Now consider that this planning has to be done for the forecasted demand for the time horizon of next 2 weeks. Each day represents a new demand entry. Thus this further increases the problem size by an order of 14!

Daily demand fluctuations are usually computed based on ‘POS’ (Point-Of-Sale’) data. This data is often directly generated at the systems at the point where the sale takes place (e.g. cash register). POS Systems collect validate and transfer this data to the Replenishment System.

Through efficient store replenishment, DeshMart can make sure that they have the right product at the store, while keeping their costs low. The same cannot be said about their competitors! In fact, walk into any retail store today in India, and chances are you would find many of your preferred items to be out of stock. This goes a long way in generating the customer loyalty that DeshMart has been able to create over the years. What many of the new retail chains don’t seem to realize today (and what some ‘Neighborhood Kirana Stores’ do very well…) is that it is not the fancy layouts, air-conditioning, jazzy promotional material, etc. that attracts the customers! It is being repeatable and consistent and always having the fast moving goods in stock at all times – this is what the customer ultimately cares about!

Store Operations

Store Operations for DeshMart represents a great challenge and a terrific opportunity. Store operations in India can be quite different from that seen in the US or other developed countries. To start with, the store footprints are much smaller. The assortments are also smaller, but there is a lot of localization. For example, a large percentage of the assortment of a store in Chennai will differ from that in New Delhi. Managing store layouts and displays and locating the right stuff in the front, at the end aisles is very important. DeshMart uses CAD like software capabilities to do ‘Planograms’ (Planograms refer to the designing of products placement on the various shelves, while accounting for display priorities as well as the products’ volume dimensions). A fairly unique service in India is ‘home delivery’ service, provided by many grocery retailers. Ordering is either done over the phone or in person. A store level order entry and tracking system captures the order and coordinates the home delivery. DeshMart will be the first retailer in India to launch a completely web-based & call-center based ordering system, starting early next year. Here the order will be accepted and promised centrally and delivered from a central warehouse or a nearby store. This ‘hybrid’ web and brick and mortar model will be fairly unique not only in India but globally as well.

Customer loyalty is key for DeshMart. They have implemented a sophisticated customer loyalty program. A unique card/id number is assigned to a customer and rewards are given based on amount of purchase, as well as other special criteria. DeshMart collects, analyzes and mines customer buying preferences in their centralized business intelligence system and comes up with pricing and product placement strategies. Customer specific targeted emails and other specials are also managed through this system. For example, DeshMart’s data mining system can literally predict what special brand hair oil Mrs. Shah from Ahmadabad is likely to buy and at what frequency – and automatically send specials (or alerts) for the same!

All these entire store-centric systems ensured that even when the consumer spending all over India was going down, DeshMart still had their loyal customer continue to find and spend on the right product mix at their stores.

Conclusions and lessons learnt

In retrospect, the 2008 economic slowdown turned out to be a blessing in disguise for DeshMart. Through their superior business processes, management teams, and IT systems – they were able to not only react effectively to the changing market dynamics; they were also able to grab even higher market share. This same slowdown saw big troubles for many of DeshMart’s competitors, some of which like ‘Bharat Bears Mart’ actually went out of business.

Raj Deshpande reflects on this ‘interesting year’ and ponders how these 3 basic principles go a long way for his business success:

  • Focus on the customer – learn from the neighborhood Kirana Store.
  • Focus on costs at all costs – learn from the world leader, Wal-Mart.
  • Focus on leveraging IT for business – learn from industry leaders.
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Peepaal – Bringing Industry and Academics Together

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improving engineering education in PuneThis is the third in PuneTech’s Improving Education series of posts detailing the efforts being taken by people in the tech industry in Pune to give our students a chance at giving their career a solid foundation by acquiring skills that are valued in the industry with guidance from experienced mentors from the industry. The first in the series was Techstart.in, a program to nurture the passions of students by guiding them to implement specific, and interesting projects. The second was KQInfoTech’s Post Graduate Diploma in Systems Programming where the students don’t actually pay for the course, but end up being funded by industry in return for completing projects.

The third is “Peepaal – Continuous Community Learning” is an online and offline community of industry professionals, college faculty, and students that aims at providing continuous guidance to students through knowledge, best practices and processes. This is a description of Peepaal in the words of one of the founders:

1. Introduction – Bringing Industry and Academics Together

Bill Gates (Windows) , Steve Jobs(Mac, iPod, iPhone), Larry Page & Sergey Brin (Google), Orkut Büyükkökten (Orkut), Mark Zuckerburg (Facebook) , Sabeer Bhatia (Hotmail)  apart from being successful have one important fact in common. They were all young when they dreamed of transforming the world into a better place to live. The truth is the pioneers in the technology field have been youngsters who have time and again brought new path breaking perspectives and solutions.

After 25 years in the IT field India has become the outsourcing hub of the world albeit with some deficiencies. On the pioneering front we are still some steps behind. Why in spite having such a large pool of vastly talented students are we still lagging behind? This is a million dollar question. But the answer to the question is easy.

Our students have always learned in a vacuum far away from the reality. Firstly they only have a very distant view of the needs of the industry and secondly they have passive view on the problems faced by the people and society. Good industrial skills are needed to become successful professionals of the IT industry.  Identifying practical problems and solving them will make the leaders and pioneers of tomorrow.

Peepaal aims to become that easily accessible Bridge between the students and the industry. Peepaal aims to become that great ladder on which the pioneers and leaders of tomorrow will climb and make a difference to the society we live in. Peepaal aims to become that Guru who will always show the right path to the students. Peepaal aims to become that Family who will nurture the students to become as independent as possible. Peepaal aims to become that Friend who will bring students with similar thoughts and interest together.

2. Do our talented students need improvement? Can it be done?

The Peepaal initiative was born out of our various interactions with students, faculty and our experience with freshers entering the industry. Each of these experiences reemphasized the significant need for Industry to provide a very strong collaborative role in shaping students and supporting faculty in delivering industry relevant knowledge to students to ensure they are more well rounded professionals by the time they enter the industry. It was also clear that this is not possible without continuous support from the industry and a collaborative model for delivering knowledge, best practices and processes.

While there are a number of areas that require focus we have identified some core focus areas for Peepaal and use projects as a mechanism for being able to deliver these improvements.

Why Projects? Well Projects have been something the students have been actively working on during their course curriculum and their is a significant focus on projects among students and faculty and we think it is a great mechanism to deliver knowledge. The issue however is that the current process of executing projects leaves a lot to be desired.

We expect to significantly alter the way student projects are executed and help them in the following:

  • Innovate: Projects can be a key medium to innovate and learn new ideas and principles and apply them in real world. We expect Peepaal guided projects to be able to help students to Innovate in the real world and follow cutting edge technology trends. In addition we believe the core CS fundamental concepts are key to ensuring that students deliver value from their project. Concepts like Data Structures, DBMS, operating Systems for example have to be understand and applied well on projects so that students learn by doing.
  • Execute: If a project does not succeed, the value of the effort is reduced to naught and it turns into an academic exercise. There are various industry proven methods like “Proof of Concept” implementation which helps support this. We expect the Peepaal Barcamps and the online portal to serve as checkpoints and support mechanism to significantly increase the number of successful projects.
  • Showcase: While an Idea looks great on paper and even after it is successfully executed it all boils down to how well you can showcase it. This applies to student projects as well. There is a considerable lack of awareness of the need and techniques to successfully showcase a project to an audience. Through a continuous stream of Barcamps and presentations we expect to significantly raise the bar on project presentations.

3. Objectives of Peepaal

How does Peepaal plan to solve the problem areas? Following are the high level steps Peepaal is undertaking at a brisk pace:

  • Establish strong collaboration between students and the industry to bring the students into reality.
  • Establish strong collaboration between students in various campuses.
  • Engage the faculty in healthy discussions and suggest solutions to the problems they face to enable successful projects.
  • Help students in the entire life cycle of their projects.
  • Provide technical and industrial knowledge,best practices to the students in an easy to understand format.
  • Compliment the students academic education with the learning and applications of the latest trends and technologies.
  • Provide guidance to the students in every manner so that they do not have to reinvent the wheel like the students of the past.
  • Encourage innovative ideas from the students that will have profound effect on the society we live in.
  • Encourage discussions so that students open up to share problems and seek solutions.

4. Peepaal Online Portal

Peepaal online portal http://www.peepaal.org/campus provides the much needed platform where the students, faculty and the industry come together. Following are the objectives it aims to meet:

  • Establish a strong communication mechanism between the students and the industry. Students, Faculty post questions on the discussion forums and the industry experts answer them in a simple easy to understand format.
  • Provide Students with articles that give them insight on the latest trends and technologies.
  • Prevent Students from re-inventing the wheel by suggesting them right tools,techniques and designs.
  • Provide Students with a forum to improve their interpersonal skills.
  • Provide industry experts a simple way to interact with students instead of visiting their colleges.
  • Provide industry experts to talk to a greater audience and use this greater audience in useful ways.
  • Community features that will get students with like thoughts together.

5. Peepaal Barcamps

Peepaal Barcamps are an innovative process model to guide the students in the entire life cycle of their project. Peepaal aims to be as close to students as possible in this regard. Peepaal engages face to face with the students during the course of their project through various Project BarCamps and campus events.

We have already conducted a number of BarCamps in the first season where we addresses close to 1000 students across various colleges across Pune. Starting January we will conduct an additional 18 Barcamps across 10 colleges in Pune where expect to work with close to 1500 students on their projects.

Some of the colleges that we are currently work with include Symbiosis, Nowrosjee Wadia, PICT, MIT, VIT, Fergusson, Modern, SP College.

6. Peepaal Linked-in community

Peepaal has setup a linked in community. This is the place where the industry experts, students and faculty will get together for discussions and debates. These discussions will give Peepaal great insights into the initiative and further improving the initiative.

http://www.linkedin.com/e/gis/1454357/1D32262ADD49

7. Get Involved !!!

All of us are aware that our educational system needs a lot of support if we want to sow the seeds for transformation in society for the future. The source for innovation and execution lie in our future students and it is all of us as experienced professionals who are best suited to provide this support. All it would take is a few hours of your time online or offline to make this impact. You can join us in our discussions online, on the portal, in the linked in community or join us for the Barcamps.

The number of Industry professionals have grown rapidly since we have started and we have close to 50 Industry professionals registered for the initiative and over 800 students impacted by the program. We do however need a lot more industry participation to ensure we have significantly broader impact across a larger number of students. If you are an Industry Professional, Faculty or a student and if all of this makes sense to you and you would like to join us on this initiative drop us a line at peepaalcampus@gmail.com and we would be happy to meet up with you to get started.

What to expect – Industry Professionals

An industry professional who wants to get involved with Peepaal should expect to:

  • Conduct Mock Interviews
  • Discuss and Refine Project Ideas
  • Mentor Projects Online
  • Own Technical Focus Areas
  • Drive Technology Trends
  • Support Campus Contact Programs
  • Collaborate with your campus
  • Discuss and Collaborate with Peers online

All you need is 2 hours a week

What to expact – Students

A student who gets involved in Peepaal can expect the following help:

  • Prepare for Placements
  • Identify, Plan and Execute Projects
  • Identify Technical and Soft Skill Needs
  • Showcase Competencies
  • Understand Technology Trends
  • Plan and execute Barcamps
  • Collaborate with Industry Experts
  • Discuss and Collaborate with Peers online

All you need is a few hours a week.

Related links:

Know any other Pune initiatives that belong to this series? Let us know.

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PuneTech’s 11 most popular articles/pages of the year

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Pune TechnologyThe end of the year is time for resolutions, introspection and top-10 lists. We too got swept up in the wave, and here is our top-11 list of the most popular articles on PuneTech in the last year. PuneTech started on 6th March, 2008 and at that time, we were not sure of what directions it will take, and whether we’ll be able to sustain or grow it. It has exceeded our expectations in terms of impact and interesting new directions. But we have been a little disappointed with the amount of community-contributed content – most of the content is still put up by just one or two people – I was hoping that there would be at least 10 people contributing regularly by now. If you would like to contribute articles to PuneTech, please get in touch with us.

In any case, here are the most popular pages on PuneTech as measured by the number of people who viewed them:

  1. Building Eka, the world’s fastest privately funded supercomputer: This was one of the first articles I wrote, and has hit the #1 spot because it got picked up by slashdot. I’m fairly proud of the fact that my server survived the slashdotting without going down or even slowing down. The related page announcing this event, and the PuneTech wiki page for CRL managed to get other spots on this list due to spillover traffic, but since they are pretty much the same, I’ve not included it in the list.
  2. The PuneTech Blog main page: Not surprisingly, the main page – which essentially holds the PuneTech blog – is the second most visited page on PuneTech.  I would still prefer that people subscribe to PuneTech instead of visiting the main page – that way, there’s less chance of missing any articles.
  3. The PuneTech wiki: This page is unfortunately a distant third – I was hoping that over time this would become the “main page”, but we are still some way away from that. The problem partially is that it doesn’t get much prominence on the main page. Also, the content there needs some work. Amit Paranjape is working on a new improved categorized list of companies to spruce up the wiki, so expect more prominence for it in this year.
  4. About PuneTech: Have you read that page? If not, maybe you should look at it, to get an idea of the how any why of PuneTech.
  5. Categorized List of Companies on the wiki: While this is very far from where it should be, it is still a useful resource – and expect it to become better. Please note, you too can add your company to this list. It’s easy and free.
  6. The list of all company overview articles on the PuneTech blog: The PuneTech blog has categorized listing pages that you can browse by clicking on the “More Links” bar at the top.
  7. Badmash.tv: Pune-based Animation Studio: To be frank, I have no idea why this one is so high up on the list. In any case, animation is a hot and happening area for tech in Pune, and I am hoping that one of these days, someone will write an nice in-depth article on this area, covering the important technologies, companies and organizations in Pune in this area. Anyone up for the challenge?
  8. Vision for Pune – 2015: Specific projects – This page, and the companion article giving the broader, longer-term Vision for Pune was written by Anupam Saraph, CIO of Pune, at the insistence of PuneTech. I’m glad to report Anupam has found some collaborators for some of these projects due to the appearance of these articles and at least one pilot project is under way already.
  9. Data Leakage Prevention overview: While it might not be obvious from this list, overview articles like this one, which introduce our readers to a new technology area are some of our most popular articles – and they do form a bulk of the #11 to #20 on the most popular list. One of my favorite such articles is the overview of SCM, (which is not on the list possibly because it is “too young”). I’m hoping for more such articles this year. Look out for overviews of CAD, CAM, CAE, life sciences, animation, etc. Suggest your own areas for an overview like this. Or best, write one such article.
  10. Narendra Karmarkar’s recent research: Karmarkar revolutionized linear programming by his Interior Point Method. After this, he worked on a new architecture for supercomputing, based on concepts from projective geometry. Currently, he is based in Pune and is synthesizing these concepts with some new ideas he calls sculpturing free space (a non-linear analogue of what has has popularly been described as folding the perfect corner). This approach allows him to extend this work to the physical design of machines. This article on PuneTech and the corresponding PDF represent the first public disclosure of his new ideas.
  11. Category:Events: I had to extend this list to 11 instead of 10 because I could bear to leave out the events page. PuneTech has easily become the most comprehensive source of information about interesting technology events happening in the city. There are various different ways in which you can keep track. All tech events that we find interesting are added to the PuneTech calendar. You can subscribe to the RSS feed or email alerts. Additionally, we’ve found that people prefer to be reminded of events by SMS, hence we’ve started the (free) PuneTech SMS reminder service. And, of course, if you are aware of an event that is not listed, please let us know.

There is much more in store for 2009, so stay tuned.

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Tweet for Pune

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In Barcamp Pune 5, I gave a presentation on why you should be on twitter. I also asked Ranjit Gadgil and Anupam Saraph to give a presentation on the Pune Governance wiki that they have been nurturing for the last 6 months. As a result of these presentations, various twitter related initiatives are getting started with respect to e-governance in Pune. Pravin Nirmal implemented a system where every ward page on the Pune Governance wiki shows the latest tweets related to that ward. (See for example, the bottom of the Aundh Ward page.) Pune Mirror also has a story on other such initiatives.

Last week, Anupam Saraph wrote this post on how everybody should “tweet for Pune”. We are reproducing it here:

Imagine you could SMS to everyone. Imagine you could let everyone know there is a traffic jam at the University circle. Imagine you could send out an invite to the tree-planting drive on the Baner Hill. Imagine you could message the world that admissions open for the educational course you have been waiting for. Imagine you message out reports of malaria in your neighborhood or choose to report births, deaths, suspicious activities, new shops, sale offers, rentals….

Imagine as a government agency you message out water closures. Imagine you message out flood alerts, road closures or diversions, bus, train and air departures or arrivals, waste collection notices, new project announcements, vip visits, dates of elections, urls of actionable sites…

That’s like a twitter of birds- hundreds of messages all at once…No wonder that these public messages sent on the internet are called tweets.

Of course you do not want to have thousands of tweets clogging up your life and that’s why tweeters like @pravinnirmal are enabling location specific tweets on pages at the governance wiki. See the tweets at the bottom of this page on the governance wiki. Give it a try. This way you can see the tweets sent by anyone on a location on a page devoted to that location. You can even go edit that page and add your two-cents worth.

You can also signup on tweeter and choose to follow tweeters like myself, Barack Obama or anyone else! By following a tweeter you can see all the tweets the person sends out. Others interested in your tweets may choose to follow you too.

With the White House tweets, the US senate floor tweets, the US house floor and even the US Supreme Courts on twitter tweeting away, should the rest of the world be behind?

Cities in the US have begun tweeting. Look at: San Marcos, Texas, Greensborocity, North Carolina, Killeen, Texas, Round Rock, Texas, McAllen, Texas, Plano, Texas. The Police in Austin, Texas, are using tweets for law and order advisories, notices and quick reassurances.

Can we have our ward officers, the Pune Police, the Pune RTO, the Pune Collector, the PMC, the PCMC, the Cantonment Boards, the MIDC, the PWD, the telecom companies in Pune, the Income Tax commissionerate, the Service tax commissionerate, the Pune University and even the businesses in Pune tweet?

All this is simple and free. Just sign into Twitter and start listening to the whole world- or talking too! Well not exactly the whole world, but to the whole world signed into twitter. If you are a government agency or a business in Pune you may qualify for some help and customization to get your tweets increasing your impact and effectiveness. Just email cio.pune@gmail.com to request your office to show the way to the rest of India.

About the Author – Anupam Saraph

Anupam Saraph is the CIO of Pune City. What that basically means is that

In January 2008, Pune Municipal Corporation (PMC) and Software Exporter’s Association of Pune (SEAP) announced the appointment of Dr. Anupam Saraph as the “CIO of Pune”. Dr. Saraph’s appointment has been made with the objective of providing expert guidance to various e-governance initiatives that are underway in Pune, to build a vision for Pune to transform into one of the most technologically advanced cities of the future.

Dr. Saraph has a Ph.D. in Informatics from the Rijksuniversiteit Groningen University in Netherlands, and is a co-founder of a think-tank and a management consultancy. You can follow him on twitter, his blog, and soon on the under-construction site ciopune.in.

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Win two entry passes to Innovations 2009 – PuneTech Exclusive

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Update: Yogesh Pathak and Ravi are the winners. Congratulations, instructions have been sent to you by email.

Innovations 2009Every year, the IIT-Bombay Alumni Association of Pune holds their flagship event, Innovations, which showcases 16 of the most interesting innovations from across India. This year, Innovations 2009, will he held on January 10 and 11 from 9am to 6:30pm at the Dewang Mehta auditorium, Persistent Systems.

PuneTech has teamed up with IITBAA to give two of our readers a chance to win free delegate passes, which would otherwise cost you Rs. 1000 each. To enter, all you need to do is leave a comment on this post as to why you would like to attend Innovations, and how you expect to benefit from attending. (If you are a blogger, and would like to send some google juice our way, blog about this, and link to this post. Your trackback/pingback appearing in the comments sections will be considered an entry into this contest.) The two most interesting responses, as determined by the IITBAA executive committee in consultation with PuneTech editors will get one free entry pass each. Contest ends on Monday, 5th January, midnight (Indian time).

What to expect at Innovations 2009

Innovations 2009 will be a two day event

Day 1 will start with keynote speech, followed by 16 fast-paced presentations by the innovators, a visit to the exhibits, and Q&A with all the innovators. In the evening, there will be a networking dinner for innovators with special invitees.

Day 2 will be an i2i (Innovation to IPO) Workshop. i2i is a concentrated learning capsule of 4-5 hours on the vital aspects of starting a new enterprise. The innovators and would be entrepreneurs are exposed to ‘how to’ – create a business plan, explore funding options, create a go to market strategy, deal with legal/regulatory aspects and more. Renowned experts from diverse fields share their experiences & expertise in 45 min sessions (3-4 of such sessions are planned) and help innovators create their own roadmap to success.

Why we think you should attend

Amit Paranjape, primary advisor to PuneTech, has attended the last two Innovations events, is a fan of this event and the reason why we talked the IITBAA into running this contest for our readers. Both of us (i.e. Amit and Navin) are attending Innovations (with our own money). We this this will be a great place to meet a whole lot of very interesting people from the startup ecosystem in India (although, technically, Innovations is not limited just to startups – even innovations in big companies are eligible.)

The innovations website gives these reasons for why you should attend.

Approximately 350 invitees consisting of VC’s, bankers, corporate executives, academicians, scientists, media, and other professionals are expected to attend this event. The organizers believe that there are a number of reasons why an invitee will be compelled to attend such an event. They are:

  • Meet multiple innovators to learn about what it took to put the innovation in practice. The attendees will acquire an interdisciplinary perspective on the process of innovation and on how to pitch an innovation.
  • Listen to an industry leader’s perspective on the process of innovation.
  • Have one-on-one sessions  at the exhibits and set up subsequent dialogs. The exhibition  booths will highlight  the key aspects of each innovation. The organizers expect that individuals closest to the innovations presented are available to interact with the attendees.

So try to come up with different reasons as to why you want to attend – maybe something specific to what you want to get out of this event. If you’ve attended this event in the past and have interesting stories to share, you would have an unfair advantage. So be it – life is unfair.

And let your friends know. PuneTech is a free, non-commercial, for the community and by the community site which depends only upon word-of-mouth advertising.

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Do an industry-supported “free” PG Diploma in Systems Programming

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This is the second in PuneTech’s Improving Education series of posts detailing the efforts being taken by people in the tech industry in Pune to give our students a chance at giving their career a solid foundation by acquiring skills that are valued in the industry with guidance from experienced mentors from the industry. The first in the series was Techstart.in, a program to nurture the passions of students by guiding them to implement specific, and interesting projects. Today we cover KQInfoTech’s idea of having a Post Graduate Diploma in Systems Programming where the students don’t actually pay for the course, but end up being funded by industry in return for completing projects.

KQInfoTech was started by Anurag Agarwal and Anand Mitra, both of whom chucked high-paying jobs in the industry because they felt that there was a desperate need to work on the quality of students that is being churned out by our colleges. For the last year or so, they have been trying various experiements in education, at the engineering college level. All their experiments are based on one basic premise: students’ ability to pay should not be a deterrent – in other words, the offerings should be free for the students; KQInfoTech focuses on finding alternative ways to pay for the costs of running the course. Their latest offering is the KQInfoTech PG Diploma in Systems programming which they explain thus:

This PG Diploma is for the people looking for making a career in the system programming.

It is a program in the “Gurukul” tradition of education. There are two unique features to this program :

  • Cost: Your education does not depend on your capacity to pay. This course is effectively free. Your education gets paid by your work during this program.
  • Work experience: You are also getting real industry work experience during your education. During this course, you will get one year worth industry experience.

Does working in Linux Kernel, writing device drivers for Unix and Windows, writing system level programs that interacts closely with operating system interests you? But you don’t have the right skill set for this.

KQInfotech is lead by people who have spent decades working in the area of file system, kernel programming, Linux kernel etc. They are ready to educate you in “Art of System Programming”. Are you ready for all the hard and interesting work required?

It is a unique post graduate program of one year, which would provide you education as well as work experience. This program will cover Unix internals, Linux kernel programming, Multi-threading, Windows internals, Writing device drivers etc.
1. Industry Experience

Experience gained working on live industry project is more important than just theory based education. Two third of this program’s duration will be spent on real industry project as interns. Beside gaining industry experience, internship makes this program free for participants.
2. Course Details

Experience of Unix or System Programming is not a pre-requisite for the course.

The course is divided into three broad areas namely Unix internals, Linux Kernel and Windows System programming. To cement the concepts candidate will have to submit a month long project or thesis in each area. Whole course is divided into a number of modules. These modules are:

  • Introduction of Unix
  • Advance system programming in Unix
  • Rapid development tools
  • POSIX multi threading
  • Linux Kernel internals
  • Linux device driver development
  • WinAPI
  • Windows device driver development

Each module will be covered over a duration of 4 to 6 weeks and each project will run for 4 weeks.The program stresses on imparting knowledge through practicals and hence more than 50% of the time will be spent on programming.

3. Eligibility

Participants with following qualifications can apply for this course.

  • BCS, or BSc with Computer Science
  • MCS/MCA final year students
  • BE in any field
  • People with industry experience

4. Selection Process

Candidates will be selected on the basis of a written technical and aptitude test, followed by a technical and personal interview. Syllabus for technical test contains :

  • C programming language
  • Data structure and algorithms
  • Operating system concepts

Entrance exam will be held on 20th Jan at 10:00 AM. Duration of exam will be 2 hours.

Diploma course will start from 2nd Feb.

Next batch will start from 3rd Aug. Corresponding entrance exam will be held on 20th July.
5. Logistics

It is an intense program with 12 hours of daily commitment for one year. One third of that time would be training and the rest will be internship.

There will be security deposit of 10,000/- (Ten thousand) rupees for this course. On completion of this course, deposit will be returned to the participant. Every participant needs to have a laptop for this course, participant can bring their own laptop, or we can arrange one for them for a security deposit of 25,000/- (Twenty five thousand). At the end of the course, the participant can return the laptop to get back the deposit.

6. Placement

Market for system programming is huge. There are a large number of companies looking for people with these skills. Symantec, Symphony, Calsoft, Persistent, Marvell, KPIT, Wipro, Infosys are to name few of them.

We will provide placement assistance to all participants.

The website for this course is here. For more details on Anurag and Anand’s background see the about us page on KQInfoTech.

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Techstart.in: Nurturing the passion of our engineering students

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This week on PuneTech, we are going to feature a bunch of initiatives started by people who are passionate about helping students in our engineering colleges (actually anybody interested in technology, student or not, engineering or not) to be more, achieve more, learn more, all with the help of mentors from industry who would like to see all these talented students reach their true potential. Watch this space over the next few days for more such initiatives or better yet, subscribe for updates via RSS, Email, or twitter. Today, we are featuring, Techstart.in. (Update: the next post in this series is about KQInfoTech’s industry-supported “free” PG Diploma in Systems Programming.)

Techstart.in is a group that aims to create special interest technology clubs of students, with each club mentored by one or more people from from industry who have experience in that area, and are willing to spend time with the students to guide them. The club will have loosely structured activites, projects to complete, possibly presentations and discussions, all planned and guided by the mentors.

The club was started by Freeman Murray and has since been joined by a number of mentors – but there is no such thing as too many mentors. So, you should seriously consider signing up. The only qualifications you need are that you should be passionate about this, and you should have a little industry experience.

Freeman explains techstart.in thus:

The basic idea is to find people with practical industry experience willing to spend some time each month creating or identifying useful exercises people interested in their field could do to develop their skills and posting them on a blog or mailing list. Additionally they spend time each week facilitating a discussion of the participants on a mailing list.

The intention is not to compete with existing online resources for technical training and support, but to provide some more human support and mentorship for people on the path. Mentors can and should encourage participants to engage in the existing online communities surrounding their technologies. Their guidance as to what communities to engage, and how to engage could still be invaluable.

In this way, over time people can develop significant skills in fields where they don’t have formal training while they continue their studies or working full time.

We all crib about the quality of technical education, but with the Internet we have the opportunity to do something about it. We can help eager young and the motivated who want to get into high-tech but are over whelmed at the amount of information available on the internet, or get blocked because of elementary problems.

It shouldn’t take much time, for mentors just a couple hours a month to research the monthly activities and post links to learning resources participants should look into, and then a couple hours each week responding to questions and facilitating discussion on the mailing list. For participants, activities should take 5 – 10 hours of effort each month, plus some additional time sharing with the community thru the blog and the mailing lists.

If there’s a field you are passionate about and feel more people should get into, please think about setting up a small club for it on the techstart wiki. If you see a club where people are exploring a technology you’ve been curious, by all means join the community.

The initial clubs we have are in blogging, advanced java and open source technology. Amit is also mentoring a group to write some automatic deployment scripts in php.

Find out more on the wiki – http://techstart.in

How to participte – Students

To participate in one of the techstart clubs simply visit the clubs website, or join the their mailing list. Make sure to introduce yourself to the community when you join, and read over any introductory material the mentor put up on the website or in the group.

How to participate – Mentors

Start your own club or make yourself available for mentoring people on a project – simply create a mailing list for it on Google Groups or any other public mailing list site, and add a description of it and yourself to this wiki. At least every month post exercises to the list which participants can do to strengthen their skills, and spend some time every week monitoring the list, encouraging discussion, and helping people with problems. That’s it !

Contact [mailto://freemanATpobox.com|Freeman] to get the wiki key. If you’d like to join the discussion about how to make TechStart better please join the TechStart Google Group

Clubs already formed

Title: Bloggers Club

Mentors: Freeman Murray Tarun Chandel

Description:

This track is for people interested in writing on the internet. All participants will set up and customize their blog initially, and then every two weeks participants are encouraged to share their next post with the group. The group will give feedback on the writers style, grammer and ideas. Members are additionally encouraged to comment on eachother’s blogs and do cross linking. Occasionally exersizes relating to google analytics and SEO will be given to the club members. Twitter, Videoblogging , Google Analytics, SEO, RSS and feedreaders will also be discussed in time.

Mailing List: groups.google.com/group/bloggers-club

Title: Java Insights 101

Mentor: Parag Shah

Description:

This learning track is for developers who have completed at least one course in Core Java (or are familiar with basic principles of Java, like syntax, compiling, and running Java programs) and would like to improve their understanding of the Java language and ecosystem.

URL: adaptivelearningsolutions.blogspot.com/2008/11/javainsights-101.html

Mailing List: groups.google.com/group/adaptive-learning

Title: Open Source Technology

Mentor: Tarun Dua

Description:

This is a track for technologists who want to build upon their understanding of the free and open ecosystem being provided by the Open Source and relatively open and portable datasets. Do you dig a well everytime you want to drink water, then why do you insist on hacking a new solution when another more efficient solution already exists as Open Source. Leverage what already exists in the ecosystem instead of re-inventing the wheel.

URL: linux-delhi.com

Mailing List:groups.google.com/group/linux-delhi-techstart

Title: Auomatic Deplyoment Script

Mentor: Amit Singh

Description:

Ami of this project is to automate the process of deploying websites written in PHP. A very basic script exists at my blog, we will be enhancing it by putting continuous integration, database migration etc.

URL:http://sourceforge.net/projects/adscript

Mailing List: http://groups.google.co.in/group/adscript

Mentors already signed up

Name Affiliation Skills & Interests
Freeman Murray upStart Software development training, startup culture, internet video, internet advocacy
Subhransu Behera EnTrip Ruby on Rails, Web Application Development, Linux System Programming, Fedora Packaging
Parag Shah Adaptive Software Solutions Software development, Software development training, New media technologies
Tarun Dua E2ENetworks Efficient technology operations is the key to effective delivery of technology where it matters most.
Amit Singh Pune It Labs Pvt. Ltd. Web Application Development
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Pune’s Satish Talim wins “Ruby’s Top Teacher in 2008” award

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Satish Talim

Satish Talim, whose RubyLearning onine classes have enrolment of more than 5000 students from over 100 countries, has been named the “Top Ruby Teacher in 2008” by RubyInside (the #1 Ruby news site in the world).

An excerpt from the article:

How (and when) did you find your way into Ruby?

After being with Java since its beta days, my interest in Ruby was aroused after I read an article Ruby the Rival in November 2005. I decided to learn Ruby myself and started making my Ruby Notes for my site, RubyLearning.com.

How have your Ruby & Rails related projects progressed in 2008?

I started my free, online Ruby teaching site in January 2008 and today it has over 5600 participants who have either learned Ruby or are in the process of learning Ruby with me. The experience has been very positive and fulfilling. I’ve also been promoting Ruby in India since 2006 with my PuneRuby User Group. I also managed to convince the the University of Pune to introduce Ruby as a full time paper in their computer science course from Jan. 2009.

With RubyLearning.org I am able to give Ruby exposure to people across the globe (there are currently students registered from over 140 countries) – we have people from far-flung places where no trainers (leave alone Ruby trainers) are available – my site facilitates that.

Read the full article for more about the award.

Satish runs two RubyLearning portals: namely RubyLearning.com (is a thorough collection of Ruby Study Notes for those who are new to the Ruby programming language and in search of a solid introduction to Ruby’s concepts and constructs) and RubyLearning.org (where, since 2006, participants from across the globe have been learning online and for free, the Ruby computer programming language).

However the RubyLearning portals are not Satish’s primary occupation. His experience lies in developing and executing business for high technology and manufacturing industry customers. Basically, he has helped start subsidiaries for many US based software companies like Infonox (based in San Jose, CA), Maybole Technologies Pvt. Ltd. (Servient Inc. based in Houston, Texas) in Pune.

You can also follow Satish on Twitter where as @IndianGuru, with over 700 followers, he is the top twitterer from Pune. (As to why you should be on twitter, see our article “Why you should be on Twitter“; and then immediately after that, you should follow @punetech, and all the others mentioned in in these posts over at AmIWorks.)

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Supply Chain Management in Consumer Goods – An In-Depth Look

In Depth, Overviews,

Amit Paranjape, a regular contributor and primary adviser to PuneTech, had earlier written an article giving an overview of Supply Chain Management, and companies in Pune that develop software products in this area. This article, the next in the series, goes into details of the problems that SCM software products need to tackle in a consumer goods supply chain. This is a longer-than-usual article, hence posted on a Friday so you can read it over the weekend (assuming you are not attending one of the various tech activities happening in Pune this weekend.)

Here is a story about a packet of ‘Star Glucose Biscuits’ in ‘SuperMart’ on FC Road in Pune, told from the point of view of Supply Chain Management. Buckle up your seat belts because this story has tension, drama, emotion, and suspense (will the biscuits reach the shops in time for the T20 World Cup Promotion?)

Overview

The story begins at the Star Biscuits Factory in Bangalore where flour, sugar and other raw material are converted to the finished cases of biscuits. From Bangalore, the biscuits are shipped to a regional Distribution Center on the outskirts of Pune. This center then ships the biscuits to the local depots in different parts of cities such as Mumbai, Pune and from there they ultimately end up at the neighboring retail store, such as SuperMart on FC Road, Pune. In this seemingly simple journey are hidden a host of difficult business decisions and issues that arise on a daily basis. And to complicate matters further, we will throw in a few ‘interesting’ challenges as well! Throughout this story, we will take a deeper look at how the various business processes, and software programs associated with planning this entire supply chain network work in concert to bring you the extra energy and extra confidence of Star Glucose Biscuits.

This chain, from the raw materials all the way to the finished product sitting on the retail shelves is called the supply chain, and managing it efficiently is called supply chain management. Supply chain management is one of the most important aspects of running a manufacturing business, and doing it well has been the key to the phenomenal success of such giants as Walmart and Dell. The basic conflict that SCM is trying to tackle is this: you must have the right quantity of goods at the right place at the right time. Too few biscuits in the store on Sunday, and you lose money because have to turn customers away. Too many biscuits in the store and you have excess inventory. This is bad in a number of ways: 1. It eats up shelf space in the store, or storage space in your warehouse. Both of these cost money. 2. Your money, your working capital is tied up in excess inventory which is sitting uselessly in the warehouse. 3. If the biscuits remain unsold, you lose a lot of money. The same trade-off is repeated with intermediate goods at each step of the supply chain.

The Supply Chain in detail

Schematic of a supply chain. From bottom to top: multiple suppliers supply raw materials to multiple factories. Finished goods are then sent to regional distribution centers. From there it goes to smaller regional depots, and finally to individual stores.
Schematic of a supply chain. From bottom to top: multiple suppliers supply raw materials to multiple factories. Finished goods are then sent to regional distribution centers. From there it goes to smaller regional depots, and finally to individual stores.

At the Star Biscuit factory in Bangalore, they are gearing up to meet forecasted production requirements that were recently communicated by the Star Biscuits headquarters (HQ) in Mumbai. This is the ‘demand’ placed on this factory. These production requirements consist of weekly quantities spread over next 12 weeks. The factory planning manager now has to plan his factory to meet these requirements on time.

Let us see what all he needs to take into account. First, he needs to figure out the raw material requirements – wheat flour, oil, sugar, flavors, etc. as well as packaging material. Each of them has different procurement lead-times and alternative suppliers. He needs to pick the time to place orders with the right suppliers so that the material is available on time for the manufacturing process.

The manufacturing process itself consists of two primary steps – making the biscuits from the flour, and packaging the biscuits into individual boxes and cases. Typically, multiple parallel making and packing lines work together to achieve the desired output. The packing process scheduling is often complicated further by a series of different sizes and packaging configurations.

Ensuring that the right amount of material is available at the right time is called Material Requirements Planning (MRP), and in the old days, that was good enough. However, this can no longer be done purely in isolation. Even if the amounts of the different raw materials required are predicted precisely, it can be problematic if the various making and packing machines do not have the capacity to handle the load of processing the raw materials. Hence, another activity, called capacity planning, needs to be undertaken, and the capacity plan needs to be synchronized with the materials requirement plan, otherwise excess raw material inventory will result, due to sub-optimal loading of the machines and excessive early procurement of raw material. Excess inventory translates to excess working capital cash requirement; which in the current hyper competitive world is not good! Luckily, today there are sophisticated APS (Advanced Planning & Scheduling) software tools that are far superior to traditional MRP systems that enable him to simultaneously do material and capacity planning.

Happy with the production plan for the next 12 weeks, the factory planner then makes sure that individual making and packing lines have their detailed production schedules for the next two weeks. The finished cases leave his factory on truck loads. But where do they go from here? The journey to SuperMart where our customer wants to purchase the final product is still far from over!

The next stop is a big distribution center (DC) for the western region that sits on the outskirts of Pune. This distribution center is housed in a large warehouse with multi-level stacking pallets (each pallet contains multiple cases) of multiple different products from the manufacturer. A set of conveyors and fork-lifts enable material to flow smoothly from inbound truck docks to stocking area, and from the stocking area, to the outbound truck docks. These products come not only from our Star Biscuits factory in Bangalore, but from various other Star Biscuits factories located all over India. In fact, some of these products could also be directly imported from the parent company of Star Biscuits in the UK (the ones with the bitter, dark chocolate!). This Pune distribution center stocks and stores this material in proximity to the western region – with specific emphasis on the large Greater Mumbai and Pune markets. How are all these warehousing related activities smoothly managed? The DC manager takes full advantage of a Warehouse Management System Software (WMS). The truck loading and load containerization is managed by a Transportation Management Module.

From here outbound shipments are sent to smaller regional depots that are located in the cities, nearer to the stores. From these depots, the biscuits are finally shipped to the stores to meet the end customer demand. How is this demand calculated? Clearly, it is impossible to predict the demands coming from individual customers at the store, few weeks in advance! Hence it is necessary to ‘forecast’ the demand.

Forecasting demand and determining stock levels

Who decides how much material to stock? And how is it calculated? Clearly, as we briefly indicated earlier, keeping too much product is costly and keeping too little results in stockouts (material unavailability on store shelf) at the stores, thereby resulting in unhappy customers and lost sales. Too much product equals excess working capital (similar to the excess raw material problem) and is not good for the company’s financial performance. Too little, and we will run out if there are any major demand swings (commonly referred to as ‘demand variability’). To achieve the optimum level of the desired stock on hand to buffer against demand variability a ‘safety stock quantity’ is maintained in the warehouse. This quantity is computed by the central Supply Chain Management (SCM) team at HQ.

The actual computation of the safety stock for different products in the distribution center is calculated using a statistical computation (In some cases, a manual override is also done over the computed value). The most common technique consists of using Poisson distribution, demand & supply variability historical data, demand & supply lead time data, and desired customer service levels. Customer service levels are assigned based on an “ABC” classification of the products. ‘A’ category items are the fast movers and have a high revenue share and are typically assigned a 99% customer service level. Roughly speaking, a ‘99%’ customer service level implies that the safety stock quantity is adequate to guard against demand variability signals 99 times out of 100. Proactive planning on a daily basis that involves daily monitoring of stocks of all products is done, based on actual outbound shipments, can many times help in even reacting to that ‘1 in 100’ cases with rapid corrective measures.

The forecasting process for all the products is done at Star Biscuits Head Quarters. Let us continue with our example of ‘Star Glucose Biscuits’. The modern forecasting process is more accurately referred to as a ‘Demand Planning’ process. Statistical forecast is one input to the overall process. Statistical forecasts are derived from shipment history data and other input measures such as seasonality, competitor data, macro-economic data, etc. Various statistical algorithms are used to come up with a technique that reduces the forecasting error. Forecasting error is typically measured in ‘MAPE’ (Mean Absolute Percentage Error) or ‘MAD’ (Mean Absolute Deviation).

The statistical forecast is then compared with the sales forecast and the manufacturing forecast in a consensus planning process. This is often done as part of a wider ‘Sales & Operations Planning Process’ in many companies. Often times, a ‘top-down’ and ‘bottom-up’ forecasting technique is used. Here, individual forecasts at the product level are aggregated up the product hierarchy into product group forecasts. Similarly, aggregate product group level forecasts are disaggregated down the same hierarchy to the individual product level. These are then compared and contrasted and the expert demand planner then takes the final decision. Aggregated forecasting is important, since often times this reduces the forecast error. In case of Star Glucose Biscuits, the aggregated product hierarchy would first combine all sizes (e.g. 100 gm, 200 gm), then aggregate along sugar based biscuits type, and then into ‘All biscuits’ groups.

The end result of the demand planning process is the final consensus forecast that is calculated in weekly time intervals (commonly referred to in planning terminology as ‘buckets’) for a time horizon of 8-12 months. The demand forecasts drive the entire Star Biscuits Supply Chain. To simplify the overall Demand Planning process, modern DP software tools provide great help in statistical forecasting, OLAP based aggregation/disaggregation, and in facilitating interactive collaborative web-based workflows across different sets of users.

Managing the Supply Chain

It was easy if all we had was one DC in Pune and one factory in Bangalore, supplying to one store. But Star Biscuits has a much more extensive network! They have multiple factories throughout India and the same biscuits can be produced by each factory. How much of the demand to allocate to which factory? This problem is addressed by the Supply Chain Management (SCM) team that works in close concert with the Demand Planning team. The allocation is made based on various criteria such as shipment times, capacities, costs, etc. In coming up with the sourcing, transportation and procurement decisions – minimizing costs and maximizing customer service are amongst the top business objectives.

Now, getting back to Star Biscuits, they have over 300 products across 5 factories and 4 DCs. The DCs in turn, receive demand from nearly 100 depots that are supplying to thousands of stores all over India. Determining the optimal allocation of demands to factories, safety stocks to DCs and all the transportation requirements is beyond the abilities of humans. Such a complicated scale and decision problem needs computer help! Luckily, advanced SCM software tools can help the SCM team make these decisions fairly efficiently. Good SCM tools allow user interactivity, optimization, and support for business specific rules & heuristics. The SCM process thus determines the 12 week demand in weekly buckets for our factory in Bangalore, where we started.

To summarize, the overall supply chain – we saw how the product demand gets forecasted at HQ by the demand planning group. The SCM group then decides on how to allocate and source this demand across the different factories. They also decide on the ideal safety stock levels at the DCs. The WMS group ensures the efficient management of the distribution center activities. The factory planner team decides on the most efficient way to produce the biscuits demand allocated to their plant. The transportation management team is assigned the task of shipping material across this network in the best possible way to reduce cost and cut down on delivery times.

Dealing with drastic changes

And all of this is just to do “normal” business in “normal” times.
All the processes described earlier are great if the business works at a stable, reasonably predictable pace. Our safety stock policies guard against the day to day variability. But what about drastic changes? Unfortunately in the current environment, the only thing that is constant is ‘change’.

Here is what happened at Star Biscuits. One day, out of the blue, the entire planning team was thrown into a mad scramble by a new request from the marketing department. In order to react to a marketing campaign launched by one of their top competitors, the marketing department had a launched a new cricket promotion of its own for the next month.

Promotions are extremely important in the consumer goods industry. They entail targeted customer incentives, advertising spending and custom packaging – all in a synchronized fashion. The success of promotions often times make or break the annual year performance of a Consumer Goods Company. Promotions driven sales often times contribute large double digit percentage of total sales of consumer goods companies.

This particular cricket promotion involved a special packing requirement with the star logos on the packet. The target customer demand was not only upped by 50%, the offer also had a ‘Buy 1 Get 1 Free’ incentive. As a result, the total demand was going up by nearly 300%.

The SVP in charge of Supply Chain was trying his best to get a handle of the problem. He was getting irritated by the constant pressure he was under from the SVP Marketing, and the CEO.

The demand planning team had to quickly alter its demand numbers to meet the new targets. The real trouble spot was brewing at the SCM team. The team had to rapidly make decisions on where to source this sudden demand spike. While cost optimization is important, meeting customer demand at ‘all costs’ is the key. The Bangalore factory was already running at 90% capacity and was in no position to produce much more. Luckily for the SCM team, their SCM tool quickly ran a series of scenarios and presented possible alternatives. These scenarios looked at various alternatives such as contract packing, new factories, expedited raw material shipments, direct shipments from the factories to the stores, etc. One of the resulting scenarios seemed to fit the bill. It was decided that bulk of the extra demand be routed to the alternative factory in Faridabad which had some spare capacity. From here, the product was going to be shipped directly (where feasible) to the Mumbai and Pune depots, where a large chunk of the promotion driven demand was expected. The rest of the country’s demand was going to be met by the conventional approach, from the Bangalore factory. The new package also resulted in demand for new packaging material with the cricket logos. New scenarios were generated that source this material from packaging material suppliers from the middle-east. (Interesting to note, that in some time crunched promotions, packaging material often times ends up being the bottle neck!)

Satisfied with this approach, the SVP Supply Chain ordered his team to come up with process improvements to prevent such scrambles in future. Luckily there was an easy solution. The Demand Planning software tool had a nice capability to support an integrated promotions planning & demand planning workflow. Such workflows look at various promotions related data, such as timing, costs, volume, competitor strategies and efficiently plan future promotions – instead of reacting to them at the last minute. In turn, such effective promotion planning can not only drive revenues, but also further improve supply chain efficiencies.

The SVP is happy, but what happened to our end customer on FC Road Pune? Well, she walked away happy with her promotion pack of Star Glucose biscuits, completely oblivious of what had happened behind the scenes!

About the Author – Amit Paranjape

Amit Paranjape is one of the driving forces behind PuneTech. He has been in the supply chain management area for over 12 years, most of it with i2 in Dallas, USA. He has extensive leadership experience across Product Management/Marketing, Strategy, Business Development, Solutions Development, Consulting and Outsourcing. He now lives in Pune and is an independent consultant providing consulting and advisory services for early stage software ventures. Amit’s interest in other fields is varied and vast, including General Knowledge Trivia, Medical Sciences, History & Geo-Politics, Economics & Financial Markets, Cricket.

How is the Indian IT industry handling the recession – facts and figures from NASSCOM

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Ganesh Natarajan, CEO of Zensar, and President of NASSCOM, gave a talk last week about how the Indian IT/ITES industry is tackling the recession. It was full of facts and figures about the state of the industry, and the initiatives that are being taken by NASSCOM. This talk was given during the IndicThreads conference on Java technologies. I’ve already included this in my overall report on the IndicThreads Conference, but thought that it was interesting enough and important enough to warrant a post on its own.

The basic point he made was that we are not going to affected as badly as the rest of the world because of the following reasons:

  • We had already been tightening the belt for almost an year now, so we are in much better shape to handle the recession than those who weren’t being so prudent
  • We are creating new products, tackling new verticals, and focusing on end-to-end service (and these claims were all backed by facts and figures), and this diversification and added value makes us resilient

And he spent a lot of time pointing out that to do even better, or primary focus needs to be the tier 2 / tier 3 cities, 43 of which have been identified by NASSCOM and whose developement will get some attention. Also, our tier 2 / tier 3 colleges are sub-par and a lot of work is needed to improve the quality of students graduating from there. NASSCOM has started a number of initiatives to tackle this problem.

His full presentation with a whole bunch of interesting graphs, facts and figures from NASSCOM is here. Definitely worth checking out.