Beer Distribution SC game at Alliance School of Business, Bangalore

Late Prof. J. Forrester, of Massachusetts Institute of Technology, US, first described the order variance amplification phenomenon (later coined as bullwhip effect) in 1961 where he identified increasingly large demand distortions along the supply chain resulting in swings in inventory levels.

It was during the nineties at P&G that the impact became popularly known as Bullwhip effect. At MIT Boston the improved versions of the game is played for 24 time periods to get the students to experience the real feel of supply chain dynamics. 

 

Simulation of supply chains in the classroom can be used to: 

• Determine safety stock values in multi-echelon supply chains. 
• Evaluate inventory policies. and 
• Identify bottlenecks.

On the afternoon of 19 August 2022 at Alliance School of business Bangalore we played the Beer distribution supply chain game for MBA sem 1 sec C students. Totally there were 3 supply chains. The game was a great learning experience for the students as some of them were experiencing real life commercial situations for the first time in their lives. There was information sharing possible vertically between the stakeholders of a supply chain and laterally between the members at the same level during the game.

Supply chain A was the winner as their initial supply chain costs were the least.

The real benefit from the game happens after the playing during the analysis phase while discussing the dynamics in the post-game classroom sessions. Click here to go thru earlier versions of the game played by the author across educational institutions. 

Discussions will be centred in the introductory classes at the basic level around how the profitability of the supply chain gets eroded when supply chain costs escalate. This is at best the simplest level of understanding.

 

In higher classes we also bring in the concept of order variance amplification (aka Bullwhip effect) leading to profitability erosion due to escalation of hidden inventory holding and shortage costs. The amplification of the variance of orders placed on upstream entities leads to the high costs which adds to the erosion of profitability.

Even sixty years after introducing this concept at Massachusetts Institute of Technology classrooms in Boston by Prof. J. Forrester, the game when played at other top business schools of the world, has not lost its novelty and usefulness in giving the participants real life feel of understanding the impact of supply chain dynamics on supply chain profitability. 

 

The author's beer distribution game sessions with classmates under guidance of Prof. Narayan Rangaraj at Indian Institute of Technology,  Mumbai was a great eye opener. We wish to thank late Prof Jay Forrester and other faculty members at MIT Boston and Prof. Narayan Rangaraj at IIT Bombay India for making possible playing this game that has great intrinsic learning for the student community of the world.

In the Alliance School of Business Bangalore classroom, supply chain A played a very sensible game allowing coordination and communication among themselves (not across echelons) which helped them keep their unit sc costs low and emerge the winner. It offered good learning for everyone. 

 

These days supply chains are a vital aspect of any activity, be it manufacturing or service, even not-for-profit organisatons have vast supply chains. Understanding the impact of holding inventory (and also not having enough of it) across the supply chain is a great lever in hte hands of the CEO in controlling costs. 

 

We shall be playing this ROLE PLAY GAME with all first MBA sections to help them improve the understanding of how supply chain inventory management plays an important role in making or breaking companies.

Click here for a ppt on the game details

George 

Autonomous Maintenance

https://safetyculture.com/topics/autonomous-maintenance/

Industry 5.0 - How can it benefit humanity.

Industry 5.0 is about the nature of the harmonious human-machine relationship that will be brought between the major stakeholders in the business, the customers, businesses, society, employees, technology, machines, suppliers and shareholders. 

In modern industry we find, 

• customers are looking at improved valued offerings, 
• businesses are looking at sustainably meeting its goals keeping in mind the needs of the future generation of customers, 
• society which is the final beneficiary, 
• employees whose work besides getting convenient has become more cognitive in nature, 
• technology that keeps evolving and finding new unmet customer needs to be satisfied, 
• machines that work with high uptimes meet the customer demand, 
• suppliers who give high quality material inputs to the conversion process and the 
• 
  shareholders who give the needed investment to the business. 
  

While Industry 4.0 was focusing more on automation and efficiency, Industry 5.0 gives a human touch or improves the cognitive EQ of the process. 

The term Industry 5.0 refers to people working alongside robots and smart machines. It's about robots helping humans work better and faster by leveraging advanced technologies like the Internet of Things (IoT) and big data. It adds a personal human touch to the Industry 4.0 pillars of automation and efficiency. - www.mastercontrol.com

Industry 5.0 talks of the merging of digital, physical and biological technologies. 

The figure on the right is from Industry 5.0, Pravin Reddy et al, Journal of Industrial Information Integration, March 22 and makes it very clear how from an era of mass production with automation, AI, IoT etc in Industry 4.0, we are moving to an era of mass personalisation in Industry 5.0.

Rail transportation, Super Vasuki, India's longest train ..

In any country, the transportation of people and freight over large distances is necessary for national economic development. Migration of people over large distances and heavy freight movement are the results of fast economic development in any country and faster modes of transportation

In the 75 years of India's economic growth after independence, we have seen great growth in the transportation sector, especially in freight transportation and the role of Indian railways in this growth cannot be neglected. To reaffirm it's role in national economic development, the government with the help of Indian Railways is stressing on building permanent capacity augmentation in freight transportation across the country.

Different freight transportation modes

Reaffirming the role of freight transportation in the growth of the country, Super Vasuki, India's longest freight train, from South East Central Railway, 3500 metres long, with 6 locomotive engines and 295 coaches did it's first trial run between Korba in Chattisgarh and Rajnandgaon Nagpur carrying 27,000 tonnes of coal on the 15 th of August 2022.

In India we have not had trains of this length and hauling capacity before. It was done as part of Azadi Ka Amrit Mahotsav celebration. (click here) . It took 11.2 hours to cover a distance of 267 kms, an average speed of 24 kms per hour. Being a trial run it is very reasonable to expect such low speeds as it is the first run. Especially at India's 75th year of independence it is a great sight seeing such long trains in service.

Sishen–Saldanha, South Africa. Run on 26–27 August 1989, comprising 660 wagons, 7.302 kilometres (4.537 mi) long and a total weight of 71 765 tons on a 1,067 mm gauge line. The train comprised 16 locomotives (9 Class 9E 50 kV AC electric and 7 Class 37 diesel-electric). - wikipedia.org

Though the train from top view was found to have been partly loaded, the total load of total 27,000 T of coal moved over a distance of 267 kms in a time of 11 hours was a great task. This paves the way for more long distance freight trains hauling more freight to  move over railway tracks, helping in the fast industrialisation of our country. 

The graph on the right tells us a bit about the transport economics of multiple modes of transportation (taken with courtesy of www.transportgeography.org). 

While the cost curves are known for centuries the slope of the different lines tells us that road is least preferred over rail and sea when the distances are large. The costs are only dependent on the distances involved. The fixed costs (the y coordinate at x=0) are lowest for road, then progressively increases for rail and is maximum for sea, while the increase in running costs (slope of the lines) is very steep for road, less steep for rail and least steep for sea modes.

Let us try to find how the values of D1 and D2 vary over the different regions of the world. (click here)

In the most populous and presently fast developing regions of the world including Asia and Africa, D1 is at between 500-750 kms while D2 is near about 1500 kms

In the developed economies of Europe, D1 is at 1050 kms and in US it is around 1200 kms. The average rail haul length is US is around 3050 kms with 65% of trains in US hauling loads for average 3200 kms. 

In a peninsular country like India, national rail transportation is economical and short distance inland transport in Indian hinterland while sea based transportation appears attractive in terms of cost and distance only for coast to coast transportation.

George

Amrita Hospital, Faridabad, world's largest..

The Amritha hospital (green building, limiting Carbon footprint and effluent discharge) that started construction in 2017, will finish construction in 2027 with 1 crore sq ft floor area, (10 million or 100 lakh sq ft) spread over 14 floors and a separate 4 floor Research centre (300,000 sqft with a total of 10 million sqft) offering 2400 beds.

The present global #1, First Affiliated Hosital in Zhengzhou, China with 7000 beds has a total of only 78 lakh sqft builtup area of hospital. 

 

The Amritha hospital in Kochi was the first hospital from Mata Amritanandamayi, the spiritual leader from Kollam Kerala, who shot to fame for her humanitarian work. Mātā Amritānandamayī Devī  was born Sudhamani Idamannel; 27 September 1953, often known simply as Amma ("Mother"), is a humanitarian and spiritual leader who could be listed foremost with Sri Sri Ravishankar and Jaggi Vasudev. 

 

Though Sri Sri Ravishankar based out of Bangalore runs Art of Living, the world's largest non governmental organisation and Jaggi Vasudev runs the Isha Foundation out of Coimbatore, two large organisations serving the spiritual needs of the people, they have not ventured at projects this big in size and stature.

Amrita hospital in Faridabad when fully complete in 2027 will have

• 8 Centres of Excellence
• 81 specialities
• 64 Operation theatres
• 534 ICU beds
• 10,000 staff
• 800 doctors
• Robotic testing labs
• 498 room visitor Guest House and 
• a helipad.

Helipad is common in all corporate hospitals that work for profit and not service. 

Each floor is 11 acres in area with 14 floors on a 133 acre area land in Sector 8 in Faridabad, Haryana.

When completed in 2027, as regards hospital built up space, the Amrita hospital will be 2.2 million sq ft larger than the present global #1, First Affiliated hospital in Zhengzhou, China.

 

Click here for more information from Financial Express.

India is the land of spiritual sages, the people who have known nature and God for centuries, has also been the land where maximum philanthropic activities have been undertaken by spiritual organisations. This centre gives us hope that our spiritiual leaders are indeed on the right path of service to society.  

 

With the example of Arvind Netralaya in Madurai housing the world largest, advanced and affordable eye care in the world offers 90% of its services free to the needy and poor patients, it has to be seen what percentage of patients coming to the Amrita hospital in Faridabad will be treated free, though we know approximately 20% of patients coming to the Kochi Amritha Institute of Medical Sciences, super speciality hospital get free treatment.

 

With Bureau of Energy Efficiency and GRIHA ratings for environmental management, Amrita hospital in Faridabad is going to set an example for hospitals around the world on using locally available materials for building construction, ensuring high quality of indoor environmental space, use of electric vehicles in the 133 acre campus, effective rainwater harvesting, effective waste treatment and waste management practices and so on. click here

In addition to being the world's largest hospital in terms of built up area (in First Affiliated hospital in Zhengzhou, it is told they have patient beds even under the staircase and in the corridors to make the numbers) Amrita Faridabad is also the world's largest green hospital with 

 

1. construction done using locally available building materials, 

2. large rainwater harvesting facilities, 

3. solar panels to generate electricity, 

4. excellent indoor environmental air quality with good cross ventilation and 

5. possessing excellent waste treatment facilities 

 

helping it earn GRIHA (Indian green building) certification too. I doubt whether any other global hospital has these superior green building standards. 🌹🙏 Hospitals around the world are known to be all-time environmental hazards..

When healthcare facilities of this magnitude take to healthy green practices, it gives great promise to the future citizens assuring them a great future and teaching them how economic and healthcare growth can indeed go hand in hand with healthy environmental practices.

I had the good opportunity to visit the Amrita School of Business at Ettimadai, Coimbatore early this year, being among the first Bschools in South India to get the much coveted and prestigious globally acclaimed AACSB accreditation. Click here for my write up on that visit and why Bschools need to go for accreditation.

 

George.

Walmart and Amazon, neck to neck ..

Walmart registered revenue of $572 billion in 2022, with profits of $13 billion and market capitalization of $355 billion. 

Amazon registered revenues of $470 billion profits of $33 billion (2.5x Walmart) and a market capitalization of $1200 billion , almost 4x Walmart.

It is just $100 billion revenue that separates Walmart and Amazon. Will 2023 be a great remarkable historical year for Amazon, the 1995 started

internet book company ?

Automated Amazon warehouses, a wonder and technology marvel..

My understanding of Amazon AI based automated warehouses all started with classroom discussions and with the fact that after an MBA from IESE Barcelona, my son was going to join Amazon in their warehouse in Manchester MAN8 for training.  

 

Kiva robots

When I went through Amazon site information and articles from technical sources on the Internet, the topic became more interesting which made me do research more and prepare this small write-up for my students. This is new knowledge, thought of sharing. 

 

The true fact is without AI and robot intervention, Amazon could never ever have imagined to handle 400 million item shipments a day around the world. Even humans have a limitation in handling products. Scaling up is a real challenge in large scale applications and AI based robots, is the only solution. Amazon is, no doubt, going to give leadership to the world in handling super large scale systems benefiting the public and adding value to the whole ecosystem.

Difference between conventional and modern warehouses : Conventional warehouses have fixed storage shelves and moving pickers. In Amazon we have moving shelves (mobile shelving units with moving robots under the shelves raising them) and human stowers and pickers. Lot of sensors and lights help stowers keep or stow and pickers pick right items from mobile shelves. 

Proteus robots

Amazon also has a different storage philosophy, dictated by its over dependence on AI. Unlike conventional warehouse shelves where all items of a fixed product type or manufacturer are grouped together, in Amazon warehouses they are randomly placed in different mobile shelves at different levels, decided by AI algorithms.

The AI algorithm decides where the similar items are to be kept, also helping pickers retrieve items faster. 🤔😳😟

 

Click here to find how Amazon Robotics develops sophisticated machinery and software to optimise efficiency at its fulfilment centres.

Meet Proteus, Amazon's first fully autonomous mobile robot, smart, safe and collaborative ... click here..

Proteus autonomously moves through our facilities using advanced safety, perception, and navigation technology developed by Amazon. The robot was built to be automatically directed to perform its work and move around employees—meaning it has no need to be confined to restricted areas. - www.aboutamazon.com

Click here to watch the video of old generation Kiva robots on the Amazon Fulfillment centre warehouse shopfloor. Amazon acquired Kiva systems in March of 2012 for about $770 million and this acquisition took Amazon warehouse automation to great heights. The Proteus introduction is to new levels unheard of.

The public fear that Amazon is replacing human workers is totally misplaced, according to Amazon insiders. The Amazon warehouse robots are only enabling the human workers inside the warehouses to do tasks with the help of these AI based robots, which otherwise would never have been possible. The real fact is automating the Amazon shop floor has helped them retain the existing warehouse staff and also increase the warehouse operations efficiency manifold.

 

Kiva robot

In spite of having about 5,20,000 robotic drive units around the world as of June 2022, Amazon has over the last couple of years added almost a million new jobs too.  Robots have helped ease the human's job and helped scale up Amazon's product handling to almost 400 million daily as of now. Click here for an article on the Amazon journey from Kiva to the more Proteus advanced robotic systems ..

Click here for an interesting Guardian article which exposes the risk the society now faces from too much automation at Amazon .. This article from Amazon (click here) traces their 10 year journey from 2012 to 2022 how robots helped them to trace, move the products and do it safely too.

Amazon would have been a great organisation with just robots, but to have AI and ML mediated robots has helped Amazon scale their operations to unheard of levels and they handle almost 400 million shipments daily across the world.

 

George..