Supply chains and sustainability ..

These days any talk of supply chins is no complete with some discussions on the sustainability of these supply chains. More frequently than not, we tend to talk of supply chain practices only by the main player, but do we insist the suppliers to these main manufacturers or service providers also follow the same practices ? We fail in checking these practices and that is the main failure of the upply chain.

Recently while going through an article by Veronica and Dennis in March '20 issue of HBR, (click here) this issue was very much highlighted.

The authors did a study on how the suppliers of 3 MNCs were following sustainability practices mandated by the same MNCs in the supply side of the supply chain. Unfortunately it was found that the sustainability practices mandated by the main cos. on their first tier and second tier suppliers were not being followed. An example was how major companies like Apple, Dell and HP had to incur the wrath of the public due to financial, environmental and social sustainability risks from their first level (nine suppliers) and second level suppliers (twenty two).

Even though first level suppliers do try their best to stick to sustainability concerns, the second and third level suppliers fail very much. It is attributed to the low levels of control and check exercised on the lower level suppliers (the riskiest elements) due to the very uncommon demands on cost optimisation and faster delivery enforced on these low level suppliers. 

Effective strategies practiced by these high level; suppliers on their low level supplier fall into basically four classes, 

direct 

    ensure min 7% of procurement spending by top level suppliers on low                 level suppliers

`  ensure annual checks to ensure that lower level suppliers do stick to these         standards

    Mapping the connections and inter dependencies of these lower level                 suppliers to asses the possible risk of these lower level players

indirect

collective and 

global

 

A Design Thinking (Reverse Innovation) exercise to enable mobility ..

As part of Reverse Engineering of a movable chair for the physically handicapped, paraplegics, Prof. Vijay Govindarajan of Tuck School of Business has reported a very innovative wheelchair for the paraplegics. As part of HBR;s offering on Design Thinking this product was discussed in great detail in the book. 

Developed by the Global Research  Innovation Technology (GRIT) from MIT and Continuum, the wheelchair  is a great example of Design Thinking.

Click here for the HBR article by Amos Winter and Prof. Govindarajan, HBR, July '15.

A very revolutionary and cheap wheelchair design has been proposed by the MIT Design Lab to enable wheel chair patients around the world. There are about 40 million paraplegic patients around the world who do not have access to wheelchairs and of these 70% are from rural areas who do not have access to the expensive wheelchairs in the market, costing about $400 apiece..

A paraplegic is one who is affected with paralysis of the torso, legs and pelvic organs ..

Paraplegia can occur after a spinal cord injury. It's caused by damage to the vertebrae, ligaments or disks of the spinal column. Paraplegia is the loss of muscle function in the lower half of the body, including both legs. Rehabilitation, medication and medical devices allow many people with spinal cord injuries to lead productive, independent lives.  Source : Appollo hospitals, Chennai. 

Click here for more details from the World Design Organisation (WDO) .. 

 

 

Some of the advantages of the Leveraged Freedom chair are given below.

 

1. Safety - long wheelbase, cheststrap, seatbelt and footstrap

 

2. Cheap to make and repair - the cycle is made from parts that are found in any village cycle shop

 

3. Less tiring - energy required to get the wheelchair moving is not very high as the tyres are made of rubber

 

4. Faster and all-terrain - the chain and sprocket drive train of a standard bicycle and the hand levers help users generate 38% more speed on flat terrain and 53% more torque to cover rough roads

 

5. Versatility - the levers can be removed, thus making it comfortable for indoor use.

 

6. Supportive backrest - helps users to bench press the levers adding more power to the lever movement

 

This wheelchair has been  designed with the final customer in mind, his physical and economic limitations. This makes the wheelchair design a Design Thinking exercise where the ideation phase has given the great possibilities and features in the wheelchair, all at a lower cost.

Recently in the Design Thinking class which we have at our school, I discussed the Freedom chair exercise in the class. I encouraged the students  to empathise with the paraplegics of the world and to come up with additions / enhancements to the Freedom Chair with cost constraints.

I am enclosing the relevant top ten suggestions which may be included in the product in future.

1. Elevation adjustment
2. hooks on the body to hang bags for patiients
3. to ensure stability two wheels at the front
4. mostly women enter with kids. Addition of a barrier / body rest for the baby too
5. chain with hand pedal
6. accupressure points on the foot and hand pedal to ensure better health for patients
7. replace chains with wires as chain can corrode and fail
8. design rear pockets on the chair for patients
9. front and rear light reflector
10. dynamo based lights that can burn with movement of wheels

These suggestions have come from Tejus, Niharika, Greeshma and Ankit, students of the MBA sem 4 Operations class.

George..

 

Design Thinking in startups, Uber Eats ..

Design Thinking has been successfully implemented in startups and Uber Eats is one such application. 

Design Thinking involves five steps

1. Empathising - sitting with customers, users, parters etc will help give one an idea of how the present product or servicve offering is not helping meet the customer needs and preferences
2. Defining the problem - there is no better way to define the problem than by living and trying to understand the customer's problem. It helps to understand each step of the food ordering and food preparation process from different perspectives. In the process, the different visible and invisible actions in the process are understood.
   
3. Ideating - Uber Eats encourages all internal and external stakeholders to take part in the ideation process, to look from different perspectives and angles, trying to come up with alternate methods and processes for carrying out the tasks. Virtual Restaurants and Pooled deliveries were outcome of such ideation proces.
4. Prototype rapidly - Most Popular Items was first proposed by Toronto unit of Uber Eats. They believe in the principle to fail fast and improve rapidly from those failures
5. Test and Validate - if the testing done does not actually show the necessary results, it is the time for cross checking and revalidation. If it is not successful in spite of rechecking, start again.

Click here for the Forbes paper on Design Thinking ..

 

What we can learn from Tesla ?

 Tesla is the world leader in Electric vehicles. It not only did EV but before it started selling EVs, they actually built charging stations across the US and the world. How did that strategy help Tesla ?

It went ahead of the competition. 

Now other EV manufacturers are trying⁰ to partner with conventional gas stations asking them to put up their chargers. In US there are 1,60,000 of these conventional fuel charging stations while only 4000 EV charging stations. 

By 2022, global EV manufacturers plan to roll  out 500 EV models, do all of them have the needed charging stations ?

When a customer buys an EV, the first thought that passes through his/her mind is does the co. have enough charging stations across US or the world ? It is called Range Anxiety. 

For EV manufacturers it is a chicken and egg story, customers do not buy EVs unless there are enough charging stations across the country and companies do not want to build charging stations across the country unless there are enough EVs moving around. 

With each EV having it's own charging instrumentation and protocols, the race ahead for the EV manufacturers is going to be pretty dim, unless they come up with common charging protocols and instrumentation that would benefit the industry as a whole. Will the leader Tesla, agree to a common charging protocol and infrastructure for the sake of the sector or will it try to dominate the market. At present the second largest player in the US EV market has only one tenth the number of charging stations as Tesla.   

Can all other EV manufacturers gang up against Tesla and start their accepted standardised charging platforms? 

Hemant Bhargava et al , Jan 21 HBR (click here) mentions of the strategic advantage Tesla has over EV manufacturers of the world in terms of the charging infrastructure. 

Will this advantage take Tesla to great heights, we need to wait and watch. Will the other competitors gang up and force Tesla to a cornet in terms of coming up with a standard charging infrastructure and battery sizes and capacities.

george.

Are governments giving enough attention to ESG norms ..?

World over we find over the three month from April to June '20, about $80 billion have flown into funds that care for the preservation of the environment. About $30 trillion assets  across the world are defined and directed by Environmental Social Governance standards. It no doubt tells us that across the world, corporates and organisations are re-looking at sustainability and governance standards and guidelines to ensure a brighter future for the future generations that will inherit planet earth. 

While going through the article in HBR of Jan '21 by Jennifer Grenville titled "ESG Impact is hard to measure, but it's not impossible" (click here), the author is trying to tell us how global interest and attention is bring directed to environment and sustainability aspects and how investors are putting their money into those ventures that care for the environment.

But what should we really do in this case ?

1. Need to have measurable metrics - Anything that gets measured, gets managed. For example measuring the Carbon footprint was an effective way for countries to raise awareness of carbon pollution and measures to contain CO2 emissions are being carried out across the world with the help of International organisations like UN. . Even if we can list them there is a chance that it can get managed, eg. checklists. But if we do not list or measure the outcome, we are bound to fail miserable the war against environmental pollution.

2. Measuring the easily monetisable, but missing the valued - like reducing Carbon footprints and Carbon emissions but missing the more important dangerous impact of the manmade emissions on the ecosystem, the pollination enabling bees, the earthworms that aerate the ground, the algae that oxygenate the water and so on. 

3. Announcement of global recognition - Elon Musk a week back came out with an all important announcement of a prize money of $100 million ( a Nobel Prize is just $2-3 million) for anyone who develops the best Carbon capture technology. This is bound to improve global research across academic institutions and research labs to find efficient ways of Carbon capture.

4. Zoom in closely in areas where concerns are being raised - For example, Nike violations of environment and employee welfare measures across the world led to Nike taking proactive action to save its reputation and at the same time the immediate environment and the lives of its employees across the world.

5. Zoom out for the bigger picture - As an illustration, HBR research shows that by 2030, world fresh water usage will increase by 40% due to increased urbanisation and population. By looking at the bigger picture we should be looking at new research that can reduce the usage of fresh water or increase availability of fresh potable water. Desalination or moisture capture technologies can definitely help in this regard. Similarly renewable energy generation, Carbon capture, effective waste treatment, responsible urbanisation etc are interesting areas to work on.    

6. Looking beyond profit maximization to serving society - Most businesses globally are only concentrating on maximising profits unmindful of the environmental impacts of their actions. Instead organisations should look at the bigger socio-economic environmental impact to assess the situation well. 

George..

Carbon capture technology prize from Elon Musk for $100 million ..

Elon Musk, the world's richest person, tech-preneur, founder of Tesla, SpaceX, Hyperloop etc has announced this $100 million prize to anyone who can bring an effective technology to capture the atmospheric Carbon that can reduce or help contain Climate change. . 

The next threat facing humanity is scarcity of pure drinking water, potable water, expanding urban spaces, waste disposal, increasing traffic congestion in urban spaces, controlling growing global population etc.. 

If humanity can think of ways by which we can clear just the air we breathe and water we drink and use for our daily purposes, the world would be a better place to live. 

Alex Rau et al writing in HBR Jan, Feb 2010, Can Technology really save us from climate change, (click here) mentions that Clean tech has from 1996 to 2007 followed essentially a path as given in the picture. There has been a clear lag of three years from innovation to implementation stage. From about 160 patents in 1996, the number of patents has increased to 1600 in a span of 10 - 11 years, ie. almost 10x growth. In the same time span we find, the implementation or installation of new wind energy installations also increased to 25000 MW from 2500 MW, this happened with a time lag of approximately three years.

The above data shows when a surge in innovation happens, there will be a successful implementation phase with a lag of 3 years. Also every 30 months, ie. 2.5 years, there has been a doubling on clean energy implementations in the wind energy sector. It may be too early to comment on something like a Moore's law for Green technologies (Gordon Moore, '65, the no. of Transistors on a Silicon chip doubles eighteen months), but the trend shows that very soon we can propose something similar. 

Considering the pace at which clean technolgies are growing, very soon some organisation or individual will be able to collect the $100 million prize money (which is just one in 200th of his wealth as of Jan '21) from Elon musk and thus make the world a better place to live. 

George..

Creating a Kaizen culture - of Continuous Improvement ..

While being busy with our daily chores where ever we are working, most of us forget the fact that in the rut of daily decision making and performance issues, we forget to keep tab of improvements that need to happen at our workplace. The Japanese and specially Toyota brought this to the fore with the concept of Kaizen, or Continuous Improvement. 

We need to make Continuous Improvement part of the DNA of organisations. 

Managers mostly talk about it but fail to practice and implement it on the shop floor. Managers generally lack the commitment to implement Continuous Improvement on the shop floor.

What greater way to promote this concept than by practicing it on the shop floor. At Alliance University, Bangalore, we have the good practice of getting interested Professors research and present initial findings of their research study with their colleagues in the department for the feedback. We do this activity once in a fortnight in the Operations area in Alliance School of Business and shortly plan to get this working in other areas as well. Just a small step, but we are sure in the long run, it will help improve the teaching and research output from the area. 

Arvind Chandrasekhar of the Ohio State Fisher College of Business and John Touisant in their HBR article of May, '19 speak (click here) of the 5 steps that can help organisations sustain a culture of Continuous Improvement in the organisation. 

1. Include TPS in succession planning - this is done so that lean practices are not forgotten once the initiators leave the organisation. Ensure that the successors are well aware of TPS and Lean principles

2. Installing lean behaviours in managers at all levels - leading with humility and putting them through training frequently, insisting on managers or doctors in hospitals practicing Genchi Genbutsu, as front line warriors going to the problem area and seeing problems and issues for themselves to come up with effective long term solutions identifying the root causes, engage in huddles to solicit discussion of problems seeking solutions etc.. Implementing 5S or orderly work place management and implementing policy of reducing wastes etc can be very effectively implemented o the shop floor.

3. Practicing and creating one's own success stories -  very frequently, instead of mentioning about other success stories, it creates better impression if one has their own success or failure stories of lean practices and continuous improvement to highlight. 

4. Finally establishing a Lean TPS operating system in the organisation by institutionalising Lean Implementation and Continuous Improvement across the organisation, giving frequent training to employees and motivating even small successes and dissecting failures to understand what can be avoided can result in establishing systems that last and bring value. 

Not being complacent and not resting on one's laurels is the guiding light to ensure success for Continuous Improvement in the organisation. 

George