Near Shoring

Two articles on Return of Manufacturing to US from McKinsey

First an interview with McKinsey Director, Katy George, on next shoring (http://www.mckinsey.com/Insights/Manufacturing/Radically_reshaping_manufacturing_A_conversation_with_Katy_George?cid=manufacturing-eml-alt-mip-mck-oth-1401 ) and

A CEO’s guide to Next Shoring (http://www.mckinsey.com/insights/manufacturing/next-shoring_a_ceos_guide?cid=manufacturing-eml-alt-mip-mck-oth-1401)

A graphic on nearshoring...

 

IT risk in Supply Chain

From being an enabler to being the differentiator, IT in supply chain is at a point where it is considered a risk if not properly managed.
A research paper by Zurich based insurance groups across 71 countries highlights the lack of visibility especially one level below the immediate supplier. The high costs associated with this are also detailed inclusing the fact that 9% have experience disruptions of more than 1 Mn. euro from a single event. Other than the As per the report 'The key issue for those in the industry is that 62% of respondents felt that top management commitment to managing the supply chain is inconsistent or totally lacking'
http://www.zurich.com/media/newsreleases/2013/2013-1106-01.htm

Big Data in Logistics

The 18th annual 3PL study (www.3PLstudy.com), focuses on big data. As far as shippers and 3PLs go, big data seems to be at cross roads, with 1/3 implementing it some form, 1/3 unsure about it and another 1/3 being not much familiar with it.

How NOT to manage a lakh plus employees

Infosys seems to have struck itself quite firmly on its right foot with its new HR policy. (see here). With its new iRace policy, Infosys has disgruntled a lot of lower level employees, the very resource base it has invested in the initial couple of years and who they should be seeking to consolidate in todays resurgent market conditions. The main grouse towards the initiative seems to be the unfair manner in which promotions and 'depromotions' are being carried out, along with the career development policies which the company has deployed in recent years. (see here and here).

Managing a lakh plus employees is never easy. What makes it even more difficult for the IT companies like Infosys is the rapid change in the market conditions keeping HR on their toes and forcing them to rehaul their manpower strategies every 48 months or so. Most IT companies had been growing at a staggering pace till almost last year. This resulted in non uniform policies across the business units and projects. Projects/ units which outperformed others were given preferential treatment almost across all companies. Promotions were pushed through recklessly to accommodate for the rapid increase in manpower and because of need to fill in the middle level management. However since the last couple of years, the slowdown has allowed the HR to create some uniform policies and to bring some sanity to the process.

Infosys however seems to have swung the pendulum too much to the other extreme by introducing policies like depromoting people who have been through a rapid growth in their career. What it basically means is that they admit it was a failure on their part to have promoted these people in the first place. But then promotions are made by the HR in consultation with the Senior Management. If they have done such a shabby job of it, then shouldn't some heads be rolling there in the first place. Their seems to be no news on that front though. In all likelihood its the very same HR people who had advocated these promotions who are now reversing it, all at the concerned employees cost of course.

HR is always a tricky business. Its almost as much about an image as about the actual implementation. More than the actual benefits that accrue to an employee, its the fairness of the whole process that determines employee satisfaction. That is where Infy seems to have failed the most in recent times. While the attrition rate seems to have held steady for them so far, the real test will probably come in the coming months, when the economic situation improves and companies go beserk in hiring. Will the company be able to hold on to these employees at that time. My hunch is that a lot of employees will be looking for greener pastures very soon. For a company that used to top the Best Employer survey pretty regularly till the recent past, that indeed will be tragic.

Tackling recession in IT

Although talks of a double dip recession and all time high unemployments are still doing the rounds in US, Indian IT firms seem to be all gung ho about the coming financial year. The expectations from the coming year the IT heads are talking about is not just rhetoric can be gauged by the hiring sprees, announcements of wage hikes, promises of better bonuses and one or more promotion cycles for the year. What happened last year could not be strictly called a recession for IT companies. While many core industries, especially Banking and Finance Services, suffered; with many closing down shops as well, the IT budgets never got slashed as much as one would have expected. New projects and investments in nascent technologies were kept in abeyance, but the savings being accrued from outsourcing and offshoring meant that the bread and butter of Indian IT industry was never in danger. In fact had it not been the fallout of jobs moving abroad and the new Governments policy of trying to keep jobs on shore, IT companies here might have even been able to reach their expected growth targets.

On the other hand while the rest of the world was grappling with recession, Indian IT found it the right time to consolidate their operations. Unbridled growth of the last decade meant that there was a lot of scope for cost savings and increasing efficiency. This was carried out in most companies by slowing down or stopping hiring, cutting down salaries for existing employees in some cases but mostly for fresh joinees from college. In addition the internal cost savings from cutting down on travel and stay, cutting down on operational expenses, consolidation of delivery centers, freezing the capex plans, and most of all by deferring hikes, bonuses, promotions and even annual gifts led to huge savings for these companies which would be carried down for a few more years.

Spokeo

I recently discovered an innovative site called spokeo.com and was so impressed that I had to write a blog on it here. Spokeo is a wonderful tool which helps me keep track of who’s posting what and where as long as its open and public. I first started using the google reader around a year back, first for news and then for tracking all the relevant blogs. But this one takes it a step further by linking all the social networks I want to trace. The idea of an open social graph reader (as its popularly called) has been around for some time now, but spokeo was probably the first one to come out with a good enough version. When I mean good enough I mean it certainly is going to get better with time. First of all it has to include a few more networking sites like orkut, facebook (currently only facebook notes and shares are available) if it wants to attract more Indians. Then there is the small problem of not being able to see the blogs of my friends. Inspite of spokeos claim of being able to link with blogger, it doesn’t add by itself even if I import their gmail ID’s (I can add them on my own but it’s a whole lot of hard work and I’d rather use a normal reader like google reader if I had to do it). But apart from these two spokeo and its ilk certainly seem to be the future as far as RSS goes. And perhaps if someone could make a one stop solution where I can read my news from any site, check all my friends spread out across various networks & read all blogs, well then I’ll be hooked for life. There are certainly more features one could add but this one would certainly make a good start.

Nagpur- Connecting India to the World

Studying in NITIE, the hub and spoke models used to be one of the favourites in all supply chain models we discussed and developed. In all these models concerning India, Nagpur always somehow held a special charm. If you take a look at any Indian map, the city of oranges was clearly the heart of the country. So whether it be B School competitions, case studies or paper presentations, any supply chain model regarding India could hardly ignore Nagpur.

What seemed like a B School ideal at that time, however is today fast turning into reality. Nagpur is all set to become India's gateway to the world. Already investments worth several millions (if not billions) are pouring into the city. At the center of this transformation is the upcoming MIHAN or Multi-Modal International Hub Airport. This Hub is expected to make Nagpur the center of all domestic as well as international cargo movements. This airport of international standards will be supplemented by a road and rail terminal coming up right next door. The investor confidence on the city's potential is also tremendous. Boeing has already committed to building a $ 100 million Maintainence, Repair and Operational (MRO) hub in Nagpur. That the civil aviation minister, Praful Patel as well as Mahrashtras CM VilasRao Deshmukh are both from Nagpur, should have probably helped in no small measure though. Domestic investors seem to be bullish too, with SICAL Logistics leading a consortium to setup the rail terminal as well as a world class warehousing facility.

Nagpur already is a center of the Golden Quadrilateral (GQ) with four lane highways connecting it to delhi and Bangalore. A host of companies have already set up shop here, with a new IT park proposed to be built by Shapoorji Pallonji also expected to come up soon. With so much of activity Nagpur is surely set to scale new heights to truly become the Hub of the country. However what gives the most of the most confidence is that MIHAN is being led by R C Sinha, presumably one of the most hard working and sincere beuracrats in the country today. Another Sreedharan in the making? Only time will tell.