The COVID-19 pandemic made us all aware of the extreme vulnerabilities in the supply chains all across the globe. The challenge was truly unprecedented. The disruptions ranged from being present in the manufacturing processes to delays being experienced in transportation. And hence in the post-pandemic era, building resilient supply chains is now more than ever imperative.
By Supply chain resilience, we refer to the ability of a system to anticipate, prepare for, respond to, and recover from disruptions. This is now not an option which should be looked into but a necessity at all costs.
Through this article we aim to discuss the various avenues and aspects that should be taken care of:
Diversification: One of the most primary lessons that we learned from the pandemic is how important it is to diversify. One should not rely heavily on a single supplier or a specific geographic region. Businesses should diversify their supplier base, source materials from multiple locations, and establish backup plans to mitigate risks that might cause disruptions in a particular area.
Technology: Like any other area of life today in general, technology plays a pivotal role in enhancing supply chain resilience as well. Greater visibility and transparency across is enabled through advancements in artificial intelligence, blockchain, and Internet of Things (IoT). One can even identify potential bottlenecks through real-time data analytics and prevent a crisis.
Collaboration: Establishing strong partnerships with primary and secondary stakeholders fosters better communication and coordination. This helps share resources, information, knowledge and best practices, thereby enhancing the collective ability to respond to disruptions more effectively.
Robust risk management strategies: Conducting comprehensive risk assessments, identifying potential threats, and developing contingency plans to mitigate their impact are some of the pointers. There needs to be development of dynamic capabilities for the same.
Agility and flexibility: The traditional models had rigid structures and were accompanied by long lead times but they are not suited to cope up with the volatility and uncertainty of today’s business environment. Hence structures that enable rapid adaptation to the ever changing market conditions and customer preferences must be put into place.
Culture: A culture supporting continuous improvement and innovation at all levels, with organizations trying to constantly evolve and refine their supply chain processes to stay ahead of emerging challenges is the need of the hour.
Talent development and training: Enough stress cannot be put on this point. Employees need to be provided the skills and the necessary knowledge to navigate the complex supply chain dynamics effectively. Cross-functional teams can facilitate collaboration and decision-making, enabling organizations to respond more agilely to disruptions as they arise.
Finally, organizations need to note that resilience is a journey and not the destination. Building and maintaining resilient supply chains will be a continuous and ever going commitment and investment. Organizations should continuously monitor and evaluate their supply chain performance against set metrics, identify the suitable areas for improvement, and try to adapt their strategies accordingly. To navigate the complexities of a post-pandemic world, businesses must make resilience as a part of the organization’s basic values to thrive in this increasingly uncertain and dynamic global landscape.
A core definition of total quality management (TQM) describes a management approach to long-term success through customer satisfaction. In a TQM effort, all members of an organization participate in improving processes, products, services, and the culture in which they work.
How does TQM benefit operations?
Reduces defects and waste.
Improves efficiency and productivity.
Enhances customer satisfaction.
Increases employee engagement.
Boosts profitability.
Primary Elements of TQM:
Customer-focused:Â The customer ultimately determines the level of quality.
Total employee involvement:Â All employees participate in working toward common goals.Â
Process-centered:Â A fundamental part of TQM is a focus on process thinking.Â
Integrated system: Micro-processes add up to larger processes, and all processes aggregate into the business processes required for defining and implementing strategy.
Strategic and systematic approach: A critical part of the management of quality is the strategic and systematic approach to achieving an organization’s vision, mission, and goals.
Continual improvement: A large aspect of TQM is continual process improvement.Â
Fact-based decision making:Â To know how well an organization is performing, data on performance measures are necessary.Â
Communications:Â During times of organizational change, as well as part of day-to-day operation, effective communication plays a large part in maintaining morale and in motivating employees at all levels.
How to start your journey of TQM and what are the steps?
Define Your Quality, i.e, align your entire team around this shared vision.
Understand your customer’s needs and pain points.
Equip your employees with the training, resources, and authority to identify and solve problems.
Track key metrics, analyze trends, and use data-driven insights to identify areas for improvement.
Acknowledge and reward employee contributions,
Here are some inspiring examples of TQM journey:
General Electric: Jack Welch’s leadership transformed GE into a TQM champion, leading to significant quality improvements and increased profitability.
Toyota: Their legendary “lean manufacturing” system, rooted in TQM principles, has made them a global leader in efficiency and quality.
Amazon:Â Their focus on customer satisfaction and continuous improvement aligns perfectly with the TQM philosophy.
Before implementing TQM, one should keep in mind the following pointers:
Organizing and getting things: A lot of planning and time are needed over time to make sure that TQM resources are used correctly.
Company-wide dedication: In TQM, continuous improvement means that the culture of the company needs to focus on making processes better. Support must come from all ranks of management.
Extra costs: It’s possible that TQM will raise the prices of training, building, and building up teams.
Time: It could take years for a business to fully show the results it wants.
Partially done: Putting TQM into practice takes a lot of work, so even a small step toward it can fail.
Don’t forget that TQM is a process, not a goal. It needs leadership commitment, dedication from all employees, and a culture of always improving. But the benefits are huge: a business that is more effective, efficient, and focused on the customer.
The conflict between Ukraine and Russia has sparked a global crisis. Russian Federation launched its special military operation in Ukraine on 24th February 2022 ending months of uncertainty over its troop build-up at the border. The subsequent sanctions on Russian exports, banks and individuals by the United States, European Union, and G7 have added to the woes of already stressed global supply chain network. This has led to higher oil prices, food shortages, and disruptions in supply chains. The tension between these nations dates back to 2014, but it’s escalated significantly now, prompting harsh sanctions from the US, EU, Australia, and others. These sanctions target Russia’s financial, real estate, import/export, and technological sectors. While some countries in Europe haven’t completely stopped trading oil and energy with Russia, they’re gradually reducing reliance. The US, once a major oil trade partner, has completely banned energy-related trade through an order by President Biden on March 8th.
Despite their support for Ukraine, most European countries heavily depend on Russian oil for various purposes, including fueling vehicles and powering manufacturing. Russia stands as the EU’s main crude oil supplier, accounting for about a quarter of their petroleum imports in recent years. With these major importers banning Russian oil, other suppliers are struggling to meet global energy needs. The International Energy Agency responded by releasing emergency oil reserves, but the demand surge led to further releases and skyrocketing prices, hitting around USD 130 per barrel in March 2022. Although prices later dropped to around USD 95, the impact on electricity generation and overall global markets remain significant. The conflict between Russia and Ukraine has affected global food supplies like wheat, corn, and edible oils, as both countries are major exporters. Together, they provide around a quarter of the world’s wheat exports and fulfill about 70% of grain needs for nations like Turkey and Egypt. Ukraine is a significant supplier of corn to China and dominates global sunflower oil exports, accounting for about half of the total.
The scarcity and high prices of basic goods are expected to drive up labor costs in affected countries as people struggle to manage the increasing cost of living. In the UK, wages have already risen by around 4% this year and are likely to continue increasing due to the war’s impact. The conflict has also led to a drop in remittances in Central Asian countries with many residents working in Russia, such as the Kyrgyz Republic, where remittances are predicted to decrease from 83% in 2021 to about 33% this year. These effects will push more people into the domestic labor market as they seek additional income to cope with rising prices. These combined impacts on labor and commodity prices will have significant effects on various sectors and drive unsustainable prices for goods, including technology crucial for sustainability transitions.
Disruption in Oil and Gas: – The Russia-Ukraine conflict and the resulting sanctions on Russian oil disrupted the oil and gas sector’s supply chain, causing crude oil prices to surge from $91 to $130 per barrel. Sanctions on shipping for Russian oil led to a threefold increase in shipping rates and impacted transportation, a key element of the supply chain. This, coupled with heightened global freight charges and increased ship fuel prices, has significantly affected supply chain profitability. High oil prices are causing inflation in oil-importing nations like India and escalating commodity costs in developing countries. Industries reliant on crude oil, such as rubber, plastics, and petroleum products, are experiencing soaring manufacturing and transportation expenses. Uncertain oil prices are hampering timely deliveries, undermining the supply chain’s goal of efficient and affordable product distribution.
Figure 1. Increase in Freight costs in US.
Source: – Sathe, M., 2022. Global Supply Chain Imputations of Russia-Ukraine War. Journal of Supply Chain Management Systems, 11.
Disruptions in Agriculture Sector: The conflict in Ukraine disrupted local supply chains, causing widespread food shortages in Europe and Africa. Egypt, Tunisia, Lebanon, and Western European countries faced surges in food prices alongside rising energy costs, supply chain disruptions, and decreased profitability. As Ukraine is a major grain producer, sanctions on Russia and Ukraine halted wheat exports, leading to price jumps of 12% for wheat and 14.5% for corn. Sunflower oil prices soared due to disrupted supply chains in Ukraine, while fertilizer prices reached record highs globally. These increased agricultural input costs will impact supply chains worldwide and raise costs in various regions. Shutting down food and agriculture-dependent manufacturing units has strained supply chains with limited food product availability. However, India’s agriculture supply chains benefited as countries like Egypt, Indonesia, and Qatar increased wheat and grain procurement from India due to its efficient supply chain, making Indian wheat exports cost-effective.
Disruptions in Chemicals and Metal Sector:- The conflict in Ukraine disrupted crucial supply chains in the chemicals and metal sectors. Ukraine’s significant role in neon gas production for the semiconductor industry was affected, causing disruptions in the manufacturing cycle and adding stress to already strained semiconductor supply chains due to COVID-19. Meanwhile, sanctions on Russia boosted chemical exports from India, benefiting Indian supply chains. The war in Ukraine also impacted steel production, with blocked Ukrainian ports halting metal exports and leading to a sharp rise in global steel prices. Sanctions affected raw material supplies like coal and iron in Russia, impacting steel production further. Major metals such as nickel, palladium, aluminum, pig iron, and copper saw price surges due to supply concerns. These disruptions directly impacted supply chains for automobiles and heavy machinery.
Figure.2. Rise in Steel Prices
Source: – Sathe, M., 2022. Global Supply Chain Imputations of Russia-Ukraine War. Journal of Supply Chain Management Systems, 11.
Disruptions in Automobile sector:- The automobile sector experienced assembly unit closures in Germany by BMW and Volkswagen due to shortages of raw materials sourced from Ukraine. Around 1 million car demands were lost in Ukraine and Russia for European and American manufacturers. Car sales in Russia dropped by 63% due to sanctions and supply chain closures. India felt the impact with an 8% decline in passenger vehicle sales in February, coupled with a 15% rise in steel and aluminum costs. A global chip shortage is driving up vehicle prices in several countries, leading major automakers like Renault, Hyundai, Kia, and Toyota to either shut down or reduce sales in Russia as part of a broader corporate retreat from the country.
Figure 3. Automobile sales in Russia
Source: – Sathe, M., 2022. Global Supply Chain Imputations of Russia-Ukraine War. Journal of Supply Chain Management Systems, 11.
Disruptions in Pharmaceutical sector: – The pharmaceutical sector faced disruptions as sanctions halted the supply of pharmaceutical equipment and products to Russia, impacting supply chains in Ukraine, Russia, and Eastern Europe. Increased transportation costs, port blockades, and disrupted logistics affected major Indian pharmaceutical companies’ exports to Russia and Ukraine. Sales to Russia from April to December 2021 by the Indian pharma industry totaled $386 million. India, a major exporter of pharmaceuticals, relies on raw material imports from Russia, making the supply chain disruption costly for Indian pharmaceuticals. This disruption in the Indian pharmaceutical supply chain affects the global supply of medicines, given India’s status as the largest exporter of pharmaceutical products worldwide.
Conclusion
Together, the economies of Russia and Ukraine total $1.93 trillion, ranking them as the eighth largest in the world. The two countries export a lot of food, energy, metals, and pharmaceuticals. These exports are essential to global commerce. However, the conflict has seriously disrupted supply networks not just in Eastern Europe but also throughout all of the countries’ internal supply chains. The war is putting stress on every sector of the economy and its associated supply chains. Global supply chains are stagnating, costing billions of dollars in losses every day. Years will pass before the global supply chains, particularly those in Eastern Europe, get back on track.
References:
Sathe, M., 2022. Global Supply Chain     Imputations of Russia-Ukraine War. Journal of Supply Chain Management Systems, 11.
Arekzi, R. (2022). War in Ukraine, impact in Africa: The effect of soaring energy and food prices. Video Vox.
Jack, C. (1997). Achieving maximum supply chain efficiency. IIE Solutions, 29(6).
Macdonald, J. R., & Corsi, T. M. (2013). Supply chain disruption management: Severe events, recovery and performance. Journal of Business Logistics
Revilla, E., & Sanez, M. J. (2013). Supply chain disruption management: Global convergence and national security. Journal of Business Research, 67, 1123-1135
Craighead, C. W., Blackhurst, J., Rungtunsanatham, M. J., & Handfield, R. B. (2007). The severity of supply chain disruption: Design characteristics & mitigation capabilities. Decision Sciences, 38, 138-156.
Russia-Ukraine Crisis: Exporters Fear Fresh Spike in Shipping Costs. (2022). Retrieved from https://www. financialexpress.com/economy/russia-ukraine-crisisexporters-fear- fresh-spike-in-shipping-costs/2444119/.
We find ourselves in an era where consumers are well-informed, contributing to a business landscape marked by intense competition. This necessitates maximum efficiency at every level for companies, particularly where inventory management is concerned. Inventory often stands as the most substantial asset on a company’s balance sheet, thus requiring meticulous handling. The efficient management of inventory is pivotal, given that a significant portion of a company’s expenses is tied to inventory investment, this comprises of holding, transportation, and management costs. This is especially crucial for the profitability of Small and Medium-sized Enterprises (SMEs).
Effective inventory management extends beyond mere forecasting and replenishment; it involves the strategic optimization of services and profits through inventory control. Organizational effectiveness pertains to the efficiency of internal processes within an organization and by extension, inventory management.
Primarily, effective inventory management necessitates the judicious determination of optimal quantities to order and maintain at a given time due to the attendant costs. The consequences of holding excess inventory include the tying up of capital, leading to potential deterioration, obsolescence, and vulnerability to damage, pilferage, and burglary. Conversely, insufficient inventory levels result in sales interruptions due to stock-outs, strained consumer relations, and underutilization of machinery and equipment. Achieving an optimal balance in inventory levels is contingent upon the possession of the requisite knowledge, skills, and abilities for planning, monitoring, and controlling inventory. Consequently, small business managers equipped with fundamental knowledge of inventory management strategies, coupled with the skills and abilities to implement these strategies, stand to enhance their inventory management practices, thereby improving overall business sales and profitability. It is imperative to recognize that regardless of the chosen approach to plan, monitor, and control inventory, the unit heads or managers must possess a comprehensive understanding of “know-what,” “know-when,” “know-how,” and “know-why,” elements which cannot be overlooked or assumed.
Secondly, the impact of inventory management and managerial competence on financial performance finds support in the Resource-Based View (RBV). The RBV posits that organizations can sustain performance by effectively leveraging their held resources. Given the inherent nature of small businesses, where management is often centralized around the owner/manager, their business-related knowledge, skills, and abilities emerge as pivotal resources for augmenting financial performance. This perspective aligns with the Dynamic Capability Theory, which emphasizes a firm’s capacity to integrate, construct, and adapt internal and external competencies to navigate swiftly evolving environments. In the context of inventory management, firms must be cognizant of the volatile nature of customer preferences, steering clear of overstocking items that might detrimentally impact financial performance. Therefore, the cultivation of dynamic capabilities becomes imperative to ensure efficient inventory management, mitigating the risks of failing to meet customer demands on one hand, and averting undue investments in inventory on the other.
Traditionally, organizational success is often quantified in monetary terms by accountants and senior managers. However, effectiveness is defined not only in financial metrics but also by the ability to attain specified inventory levels, as measured by indicators such as inventory turnover.
Contemporary inventory management systems, rooted in established models like Economic Order Quantity (EOQ), Activity-Based Costing (ABC), and Just-in-Time (JIT), continue to form the foundation of efficient inventory systems. Despite the emergence of advanced systems like MRP/MRPII and ERP, little research has been conducted to evaluate the potential competitive advantage these systems may offer SMEs.
Safety inventory plays a crucial role in mitigating uncertainty, acting as a buffer against unforeseen events that may lead to inventory shortages. Supply Chain Management (SCM) is a holistic approach aimed at integrating suppliers, manufacturers, logistics, and consumers to optimize inventory placement.
Given that inventories represent a substantial investment for businesses, the challenge lies in determining the optimal inventory level to achieve service-level targets while managing costs effectively. Balancing service levels, holding costs, and manufacturing costs is key to enhancing profitability.
Statistical analysis from various studies has revealed that over half of the existing SMEs in the market are ineffective at inventory management, potentially stemming from a lack of theoretical knowledge. Additionally, many SMEs often experience inventory shortages due to Just-in-Time (JIT) ordering but refrain from holding safety inventories due to associated costs, making them reliant on their suppliers’ supply chain management for efficient service delivery. Moreover, the implementation of ERP systems, such as SAP, has been deemed too expensive for small businesses, leading many to adopt more affordable solutions like Pastel for inventory management.
The fragrance of buttered popcorn, the crispness of nachos, and the pleasant perfume of candy – these are all connected with the act of seeing a movie in a theatre. Although we typically consume these delicacies without much contemplation, there exists a complex network of suppliers that guarantees the prompt availability of our beloved movie theatre snacks. This blog will examine the supply chain responsible for delivering movie theatre food to our laps, delving into the process these treats go through before reaching our hands.
Raw materials: The beginning of the voyage
The first stage of the cinema snack supply chain starts with the acquisition of raw ingredients. Regarding popcorn, this entails the corn kernels; as for sweets, it refers to the sugar and flavorings. The cinema snack supply chain is essentially global, since it sources basic ingredients from diverse vendors worldwide.
For instance, corn producers play a key role in guaranteeing a consistent supply of premium popcorn. The flavour and texture of the final product are influenced by factors including as weather, soil conditions, and growing practices. Similarly, candy producers depend on sugar farms and flavoring suppliers to produce the wide range of delights found at the concession stand.
Processing and Manufacturing: Transforming Raw Materials
After the raw components are gathered, they undergo a sequence of procedures to transform into the snacks we are familiar with and enjoy. Popcorn seeds undergo processing and packaging, while candies are created in expansive facilities. These processing procedures are crucial for ensuring the quality, uniformity, and longevity of the product.
Regarding popcorn, the kernels undergo a specialised popping procedure in which they are subjected to hot air or oil, resulting in their transformation into the light and airy snack that we often associate with movie evenings. In contrast, candies undergo a series of procedures including mixing, shape, and packing to assure their readiness for display on theatre shelves.
Distribution: The Process of Bringing Films to Cinemas
Following the completion of processing and manufacture, the snacks are then sent to regional warehouses. Distribution networks are crucial in maintaining a continuous supply of new food to theatres. Trucks, ships, and even aircraft are used to convey the merchandise from production sites to distribution centres.
Effective logistics are essential in avoiding any delays or shortages in theatres. The supply chain must possess the ability to swiftly adapt to changes in demand, particularly during periods of high demand such as blockbuster releases or holiday seasons when the demand for theatre snacks reaches its height.
Wholesale and retail
The subsequent stage in the supply chain is transporting the refreshments from distribution centres to the theatres directly. Wholesale distributors collaborate closely with theatre chains to guarantee timely delivery of the appropriate number and assortment of refreshments. This entails predicting demand, overseeing inventory, and synchronising delivery to align with movie timetables.
After the snacks reach the theatres, they undergo the last stage of the voyage, which is the sale phase. Concession stand staff replenish the shelves with popcorn, nachos, sweets, and drinks, in anticipation of the arrival of moviegoers who are anxious to enhance their film experience with delicious snacks.
Consumer Experience: Reaping the Benefits of the Supply Chain
At last, the goodies have been delivered to the customers. Movie enthusiasts, equipped with their preferred refreshments, take their seats to indulge in the most recent box office hit. The effectiveness of the supply chain is apparent in the smiles and contentment of the audience, who are unaware of the complex process their snacks have gone through.
Conclusion
The cinema snack supply chain is an intricate network of procedures and collaborations, guaranteeing the availability of our preferred sweets anytime we want to see a film. Every stage in the supply chain, from the cultivation of cornfields to the operation of the concession stand, plays a vital role in ensuring a smooth and enjoyable experience for moviegoers. When you enjoy the rich and creamy popcorn or indulge in a sugary candy while watching a movie, pause for a minute to acknowledge the complex process these delicacies have undergone to enrich your film-watching experience.
In today’s dynamic business landscape, where competition is unfathomably fierce, and changes happen just around the corner, staying ahead of the game is not just a strategic decision anymore—it is a crucial prerequisite for long-term and sustained success. As we embrace the future, the winds of change ushering in a new era of operational excellence are palpable. In this blog, we’ll take a closer look at the pivotal trends in business operations that will influence the companies of tomorrow, paving the way for enduring growth and resilience.
Digital Transformation as the Cornerstone
The pace of progress is picking up, and this rapid movement’s core is the unstoppable wave of digital transformation. Nowadays, businesses are not just using technology but evolving into tech-savvy entities. Whether harnessing the power of cloud computing, diving into artificial intelligence, or integrating robotic process automation, companies employ cutting-edge tools to streamline their operations, boost efficiency, and augment the overall customer experience.
However, it is vital to note that the digital transformation journey is not a one-size-fits-all affair. A significant strategy will be customising technology solutions to align with specific business needs. Embracing a digital-first mindset goes beyond just adopting new technologies; it is a cultural shift that calls for dedication and an unwavering commitment to continuous learning and adaptability.
The Rise of Remote Work and Virtual Collaboration
Surprising events have accelerated the global shift towards remote work, reshaping how businesses operate for the foreseeable future. The traditional office setup is no longer the sole hub of productivity. Thanks to virtual collaboration tools, teams can seamlessly collaborate regardless of their physical location, creating a diverse and constantly evolving workforce.
Organisations need to rethink their operational models to embrace and maximise remote work to thrive in this evolving landscape. This involves investing in secure and efficient digital collaboration platforms, nurturing a culture built on trust and accountability, and redefining performance metrics to align with the dynamics of a distributed workforce.
Fortifying Supply Chains
Recent disruptions have exposed the vulnerability of global supply chains. Looking ahead, it’s essential to prioritise not only efficiency but also resilience. Companies are reassessing their supply chain strategies, pivoting towards flexible and resilient models capable of weathering unforeseen disruptions.
A notable trend is the move towards localising supply chains. By bringing production and sourcing closer to home, businesses gain the advantage of reducing dependencies on distant suppliers, enabling better risk management and quicker adaptation to market changes. Integrating technologies such as blockchain and IoT becomes crucial in enhancing transparency and traceability within the supply chain.
Sustainability as a Strategic Imperative
Sustainability is not just a buzzword; it’s a paramount need and imperative for businesses aiming for longevity. The modern consumer is environmentally conscious, and companies recognise the need to integrate sustainability into their operations to remain competitive.
From eco-friendly sourcing practices to energy-efficient operations, sustainability is becoming a cornerstone of corporate strategy. This shift is not merely about compliance; it’s a commitment to environmental stewardship that resonates with a socially responsible consumer base. Forward-thinking organisations are embedding sustainability into their core values, understanding that it’s good for the planet and the bottom line.
Sustainability can start anywhere – using naturally sourced materials or shifting towards biodegradable packaging. No step taken is too small – the intent matters and is appreciated by the worldwide consumer base.
Embracing the Power of Data-Driven Decision-Making
In this era overflowing with information, data takes centre stage as the new currency, akin to oil’s significance. Businesses find themselves with vast data reservoirs, and the smart utilisation of this resource sets successful companies apart. The future of operations unfolds in the realm of data-driven decision-making, where insights from analytics shape strategy and fuel innovation.
With advanced analytics, machine learning, and predictive modelling, organisations can extract actionable insights from massive data sets. The applications range from optimising supply chain routes to tailoring customer experiences, offering limitless possibilities. However, this power comes with great responsibility. Organisations must prioritise data governance and cybersecurity to safeguard sensitive information and maintain their stakeholders’ trust.
Consumer will Always be the King
In an increasingly competitive business landscape, the battleground for success revolves around customer experience. As customer expectations evolve, organisations prioritising customer-centric operations stand out in the bustling marketplace.
Understanding customer needs, preferences, and pain points is not just a choice anymore; it’s a prerequisite for success. Businesses leverage advanced analytics and AI to gain profound insights into customer behaviour, enabling them to deliver personalised and seamless experiences. Additionally, the feedback loop has become nearly instantaneous, demanding organisations to be agile in addressing customer concerns and continuously improving their offerings.
In conclusion, the future of operations is dynamic, shaped by the harmonious convergence of technological advancements, evolving work dynamics, and an intensified focus on sustainability and customer experience. Organisations that proactively embrace these trends, fostering a culture of innovation and adaptability, position themselves as leaders in the ever-changing business landscape. The journey toward operational excellence in the future is not a destination; it’s an ongoing evolution, and those navigating it with foresight and agility will emerge victorious in the ever-shifting tides of business.
Quick commerce or Q-commerce is a business model that focuses on ultra-fast delivery of goods and services to make on-demand delivery and innovations in last minute delivery a reality. It is changing the landscape of the e-commerce business. The evolution began in 2011 with companies like Postmates but gained traction only in 2017. This paradigm shift has not only reshaped consumer expectations but has also opened up new opportunities for businesses.
HOW DOES IT WORK?
The speed is obviously of utmost importance here and this would come with better management of operations. Earlier, it was believed that the economies of scale is what would lead to generation of lower costs to gain the edge but with the micro-quantities being ordered, the model had to change.
BUSINESS MODELS
Third party delivery platforms: This is an asset light model because the players in this category do not hold any inventory, they simply deliver the retail products belonging to the third-party. This helps them avoid the heavy inventory costs. Some examples for this could be Dunzo, Swiggy instamart.
Vertically integrated models: These players manage operations from one end to the other, they have their own warehouses where they maintain the inventory and Blinkit and Zepto.
KEY DRIVERS
Changing consumer behavior: The modern consumer now values their time and convenience more than they ever did before. Q-Commerce beautifully aligns with this shift in behavior. It provides a solution that not only caters to the fast-paced lifestyles of urban dwellers but also keeps evolving because of the innate agility this model provides. The adoption provides the ability to order and receive products almost instantly and the increasing internet penetration can be awarded some points for this.
Technology integration: Q-commerce has been able to grow because of the integration of cutting-edge technologies, including artificial intelligence, machine learning, and data analytics. These technologies enable businesses to predict consumer preferences, thus manage inventory efficiently, and undertake the route deliveries in the most time-efficient manner.
Hyper local fulfillment: Quick Commerce relies heavily on establishing a robust network of hyper-local fulfillment centers strategically placed in urban areas which act as hubs for storing products, reducing delivery times by ensuring that the distance between the fulfillment center and the consumer is minimized. With the increasing tilt towards entrepreneurship, many such centers have been coming up or the earlier ones are being roped in this network.
Competition and innovation: The competitive landscape of Q-commerce has led companies to continually innovate and enhance their services. This has resulted in improved delivery times, expanded product offerings, and the introduction of subscription models, which has led to fostering a culture of further innovation in the industry.
It is important for the players or the prospective players to make note of these before planning their entry and operations.
OPERATIONAL CHALLENGES
Apart from several others, management of operations definitely is one of the top most challenges because reduction in price and thus the edge cannot come without efficient operation management. There needs to be faster turnaround times, with lower cost and with higher margin for sustained presence in this arena. Some solutions could be:
Removing bottlenecks in fulfillment processes
Increasing basket values and customer satisfaction using AI-driven personalization
Offering low (or no) delivery fees to boost sales
Rewarding customers for larger basket sizes
Building a subscription model to promote repeat purchases
Offering flat rate for delivery services
Q-commerce is poised for further growth with the advancement in technologies. The ongoing transformation not only reshapes the retail landscape but also contributes to the broader narrative of digital economy. In the years to come, Quick Commerce is likely to remain a driving force, redefining the very essence of convenience in the retail experience.
Guest happiness is of utmost importance in today’s fiercely competitive hospitality business. Guests have many options when choosing a hotel, and their expectations are becoming more refined and exacting. Consequently, hotels must surpass expectations to deliver an outstanding visitor experience. Optimal hotel operations are crucial for attaining this objective.
What do effective hotel operations entail?
Efficient hotel operations refer to the comprehensive administration of all facets of a hotel’s activities to optimize productivity, reduce expenses, and improve overall visitor satisfaction. It includes a wide range of activities, from managing reservations and providing guest services to tasks related to housekeeping and maintenance.
The significance of effective hotel operations lies in its ability to optimize productivity and streamline the overall functioning of the hotel.
Efficient hotel operations are crucial for a multitude of reasons:
Enhanced income: Research conducted by HFTP reveals that hotels that adopt efficient operating techniques might experience a revenue surge of up to 20%.
Enhanced guest satisfaction: Streamlined hotel operations can result in a smoother and more pleasurable guest experience. Consequently, this results in elevated visitor satisfaction ratings, which have the potential to enhance a hotel’s reputation and entice a more significant number of guests. According to a study by J.D. Power, hotels that achieved higher scores in operational efficiency experienced a 12% increase in guest satisfaction ratings.
Cost reduction: Implementing efficient hotel operations can decrease expenses in various areas, including energy use, labour expenditures, and trash management. A survey conducted by Hospitality Net revealed that hotels that adopted energy-efficient measures had an average energy cost reduction of 15%.
Enhanced employee morale: Streamlined hotel operations can create a more favourable work atmosphere for staff members. Implementing this can improve employee morale, productivity, and retention. A study conducted by Cornell University revealed a significant correlation between elevated staff morale and a 10% reduction in employee turnover rates inside hotels.
Strategies for Optimizing Hotel Operations
Hotels can implement many strategies to get optimal efficiency in their operations. Here are a few recommendations:
Develop and integrate a property management system (PMS): A PMS can streamline and automate various hotel operations, including booking management, guest administration, and financial transactions. This might liberate personnel to concentrate on delivering exceptional customer service.
Utilize technology to optimize operations: Various technologies, such as mobile check-in, keyless entry, and chatbots, can be employed to enhance the efficiency of hotel operations. According to a survey conducted by HotelTechReport, hotels that used mobile check-in achieved an average 50% reduction in check-in durations.
Provide staff with training on optimal practices: It is essential to provide staff with the necessary skills and knowledge to carry out their tasks efficiently and effectively. This encompasses tasks such as expeditiously and meticulously cleaning rooms, successfully addressing visitor grievances, and proficiently utilizing technology. A survey by the American Hotel & Lodging Association (AH&LA) revealed that hotels that implemented extensive employee training programs experienced a notable 15% boost in client satisfaction ratings.
Monitor and assess performance: Hotels should diligently monitor their performance across various critical indicators, including guest satisfaction ratings, revenue per available room (RevPAR), and cost per occupied room (COPOR). This can assist them in identifying areas where they can enhance their efficiency.
Throughout the hotel industry, prominent figures are establishing higher standards for operational proficiency, showcasing the revolutionary effects of inventive methodologies:
Marriott International has utilized artificial intelligence (AI) to transform how it personalizes visitor experiences. By leveraging AI, Marriott can customize recommendations and services based on individual preferences. In addition, robots have been utilized to optimize housekeeping duties, allowing staff members to allocate their attention towards client interactions. The dedication to innovation has led to a notable 15% rise in client satisfaction ratings for hotels adopting AI-driven customization.
Hilton Worldwide Holdings has effectively utilized data analytics to detect and resolve issues that cause discomfort to guests proactively. Hilton has improved the whole experience and reduced inconvenience by comprehending visitor behaviour and preferences. Implementing this data-centric strategy has resulted in a 10% surge in Hilton’s revenue per available room (RevPAR).
Hyatt Hotels Corporation has adopted social media to promote visitor interaction and cultivate customer loyalty. Hyatt has established a community of devoted and contented patrons by carefully attending to guest input and immediately addressing it. Hyatt’s dedication to social media engagement has led to a 12% rise in their brand loyalty ratings.
Summary
Effective hotel operations are not simply a method to achieve a goal; they are the fundamental basis for constructing outstanding guest experiences. Hotels may achieve sustained success in the constantly changing hospitality industry by adopting technology, empowering employees, and focusing on continuous development. These strategies will help hotels improve their operations, attract loyal customers, and reach new levels of success.
Demand forecasting is the process of figuring out how much inventory you will need in the future by looking at past data, trends, and events to fulfill the demand of the consumer. Businesses ensure that they have enough products to fill customer orders. It helps them mitigate risks associated with the supply chain and plan the execution in a better way.
In today’s fast-paced business environment, demand forecasting has become increasingly important.
Importance of Demand forecasting:
Avoid overstocking.
Reducing high holding cost
Stock obsolescence
Preventing loss of sales due to stock out
Efficient inventory management relies in part on good demand forecasts. Insufficient inventory will not only leave customers dissatisfied and cost you revenue, but if it happens enough, or on an important enough occasion for a customer, it can result in lost future business as well. But overstocking is costly in terms of storage and logistics and could leave some inventory unsold for a long time. So, finding the right inventory balance is an indispensable aspect of a good demand forecast.
Types of forecasting which are generally utilized are as below: –
Trend forecasting: Use changes in the market for your product over time to guess possible trends. There are times of the year as per past sales statistics that this doesn’t consider especially the seasonality of the sales.
Forecasting with graphs: By plotting historical data on a graph, you can find patterns and add trend lines to find insights that you might not have seen otherwise.
Qualitative forecasting: Market study and focus groups are common ways to do qualitative forecasting. This kind of info is then used to build models by forecasters.
Quantitative forecasting: This uses past numerical data to predict future demand. The more data gathered, the more accurate the forecast usually is.
Technology-Driven Demand Forecasting
Advances in technology and available of abundance data have revolutionized demand forecasting. Businesses are increasingly leveraging machine learning, artificial intelligence, and big data analytics to gain deeper insights into demand patterns and improve forecasting accuracy. These advanced tools can analyze vast amounts of data, including sales data, social media sentiment, and weather patterns, to identify hidden trends and predict future demand with greater precision.
Role of data is utmost important in demand forecasting and biasness or error in data might lead to varied results. To mitigate the risk due to data error it is essential for the organization to improve the accuracy of demand forecasting.
Organization can improve the Demand Forecasting Accuracy by doing the following:
Use multiple forecasting methods: Combining multiple forecasting methods, such as time series analysis, regression analysis, and causal analysis, can help improve forecasting accuracy.
Incorporate real-time data: Incorporating real-time data, such as sales data, into the forecasting process can help organizations respond quickly to changes in demand.
Consider external factors: Organizations should consider external factors, such as economic conditions and competition when making forecasts.
Continuously monitor and adjust forecasts: Organizations should monitor and adjust forecasts to ensure accuracy.
Benefits of Integrating demand forecasting with Inventory Management
Improved inventory control: By accurately forecasting demand, organizations can ensure they have the proper inventory to meet customer needs.
Increased efficiency: Integrating demand forecasting with inventory management allows organizations to streamline processes and minimize waste.
Better decision-making: By accessing accurate demand forecasts, organizations can make better-informed decisions about inventory levels, restocking, and resource allocation.
Increased profitability: Accurate demand forecasting and inventory management can increase sales and reduce waste, improving profitability.
Conclusion
Demand forecasting is an essential component of efficient inventory management. By accurately predicting future customer demand, businesses can optimize their operations, reduce costs, improve customer satisfaction, and enhance profitability. As technology continues to evolve, demand forecasting is becoming increasingly sophisticated and accurate, empowering businesses to make data-driven decisions and achieve greater success in the competitive marketplace.
The growth of the internet has affected many industries, and the food industry is no exception. Online Food Delivery Apps (FDAs) have become popular, reaching a larger audience. The demand for food items in India has increased due to the rising number of internet users in the country. Other reasons for this growth include an increase in the working population, the younger generation, and the growing use of digital payments, especially during demonetization.
The global advancement of the digital economy has made online promotional activities attractive to customers. FDAs act as platforms that bring together restaurants, food eateries, customers, and logistics partners. These apps make it easy for customers to select, order, and pay for their desired food from various restaurants through mobile applications. Popular examples of such apps in India include Swiggy, Zomato, and Uber Eats.
The rise of the internet as a retailing channel has provided food outlets with an ideal platform to showcase their specialties and offer special discounts. Now, even small food outlets in residential areas can easily promote their businesses through FDAs. While this has made it easier for customers to switch between food outlets and generated new demand, the increased competition on a single platform with varying prices and fame has posed a challenge in quantifying the demand for food items in the online food industry.
FDAs have played a significant role in changing the nature of demand in the supply chain. Demand can be categorized as push demand or pull demand. In traditional supply chains, products are “pushed” through the channel based on forecasts, whereas online platforms have shifted demand to a “pull” system, where customers request products according to their needs. This shift from push demand to pull demand reduces the reliance on forecasting techniques and minimizes the bullwhip effect, a phenomenon where variability in demand at lower levels can cause larger variations in demand at higher levels of the supply chain.
The bullwhip effect has five causes: demand signal processing, order batching, price variation, rationing and shortage gaming, and economic reforms such as demonetization.
The FDA (Food Delivery App) relies on various things to work well. It plans how to use resources, organizes logistics, and schedules deliveries. Figuring out the best way to do this is tricky because there are lots of factors that are hard to measure, like how much time customers are willing to wait, how efficient things are, how well deliveries are done, and other things like traffic.
It’s important to understand how the system works for different parts of the supply chain. In this case, the supply chain involves restaurants, customers, and the FDA. The FDA helps restaurants in two ways. First, it gets them more business by using their resources better. Second, it lets them connect with new customers without spending a lot on advertising. This is especially good for restaurants that can’t deliver food themselves. According to surveys, even though some customers who used to eat at the restaurant switch to home delivery, there are many more new customers ordering food online. This means that even if some customers switch, there’s still more business because of the new ones.
For customers, the FDA is helpful. It brings the taste of restaurant food to your home. You can get a variety of foods from different places, all in one order, at your home, and usually at a lower price. This wasn’t always possible before these apps, especially for things like breakfast or lunch. Now, you can even order lunch in the middle of the day. Customers can track their delivery in real-time, and because everything is connected, there’s no confusion or mistakes in the orders. This is great for customers, and because the market is focused on what customers want, it also makes the whole supply chain work better.
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