Future of data visualization tools in business analytics

– Team MPRC, IIM Kashipur – 

We are in the age of data science. The ever-growing complexities of data science welcome a whole new scope to unlock the power of data. With big data rising at an exponential rate, it is becoming essential to organise, filter, analyse, and visualise data to gain a competitive edge in the business. Data visualization is gaining traction. According to Gartner, by 2025, data storytelling will emerge as an industry trend, with 75 percent of the stories automatically generated using augmented analytics techniques.These techniques are at the center of revolutionising the sense of looking at data differently and thereby enhance the experience of analysing data.

Prof. Vivek Anand talks to the Media and Public Relations Committee (MPRC), about the scope of data visualization for the managers of tomorrow, and more.  

Prof. Vivek Anand is currently associated with Wilson Consulting Private Limited as an operations director. He is a data visualization consultant with 17 years of experience and has done MBA from Monash University Melbourne Vic. with an area of specialization including Marketing & Econometrics. He has a background in Sales & Marketing with leading Indian hospitality brands across the country. His inclination to analytics made him switch roles 8 years ago to become a full-time consultant in analytics and spearhead corporate training for Wilson Consulting in India and the US. He is a qualified trainer of some leading tools in the industry such as Tableau & Power BI and has a passion for teaching. He is also an adjunct or visiting faculty at Great Lakes Institute of Management, Great learnings, SP Jain, IIT Madras, IIM Kashipur, IIM Calcutta, IIM Trichy, IIM Ranchi, IIM Kashipur.

[MPRC]– What is data visualization? How important is it today?   

[VA].- So to give it to you in a nutshell, Data Visualisation is trying to look at data or trying to see or perceive patterns in the most effective manner. That’s what it is. It’s not a tool if I may say, I would rather call it science and I think it forms a vital part when it comes to business operations because we are moving into a phase where data is becoming the key. One of the biggest challenges that organizations face is how to best organize data, how to best seek patterns and once you find a pattern, the next task is how to best present it as a story or a dashboard or something. So I would say it is extremely crucial when you want to kind of make any sense of the data.

[MPRC]– How is this science helping the managers to perceive a pattern?

[VA]–  When you are trying to perceive a pattern, the intent is to try and get the answers. The interpretation must happen as quickly as a reflex action. Say, for example, you are made to touch a 500 degrees Celsius hot iron ball, your spontaneous reaction would be to take a hand off the ball. Now, you need to have a similar kind of reaction when you see data. Without even thinking for a second, you must be able to get the answers as quickly as you can without having too much hand-holding or too much help. That’s when you know that you have actually got it right. And also the thing is no one has the time or bandwidth to really sit and ponder old things to see what it was all about. So if we don’t get things right, we won’t get that kind of reaction from your audience.

[MPRC]– From a managerial point of view, prior to 2010, there were not many tools for data visualization. As we remember when we were in school, we were still using PowerPoint and it was just the beginning. But right now a lot of software has come up. So which software is used in the market right now?

[VA]. – Okay so, I’ll give you an answer for a software. There are so many tools like Tableau to lead with today. There is Power Bi for rich visualization and multiple other tools like Qlikview etc. A lot of tools are there. There are tools which are user-friendly, like drag and drop feature. Some of them require a bit of coding. But, I would say that learning software is not going to give you science. Just to tell you something, whatever that can be done with all these cutting-edge tools, can also be done with Microsoft Excel. It is just that it needs a little extra bit of time and effort.

The tool is not again a bit of a challenge because a tool which is learnt at the drop of a hat today might completely transform tomorrow. So tools should never be a constraint for learning and that is something that I keep telling everyone, organizations and students especially. To students, I advise that don’t worry about the tool at all but rather learn science. Transfer science to whatever tool you have. If an organization has an XYZ tool and you do not have any other choice, you still have to make do with what you have. So that’s something that I always believe in.

[MPRC]–Has there been any instances where this data visualization science has helped you or your clients in figuring out problems that might not have been possible with traditional approaches to data handling?

[VA] – Actually yes. Quite some time back. In fact when I was working for one of the hotel chains. I had joined the company recently and I was looking at its past years’ data performances and all that. We realized that the hotel was dipping very largely in terms of occupancies. Now, there were a lot of reasons as to why the occupancies were dipping…so on and so forth. Oh! I still remember the charts very vividly in my mind. We had access to a lot of reports from hotel agents, something called a spy report and a lot of other reports, basically numbers. We realized that when we actually did a very effective visual technique, we were able to see how the market is trending. We saw that the market was still growing at a very rapid rate. Everybody was growing except for the company that I worked for. So that was where the problem came about and we realized that it was not the market that was not growing but we were the one not growing. So the next move was to find who is actually the one who has kind of taken away from us and who is doing better. There were multiple lines. We saw that the year that we started having dips in occupancy levels, a couple of chains were actually gaining momentum and there was a very inverse proportion. As ours was dipping down, we saw that they were growing better and better. So that was a very fantastic and early indicator that I saw, the way things are actually coming up pretty well. Another example that I can share is one of the companies that I had worked for. They worked in a manufacturing setup; safety is of utmost importance. It was a US-based company so all the more reason they were very paranoid about safety than a lot of other folks because of a fear of lawsuits or claims. We were able to foresee how accidents were likely to occur. So the kind of visual that we created came with an effective technique which captured a lot of factors indicating a potential accident. We had to take a lot of corrective actions. So that kind of really averted a potential crisis. I mean nothing happened in the end of it but there were a lot of indicators based on things. So that’s another fantastic example that I can think of. There are so many examples we stumble upon every day but these are two diverse examples where I can think of applications.

[MPRC]– What would you suggest for the managers who are interested in data science and visualization and how they can develop this knowledge?

[VA]– See again, there are two kinds of audiences that one can talk about: a person who creates an actual report and the other who consumes the report. So a report consumer needs to have a different set of skill sets and the one who is going to create the report must have slightly different skill sets. I am assuming if a person is a manager and he may have someone working for him or maybe he is a director or VP of a good company, I don’t expect him or her to learn technology. For example, suppose you got a platform which requires complex coding. All you need to do is know that you have to understand how to read the results and absorb it. That’s the kind of learning that I would recommend a manager to get himself or herself acquainted with. If you are a marching soldier and you are the one who is going to create the reports, then you need to have a couple of tools. First of all, you need to have the technological input. You need to also have the science of visualization. While you have the science, you also need to make sure that you do things right. You must be one step ahead of the manager. Therefore, the one who is developing should be twice as smart as a manager. That’s the irony but then that’s how things work.

So in terms of decision-making, you want to support the manager with the right quality of output so that they are able to absorb. And of course, with their experience in the business, they will make the right decisions.

[MPRC]– So in your opinion at this moment, what is happening in the industry? Do you think that the data visualization is not being given the importance as it should have been?

[VA] – The thing is…it’s the mindset of a lot of people. To give you a little insight into it, the particular clients that I have been dealing with, they had a very stereotypical mindset. They are the ones who have not been able to think beyond what they have been doing. So for them, it is a concept selling that you still have to do.  I think they are happy in their own space. They are happy with what they are doing and they don’t really wish to evolve into the next level. So there is nothing that you or I can do. But having said that there is also another whole bunch of cohorts where things are very different, where people are actually now adapting to this entire concept. They are embracing this whole idea. They want to really see how to make it fit into the reader or the business operations. They are getting very data-driven. But everyone does not have the skill set. Because that’s a different piece altogether that one has to know. But this is starting to grab people’s attention and the trend is changing. I can see it’s slowly changing.

[MPRC]–  When did you realize that you should pursue a career in data visualisation?

[VA] –  So I must admit I am not the brainchild behind this particular thing at least as far as I am concerned. I must owe this to my brother who is taking a leap more than I did to take it back to where we started. To give you a background, he used to work for a utilities firm back in the US. I think he was more on the supply chain side. Back then all that they were doing in his team was simply reporting. They were just getting reports and putting them in different forms. Nobody was really taking any sort of action with the data. So I think what he actually did from there in the early 2000s is to start to take some actions on data. It was a very rudimentary technique to really get going with how to generate some meaningful insights from the data. Back then I think they would not do it anywhere. There was not a lot of content. there was not a lot of technology also to support something in this space. Simultaneously, while my brother was working in the US. I had gone to do Master’s in Australia and I also picked up a sense for Analytics. So to be very honest that’s when I kept hearing things on a very similar note. We also had a lot of exchange students from the US. We interacted with some folks and we understood that there was a buzz. There is going to be some sort of explosive technologies. We could pre-empt. People are talking about it that this is going to be big. There was a lot of hype getting built in its own capacity. So that’s when I started to think about this as a thing. I said, maybe this could be a potential career path, but I guess for me what happened was I was basically inclined into analytics and I found that this was a very useful feature or a very useful skillset to have if you are going to get into the analytics profession. So as a career path, yes, that’s when the whole thing I can take it back.

[MPRC]–  So you have been in the industry for almost the past 10 years. Based on that, what is your opinion about the industry trends or the career option which anyone can have in this field?

[VA]. – A career path just on data visualization alone is something where I would not put all my eggs in one basket. This has to be in combination with all your other learnings.  So today, If you want to make a career path in this alone, it’s a very slim chance. Because right now, as a student if you try to set a career for the first time, you need to be a jack-of-all-trades, you can’t just be a master of none. It happens over a point in time, once you have your expertise. So right now, my recommendation is to learn everything. You don’t know when what will come in handy. Because you need to have your skill set in analytics, data mining, business analytics, forecasting etc. Put all your regressions, your modelling techniques and you should be able to combine visualization as a part of your data model as well. If that works well, I think it is a fantastic career path.

(Prof. Vivek Anand teaches data visualization at IIM Kashipur). 

HRhythm - The HR Club | IIM Kashipur

Human Resources is one of the most sought-after domains for students who enrol every year to pursue an MBA. HRhythm-The HR club of IIM Kashipur comprises aspiring HR professionals, focused on providing HR-related content and making students abreast of the current industry practices. Hence, they leave no stones unturned to make the students aware of the opportunities and competition present in the domain in terms of B-school and corporate competitions.

HRhythm conducts a plethora of activities to cater to the interest in the Human Resources domain. The club has adapted to changes in the learning behaviour. It continues to implement them to efficiently impart knowledge and develop the interest of people in the field of Human Resources.

HRhythm conducts events encompassing various HR themes to accomplish the objective of amassing the HR enthusiasts nationwide by providing them with a platform for showcasing their HR skills. Apart from discovering and honouring the country’s talents, these events also provide a conducive environment to sharpen the ‘HR skills’. Some of the famous events by the club include – 

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  1. Scribble Dribble

Scribble Dribble is a Pan India article writing competition which encourages the bright minds of Indian B-Schools to draft an innovative article pertaining to the domain of Human Resources. It is conducted every year with an additional attribute that makes the event more stimulating than before. Both undergraduate and MBA students, across the country participate in huge numbers with great enthusiasm to demonstrate their writing skills and HR acumen. This year, a quiz-round was added to the existing competition structure, before the article-writing round to test the basic understanding of the HR concepts in a participant.

2. Pragyan

This is the annual flagship Case Study Competition hosted by the club. The participants are given a set of real-world scenarios that reflect the current problems faced in the corporate world, specifically in the HR domain. The motive is to let the participants take a peek into the state of affairs in most organizations and to make them savour the essence of solving simulated real-life corporate problems.

3. HResilience

In HResilience, the participants wear the hat of Labour Union Leaders and Employee Relation Manager, to showcase their bargaining expertise, problem-solving skills, and empathy for solving the persisting employee problems via reaching an amicable solution at the end. This event is also conducted to provide students with the industry conflicts that emerge in real case scenarios and apply HR concepts to come up with the optimum solution.

4. Negotiator 

This event encourages students to display or showcase their negotiation skills when confronted with a real-life business case. ‘Negotiator’ allows participants to be in the shoes of the CHRO and provides them with a platform to present their solution for the problems prevailing in the organization. It challenges their critical thinking, decision-making ability, analytical skills, and emotional intelligence to come up with the best possible solution in the given scenario.

The club utilizes its social media handles as a platform to impart knowledge about the HR world, with an additional essence to the content to make them cater to an average individual with even little to no interest in Human Resources. The club has consistently posted articles, and other relevant content on social media handles to promote students’ interests and keep them updated with the relevant information. Following is a walk-through of the HRhythm’s efforts:

  • Interactive content in the form of small videos and slides facilitates human resource learning lucidly. Audio-visual content aims at learning, brushing, implementing HR concepts.
  • A regular series of content uploads in the form of infotainment. Articles based on an amalgamation of HR concepts with mainstream Pop-Culture to generate interest in the student community.
  • Personality development and interview tips which help students to survive, sustain, and flourish in today’s competitive environment.
  • To complement classroom learning with corporate implementation, HRhythm is currently working towards organizing a series of interviews with industry experts. A summary of the same would be shared with the students in the form of a write-up or video. Inputs from industry experts will help students in gaining insights into the real-life HR world.

These efforts have not only increased the club’s social media presence but most importantly, it has been able to spark the desire inside many people towards the HR domain and it continues to do so.

Also, the team invites leaders from the corporate world to share their understanding of the domain and talk about the experiences that shaped their career as a young HR aspirant. They believe students should always perceive the reality and not illusions, which reflects in the engagement activities carried out by the club. Knowledge sharing sessions by Executive Members have been conducted to make students aware of recent happenings in the field of Human Resource Management, which will help them in acing selection processes for HR roles.

HRhythm also undertakes the responsibility of representing IIM Kashipur in the Human Resources domain and this involves maintaining relations with HR Clubs of other premier B-Schools across the country. This, in turn helps the students at IIM Kashipur to seamlessly participate in HR events of these institutes and thus creating synergy. Such relations would provide mutual benefits as students can participate, learn and win competitions. With this, the club has been able to establish the flag of IIM Kashipur in the sphere of human resources.

Econs – The Economics Club | IIM Kashipur

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Econs – the Economics Club of IIM Kashipur is one of the seven academic clubs of IIM Kashipur. Econs bears the responsibility of increasing awareness, generating inquisitiveness, and fostering passion among the students and faculty in the field of economics. 

The economics club was founded in the year 2019 as an interest-based club to impart knowledge, invoke discussions and conversations pertaining to economics, and highlight its importance and linkages to different business domains. Late American scholar Warren Bennis said that “Success in management requires learning as fast as the world is changing”. Keeping up with this notion, the club has found it extremely pertinent for aspiring managers to be aware of “Economics” affecting their daily lives and make them better prepared to tackle business situations efficiently. Since its inception, Econs has gradually attained the status of a core academic club and has carried out a plethora of activities in this direction.

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In the first year of its functioning, the club conducted ‘Arthashastra’, the flagship event of Econs, during Agnitraya 2019, which saw participation by around 450 teams from various B-schools across India. In this competition, different teams designed a feasible economic policy of their choice that resonated with India’s ultimate goal of achieving a five trillion-dollar economy. Along with that, Econs also conducted an ‘Infographics Making Competition’ covering topics like the future of banking, green Economy, and the effects of immigration on the Indian Economy. Econs also conducted the ‘Union Budget Prediction Competition’ wherein the participants had to guess highlights of the Union Budget and the participant with the closest prediction took away the prices. The event was welcomed with utmost enthusiasm.

The club makes the students aware of the domain by posting short articles bi-weekly through its social media handles on Twitter, Instagram, Facebook, and LinkedIn. For the academic year 2019-20, the posts have covered topics like RBI monetary policy highlights, US elections impact on the Economy, and Atmanirbhar Bharat 3.0 to name a few. Along with the weekly posts, social media handles also feature monthly newsletters. The club shared this academic year’s first newsletter for the month of October 2020. The comprehensive issue featured the fragile state of the NBFC sector in India along with articles on comparing the Chinese Economy with the Indian Economy and giving a brief about the economic aspect of “Stubble Burning”. With an objective to inculcate the interest in reading in the field of economics, the newsletter also featured a review of a famous book ” Of Counsel-The Challenges of the Modi-Jaitley Economy” written by our former Chief Economic Adviser, Government of India, Mr Arvind Subramanian. Along with these, the newsletter had lighter sections like “Jargons” and “Current Affairs” too.

The club provides a platform for all the people to discuss, debate, and design on the current economic developments and government or regulatory policies and announcements. Throughout the year members of the club also conduct knowledge sharing sessions through case studies, quizzes, and games to instil and fuel a growing interest among students to understand and analyze their theoretical concepts towards practical applications.

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On the corporate front, the club extensively interacts with experts and industrial stalwarts in the field of business and economics to share insights regarding the latest happenings through a seminar or a lecture. Econs became the first academic club in IIM Kashipur to conduct a guest lecture in Conscientia 2020 leadership talk series. The eminent speaker of the guest lecture was Mr Dhiraj Nayyar, the Chief Economist of Vedanta Group and a former member of NITI Ayog, who delivered an insightful session on the relevance of economics for the managers.

Through its numerous strides in continuously highlighting different aspects of economics, Econs has achieved a distinct recognition in keeping up with its mission and being a forerunner for the same. The aim is to increase awareness about Economics among students. Our mission is to inculcate interest among the students of IIM Kashipur in economics and help them understand how economics is interlinked with various fields. We work to bring together all the economics and business enthusiasts inside and outside the campus together to discuss and debate the major economic events of the world to foster new ideas for the future.

Consilium - the Consulting and Strategy Club | IIM Kashipur

Opportunities! “Consultants must find newer opportunities. If you can’t find one, create one.” This is precisely what Consilium strives to do – creating opportunities!

Consilium, the academic club of IIM Kashipur deals with Strategy and Consulting aspects of  Management. Since its inception, Consilium is determined to assist the students with preparation, comprehension and expertise in this domain. The club continuously collects and updates relevant resources to enhance the knowledge of the community. With the changing business dynamics across the globe and shift in the recent global order, Consilium ensures that the students are equipped with the latest trends and have hands-on learning experience throughout the academic year.

Established with the vision of nurturing students to become the future leaders in the domain of consulting and business strategy, Consilium has been consistently working in this direction by conducting case study competitions, knowledge sharing seminars, guesstimate workshops and the most anticipated-industry interactions.

The Domain

“Without strategy, execution is aimless. Without execution, strategy is useless.” – Morris Chang

Consultants often find themselves interacting with different verticals and domains of the business. It requires solving problems not just through single domain optimization but via a collective approach encompassing all domains. The problems can be visualized with say an example where an organization wishes to analyze the pros and cons of venturing into a new market, which will require an understanding of marketing, finance, supply chain, operations, and a fair knowledge of relevance between all of these. That is where strategy comes into play. The methodology does not limit to one vertical but through a broader lens for looking at multiple domains.

Roadmap

The journey with Consilium starts with the very first month in the MBA curriculum at IIM Kashipur, where students are provided with the introduction to Strategy Frameworks, Consulting interview questions and reference materials. These resources assist students not just to gain a perspective in the domain, but also to comprehend highlights of the practices that are used in further stages.

Moving forward, Consilium provides a variety of hands-on opportunities through case competitions, business simulations, questionnaires and industry connections. The club is managed by Executive members who have demonstrated the knowledge and expertise at National level having a flavour of participating and winning reputed B-school and corporate case study competitions like Flipkart Wired, Thoucentric Bottoms Up, etc.

Consilium Insider

Consilium’s monthly newsletter shares the best practices, strategies and changing dynamics from different industries ranging from sports, FMCG, Petrochemical to latest Industry 4.0. Further, the newsletter comprises frameworks and their usage in real-life business problems from these industries. The club also ensures that the resources are not just limited to a monthly basis, and provide consistent updates through our social media channels.

The theme for the November Newsletter had been Covid-19 impact on business strategies covering the impact on the Sports and Oil industry along with the role of Digital trends in business expansion.

ForeSight Series

“It’s not about money or connections – it’s the willingness to outwork and outlearn everyone…And if it fails, you learn from what happened and do a better job next time.” – Mark Cuban

In Foresight Series, the academic experience in consulting and strategy is tested through gamified quizzes, guesstimates and infographics. Foresight comprises three events throughout the year, offering a constant opportunity to compete with peers and test their mettle in solving real-world problems. Due to pandemic, Foresight 4.1 was conducted online with a mix of quiz to cover domain knowledge and guesstimates problems to prepare students for interviews.

Industry Connect

Consilium brings together experience from industry leaders in the consulting and strategy domain. Students get to explore from real-life experiences of consultants and explore insights from the challenges they face, the thought process behind critical decisions taken and the key takeaways from years of experience in the domain.

EndGame

EndGame is a national level simulation designed on a business scenario wherein the students walk the consultants’ shoes and apply their knowledge to compete with peers from other B-schools. It involves the application of academic knowledge from various facets of decision making, marketing and economics. It also tests the strategic forecasting and understanding of competitive dynamics in real-life situations. Further, the event demonstrates the presence of zero-sum game, to create similarity with as much real-world dynamics as possible.

Consulting Knights and Ranbhoomi

Consulting Knights and Ranbhoomi provides a diverse and enriching experience in solving cases at Pan-India level. Students utilize their knowledge of all disciplines to prepare strategies for business cases in teams. This event is organized in collaboration with various organizations like Havish M Consulting, to get an essence of existing business problems.

Consilium Conversations

In the academic year 2020-21, the club initiated a strategy-talk series “Consilium Conversations” wherein it invites budding entrepreneurs and industry stalwarts from various domains for a conversational interview. It focusses on unearthing the strategies that go behind creating a successful business or project. The motive behind the series is to inspire the students to develop strong critical-thinking skills required in strategy & consulting roles and learn about the latest developments in the industry. With each initiative, Consilium creates a robust environment for the students to learn and challenge themselves in the field of consulting and strategy.

Cause-Effect Relationships – The ToC Way

Theory of Constraints is a breakthrough and powerful management philosophy that has evolved in the past couple of decades along with other new-age concepts like TQM, JIT, re-engineering and the learning organization.

This article has been adapted from the bestselling book Critical Chain by Dr. Eli M. Goldratt, an internationally recognized industry guru and the originator of the Theory of Constraints (or ToC). This book is one of many business novels written by Dr. Goldratt through which he has transformed and revolutionalized the thinking and actions of management throughout the world.

Theory of Constraints is a breakthrough and powerful management philosophy that has evolved in the past couple of decades along with other new-age concepts like TQM, JIT, re-engineering and the learning organization. By complimenting these other philosophies with its clarity and systematic analytical methods, ToC boasts of the following merits:

1 osm

Now, in layman’s terms, let’s understand the approach of ToC in resolving cause-effect relationships. For instance, what are some of the biggest problem faced by managers today? These include:

2 osm

ToC regards that problems such as the ones stated above are just symptoms. It claims that they all stem from one single core problem. Let’s delve into detail on this conclusion.

One assumption or observation in the ToC universe is that most managers want to manage well. In order to manage well, managers must ensure that the right products reach the right clients at the right time and in the right quantity. There are two absolutely necessary conditions to achieve effective and efficient management.

3 osm

Each of these conditions, controlling cost and protecting throughput, implies a different mode of management. Let us understand this through an analogy. Let’s view a company as a physical chain with many links. You are the President in charge of the entire chain.

In our chain, the closest thing related to cost will be weight. And one way to determine the total cost of the organization is to sum up the weights of all the links. Now, if I am a manager in charge of a specific department, a specific link in the company, then to improve my link the obvious thing to do is to make it a few grams lighter. However, as President you are not interested merely in my link; you are interested in the whole chain. But when I reduce the weight of a link, the entire chain becomes lighter by that amount.

4 osm

This analogy implies a management philosophy. It implies that any local improvement automatically translates into an improvement of the overall organization. Hence, any global improvement can be achieved by inducing many local improvements. Let us call this management philosophy the ‘Cost World’. Most organizations today function on the principles of the cost world.

Now, let us examine throughput (or flow) through the same analogy. What is the equivalent of throughput in our physical chain? It is the strength of the chain. If one link, just one link in our chain breaks, what happens to the strength of the chain? It drops to zero. This indicates that when we deal with throughput, it is not just the links that are important; the linkages are equally important.

Intuitively, it follows that the strength of the chain (or throughput of the Company) is determined by the weakest link in the chain. And obviously, there can be only one “weakest” link in a chain at a time

5 osm

Now, let’s see what this implies. If you are still the President in charge of the entire chain and I’m still in charge of just one department (let’s take the more general case where I’m in charge of a department that is not the weakest link). If I make my link stronger, do I improve the strength of your chain? The answer is … absolutely not!

This leads us to another management philosophy which we shall call the ‘Throughput World’. The throughput world says that most local improvements do not contribute to global improvements. The way to improve the total organization is definitely not achieved by inducing many local improvements.

Considering these two contradicting philosophies, the next obvious question is – Can we manage according to both worlds at the same time? The answer is NO. There is no compromise between the cost world and the throughput world. Not even theoretically. In academia we don’t call it compromise, we call it optimize. To understand why we cannot optimize between the two worlds, we need to first understand an important concept called Focusing.

Any improvement in a company requires basically 3 resources:

6 osm

It is important for a manager to know where to focus his resources. A manager who does not know how to focus will not succeed in controlling cost and will not protect throughput. In Statistics, we have come to know Focusing through a tool called the Pareto Principle. Focus on solving 20% of the important problems and you’ll reap 80% of the benefits. But those who teach statistics know that the 80-20 rule applies only to systems composed of independent variables; it applies only to the Cost World where each link is managed individually.

7 osm

Where linkages are important and the variables are dependent, the Pareto principle is not applicable. So how can we find out on what to focus in the Throughput World? Well, it’s simpler than expected. Just think about the chain and the fact that its strength is determined by its weakest link. If you want to strengthen the chain, the first thing is to find the weakest link.

This leads us to the 5 stages of Focusing as per Theory of Constraints:

Step 1: Identify the system’s constraint(s)

Step 2: Decide how to Exploit the system’s constraint(s)

Step 3: Subordinate everything else to the above decision

Step 4: Elevate the systems’ constraint(s)

Step 5: Avoid Inertia and go back to step one

The above steps are also called the Process Of On-Going Improvement or POOGI. Simply put, it means that once we find a bottleneck, we need to strengthen or improve it. Now, as per the intuition of the throughput world, we should not produce at the non-bottleneck resource any more than we can squeeze out of the bottleneck resource. If we want to increase throughput, we must then lift some of the load from the bottleneck by buying more machines or hiring more people, whichever may be suitable. The logic here is impeccable as well as intuitive. Once the bottleneck is strengthened enough it no longer remains the constraint resource and we must move on to the next bottleneck. And this is the process to focus in the Throughput World.

This learning will now help us understand easily why there is no acceptable compromise between the cost world and the throughput world. Imagine that I am still in charge of the department that is not the weakest link. As per ToC, I must now subordinate my process to that of the constraint resource, forcing me to operate at sub-optimal efficiencies. And in industry, which is governed on the principle of maximizing efficiency, this would be a sure shot way to get oneself fired out of a job.

Do you understand what this means? It means that your intuition lies in the throughput world and in this world the answer is ‘don’t dare to produce more than the constraint resource’. But your performance measuring systems are in the cost world that wants you to reach maximum local efficiency. And therefore, there is no compromise. If one tries to optimize this conflict between the 2 worlds, both worlds will kill him.

The Theory of Constraints firmly believes that there are no inherent CONFLICTS. As mentioned before, ToC is derived from the accurate sciences. And in the accurate sciences, what do scientists do when they face a conflict? Their reaction is very different to that of managers. While we try to find an acceptable compromise, this thought never crosses their minds. Their starting point will never allow it; they don’t accept that conflicts exist in reality.

So, no matter how well the two methods (cost world & throughput world) are accepted, the scientists’ instinctive conclusion will be that there is a faulty assumption underlying one of the methods used. All their energy will be focused on finding that faulty assumption and correcting it.

Can we do the same in our Cost World vs. Throughput World scenario? Can we eliminate the conflict and emerge at a win-win? Think about it. We will elaborate more on this in our next post.

Rishi Varma

OSM

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Is Market Share still a Competitive Edge?

You might be bemused how our cows became relevant to businesses, that too when the matrix originated in the West. Yes, we are talking of the BCG’s growth-share matrix which is considered so much relevant for the adequate allocation of resources to exploit the growth opportunities.

If you are hearing to a strategy class in any of the B-schools, you are bound to get past this framework which talks of cows, dogs, cash and finally a question mark. You might be bemused how our cows became relevant to businesses, that too when the matrix originated in the West. Yes, we are talking of the BCG’s growth-share matrix which is considered so much relevant for the adequate allocation of resources to exploit the growth opportunities.cash-cow

Rather than describing the nitty-gritty of this matrix, which you are so much cognizant of, we would like to share our views regarding the relevance of its two measures, especially in today’s context.  We are afraid, the two measures of competitiveness, more specifically the market share axis, seem to have lost its pertinence.

Let’s analyze this with the two, not-so-old developments. Take Nokia, with such a huge market share during its heyday, and a high growth, it would have been shining as a star, enjoying an indomitable position vis-a-vis its peers. Or at least as it matured, it would be peacefully sleeping like a cow, with eyes wide open, seeing its competitors struggle and chewing the dollars cashing in. Aghast! Its situation is so contrary. With its operations around the world, assets in the shape of factories, R&D investments, probably patents too, it got bought by our most omnipresent OS provider for a mere $7.2 billion, who hardly had any grasp over mobile handset business.

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On the contrary, check the valuation of your new messaging tool, hey Whats-app!, it’s worth $19 billion without a factory or an assembly line and other physical assets. Isn’t technology more prominent than market share? There is definitely a next big thing being designed as you read this, so Whatsapp don’t sleep like a cow or be complacent of your shining stars. Businesses are evolving fast, your market share might not be the true testimony of your sustainability in the future. So should we evolve the BCG ‘growth-share’ matrix to ‘growth-technology’ matrix?

Blessen Mathai

Consilium

Consilium

Blood Donation Camp @ IIM Kashipur

Parivartan Club-IIM Kashipur organized Blood Donation camp on 29th July, 2014. Along with the Director Dr Gautam Sinha, 65 members of IIM Kashipur participated by donating their blood. This included faculty, students, administrative staff and others.

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SPIC MACAY Chapter Begins @ IIM Kashipur

On the eve of Republic Day, SPIC MACAY Chapter of IIM Kashipur concluded a grand event which witnessed performances by virtuosos like Pandit Bhajan Sopori, Shri Suchit Narang and Pandit Kalamandalam Amaljith.

On the eve of Republic Day, SPIC MACAY Chapter of IIM Kashipur concluded a grand event which witnessed performances by virtuosos like Pandit Bhajan Sopori, Shri Suchit Narang and Pandit Kalamandalam Amaljith. This event also marked the beginning of the SPIC MACAY chapter of IIM Kashipur. SPIC MACAY is a voluntary movement that seeks to conserve and promote an awareness of our rich and heterogeneous cultural tapestry amongst the youth of this country through focus on the classical arts.

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Operations Club conducted its second session

Operations Club conducted its second session on 22nd August 2012. The session was facilitated by Mr Kapil Vaish and Mr Avinash Saha, students of PGP’11-13 and majoring in operations. The session was attended by a bunch of operations enthusiast from PGP’12-14 batch. The session focused on giving a bird’s eye view of all the components of operations from an industrial perspective. An introduction to Mix Integer Linear Programming  Model was also given to the attendees.

The session started with understanding the major components of Operations at a high level. The entire hierarchy and architecture of Supply Chain management was discussed. Enthusiasts were introduced to the concept of forecasting the need, master production schedule, material resource planning, capacity planning. The chronology of events was discussed in detail starting from the vendor finalization for supply of raw materials to the distribution of the final product to warehouses and retailers.

Thereafter, an introduction to Mix Integer Linear Programming model was made wherein members solved a sample optimization problem in excel using Solver. The example threw light on how the constraints are identified for a given problem and entered into the solver to achieve an optimum solution.

The session helped the attendees in understanding what exactly an operation is and to a high extent exposed them to the kind of challenges that entail this area of management.