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  • 8/8/2019 Perspective Clique


    ~ Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation

    the vital spark of all human change, improvement and progress. ~ Ted Levitt

    Improving operational efficiency and business processes by integrating business management

    practices with modern technology are the pillars of any enterprise today. This event provides you a

    platform to showcase your investigative skills and how to optimise your resources in required

    context following the best business practices in IT. Navreeti is a case study contest with a focus

    on applying IT strategies for business.


    Team Details

    1.Team should consist of maximum 2 members.2.

    Team members should be from the same institute.

    3.There can be multiple entries from the same B-School.4.One person cannot be the member of more than one team.

    Round 1

    The teams need to submit an executive summary (max. 750 words) on the proposed case solution.

    Solution format:

    1.Font Size12, Font TypeTimes New Roman, 1.5 line spacing2.The file should be a Microsoft Word Document.3.The front page should carry only Name of your Institute, Team Name, Details of the team

    members (Name, Email IDs, and Phone Numbers)

    4.The details of the participants SHOULD NOT appear anywhere else in the case solution.

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    5.Send entries to [email protected] with the document name as Navreeti_InstituteName_Team Name and subject of mail as Perspective_Navreeti_Institute


    6.The entries must reach us positively by, January 29th, 2011 23:59:59 hrs.7.Shortlisted candidates of Round I will be informed via e-mail.

    Round 2

    1.Top 8 teams shortlisted from Round I will have to present their proposed solution in front ofan esteemed panel of judges at IMNU campus.


    The shortlisted Teams will have to send the detailed report/solution soft copy to

    [email protected] by, February 8th, 2011 23:59:59 hrs.

    3.Maximum time allotted for presentation is 25 min (including 5 min of Q & A session).The decision of the organizers of the contest and the panel of judges will be final and binding on all



    First Prize `5,000/-Second Prize `3,000/-

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    Forecasting demand is a necessary part of our business planning. But as we have seen our forecasts

    tend to vary a lot and more the forecasts miss their target, the more orders vary, with the variation

    expanding up the chain, said Amol. Rahul Gupta operation supervisor, Khandelwal Knitwear Ltd.

    (KKL), and Amol Khandelwal , Executive Director, KKL, had met up to discuss the issue of

    Demand Planning. Amol suspected something was going wrong and it required immediate


    Amol noticed major variations in the demand forecasts. This started becoming a major concern as

    mismatch between actual demand and forecasted sales led to both lost sales and increase in

    inventory carrying and holding cost.

    Earlier forecasts were just based on the personal insight of my father but it is only useful when

    product is new and historical sales data is not available. In the current scenario I am not able to

    understand the reason for this error.(Exhibit 1)

    Rahul replied After having discussions with Mr. Joshi (marketing and sales head) we have realised

    that each person down the chain tends to give a forecasted data including a certain level of safety

    stock. And this stock level tends to fluctuate leading to variations in our forecasted demand

    So you mean, we cant predict our forecasted demand accurately, Amol said.

    Forecast is at best an estimate of what may happen in the future- if there are no surprises. Just as

    the weather forecaster frames the likelihood of rain in terms of probability, for example 40 percent

    chance of rain, and opinion polls often specify a margin of error, demand forecasts should include

    an indication of their range of probability.

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    Since our forecast error has grown significantly over time, we either need to improve the

    forecasting process or arrange the supply chain to accommodate a large amount of uncertainty,

    Rahul replied.

    Rahul again said, I think we do not have a comprehensive IT infrastructure in place which will

    help us to cope with changes in external environment.Khandelwal Knitwear Ltd. (KKL) a woollen textile manufacturing company was started by Mr.

    Ashok Khandelwal in Mewar, Rajasthan in 1982 under the brand name Kozy Clothes. Ashok

    negotiated contracts from local suppliers who were ready to provide raw wool to the company at

    subsidised rates relative to competitors. In return, Ashok promised long term partnership and year

    round procurement of raw materials. Not many companies were into woollen segment at that time

    in Rajasthan. It helped the company to gain a strong foothold in the regional market easily.

    Initially KKL catered to mens segment and included a range of products like socks, hats, sweaters,

    overcoats, gloves and mufflers. Within a span of 3 years, KKL market share increased from 10% to

    25%. The major competitors for KKL were Arun Wollens and Esa Garments. These companies put

    together accounted for 65 % market share with no clear market leader. On time delivery and

    customer focussed service were the main strengths of KKL.

    Amol Khandelwal son of Ashok Khandelwal after completing his MBA joined the family business

    in 2005. His main role was to look into the daily operations of the company and to monitor the

    external environment for new opportunities and threats. He saw the opportunity to expand in the

    neighbouring states of Gujarat and Maharashtra. In 2007 KKL entered these two states and also

    diversified into women and children segment. (Exhibit 2, 4)

    The company till now had been functioning as semi-functional enterprise. They had implemented

    different information systems to take care of inventory, warehouse, logistics, employee pay roll etc.

    to suit their operations. These systems were introduced in the functioning of the organization in an

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    warehousing costs. Also reducing inventories, manufacturing costs and transportation costs

    typically comes at the expense of customer service which was the core strength of KKL.

    Amol knew deploying latest Enterprise Resource Planning (ERP) systems can help the company to

    gather, store, analyze and share large amounts of data among supply chain partners and to facilitate

    strategic, tactical and operational planning through data sharing and analysis. It will also help to

    gather, integrate and report logistical data to simulate actual supply chain activity and create greater

    trust among supply chain partners. But the demand planning concern which the company is facing

    currently can be settled off by using better forecasting software. Then what is the need of investing

    so much for ERP? Amol had received quotations from some of the vendors regarding the cost of

    ERP implementation and the cheapest among them would cost around `3 crores.

    Amol knew that using sophisticated software that combines the best of techniques is only one part

    of successful demand planning. The forecasts have to be put to practice. Each partner in the chain

    may have a tradition of doing its own forecasting. To be effective in reducing lead times and

    lowering inventory costs, forecasting has to be married to a more inclusive supply chain

    management process. And that means building partnerships- and trust- along the supply chain.

    Partners must be willing to share information (and do it quickly), collaborate in developing a single

    forecast and agree to carry out their supply functions according to the forecast. The goal is to

    replace estimates with near-term data reflecting customers buying patterns.

    However before coming to any final conclusion he decided to consider other issues and tradeoffs

    before linking to or upgrading to ERP system. Implementation of ERP systems routinely requires

    purchase of new computer hardware, systems software, network equipment and security software.

    The cost of hardware varies in a wide range depending on the scope of implementation and

    platforms employed. He knew the old legacy systems in place had some weaknesses like

    inflexibility and requiring unnecessary steps in processes that could be streamlined. Maintenance

    and support of these systems was also an issue. However it was too expensive to replace an

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    Exhibit 1 Monthly Sales of KKL for Year 2009-2010 (All figures are in 000)

    Month Actual Demand Forecasted Demand

    January 32

    February 26

    March 12

    April 5 23

    May 4 14

    June 3 7

    July 2 4

    August 5 3

    September 10 3

    October 15 6

    November 25 10

    December 32 17

    Exhibit 2 KKL Supply Chain Model

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    Exhibit 3 Consolidated Balance Sheet of the Company at March 31, 2010 (All Figures are in `000)


    Paid in Capital 170000

    Retained Earnings 300000

    Secured Loans 20000

    Unsecured Loans 5000

    Total Debt 25000

    Total Liabilities 495000


    Gross Block 250000

    Less:Accumulated Depriciation 80000

    Less:Impairment of Assets 0

    Net Block 170000

    Lease Adjustment 0

    Capital WIP 30000

    Investments 50000

    Current Assets, Loans & Advances

    Inventories 180000

    Sundry Debtors 20000

    Cash and Bank 50000

    Loans and Advances 10000

    Total Current Assets 260000

    Less: Current Liabilities and Provisons

    Current Liabilities 10000

    Provisions 5000

    Total Current Liabilities 15000

    Net Current Assets 245000

    Deferred Tax Assets 0

    Deferred Tax Liability 0Total Assets 495000

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    Exhibit 4 KKL Product Portfolio

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    Contact Details:

    Event Coordinator Perspective Coordinator

    Alok Jaiswal +91 9016619089 Arjit Gupta +91 9904499818

    Vishal Kukal +91 9638389158

    [email protected]