Wednesday, May 27, 2009

Seven Steps To RFID Sanity

RFID clarity is best achieved through action. Once you have completed the analysis phase, the only way to learn the true value of RFID is to start testing the technology in a desired application. Follow these simple steps for a more successful implementation:
Step 1:
Understand your visibility requirements. What items do you want to read? Where? How often? From what distance?
Step 2:
Query other end users about recommendations for trials. What to do? How to do it? Recommended technologies? There are many experienced end users who are willing to share their knowledge.
Step 3:
Move into the action phase in a real-world setting. Put tags on things, and set up readers at the points you seek enhanced visibility – outside of the lab environment.
Step 4:
Evaluate technical performance. Do you get reliable reads? Does it properly update your application?
Step 5:
Assess the economic benefits. Is it better than what you are currently doing?
Step 6:
Understand the impact. How does the technology affect business processes? Are there integration issues with enterprise systems?
Step 7:
Make a decision. Decide whether or not to move forward with a larger scale implementation; refine the trial using different processes, technologies, items and/or read points; or cease activity.

Sunday, May 24, 2009

RFID based E-toll system introduced on Pakistan Motorways

Pakistan now joins the list of growing countries where RFID (Radio Frequency Identification) based electronic toll collection is in use. For now it has been introduced on Peshawar - Islamabad M1 and Islamabad - Lahore M2 Motorways. This technology allows the vehicles to pass through toll booths without stopping and toll amount is automatically deducted from the money account on record.

How the system works.

An RFID tag (transponder) is now available free-of-cost to motorists using Lahore, Islamabad and Peshawar toll plazas. This tag is attached to a car’s wind shield. News appearing to this effect in Dawn of November 7, 2007 says:“Those who want to secure the RFID tag will be required to submit full particulars about their person, details of bank account and some other information. The NHA (National Highway Authority) staff posted at the plazas for selling of the tag will register all such details in their system.”On toll plazas, RFID Readers with antennas have been installed. When a vehicle approaches a toll plaza, the RFID Reader Antenna communicates wirelessly with the RFID tag located in the vehicle wind shield. At highway speeds (in excess of 100 kmph), the system identifies the car and charges the correct amount of toll to the bank account on record. The system which is installed in Pakistan, a vehicle will still have to stop at a booth but no human transaction between the vehicle occupants and toll booth operator is needed.
Benefits of RFID
The potential benefits of RFID virtually limitless, RFID is an old technology which transform in a new approach which provides superfluous benefit to every types of organization. I believe it is definitely a step in positive direction.
  1. It will reduce waiting lines at toll booths and save fuel.
  2. Enhance the security of vehicles in term of stealing and other means.
  3. A very interesting feature of the new system is that the required amount would be electronically deducted from the bank account of the motorist.
  4. E-toll will also have a fast tracking system installed which will detect wrong information givers. As such, in case there is no amount in the account of the person concerned the NHA electronic system will recognize it and signal stop by flashing the red light and the bar would not be lifted.”It appears in the news that after initial deployment at Lahore, Islamabad and Peshawar toll plazas, the system will be extended to all toll plazas located on the motorways M1, M2 and M3.
The electronic toll system in Pakistan has been introduced by NHA (National Highway Authority) in collaboration with NADRA (National Database and Registration Authority).
Update:News update appears in Jang. It shows 10210 vehicles have so far registered for the RFID tagged E-toll system on Pakistan Motorway Network

Value of Operational Strategy

The idea of operations strategy plays an important role in determining the overall long-term success of an organization. Developing an operations strategy means looking to innovative ways to add value for the customer in the goods and services that the firm produces and delivers. Value can have many meanings. Managers must therefore align the operations strategy of their firm with the strategies of other functional areas and with the firm’s overall business strategy.
The combination of the globalization of business coupled with advances in technology has created a hyper-competitive environment in which managers must constantly be looking for new and innovative strategies to stay ahead of the competition. To properly implement these strategies, managers need to clearly understand the core capabilities of their firm and focus their resources on maintaining and improving these capabilities.
Successful firms today are looking to develop strategies that integrate goods and services into a single product offering or “bundle of benefits,” which attempts to solve problems for customers rather than just selling those products.

Supply Chain Management

Supply Chain Management

Supply Chain Management synchronizes the efforts of all parties suppliers, manufacturers, distributors, dealers, customers, and so on involved in meeting a customer’s needs. The approach often relies on technology to enable seamless exchanges of information, goods and services across organizational boundaries. It forges much closer relationships among all links in the value chain in order to deliver the right products to the right places at the right times for the right costs. The goal is to establish such strong bonds of communication and trust among all parties that they can effectively function as one unit, fully aligned to streamline business processes and achieve total customer satisfaction.


Companies typically implement Supply Chain Management in four stages:

Stage I seeks to increase the level of trust among vital links in the supply chain. Managers learn to treat former adversaries as valuable partners. This stage often leads to longer-term commitments with preferred partners;

Stage II increases the exchange of information. It creates more accurate, up-to-date knowledge of demand forecasts, inventory levels, capacity utilization, production schedules, delivery dates and other data that could help supply chain partners to improve performance;

Stage III expands efforts to manage the supply chain as one overall process rather than dozens of independent functions. It leverages the core competencies of each player, automates information exchange, changes management processes and incentive systems, eliminates unproductive activities, improves forecasting, reduces inventory levels, cuts cycle times and involves customers more deeply in the Supply Chain Management process;

Stage IV identifies and implements radical ideas to completely transform the supply chain and deliver customer value in unprecedented ways.

Common uses

Recognizing that value is leaking out of the supply chain, but that only limited improvement can be achieved by any single company, managers turn to Supply Chain Management to help them deliver products and services faster, better and less expensively. Supply Chain Management capitalizes on many trends that have changed worldwide business practices, including just-in-time (JIT) inventories, electronic data interchange (EDI), outsourcing of noncore activities, supplier consolidation and globalization.

Harvard Business Review on Supply Chain Management. Harvard Business School Press, 2006.

Narayanan, V.G., and Ananth Raman. “Aligning Incentives in Supply Chains.” Harvard Business Review, November 2004.

Slone, Reuben E. “Leading a Supply Chain Turnaround.” Harvard Business Review, October 2004, pp. 114-121.

Saturday, May 23, 2009

Introduction to RFID

RFID is known as silent communication or object to object communication without any physical medium. Radio Frequency Identification (RFID) is a technology that uses radio waves to identify objects and read data. Windshield tags that pay tolls, security tags for apparel and identity cards that permit access to restricted areas are three common applications. RFID tags consist of an electronic device—n
o larger than a pinhead—containing an antenna and a chip. Like their precursor, bar codes, they’re often employed to track and manage inventory and works in progress. But not only are RFID tags smaller, hardier, and cheaper, they can carry far richer amounts of data. Wireless scanners can read them at a distance, without a direct line of sight, and download detailed information on entire pallets of products from them instantaneously. Paired with sensors, these so-called smart tags can even be used to automatically monitor items’ temperature, pressure and other conditions.

Methodology Implementing RFID

Involves these steps:
  1. Determine which products or processes are suited for this technology.
  2. Factors to consider include the type of data to be encoded, required read range, frequency of measurements, and environmental constraints. RFID is particularly compelling if read and write capabilities are required, the tag is hidden, surface contamination is likely, or reading multiple tags simultaneously is necessary;
  3. Choose the timing and pace for RFID adoption, given the costs, benefits and customer mandates. Also evaluate the cost of not adopting RFID;
  4. Select the appropriate RFID standard and the level of integration desired with the supply chain management software;
  5. Roll out a pilot program, starting with the highest-value products first. Expand implementation of RFID based on customer mandates, and as cost and benefits warrant expanding the program.
RFID can be used to:
  • Streamline the flow of products through the supply chain, thus reducing overall inventory levels and working capital;
  • Decrease the time and expense of managing inventory, while improving the efficiency of shipping, receiving and order processing;
  • Reduce labor costs, product tampering and theft;
  • Improve forecasting and invoicing accuracy;
  • Track parts, finished goods, and reusable containers through manufacturing and assembly processes;
  • Ensure that production procedures are followed and pinpoint the source of production issues; Remotely monitor the conditions of components, products and equipment; Increase security and control access when placed on personnel badges.
Use of RFID technology can increase business productivity and reduce associated costs. To ensure that companies benefit from the advantages RFID provides it is important to understand how to adopt this technology. By analyzing current practices and procedures 8 main areas of benefit can be identified. These are:
  • Improved Productivity and Cost Avoidance
  • Decreased Cycle Time and Taking Costs Out Reduced Rework
  • Reduced Business Risk & Control of Assets
  • Improved Security and Service
  • Improved Utilization of Resources Increased Revenues Exception Management
Selected References:

Agency Theory

Agency Theory:
Probes the relationship between principals and agents. Principals appoint agents to get the work done. The goals of principals usually differ from those of agents. This gives rise to the agency problem.

For example, advertisers (principals) tend to emphasize sales goals and the cost­-effectiveness of marketing communications, whereas advertising agencies may be more inclined to think of creative goals and attention­-getting commercials. Professors of top Business Schools would like to spend most of their time doing research and consultancy. But the owners expect these professors to spend more time with students both in the classroom and outside. Agency theory is a key concept in corporate governance. Professional managers often pursue strategies that increase their personal payoffs at the expense of shareholders. For example, they may grant themselves lavish perquisites including elegant corner offices, corporate jets, large staffs, and extravagant retirement programs. Managers also often tend to pursue growth at the cost of profitability. Shareholders generally want to maximize earnings, as it results in stock appreciation. Since managers are typically compensated more for sales than earnings growth, they tend to be enthusiastic about strategies like mergers and acquisitions even when this enthusiasm is not really justified. Managers may also pursue diversification opportunities that are not necessarily in line with the company’s best interests. In other cases, managers may become complacent and allow things to drift. They may avoid risk since they feel they are more likely to be fired for failure, than for mediocre performance. Executives may be far less entrepreneurial than they should be. They may not make the bold moves that the situation demands. One way to tackle the agency problem is to align the interests of managers with those of owners by using appropriate incentives such as stock option and executive bonus plans. But ironically enough, these schemes may also tempt managers to act against the best interests of the firm. For example, they may manipulate the financial statements to increase earnings artificially.
Application of Agency Theory:
  • Risk Management
  • Supply Chain Management
  • Incentive Management
  • Logistics Management

Thursday, May 21, 2009

Note On Lean Manufacturing:

Lean manufacturing is a management philosophy which focuses on reduction of the seven wastes (Over-production, Waiting time, Transportation, Processing, Inventory, Motion and Scrap) in manufactured products. By eliminating waste (muda), quality is improved, production time is reduced and cost is reduced. Lean "tools" include constant process analysis (kaizen), "pull" production (Kanban) and mistake-proofing (poka yoke). Lean manufacturing is relentlessly focused on eliminating inventory.

The key lean manufacturing principles include:

  • Perfect first-time quality - quest for zero defects, revealing & solving problems at the source
  • Waste minimization – eliminating all activities that do not add value & safety nets, maximize use of scarce resources (capital, people and land)
  • Continuous improvement – reducing costs, improving quality, increasing productivity and information sharing
  • Pull processing – pulling products from the consumer end, not pushing from the production end
  • Flexibility –producing different mixes or greater diversity of products quickly, without sacrificing efficiency at lower volumes of production
  • Building and maintaining a long term relationship with suppliers through collaborative risk sharing, cost sharing and information sharing arrangements.

Lean thinking is a broader concept, compared to lean manufacturing. It is basically about getting the right things, to the right place, at the right time, in the right quantity while minimizing waste and waiting time and being flexible and open to change.
A term coined by James P. Womack and Daniel T. Jones, lean thinking provides a way to specify value, sequence value-creating actions in the best way, conduct these activities without interruption whenever someone requests them, and perform them more and more effectively. Lean thinking means doing more and more with less and less resources while providing customers with exactly what they want.

  • Lean thinking is the antidote to muda. Muda means “waste,” specifically any human activity which absorbs resources but creates no value:
  • mistakes which require rectification,
  • production of items no one wants,
  • processing steps which aren’t actually needed,
  • movement of employees and transport of goods from one place to another without any purpose,
  • groups of people remaining idle because an upstream activity has not delivered on time,
  • Goods and services which don’t meet the needs of the customer.

Lean thinking also improves job satisfaction by providing immediate feedback to employees on their efforts to convert muda into value. Unlike process re engineering, it provides a way to create new work rather than simply downsize in the name of efficiency.

Personal Effectiveness:

Personal Effectiveness:
Possibly, the most well known model, Stephen Covey’s seven habits provide a simple-to-understand-and-use framework of personal effectiveness.

  • Be Proactive: People are responsible for their own choices and have the freedom to make decisions based on principles and values rather than on moods or conditions.
  • Begin with the end in mind: Individuals, families, teams and organizations must have a clear purpose in mind. They must identify and commit themselves to the principles, relationships and purposes that matter most to them.
  • Put First Things First: Putting first things first means focusing on the most important priorities. Whatever the circumstances, living and being driven by values and key principles is important.
  • Think win-win: Thinking win-win is a frame of mind and heart that seeks mutual benefit and mutual respect in all interactions. Instead of thinking selfishly or like a loser, people should learn to think in terms of “we”, not “me”.
  • Seek first to understand: then to be understood: Listening with the intent to understand others is the essence of communication and relationship building. Opportunities to speak openly and to be understood come much more naturally and easily. Seeking to understand takes consideration; seeking to be understood takes courage. Both consideration and courage are important.
  • Synergize: Synergize means realizing that a third way is better than each party can come up with individually. It’s the fruit of respecting, valuing and even celebrating one another’s differences. It’s about solving problems, seizing opportunities and working out differences. Synergy is also the key to any effective team or relationship.
  • Sharpen the saw: Sharpening the saw means constant renewal in the four basic areas of life: physical, social/emotional, mental and spiritual.

Supply Chain Management

  • Supply chain management is an extension of logistics management
  • Supply Chain Management is the next step in business revolution
  • Operational management/operational research lay the foundation of supply chain management
  • One of the most significant changes in the paradigm of modern business management is that individual businesses no longer compete as solely autonomous entities, but rather as supply chains.
  • Business Management has entered the era of inter-network competition and the ultimate success of a single business will depend on management’s ability to integrate the company's intricate network of business relationships.
  • Supply Chain is a network of organizations that are linked directly or indirectly to fulfill a customer’s request for a product or service.
  • SCM is a management concept that includes a set of techniques and methods to manage and control the supply chain.
  • Increasingly the management of multiple relationships across the supply chain is referred to as Supply Chain Management.

Logistics: A Short History

  • The term logistics entered in the Military Terminology in the 18th century.
  • The term received a written definition in 1905 as 'that branch of the art of war pertaining to the movement and supply of armies. But, it was not until World War - II that the term began to be used pervasively to describe the support of military forces and their equipment.
  • HISTORY The term logistics migrated to the business sector in the 1960s as academicians in marketing saw potential in applying the principles of military logistics to physical distribution of consumer goods.
  • Most recently, the business community began viewing logistics as a component of a larger evolving concept, supply chain management (SCM).
  • Beginning in the 1970s, the word logistics crept into the lexicon of the common culture. The word is now being used with regard to supply support of activities from church picnics to the Olympics.
  • Clearly, logistics as a concept and a practice has evolved over the years and is now seen as a discipline practiced in different ways and contexts.
  • Logistics means different things to different people. Even professionals in the field differ as to what logistics actually means.
  • To some, logistics is managing the flow and stock of materials. To others, it is a customer support activity, a planning and engineering mechanism, or a science of calculating requirements and promoting operational capabilities. The dictionary treats logistics as purely a branch of military science. The Council of Logistics Management, now, Council of Supply Chain Management Professionals defines logistics purely in a product distribution context. The common culture of today views logistics as the underlying details of making something happen.
  • All these definitions, explicitly or implicitly, have in common the concept of integrating many activities toward supporting an organizational objective. Further, all have expressed or implied a sense of meeting the material, system, or process needs of a customer.