Friday, November 5, 2010

Litter Moms !

I ask myself, is growth an indication of how well India is doing? I think we would be naive to think so. Why do I say that? I am not the only one who might be saying that, anyone who introspects will say that. We continue to be discourteous publically - have low thresholds of  sense of patience, forbearance, and sacrifice. We have a high degree of tolerance to inadequacies - litter on the street, dirt in the public bus, broken panes in a govt building, spit and sputum in building corners. Apathy from bureaucrats, corruption from politicians, and inefficiencies from private enterprise. We live happily with that without discomfort.

I was standing outside Crossroads mall near Haji Ali, Mumbai the other day when a very well to do mom, had her 10 year old son by his hand, while waiting for the car. The obese kid was sucking on a straw in a paper glass of something from MC Donald's. As the Benz arrived, she grabbed the paper cup and threw it onto the pavement. She wanted her car clean, but not the street. She is the one I cannot forgive, being educated, aware and expected to be responsible. She is a “Litter-Mom”. She symbolizes those educated people who don’t pay back to society with good conduct and good practice. And don’t pride in bringing up children who are law abiding citizens. I think charity must begin at home, where children are taught the meaning of the word - “patience, kindness, empathy, tolerance and respect”. How will they grow up to be worthy citizens, if they have a “Litter-Moms”?
I believe this is what causes rot in society when they grow up. For me the measure of success is more than growth.

In my years in Indian Retailing, I believe retailers have positively modified the behaviour of thousands of young boys and girls, who later go on have a family of their own, and I hope those service attitude good practices stick as a habit.
Retail stores intake youth at the age of 19 to 22 from a diverse set of backgrounds and teach them to be – hygienic, neat, courteous, punctual, systematic, team players, and teach them to take pride in what they do. I think I may have personally seen over 40,000 employees. But this is a constant endeavor that is lifelong effort. Most service industries inculcate this behaviour. I have seen this particularly in the hospitality industry.

I take courage that there may be more moms who are not litter moms, and India will in years to come build a society that is kind and orderly, and which believes that the “means is as important as the end”

If it is any consolation, to moms, I use the word Litter Mom, euphemistically (applies equally to the litter dads!) - so moms don’t get wild with me. 

Friday, August 27, 2010

TIC-TIC !

The Immediate Community (TIC)
Concept
See the Table 2 Below- 
In Indian Cities there are as many poor (Q1), as there are Rich and Middle class (Q5 to Q2). 20 Mn HH poor and Q5 to Q2 are 20 Mn HH.
Surprisingly 91% of the Q5 rich are in rural. Only 9% of the Q5 rich are in the Cities! So the Rich cats in the cities, you are not so rich after all!
How can we help the Urban Poor?
We keep seeing NGOs struggle to do something, and great inspiring stories also come to the fore of admirable individual initiatives. At those times I have felt a sense of longing to be one of them to help those who are less fortunate than I. But we can all start here and now - to use a an old saying - let charity begin at home. 
So here is a plan.    
The concept is  one of The Immediate Community. TIC.
All HH Q5 to Q3 will surely have 2 to 3 people who provide some service or the other - Cooks, Top Workers, Drivers, Car Cleaners, Dhobi, Ironing man, Delivery boys, Plumbers, Watchmen, Electricians, etc
They constitute 90% of a city in India! They work for the Q5 to Q3. This I don’t mean in a derogatory way. I mean that there is an Eco-system of Need-Fulfillment-Payment-Survival.
But here is the difference. Can Q5 to Q3 do something more in a structured manner to help those who serve them? I have no doubt that every one gives a Diwali bonus and feels good about it. It is no favour we do them. It is but our means of explicitly thanking them for their service to help me live well. 

Q5 to Q3 must vow that they will help them not only  "live" by paying equal to the services they render, but will support them Additionally . This is what TIC programme. here are the steps:

  1. Recognize the presence of the Immediate Community around us.   They render valuable service for as low as Usd100 (Rs5000) per month full time work. They maintain their families with this.
  1. It is never good to dole out extra money as cash. It will not be well used. Instead give then material support, as shown in table 1
What it costs  Q5/3 HH is Rs. 400 per month. That is the cost of a  Pizza dinner. See the table below-

 Table1*
Kinds of Support
Monthly
Annual
Total
Medicines
100

1200
School Books

500
500
School Fees
150

1800
School Vehicle
100

1200
Medical Insurance

200
200
Long term Life Insurance

200
200


Total
5100


Monthly
425
* some quick estimates

So to support a Family in this way it costs only Rs. 425. To support  2, it costs less than Rs. 900, (half the cost of any fine dining) 
So if all Q5 to Q3 support 2 families each, it will send out support worth Rs. 900 cr a month!
Every Family income will go up by 10%. This can compensate for the inflation.
So start Today. Make sure that no one who is in your TIC ever goes Hungry
The best feeling is when you have started it and not told anyone that you have. No fun posting a secret entry on face book !







Urban rural split



Population Quintile arranged by Income
% Households(mn)
% of all HH Income
% of all hh expenditure
Surplus Income as a % to total Income
Income Index
Urban rural split
Urban%
rural%
Urban HH(mn)
Q1(LOWEST)
18(38)
6%
9%
-12%
100
52-48%
52%
48%
19.76
Q2
19(40)
9%
12%
11%
161
44-56%
44%
56%
17.6
Q3
20(42)
14%
17%
20%
225
23-77%
23%
77%
9.66
Q4
21(44)
21%
22%
31%
335
17-83%
17%
83%
7.48
Q5
22(46)
51%
40%
55%
841
9-91%
9%
91%
4.14
Notes
Almost equal No of HH across Quintiles
51% of the income is in the hands of 22% of the HH
22% account for 40% of the expenditure. 18% of hhspend 9%
Lowest poor are in perpetual debt, but all others have surplus
Richest is 8 times the poorest

Only 9% of the rich are Urban. 4.14 Mn only are urban, 41 Mn are rural ! 20 Mn HH of the poor are Urban. The growing Urban poor is a real problem. 


Source: NCAER-CMCR









Friday, July 23, 2010

Gross National Happiness (GNH)

Today I read with great relish an article in the Mint Lounge about Bhutan. I had toyed with an idea of a holiday there. In this article about the country by Namita Bhandare (particularly well written), I read that Bhutan has concept of Gross National Happiness (GNH), which has an interesting set of 4 indices (I quote from the article) - "Sustainable economy, Culture, Environment and Good governance, and the nine domains of well being (including health,health living standard,community vitality and psychological well being, amongst others)".
Interesting.
This got me to ponder of how little we think of the softer issues in our daily work. I am not a great proponent of work life balance, since I don't practise that well, but it will always auger well for a company to focus genuinely on the "happiness factor" in consumers and employees. Lets look at some unseen factors that could lead to GPH (Gross Personal Happiness).
In retail it is always only Price, Availability, and Service. Even though these are so cliched and well trodden, few actually will score well on all counts together.
In 1997 when I got into retailing and there was no Indian template then of successful grocery retailing, (not that there is any infallible one now), I always, as Operations head, looked at moments of truth as a good guidance to the completion of a  holistic shopping experience.The most effective loyalty driver will always be the overall happiness after shopping, when you get home.
To this end in a small way I started the STUC programme (Show That You Care), many old Foodwolders will remember. It was simply this:
I found that in retailing which has self help and with a cashier to negotiate at the end of the trip, the Last impression is the Lasting impression.
 So how do we make the last impression a pleasant one? Getting the staff  to do these three things consistently was such a problem- 1) Eye contact with the consumer. 2) Smile&Greet. 3) say Thank you, please come again! (and the particular way of taking the money and handing over the bill and change)
So I made this a Drill. For 1 year we ran a mock STUC everyday, in all stores, during the morning briefing and change over shift, where every staff member did this as a drill loudly wishing and greeting, and doing the actual smile greet and taking and handing over the money. In a few months it happened automatically. It became part of the training modules. Newer staff who came in, even without much effort learnt from the "gurukul" of the store. Mystery shopper scores were instituted and awards and rewards were given. And I dare say that was at time, and even by today's standards the best additive ingredient to the GPH. Consumers began to enjoy the smile (didn't realise how difficult it is to make a person smile). This is just a small example in a larger initiative.
For the employee, what can make for better GPH? Only salary? Well that seems to be the trend in think nowadays. But I can assure you for young employees, it the always the 4th or 5th. I believe the more important ones are Security (physical and professional), Learning opportunity (enhances market worth), Dignity( treat me concern) and the Salary (my net take home). I could write a lot about this but just a small example is the Toilets in the store. The argument always came up about separate Consumer toilets from that of Employees. I have said they should be the same (location permitting). What is good for consumers is good for employees, and visa versa.
Indian public toilets have over the past decade has improved dramatically, and I believe when we begin to attach more concern to smaller seemingly insignificant elements that make for very huge lift in GPH, we can say that there is concern and directionally society is moving in the right path. May sound silly that I use the Public toilets as a case in point , but that is only incidental the the major idea.
The quicker we as Individuals, as Families, colonies, companies, and a nation, realise the importance of GPH, like Bhutan has, the easier will it to become law abiding responsible citizens. Let Charity begin at home.

Sunday, July 4, 2010

Never Ask a Centipede How it Walks!

Senti the centepede was happy with life, feeding on debir and dead organic matter. Till one day the wise owl asked it a question. The following is their conversation.
Owl: Hi Senti how are you today?
Senti: Oh Owli. I am very well indeed, thank you.How are you doing?
Owl: I am not very well. I have been consumed by a puzzle, that I have been trying to figure out. I am not able to make rational sense using the laws of physics or engineering.
Senti: what may that be, wise one that worries you? You know everything about the world. There is nothing you dont know. We use you as our counsel.
Senti quickly move up the branch, all 100 legs working together in perfect alignment to get closer to the owl, who looked on with fascination.
Owl peered at Senti and said "I am puzzled about you"
"Me?" asked Senti
Owl: I am wondering how your 100 legs work, so perfectly, so synchronised? How do you manage it Senti, without ever tripping over yourself?
Senti: I, I ,I,...actually I never thought about it..(peering down at his hairy legs)
Senti was puzzled as well. He never make any effort to walk, all 100 legs moved in an amazing coordinated rythm. They flowed without effort. Senti even started feeling proud of his body part that he had never thought about at great depth.Senti began to think how the 100 legs move.
As if by a trigger Senti found some difficulty in walking now. Some of his legs were stuck, some intertwined. He was amazed again, he could not walk anymore. He could not figure out why. He looked up to see Owl flying away, chuckling.
Retail, folks is something like this. In an earlier article I had called it the Ecosystem. It is. Many a time we are unable to explain our successes in retail and our failures, in fact the latter may be easier than the former. Successful retailers try to replicate factors of success, without asking why. Is this good? Well, who would quarrel with success?
Retailing has millions of moving parts, that have to work in unison. In no other industry is the aspect of human coordination so well exemplified than in retailing.
But an analytical mind is always good, and necessary. But it may be inevitable that we cant explain everything that leads to success or failure.

Friday, June 11, 2010

God Speaks on Vegetable Prices

Man called God to complain about the prices of vegetables. The conversation was as follows

Man: God ? U there? Oh Hi ! What up with these vegetable prices? We are in crisis buddy. Noah did so much to keep the flock together, can't your department of agriculture keep the prices down?

God: Is that so? Where do you live?
Man: what diff does it make? OK, I live in free India in a great populated city with 12 million brethren. And you know vegetables have become more so expensive that we in our house share one carrot amongst 4 ! just Imagine.
God: Well, that is not what your brother in the village is saying. he says he is getting a better price and is happy. What do you do?
Man: BPO
God: whats that? Below POverty?
Man: Laughs forget it you wont understand, it is ahead of your times.
God: I understand and don't understand. Have you seen what you waste? Rs50,000 Cr worth of stuff each year? Let me show you some pictures of a whole Sale Market in your city. This is just 4 bags of radish that your hard working brethren farmers has cultivated and sent to this city of yours hoping someone will take care of his baby and sell it and send him the money after sale. Little does he know that his trusted agent has thrown into the dust bin. 
I see such huge wastage that I have now started living in the villages. Man are listening? Hello
Man:.........
God: Oh he logged off, or the call must have dropped- yep now a days the "attoot network" is also dropping calls...Man, oh man. when will you grow up?

Seriously. And jokes aside this must be the real truth. the city squanders, and wastes. There is no regulatory authority in the wholesale markets, to maintain handling standards and cleanliness. The dealers and agents are themselves not conscientious of the need to be careful with produce. They are not self-driven to better standards. I have seen bigger markets in Thailand and Malaysia. They are worth emulating. They are also in Asia. 
The Govt is easy target for criticism. But does anyone have to tell these agents and shop keepers to handle produce more carefully and keep their premises clean?
I am afraid this thing about "hum Aise he hain"( we are like this only) is the most dangerous way to think. I suggest we don't make a virtue of a vice. If we waste we must pay. That we are doing now. Wake Up Sid  and smell the beans ! 
     

Friday, May 28, 2010

Which Tomato will win?

Can a Lowly Tomato make you win the battle of retail? If it is sounding silly, let me explain, there is nothing silly about it.

Look at the two Photographs. These are tomatoes from two  different stores in Chennai. One is a successful exclusive Fruits and Vegetables store (sells Rs100lakhs worth of produce a month from 3000 sft ! Is that successful enough?), and the other from a large Hyper market. Which one is likely to win the consumer's heart? The one on the right was Rs. 2 more expensive than the one on the left.
The one on the left though is less red is also a different variety, but is also bruised and cut. There is no doubt that the one on the right is the winner. 
This speciality store is not cheap, but wins on quality and range. 

Every retailer has to understand the right mix of Price and Quality. 
I have seen retailing in India for over a decade now and I think the consumer is now maturing to pay for Value other than paying for Price.  This is indeed good news for everyone - FMCG companies, and retailers alike, and of course farmers. Conversely, it is a wake up call - Wake Up you price mongers, here comes the time to be counted for the lip service that you have always rendered. Price reduction will no more have the same elasticity it had earlier. Consumer will pay as per value (Price x Attribute). The ones who are truly good in Relevant-Quality must rejoice, for they have lived through the difficult times; their time has arrived.
In retrospect, Modern trade must change what they are now. What in grocery terms have they done all these years that is different from the kirans? The main difference has been only 2 things - larger choice (transferring power from FMCG companies to the consumer to cast the vote on the brands), and air conditioned shopping. There has been little or no approach to Solutions for the consumer like supermarkets have provided abroad. Super markets and FMCG companies in India are very weak in the category level thinking. Let us take an example - bakery. What solutions have they provided for bakery? No supermarket carries a full range of breads and buns at reasonable prices. They have not taken the trouble to create categories - instead have continually dug deeper and deeper in the same Red-Ocean, by competing for a share of the milk bread market! There is no mind set to create a Blue-ocean in bakery. Meat and Fruits and vegetables are similar.
Retail competition just simply steal consumers from each other, and don't create new consumers! There may have come a time now when Blue Ocean can be created by not lowering differentiation when price is lowered!
Oh! What are you saying? Can a super market create consumers?  Well now even Life seems to have been created, then why not new consumer?
 Yes they can. Next blog!

Saturday, May 22, 2010

Who are You ?

The Topic sounds almost insulting.
I speak in the realm of retail but this topic is equally relevant to any product or service. It is not new, but it is given little attention, or rather as much attention as may be needed. Let me cut to the chase.
It is POSITIONING I am referring to.
Wikipedia has a good note on this topic
http://en.wikipedia.org/wiki/Positioning_(marketing)
Having been around in the retail scene for a while, I have seen attempts at serious Modern Trade Retailing in grocery by large Indian corporates. In all cases I have seen that senior leadership have lacked clarity of thought about "what are you", and  what  they want the retail outlet to be. Positioning is the most significant one pager that the senior leadership must "literally write", laminate, and distribute to anyone who has anything to do with decision making in the company. This clarifies at a high level the identity of the retail outlet.

To write the Positioning statement needs Clarity on the following necessarily in this order:
  1. Vision of the Promoter. Lets not fool ourselves. It is the one who spends who calls the shots! I may choose for some or any reason, that I want to be a Gourmet Food retailer (high end value added foods), or someone else decides that they find Mass retailing to be the market they want to play in. It also gives a peek into the mind of the promoters of their risk appetite and expectation of the horizon of investment pay back. Having an endless tranche of cash flow also does not guarantee success in Indian retailing. Learn from Sam Walton and the subsequent CEOs after him in 1996. He never ever since he started nor to this day had any confusion of "who are you", he is the ultimate mass retailer - Pile high let Fly.
  2. Who are we talking to?  Clarity from 1. above then begs the question - "if I know what I want, then who is my target Audience?" A mass low price retailer setting up average quality merchandise in Causeway Mumbai, or Malabar hill, or Vasant Vihar in Delhi or Boat Club road in Chennai, is in the wrong place with the wrong concept.
  3. What do we sell to them? Clarity from 2. above forces category managers to understand and look for merchandise that suits the price, quality, and range requirements of the target Consumer. Need i say more? Well i need to say a lot more. I am not sure how many senior category heads in this county will pass the test of writing a category plan. Do they understand what CDT means, Mind Mapping, Assortment and Promotion efficacy? If they don't pass this test then they are the captain of the Titanic!
  4. How do I serve them? Clarity from 2. and 3. above will tell you what kind of outlet will be suitable for the consumer - glitzy, funky or functional? What kind of outlet might sell Disney products of MTV memorabilia, and what kind onions? I had seen a gourmet outlet in HongKong called Great - with truly high end food (the only gourmet worth its definition, to some extent Jaisons in Singapore).
  5. What else do I need to know? Clarity from 3. above raises many new questions- how do i get products to them- supply chain, promotions philosophy, visual merchandising, etc.
Positioning, as you can see, is the core to everything. Even for individuals at the age of 47 it is not too late to try to rediscover your calling and competence (corrected after Ninad's comment, below). But Early in life we must understand we must study and work for gaining Competence, and Capability. And this comes only from direct hands on experience. What is your Positioning? Write down the things you are good at, and that can make a difference to the people around you or to the company you work in. Don't be a John Doe! 

Friday, May 14, 2010

Can a Retail Store Influence the Country

It is disconcerting sometimes when one sees the low level of restraint and sense of responsibility that is exhibited by Indian public figures, be it the Captain of the Indian cricket team or the Minister of Environment making snide remarks at a matter of national importance and sensitivity, or the leader of one party calling some other party leader a "dog".

Have we ever heard a Chinese leader make a statement that leaves the nation embarrassed? I am not so well read but I think not.

Of what use is personal freedom if individuals cannot exercise judgement and restrain in private and public life? Of what gain is education if it does not teach forbearance and patience towards weak and impatience to get work done and not the other way around?

When will we be seen, individually and collectively as a people who pride in following the law and rules if not for the sake of pride, at least from fear of punishment? But then who are we to fear if we drive on the wrong side of the road, or litter the street?

This has always bothered me when I have dealt with store managers. We leave stores of 2000 to 100,000 sft to a store manager in his/her late 20s. The store is a like Country by itself - has a boundary to protect, goods to guard, staff to motivate and train to follow the rules of the store, serve the consumers, make profits and manage the stocks and costs. There is but that much the company can do to train them, but a lot of the foundation of his (using the male gender only for convenience - read her as well) action is built on the innate personal beliefs and values. What we personally believe is also highly influenced by our national beliefs and that of the community that we live in.

The store manager is influenced by many layers of influencers

1. level 1- parents and family
2. level 2- immediate community (society) - friends, neighbours, and colony
3. level 3- company- how they train, and practise the values
4. level 4 - political- news papers and channels - what politicians say and do

A Store is very much like a sailing ship. that is why mariners are considered very resourceful people - no one to turn to other than to they themselves for any help on high seas. A store in this sense is much less isolated but equally self contained. So a store manager must be well rounded not only in the processes of the store, but also in the values that the company wants the manager to imbibe. It is very possible for a Company to instil values that are different and better than some of the values that the store manager sees around him. For example, punctuality, and hard work. The company can inculcate standards that are different from what the store manager sees from some government employees around him- may be even the way his father of mother who may be government opine about certain issues or work.

The point is, the Retail store can be the unit that changes values in society and not only the other way around. Hence, if organised retail employs 1 million people, can influence as many households and four fold the number of people.
Let me therefore, entreat all companies to begin the reverse Influence, much like the "jago re" campaign of Tatatea. 
So lets remember what J F Kennedy said. Think what you can do for the country and not the other way around. JaiHo, JaiHind !

Saturday, May 1, 2010

Price War: Strategy of the Dying Over the Dead

In the Classic of H G wells, ”War of the Worlds” he says the wars are the Victory of the dying over the dead. Nothing can more effectively describe Price wars either.


Price wars happen between competitors under the following circumstances

1. The market is not growing and there are already well entrenched players or there are new entrants into an industry and there is pressure to gain share. Too many eye-ball to eye-ball situations.

2. The market is potentially big but the price is a barrier to enhanced consumption, and therefore competitors try to grab share by placating consumers and there is a spiralling downward direction of prices.

3. The competition is “stupid”, does not know any other way of grabbing market share and thinks price reduction, which is the easiest implementation strategy, can solve all the problems. That is why Michael Porter, says that it is better to have clever than stupid competitors.

Those companies who don’t understand the consumer’s real assessment of Value are the ones who start the downward spiral. This begs the question, what then really is Value? I will do the next blog in more detail, but it will suffice here to say this..

Value is Price + Consumer Experience of Attributes

Attributes is the functional benefits that the consumer can expect to get from as promised by the manufacturer of the product or service.

Companies must realise that Price reduction has the most dramatic impact on profitability, and therefore it is preferable to attempt to make the consumer see the attribute value of the product (and we are assuming that the product really has intrinsic attribute vale). When the consumer sees the value in attributes of the product, it insulates the product against the downward spiral of price.

Price decisions are the most important in a company. In FMCG companies and product companies, this is taken seriously, and the highest level of management takes the pricing decisions and it is also because price changes are not so frequent.

However, in retail in India at least, pricing decisions are left to very inexperienced junior merchandisers of the company. The pricing decisions are so many and so frequent, that it gets delegated. The method of pricing decision control is often margin % review that the CEOs do and this is clearly inadequate. Pricing control using margin management is always too little too late because price changes distort the value presentation to the consumer. Margin % can be managed by compensating errors- increase price of A by 20% and decrease B by 40% - is compensating margins, and if A is the top seller then it is possible that the final margin is still the same. But the price reduction changes the “pricing experience” of the consumer, and in the short term will result in changes in quantity sales and loyalty of the consumer. It could seriously damage the “positioning” of the retail format in the mind space of the consumer

So retailers of the Country, don’t let a Fresher wet behind the ears, steer the ship into the ground. Let the ERP systems build in escalations, and authorisation, merchandisers must be trained well enough to grow into pricing experts.

Tuesday, April 6, 2010

Which is More Difficult to Sell - Fruits or Shirts?

Is this a question to ask? Is it relevant to anyone?

Yes it is a good question to ask, and often the answer is one or the other. But I have mine.

It is more difficult selling shirts. I can tell you why.

Retailing is about anticipation.

Anticipation of what the consumer wants next to make her happy, (happier) and how much, where and at how much. Is that simple enough? Well any retailer who has  thousands of transactions everyday will tell you that Anticipation is the most difficult part of the business.

Anticipating the needs of the consumer for Fruits and Vegetables is not that difficult. Seasonally there are certain ranges that are available across the country, and over years consumers have ethnically developed cooking habits and dishes that suit such availability. For instance white pumpkin is very popular in Tamil nadu, not so in Mumbai, where dudhia is more preferred. The difficult part of the business is the perishability of the produce. This is a matter of skill. The lead time to decide the quantity is short, say 16 hours, but then the loss you make on wrong judgement is just one day's stock. The consumer also is used to variations in produce in the market. So F&V is able to garner an image of "expertise" for the retailer if it is done well. It is not an easy business at all but compared to shirts (read apparel), it may seem a shade easier.

Apparel has long lead time of 6 to 12 months, preferences are "fuzzy logic", residing in the innermost recesses of the consumer's mind, and there are regional and ethnic preferences in apparel as well. Sizes vary hugely - Punjab versus Kerala, for example - average sizes are vastly different.

Hence to guess the right range (colour and design) is difficult, but because it is fuzzy logic, designers are able to influence the consumer more easily in moving from pleated to unpleated pants, from normal to low waist, etc. More easy convincing a Mumbai consumer to consume white pumpkin if dudhia is not available.

Wrong decisions in apparel are far more expensive than in F&V, considering that apparel holds 12 to 20 weeks of stocks at anytime.

Apparel is a far more difficult a category to sell than F&V. Do it you will know it.

Sunday, February 7, 2010

1411 What is So Significant about this Number? If You Don't Know, Now is the Time to Get to Know !

News

China wakes up, calls for protection of tigers


China sentences tiger killer to 12 years in jail: report

 

I am going to write this blog in Red, because the matter to address is serious and today, like all days to follow will be important for the character of India and a shame that we will suffer if this number declines.


This is the number of tigers that remain.
I have always grown up with cats at home as a child and teenager and understand their behaviour very well. They are seemingly aloof, but personally loving, they are very clean and neat, dignified, find their own food and don’t beg. They have healthy habits - basking in the sun, have a clean body, alert and playful.


I know many who do not like cats and some who hate them.


I have made it a point not to hate those who hate cats, because I say "god forgive them for they know not"!


But when it comes to the tigers, that are cats after all, are equally loveable from a distance, admirable, and wondrous in their ways. All they ask is to leave them alone. If tigers are gone, so will all forest, deer will devour all there is to be eaten. Tiger also guards the forest, denying easy access.


The only living animal the tiger could not understand and conquer is MAN. Man kills for pleasure and illegitimate money.


I recommend Life Imprisonment for poachers, without parole. China has begun it. What are we waiting for?


I am too far removed to physically or legally or legislatively impact the Tigers directly. But I am going to start a mail campaign o the PM of India just asking him to personally take charge of this.


God bless the animals, 1411 of them. We will live at peace if we can see them grow, but if they decline, and vanish, I would say that I have failed at least in this one act in this birth.

Friday, February 5, 2010

How Big is the Kitchen?

Have you ever considered this?


When you go to a restaurant to have a meal, and get a good one, at an acceptable price, well served by pleasant waiters, have you ever thought, “I wonder how big the kitchen is?”
Well, unlikely.
When you go to an ATM to draw money, and you get the cash, and return home, have you said, “let me thank the IT head of the ATM bank, for enabling the cash withdrawal?”.
Unlikely.
Well in the service industry, all support services get relegated to the background, commoditized, taken for granted, and is a silent provider.

However, if the meal on the table had too much salt, and tasted unpalatable, you would surely ask, “hey can you call the chef?”, “what kinda kitchen do you run?”

Retail supply chain is about the same. You may have the best warehouse, fastest trucks, the most efficient people, but unless you can get the 6 R's (Right -Product, time, price, place, quantity, quality), correct every time, the consumer will want to see your kitchen!
Well this has a lot of implications.
Going forward supply chain equations are going to change.
As chairman of ECR India (Efficient Customer Response), I had initiated a Common warehousing project with TCI. Where FMCG suppliers could have common warehousing and hence save a lot of cost. But the pilot failed because the top FMCG companies in India were not prepared to share their plans with common logistics provider. This was since over 50 years, FMCG companies, have built their competitive advantage through distribution reach.

The next 24 months will change it all. Logistics and supply chain in India is going to change because of 2 reasons - GST (Common tax code will allow free movement of goods across the country) and the Golden Quadrilateral. There will emerge experts in this area who will consolidate the volumes and commoditize the Supply chain. FMCG companies will have the (uncomfortable) opportunity to concentrate on Product development (which is woeful at this point), and Understanding the Consumer.

Retailers and FMCG companies will have to accept the emergence of a new entity in the chain, the supply chain service provider. Who is this?
The Supply chain service provider will do the following

• Have fewer warehouses than the current retailers
• Have warehouses built with lesser cost and hence will have higher ROIs and hence have to opportunity to provide A grade service at lower cost
• Have better strategic locations along the golden quadrilateral
• Have larger and faster trucks, paying lesser permit fees
• Have the state of the art software in warehouse management systems
• Will consolidate volumes across all sorts of commodities, and hence have optimized return logistics.

Hence retailers and FMCG will have to rely on other ways of driving competitive advantages.
OTIF (On Time In Full) will be taken for granted and no one will ask to see the Kitchen !

Sunday, January 24, 2010

The Amazon Forest Eco-System and Indian Modern Retailing - What is Common?

What would happen if there were no wild cats in the Sundarbans or the Serengeti? Nothing would survive, because the deer would have eaten out all the grass and vegetation.

And,


Rainforests form a complex ecosystem that is the home to millions of species of both plants and animals. Rainforests cover less than 7% of the Earth’s land surface. However, they are the natural habitat of more than 50% of all the species of living organisms known to mankind. Scientists would expect millions more to exist especially in the rainforests. The Amazon Forest, as a typical rainforest, is no exception. One tree in the Amazon Forest might contain more species of ants than the entire United Kingdom.(source: Wikipedia)

The nature of the rain ecosystem is the following
1. Interdependence
2. Co-existence
3. Non-redundancy (nothing ever stays in the rain forest ecosystem that should not be there. Would we find polar bears in the rain forest?)
4. Ruthless Regeneration (the forest is ruthless to the weak and mild. Only the strongest and smartest can survive. Do you find maimed tigers, or blind lizards in the forest?)
5. It is fragile but evolving.
6. Evolution - It does only what is collectively needed. The direction of evolution is always only that of the collective need. (Deer will not fatten because the tiger wants more meat!)

Look around yourselves, and you will see an ecosystem everywhere. When jobs are lost, fewer drivers are employed. When real estate goes into recessions, fewer masons earn their daily wages, less spend on apparel, and clothing factories lay off workers, and so on.

Hence the realisation that the Eco-System is what we live in, is important in everything we do; affected by our thinking, words and deeds. We are dependent on others and other ecosystems, and hence we are but a speck in the galaxy of independent decision making that have dependent impact points elsewhere.

I have come to see a great meaning and sense in looking at everything that we do as in an ecosystem, and believe that we will make better meaningful decisions in our personal and official lives if we are cognisant and respectful of the fact that we are part of an intertwined fabric; it will humble us and make us better decision makers, if not better people. (I am getting carried away here).

But what has all this got to do with Retailing? Well, if the ecosystem is best exemplified anywhere, it is in modern retailing. And this is where Indian Retail companies are struggling to make sense of modern trade.

The big deficit in thinking is the inability to tie-up the following into one smooth  process flow.

Promoter’s Vision of what he wants the company to be (the biggest problem is here), Long terms financial goals, positioning of the format, deliverables at the store level, assortments that will enable delivery the KPIs, category management to understand category and consumer behaviour, setting the service standard levels ( this flows from the positioning statement), building collaborative vendor relations, store Cluster management, assortment localisation, master data integrity, planogramming, replenishment triggers, store execution and operational excellence.

All this MUST be built into one ecosystem without conflicts and contradictions, and I can tell you from personal experience this can be and has done in the past.
This topic is too vast and poorly understood by many retailers. The inability to see that all the above  as one vortex of interrelated systems, leads to top management taking ad hoc and knee jerk decision that pulls the ecosystem from one side to another. Top management sits in decision making into narrow aspect areas, and deliberate to death small issues which have great ramifications across the supply chain.

Let me give you an example. Small stores are in many ways more difficult to manage than big ones because the supply chain has a very narrow margin percentage of error, in timing, and quantity, since 3000sft stores lack spare storage. If you decide to not have Top-TOPs, (this is the extra top shelf used as the storage space on top of every shelf), you deny a 3k store of almost 300 sft of extra storage space. This reduces the assortment that the store can carry, no space to keep extra promotion quantity, new product display areas, and mark down stocks.

Every decision must be taken with the full blue print of the ecosystem in front. Top management must possess a 360 degree capability to understand all aspects to the business and must take decision with a cool head and humility. It is important to remember that the nature of the ecosystem of Vision-Processes-IT Systems-People Competence-Execution capability must be built taking the 6 points as cues which the forest ecosystem provides.

This topic is too vast for further description. Any way as they say in Hindi “just a gesture is enough for the wise” But for the others.....? Amen!