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What drives effectiveness in communication: Data-first or Narrative-first approach?

Shubham Agarwal - Hello and a very warm welcome to the Counterpoint Podcast by Vector Consulting Group. I am Shubham Agarwal, and we have a very eminent personality with us today.Mr. Niranjan Kirloskar Management Director of Fleetguard Filters Private Limited, one of the leading organizations in the auto component industry. He is here to speak about their pioneering initiatives in the aftermarket which went on to set new industry benchmarks. So, let's welcome him and talk to him more about this.Hello, Niranjan sir. Welcome to the Counterpoint Podcast. It's a pleasure to have you here. Let's begin our discussion then.Shubham Agarwal - Can you please describe Fleetguard and its operations for us?Mr. Niranjan Kirloskar - We are basically automotive part manufacturers which is specifically its filters and the filtration systems that are required for the engine. And we have a distribution system. We have around 220 odd distributors around 40 to 50,000 retail outlets and our products are distributed all over India.Shubham Agarwal - Well, Fleetguard is known to have disrupted the aftermarket with some of its initiatives. Can you please describe these for us?Mr. Niranjan Kirloskar - Mechanical Loyalty Program, ROI for the distributors. According to me in India 36%-50% of ROI is good enough. We are giving something in excess of 150% and Retailer Loyalty Program. So, these are the three things which we did for the market, which no one has done.Shubham Agarwal - I think, most companies woo their channel partners with better margins. Why did you focus on ROI or Return on Investment?Mr. Niranjan Kirloskar - If you ask the distributor or the retailer, what do you want? You are not talking about profitability. The distribution system everywhere in the world works on the distributors are not bothered about return on sales. They are bothered about return on investment. They are bothered about the turnaround time of their money. So, if you ask a retailer, "Acha boss, why are you in business? I want profit." Okay. If you are in profit, then why are you asking for a volume discount. Are you going to keep that discount which I give it to you or are you going to pass it to the market? So, the answer has been, you are going to pass it to the market. Then you are not talking about profit as your goal. You are talking about turning around of the money with least investment in that particular business. So why do you want volume discounts? I will give you a better turnaround time, better ROI on your investments.Shubham Agarwal - So how do you make sure that the distributors get a good ROI?Mr. Niranjan Kirloskar - We tell our distributors, do not invest in our products. Invest in our range. So, on your sales counter, just keep one, one, one, one filters. And rest you do not have to do anything. We will deliver it to you when you want it. Somewhere it is 2 hours, somewhere it is 24 hours, somewhere it is 48 hours depending on the demographic. The distributor in Pune based takes delivery from us four times a day from our warehouse. It does not have to keep any inventory.Shubham Agarwal - Great, but how did you convince the distributors and retailers? Why should they trust your offer to whole inventory for them?Mr. Niranjan Kirloskar - Initially, we had that problem. Obviously, they were still ordering what they wanted because reliability was a big factor for them. If I do not get the product, Fleetguard is saying all this, but what if I do not get it, then what do I do? So, there were slip ups. But now we have our full-fledged IT system in place where he does not have to-- of course, again, it was a trust issue. I won't say trust issue, but they are saying that I will get the filter on time when I want it, but how are they going to manage it? It went on for two, three years. But after that, once the systems were in place, now they are absolutely not bothered.Shubham Agarwal - Can you describe the mechanic loyalty program and the thought behind it?Mr. Niranjan Kirloskar - See, the thought was very simple. It came from the airline thing. What is it for the mechanic here? Because mechanic is just fitting the filter, and he's paid by whoever the transporter is. Other than that, he's not getting anything. So, we said we should do something for the mechanic. We thought of various things like insurance, school for his kids, education. On religious days, give them some gifts. I said, but at the end of the day, we thought, or we came to a conclusion that it doesn't make any sense, because anybody can do this. Giving a gift or doing an insurance, he will get it. What? Insurance, God knows when he'll get it. So, for me or for anybody, what is my short-term gain? Unfortunately, that is what people think of. But for a mechanic whose daily stuff is on whatever is happening or whatever is earning every day is what it depends on. So, we said, let us have something like an airline. We give him points on fitment. And our scheme is open-ended. So, he can spend his miles or retrieve his miles or redeem. Redeem is the right word. He can redeem the miles whenever he wants. So, there is no end to our MLP, number one. Like in blackout days or whatever in the airline they call, or they expire after a few days, we do not have anything of that. It's open-ended. It will go on for lifelong till free regard is in existence. So, that is what we did with MLP.Shubham Agarwal - What about the usual discounts and schemes that most companies tend to offer?Mr. Niranjan Kirloskar - No discounts. No schemes, no discounts, nothing, nothing, nothing, nothing. No Diwali bonus, no Christmas bonus, no whatever religious functions that we have in India, no schemes, nothing. Everything is gone.Shubham Agarwal - But were the channel partners okay with this? Was it difficult for them to accept it?Mr. Niranjan Kirloskar - It took us at least three to four years. Obviously it is difficult because it was a completely new thing for them, revolutionary thing. The company is not going to give you volume discounts, the company is not going to give you schemes, the company is not going to have distributor conferences. It was completely unheard of. Now they are used to it. Now they are so much used to it that they try to tell other companies why don't you start working like this.Shubham Agarwal – So, did the competition respond to your initiatives in the market in any way?Mr. Niranjan Kirloskar - Competition did and even today they are trying to copy our MLP. As I earlier said, people only see what they see and they think, they thought or anybody would think he is doing it, I will also do MLP. But they do not understand that there is a lot of back-end things that you need to do. Number one, people will start some schemes, will try to give something but when the mechanic actually goes to the retailer, the product is not available. He goes second time, product is not available. He loses interest. So, first we ensured that our product is available on the counter, at the retail counter, whenever a mechanic goes to buy it. That was the key. Your product availability is the key for any scheme. Otherwise, you are dead. Number two, you need to change your policies that inventory is not a cost, inventory is an asset. Transportation of one filter is not a cost, it is an investment because if I deliver one filter, I still am selling it. Yes, my transportation has gone up, definitely it has gone up. If I was making delta 10 because of just one filter dispatch, I am doing delta 8 but still I am earning money. Now if I take a decision, nothing doing my minimum order quantities full load a container, then you have a problem. You have put that inventory on somebody else. He cannot sell it because there is no demand for it and he stuck with the inventory. After a few months, he will come back to you and say, I cannot sell it, I need volume discount and then you are stuck and this cycle goes on and on and on. So, for any company to decide or make a policy that inventory is not a cost or transportation is not a cost, it is very difficult, very difficult. So, just by copying MLP, you are not going to go there. Just by copying our product, you are not going to get there. I know there is nothing in the product, if I can manufacture it, anybody can manufacture it. It is not that only I can do it. No, everybody can do the product. But this particular thing of taking a decision to send even one filter doesn't matter, not to lose the sale has been the thing.Shubham Agarwal - Well, I think you are a rare company that has removed primary sales targets. Why did you do that?Mr. Niranjan Kirloskar - Let me talk about the win for the salespeople first. They are my warriors in the field. If they are under pressure or if they start feeling pressure of this target and he is going to do anything. I don't want that person to be under any pressure because if you have no pressure, you will perform better. Yes, there are a few people who perform very well under pressure. They want pressure. But that is a very small percentage. If you have to give a person to think creatively, be creative, you should have to ensure that there is no pressure on that person for anything. Now when I say that there is no pressure means there are no deadlines, of course there are deadlines. But those deadlines are driven by processes. So, if I have been given a certain activity, I will follow up on what is the progress on that activity daily. When you are working on one thing, don't work on something else unless you finish this. That is the process. So, it is very easy for him or her, whoever, to follow or focus on just one thing, then it is faster. Obviously win for lead guard was the results in the aftermarket. So, it is a complete win-win.Shubham Agarwal - I believe your entire system right from mechanic loyalty program to operations is seamlessly integrated to run almost an autopilot with end-to-end digitization. Would you please give us some examples of how are you leveraging this?Mr. Niranjan Kirloskar - This is online information that we have at 12 o'clock or at 1 o'clock we are getting online information which is live information as to what exactly is happening in the market. Suddenly we can also realize that some mechanic is not fitting the filter at all. Why is that mechanic not doing it? Now how do we get that obviously because of the MLP scanning and all that stuff. So, we know exactly what is happening in the market. We exactly know which distributor has sold what to whom. We exactly know which product has been sold to which mechanic and in which area. Of course, now where was that filter fitted, we don't know. Today we don't know. But we are working on it. If a particular distributor orders more than it will give a signal. Order will that dispatch will stop and automatically from the war room that we have for the aftermarket you'll pick up a phone and say why do you want more filters.Shubham Agarwal - So what has been the outcome of this amazing journey that you have had?Mr. Niranjan Kirloskar - Nobody has asked me a question in the last 10 years about the financials or where the company is heading because they can see it. It's very very clear. I will always say my balance sheet my profit and loss will speak for myself. I don't have to go out and say how good I am or how bad I am.Shubham Agarwal - Thank you so much for the discussion today, sir. But we're not done yet. We'll come back with another episode in the same series.And for all the listeners we'll keep coming back with more such episodes. Bye Bye.

Join our Counterpoint Podcast as we discuss with Fleetguard Filters how they're redefining the auto components industry with unmatched ROI,

Disrupting the Norm: How Fleetguard Filters Redefined Auto Components industry Standards

Join our Counterpoint Podcast as we discuss with Fleetguard Filters how they're redefining the auto components

Shubham Agarwal - Hello and a very warm welcome to the Counterpoint Podcast. I am Shubham Agarwal and we are going to speak about Arvind Fashions today.Arvind Fashions markets 27+ international and national brands in India. In this episode, we have with us Mr. Shailesh Chaturvedi, MD and CEO, Arvind Fashions. He talks about how they are transforming their end-to-end supply chain from fabric to store with the help of Vector Consulting Group to improve their gross margins and stock turns. So, let’s talk to him.Hello Sir, welcome to the Counterpoint Podcast Sir, pleasure to have you here. So let’s begin our discussion.&nbsp;&nbsp;Shubham Agarwal - You have a very enviable portfolio of market leading brands like US Polo, Arrow, Flying Machine, Tommy Hilfiger, Calvin Klein, etc,. Can you tell us something about the operations of the company?Mr. Shailesh Chaturvedi - So we have multiple channels, almost 1200 stores, largely franchisee, and a couple of our own CoCo stores also. And we do very large business with our key partners be it department stores, be it online partners, lot of key retailers in cities. Typically we sell from our central warehouse to all the channels. And the way our industry works is that we book orders in advance through roadshows, collect the orders, then send it to the manufacturers through the sourcing team, produce them, and then launch the season in February for spring, summer and then August for Fall holiday.Shubham Agarwal - The company is currently in the process of transitioning to Supply Chain 2.0. What has been the thinking behind it?Mr. Shailesh Chaturvedi - See, let me start with two big broad philosophies that we really believe in and are trying to execute; one is on capital constraint theory; we believe for any company, capital should be treated as a scarce commodity. And we should always believe in good and bad times that capital is under constraint and it's a scarce commodity. So, that's one philosophy we work on. Second philosophy is the return on capital employed that anything we do must deliver a certain return for our shareholders. Now, if I take the sum total of these two philosophies, one on the capital constraint model and the other is on ROCE, then a big part of our life becomes how to manage inventory because inventory is where or let me say, unsold inventory, unsold inventory is where a large part in our industry the capital gets blocked, or the profitability of the business gets affected, and ROCE gets affected.Shubham Agarwal - How did the way in which the company manage inventory change in line with this thought process?Mr. Shailesh Chaturvedi - So you know, again, if you look at the problems are always the good style gets stocked out, and, you know, poor selling or poor sell-through garments, we always have excess, so it's a between stockout and excess. So, what we did is that with the help of Vector, we looked at our inventory into different stream, fashion at one end and the Core at the other end, or what we call NOSS, Never-Out-Of-Stock styles. And we are making sure that it is available and making sure that it is a service without human intervention through the machine learnings. And Fashion is a different business where we've focused on improving the full price sell through designing a line closer to the market conditions will limbal adapt quickly responsiveness. So you know, the two buckets of the inventory behave differently. And our treatment should be different for each of these two buckets.Shubham Agarwal - Can you elaborate on how Supply Chain 2.0 aligned with this approach?Mr. Shailesh Chaturvedi - What Vector does, they have a software VectorFLOW, and there's a very detailed working from stores to central warehouses to the garmenteers to the mills. And all the four pillars are very important from the store, what should be stocked there and where and how the visual merchandising and tracking of Core should be to the central warehouse should be the what should be the stock norms at the central warehouse. Where should the bin be in the warehouse for these Core products, the alignment of the warehouse, we work with DHL for their alignment on this, then going back to the garment makers, the factories which produce garments, alignment with them, how much stock will they keep, what kind of capacity they will dedicate it for us. And then the fourth pillar of the mill itself. Now here, we are moving away from holding inventory in the store and the warehouse back to the vendor. The vendor is going to hold capacity and inventory for us. So alignment is important; it takes time to get everybody aligned. So all four pillars, from store to warehouse, to garmenteers to mills, are all aligned; it's taken us six months of a lot of hard work for the Vector team and our team. But together, we have sort of created that alignment. And we have seen green shoots have benefited from this alignment.Shubham Agarwal - Can you elaborate of these benefits in the Core category, so far?Mr. Shailesh Chaturvedi - We've seen good progress, and there's a lot expected, even more, but what I've seen is that the contribute the availability has been more than 90%, which is good, which is a very good standard to work with. We have also seen because of this increase in availability, the sale of Core products have gone up now, seeing 17-18% contribution coming from Core, in some cases going even beyond 20%.&nbsp;And there is a portion to even increase the share of Core through Vector project, we want to take it to a higher level. And the beauty is that the turns in this business tend to be higher than the company's stock turn. &nbsp;And also, the GP tends to be higher because these are perennial; they shouldn't be discounted. And if we are able to increase the share of the Core NOSS items, and get higher GP, then it really impacts the overall company's profitability and the stock turns. And today we are moved from three plus stock turns to four plus in the last two years.Shubham Agarwal - What is the difference between this approach of Vector and the Automatic Replenishment System or ARS implementation that was earlier carried out?Mr. Shailesh Chaturvedi - Everybody has a good demand planning software, and VectorFLOW is a good software. Also, what I really liked is how the Vector team connected with our IT team to connect with our SAP system and our point of sale system, a lot of bottlenecks got cleared, and they did a better job than it was happening earlier. And there was a good working with our IT team to solve those problems. And we now have automatic linkages between our POS and our ERP system along with the VectorFlow. So, you know, Vector is a specialist so they use their specialists you know specialities to sort of solve for some of the problems.Shubham Agarwal - What are the plans for revitalizing the fashion segment?Mr. Shailesh Chaturvedi - See Fashion is the bigger piece than Core, and that's where the unsold inventory is a bigger problem. So there, the objective would be to reduce discounting improve full price sell through, design the line closer to the market and be a little more adaptable to compress the lead times. And that's a completely different piece altogether. And they're making sure you know we are ready for the season. So, when we go to the roadshow, a lot of times time is spent by the Vector team on preparing well, so that everything is prepared well. And when we go to the roadshow, the level of our preparedness is much higher than what it used to be earlier. And hopefully, that will lead to getting the goods on time in the right quantity, not access, not short. And we will hopefully work in a method where the discounting comes down by increasing full price sell-through.Shubham Agarwal - What has been the implementation experience with Vector?Mr. Shailesh Chaturvedi - See, when we appointed Vector, we had looked at two good options, and both were very, very good. One was Vector, another company. And both were really good. I mean, we could have selected either one. But we chose in favour of Vector because we felt that the senior management of Vector was a little more hands-on, and we sort of somewhere mentally aligned a little better with them. So based on the strength of Vector on the people side, we chose Vector. And they've been very, very hands-on; we work with a lot of other consultants, management consultants who come give us very intelligent theories, but they don't participate in execution. But here, we are very clear that we needed somebody to roll their sleeves and work with us, and make sure you know they deliver the promise and also participate in some gains. So it's a very sort of win-win approach where both of us are working together. And their team is sitting in our office all the time. Very hands-on, very aligned. So that's good. Also, conceptually, very, very clear that all parts be stored in a central warehouse, garment makers, as well as the fabric mills, everybody's looked in aligned in this, and it's a, I would say, once it's done, well it should change the fortune of our organisation.Thank you so much Shailesh sir for this wonderful discussion. It is wonderful to speak to you. For all our listeners we will keep coming back with more such episodes. Until then, Bye.

Join us on a journey through the transformative world of retail with Arvind Fashions on the Counterpoint Podcast. Host Shubham Agarwal sits down with MD & CEO Shailesh Chaturvedi to explore their leap towards a more efficient, profitable supply chain. Learn about their strategy for optimizing inventory and enhancing gross margins. Listen now!

Arvind Fashions: Crafting the Future of Retail Supply Chains

Shubham Agarwal - Hello, and a very warm welcome to the Counterpoint podcast. I'm Shubham Agarwal. Today we're going to speak about a very interesting topic. The problem of an ever-increasing product range in a company. Now, you would have generally come across the problem that companies complain where the sales team is complaining of new products not entering the market from the company, which is hampering, the increase of sales or the increase of revenues. While on the other hand, the NPD department complains about the new products being launched and they not being able to perform the way they had envisioned at the start. Now, that's a very difficult thing to digest, isn't it? We have Arvind Rana with us today, Senior Partner at the Vector Consulting Group, who has helped a lot of companies solve this paradox and helped them come out of it. So, let's talk to him more about this and discuss how can we solve this problem. Hi, Arvind. Welcome to the Counterpoint podcast. Thank you. Yeah.Shubham Agarwal - So, I think, you know, this ever-increasing range is, I think, a big concern in the companies, right? We have heard a lot about it. And like I said in the introduction as well, the NPD is also working on new products, while the products that are already there are not adding to the, you know, revenue as such. But I want to go back a step and ask you why is it that the range or the ever-increasing range is a concern. Why is that a concern?Arvind Rana - So, if you look at it, whenever an organization creates a new product, there is a lot of thought that goes behind it. They look at, are there untapped customer segments which we are not able to meet. And there's a lot of thought process which goes into creating that product. Right.So, theoretically, every new product should add to the revenues of the organization. Correct. But what we have seen across organizations is that when they create targets for new product development for a year, those targets are always met. However, you would find that the sales realization from these new products rarely materializes.&nbsp;Shubham Agarwal - So Arvind, I think, I want to understand and, you know, there must be a decision at the, you know, at the stage where it was introduced, and every new range would obviously cater to some customers. Why is it really a problem then?Arvind Rana - If you see a range addition from the perspective of what is the impact of the addition of the SKU on the organization? So, if you look at it from the benefits point of view, whatever the increase in sales is the benefit that the SKU is supposed to bring to the organization. Right. At the same time, every addition of an SKU has an impact on internal parameters.For example, whenever you add an SKU, it disaggregates the demand for operations, supply chain. Now, the impact of that is your productivity measures take a hit. You have to take smaller batches, because there is a wider range the ability of an organization to respond to fluctuations in demand goes down. And then that leads to a lot of cost implications for the organization.Arvind Rana - So, what happens is that if the benefits in terms of sales do not materialize, then net it’s a hit on the bottom line of an organization. So, every addition of an SKU in that sense has the potential to deteriorate your profits. That's the broad implication we are talking about. Right.Shubham Agarwal - I will go to the, you know, the internal part of it probably in the second half of the discussion; I want to still focus on, you know, the sales not getting added because I'm sure whenever there's a range addition, there will be some thought behind it, there will be some customer segments and there might be a new market that I will tap into and that is why the decision was taken. Yet the new product did not really help. Yes. I want to understand why that did not happen. Where do you see the reason for that?&nbsp;Arvind Rana - So, a lot of organizations that we have worked with, we have seen that, the research in terms of the product market fit or the pricing, everything is fine. Yeah. It's still the product doesn't result into sales. Now, why does that happen? And so, we discovered two very interesting factors here. Right. So, the overriding factor is that the SKU, which has all the ingredients to become a success, is not becoming a success because somewhere, the organization is not able to do justice to that product.&nbsp;Shubham Agarwal - Okay. Now, justice is a very subjective word, I think. Could you explain that?&nbsp;Arvind Rana - So, when I say justice, you've created a great proposition, but this proposition will result into sales only when the customer is able to see that proposition. Correct. Right. Now, what are the two key ingredients for this?&nbsp;Arvind Rana - One is you should be able to display the product properly so that the customer walks in, they're able to figure out and appreciate your product experience. Right.Arvind Rana - And interestingly, one of the organizations that we are working with, had a product basket of over 1000 SKU's. Okay. And so, we said, what's your ability to display or how many products can you really display? And you figure out that a typical store will display somewhere between 50 to 70 SKU's. That's the ability of a store to display. Okay. But we do understand that there are regional nuances. We cannot have the same products getting displayed in North and in South. So, you need to have that variety in place. Right. Right. So of course, you have to factor in that. So, even if you factor that and, on top of that, you have different store formats, COCO would probably keep more premium. COCO is a Company-Owned Company-Operated stores where you would probably want to display more premium products. So, let's say there are dealer outlets where you may display more mass category products. Right. Yeah. So, we said that, let us consider all these factors and let's try to figure out what is it that you can really display. Yeah. And even after being very safe, okay, maybe we can display a little bit more. And even after doing that, we could reach a number of around 500. Well, that's almost half. Yeah. So even if I display and the display for North is separate and South is different, but I am still not able to reach that number. So that's the number which you could reach. Okay.&nbsp;Arvind Rana - On top of that, there is another factor at play. Yeah. And that is the ability of a salesperson to explain the product to the customer. When a customer walks in, a salesperson should be able to explain the products to the customer. Right. So, we said, okay, let's do an experiment. Let's call a couple of your salespeople and maybe ask them about the features of some of the products that you recently launched. Okay. Interestingly, the salespeople could not explain much about it, to the extent that, they said “okay, yeah, something, some product was launched and yes I am aware”, but they could not really explain.&nbsp;Shubham Agarwal - They could explain a few products, but they could not explain all the products.Arvind Rana - Yeah. So, we randomly picked products and said, ‘Can you explain?’ and they had a tough time. Right. Okay. It was sort of leading to frustration that “…there are so many products getting launched, how can you expect us to remember the features of all the products?”&nbsp;Shubham Agarwal - Right. Interesting.&nbsp;Arvind Rana - So, this, this created a great realization in the mind of the organization that while I spent so much money in designing the product, creating a story around that product and, and, you know, you do all that marketing campaigns around that product, but when the customer walks in, the salesman is really not able to explain the features. Right. And this, I called as the another limiting factor that, you know, okay, you are able to display, but how much are the salespeople capable of explaining?&nbsp;Shubham Agarwal - So Arvind, assuming that, you know, the justice is taken care of, both the points are taken care of, is there anything else as well that is a concern?Arvind Rana - Absolutely. So, let's say, from a justice point of view, you have the ability to do justice to a product, right? Yeah. Then the second factor, which comes into play is, is it really financially viable to have one more product? Okay. And that's where the internal factors come into play. Right. Yeah. So, if you look at, what is the impact of an additional SKU on your internal parameters is what we need to understand with every addition of an SKU, the demand gets disaggregated. Right. Right. What do I mean? The segments are getting… yeah. So, the demand is getting disaggregated, and what that does is that in operations, then you have to take more setups and smaller batches are there, and that starts impacting your productivity parameters. Right. And when that starts to happen, it is eventually going to impact your cost structure and hence the ability of that product to sell, eventually, you want to make some money. So that is something which it's very important for us to understand that addition of an SKU does not come free, there is a cost to it. Right. Right. So that's the first cost. Second is that to do justice, you have to create a value proposition, you have to spend on marketing. So, there is a lot of spending that goes every time you bring in a new product. Right. Right. Third impact is that when the demand gets disaggregated the ability of operations to adjust to fluctuations in the demand goes.So, if there are a hundred products, it becomes difficult for me to respond to changes in the demand creation. And when that happens, I end up spending more to make up for that demand. I have to, maybe expedite or I have to do overtime or all those things so that the sales are not lost. Right. So, all these implications are there, which, if the sales do not materialize, then these costs are going to hit your bottom line. Right. And that is why, this equation is very important. Okay.Shubham Agarwal – But as good as there is a discussion about adding a product, I could also, uh, some of the products which are not performing, uh, you know, quite clearly, I can start to discontinue them as well. Isn't it? And therefore, create a balance between new products being added, and old ones being discontinued.&nbsp;Arvind Rana - Absolutely. So, I'll tell you an interesting story. See, one of the organizations, they make home furniture, okay and, so we said, look, as an organization, you cannot afford to have so many SKUs, you need to trim it down. Right. And so, the design team sort of got into action, and they said, we want to present to you, you know, why these products are there, which you were saying should not be there. And they were presenting, each product category, why it makes sense, what is the theme, and what is the story around it? Or why what segment of customer does it take care of? Right. So, what we realized in that discussion is that theoretically for every product, there is a logic of existence for that product. So, every product has a logic and there is a reason why it should exist. Makes sense. Yeah. So, what we are saying is, we are not questioning why that product should be there. Correct. What we are saying is how many products should be there? So that's the distinction that we are talking about. Now, when we went into this journey of truncating the product range, a lot of things come into play. Okay. So, the first, first thing that comes into play is that there is always hope that because you spend a lot of money to bring that baby into this world. And when you do that, you don't want to give up as humans. We are not designed to give up. Right. And so, there’s always that hope that you know, maybe next year this product will do better. So, what we realize is that while it's very easy to create consensus on the introduction of a product, it is very difficult to create consensus on discontinuation of a product.&nbsp;Also see this element comes that, you know, there's, there's this hope factor comes into play. So, the second factor that comes into play is that when you question the existence of a product, you will realize that there is always that one customer or that one channel partner for whom that product is very important. Or that one salesperson who says that, you know, in Guwahati this product sells a lot, right? And you cannot afford to get rid of this product, right? And that sort of questions, it brings out the question, why should we, let's, let's continue with this product. So that is another factor which is at play, which avoids the discontinuation. And that's why we see across organizations that while products get added, discontinuations are very rare. And so what happens is over a period of time, the range keeps on growing up. Yeah. Unless, until the negatives are so, so visible and so evident, then you start the consolidation phase. The organizations do have these phases of rampant, increase in product range and then consolidation.&nbsp;Shubham Agarwal - Okay. So, I think, you know, that's quite a detailed analysis of all the problems that happen because of the ever-increasing range in an organization. What is the way out? How do we start to solve it? How do we break the conundrum?Arvind Rana - Absolutely. Absolutely. So, what we have seen, and let's say if you sort of try to visualize, let's say this is the range, which as an organization, you have, this is your ability to display and do justice to the, and we've seen that organizations, all the organizations are trying to increase this. Whereas this, the efforts are very limited. Whereas if you look at it this way, the logical thing is to increase your ability to do justice to the product range. That's the action which is required. Now, how do we sort of bring the organizations out of this problem statement. So, what we try to do is, the first step is to logically agree that this is the maximum range which you can do justice to. Okay. And yes, there is no mathematical number around it. There is no way you can do a mathematical analysis and come up with this. There is a level of intuition, which is there. But when people realize and think from this perspective, they are able to truncate the range to a great extent that, okay, yes, this makes sense. Right. Yeah, we don't need more than this and probably anything more than this is a, is a cost rather than a benefit to the organization.Now, once this is done, the second important step is that every time you want to add an SKU to your product portfolio, you have to decide which SKU is going to get discontinued.Okay. Because I've reached my limit of the number of products that I can do justice to. Right.&nbsp;Shubham Agarwal - Therefore, I do a ‘One-In One-out’ sort of. Absolutely. And it's a very difficult step to implement. Which one to choose to? Yes. To be killed.&nbsp;Arvind Rana - But organizations have realized that it makes a lot of sense, and it makes financial sense. It makes sense from the, if you look at from a salesman perspective; if you look from the design team perspective, it makes a lot of sense to do that. Right. And that's how we've been able to convince organizations to do this.&nbsp;Shubham Agarwal - Right. Lovely.&nbsp;I want to understand some of the benefits that we've created because of this and the kind of impact that we've created because of the solutions that have been implemented across some of the companies. Can you talk about that?&nbsp;Arvind Rana -&nbsp;Absolutely. So, if you look at the first benefit which comes when we implement this is that now your marketing team, your, top management, sales, they are able to figure out what is the problem with an SKU which is not selling. Because when you have so many, you are not able to do any analysis. Right. Now you have taken care of all the conditions, that justice is being done to this product. That's when you can really figure out what is there, is there some pricing issue, or is there some feature issue, which is there in that product. So, that realization starts happening when the range is, truncated all the regular&nbsp;parameters are out. Now it's about fitment to the customer. So that is something, which happens. What also happens is because you've now truncated the range, the demand is disaggregated. So, you see a lot of cost benefits which come into place. So, your ability to optimize your operations, supply chain, everything that starts to come in. And what we have seen is that this change alone is able to impact your sales by around 15%-20%. Because now salespeople have more focus. They are able to talk about the product. You are able to display properly because there is no pressure to display in an improper way, but just because new products are getting launched. Right. So, the process of ‘One-in One-out’ ensures that your display hygiene is in place, and the mind of the salesman is uncluttered. Yeah. So, all things, all these things start impacting your sales in that sense. So that is something which we've seen that those are the results that you could immediately look at when you do this.&nbsp;Shubham Agarwal - And I think this would cut across industries, right? Or is there any specific industrial domain that this applies to?&nbsp;Arvind Rana - So, if you look at the construct of the solution, it's very generic. Of course, there would be nuances for that industry that, you know, for example, let's say an online player, how do, what do you really call as display? Yeah. Right. So, these definitions are very different. So those nuances would be there, but the overriding factor is I should have only that much product range to which I can do justice. That's the overriding factor, which works.&nbsp;Shubham Agarwal - Lovely. I think, uh, we'll end the discussion at a high point of justice, so to say because I think that's an extremely important point to be kept in mind. Uh, so thanks a lot for this discussion. I mean, I think that was really helpful. It really helps our listeners as well, you know, to be able to look at their own environments with this, with this eye. Absolutely. Thanks a lot.&nbsp;Arvind Rana - Thank you, Shubham. Right.&nbsp;Shubham Agarwal - So, thanks to all the listeners once again for giving us your time and, you know, for loving the podcast so much, uh, we'll keep bringing more episodes, more interesting topics to discuss on the podcast and, we'll be back soon with another episode as well. Until then, this is Shubham signing off.

Explore expert insights from Arvind Rana on managing product range expansion. In this episode, he discusses strategies for optimizing business performance, streamlining portfolios, and boosting sales.

Product range: More isn’t always profitable

Discover how overlooked factors in the generic pharmaceutical sector are leading to significant FDA compliance challenges, and why it's more than just 'analyst error'.

Core conflict of Pharma labs

The episode dives into the rise of US FDA warning letters in the pharma industry. Why do these warnings persist despite efforts to reduce them? What's the real impact on companies? The episode uncovers the mysteries of process errors and cognitive overload. Tune in to find innovative problem-solving cues!

Unmasking the true cause of quality issues in Pharma labs!

<figure class="table"><table><tbody><tr><td>Shubham Agarwal</td><td>Hello and a very warm welcome to the counterpoint podcast. I’m your host, Shubham Agarwal. Often when people ask me, what do I do for a living? I respond with saying, I’m a management consultant. And the response by those who know about consulting in general, go on saying, oh, okay, that, yeah, a lot of companies do that these days. And they take some typical names, to which I quickly jump onto and respond, no we are different. I tell them two things. One, that we are implementation specialists, and second, that we bring systemic analysis and holistic intervention. Heavy complex words, I think, right? Do they really mean something unique? I think they do. Now, if time permits, almost everyone asked me to explain further, and I love doing so. The first implementation specialist is something that we’ve covered in the previous episode, the one with Visu, please do check it out if you haven’t already. Now, this particular episode, we shall dedicate to understanding the second part, which is systemic analysis, and holistic intervention. We are once again joined by Visu, Senior Consultant at Vector Consulting Group, who will help us break down and explain in extremely simple terms what this means. So, let’s welcome him. Hi Visu, welcome to the counterpoint podcast once again, how are you?</td></tr><tr><td>Visu</td><td>Thanks, buddy. I’m doing fine. It’s my pleasure.</td></tr><tr><td>Shubham Agarwal</td><td>Great. So, Visu let’s, let’s start with the discussion and understand this term systemic analysis and holistic intervention. Now, you know, analysis is like a pet term these days, especially with the consultants, everyone’s behind it right and we call it systemic analysis. Is it any different from the traditional meaning of analysis?</td></tr><tr><td>Visu</td><td>Yes, it is Shubham a lot different. So, traditionally, if you see business diagnostics, it is mostly based on the approach of analysis. The analysis is a reductionist approach, where a problem is broken into independent causes and further down, then we deal with each cause separately. For example, if sales are down, what are the reasons there will be four or five reasons and we will be dealing with individually. Now on the face of it, it looks the obvious thing. But on the other hand, systemic systems thinking as adopted by Vector Consulting Group takes radically a different view. It is not just about analysis, but synthesis which is required. Synthesis meaning looking at interconnections between causes, to understand the big picture, however, this is easier said than done, and hence, conveniently avoided in traditional approaches. The first step in this journey is clearly distinguishing between what not to do and what to do.</td></tr><tr><td>Shubham Agarwal</td><td>Interestingly Visu, I think that’s a good starting point. But, you know, sadly, things don’t come with a red flag. So how do we know what not to do? How do we distinguish between the two?</td></tr><tr><td>Shubham Agarwal</td><td>That’s a good question Shubham for that, we in Vector Consulting Group follows a robust guiding framework, I can explain you briefly what the guiding framework are we use in Vector which are ingrained in our DNA for decades together.</td></tr><tr><td>Shubham Agarwal</td><td>Please, sure.</td></tr><tr><td>Visu</td><td>Yeah, the first element of this framework is called leverage point analysis. This means there are no complex systems in the world. However, complex it may look like at the beginning or surface level, when we deep dive using logical analysis, we see the simplicity hidden underneath called a leverage point.</td></tr><tr><td>Shubham Agarwal</td><td>Okay. So, Visu, can we use an example here and draw a comparison between the two systems to clarify this further?</td></tr><tr><td>Visu</td><td>Yeah, definitely. So, for example, there are two systems say system A and system B. If I ask you, which system is complex, most likely, he will say system B, you know, why.</td></tr><tr><td>Shubham Agarwal</td><td>So, so I’ll just interrupt you here Visu, just for a second and for the benefit of all my listeners, I will just tell them that you know, these two systems are depicted in the description of this episode. So, you can have a look the system A consists of four circles, which are independent circles, while system B have a lot of circles which are interconnected. Yeah.</td></tr><tr><td>Visu</td><td>Yeah, going ahead. If I ask you Shubham, which system is complex you or the audience? Most likely, they will say system B, you know why, because the commonly available definition of complexity is how much effort is required to describe a system. More the effort more the complex it is. In this definition, it is no wonder system B is more complex than system A. It requires explaining system B in more detail, including there are seven circles and the dimensions about the circles. And then we should explain each and every arrow that connections between the circles etc. Whereas in system A, the description is very simple. There are four circles period. But when we redefine the word complexity, as, efforts required to influence the system’s outcome or performance, then our understanding becomes a radically different Shubham. System A is more complex than system B. Because in system B, we know that if we touch or affect the bottom circle, the rest of the logically connected entities can be influenced. And hence, the final performance can be what we want. Whereas for system A, in the absence of the knowledge on the logical connections, among the circles, we have no idea whatsoever it may be to influence systems A’s ka outcome, which circle should we touch in what sequence, etc.</td></tr><tr><td>Shubham Agarwal</td><td>So, if it is so easy to find the leverage point using the cause-and-effect Visu. Why can’t someone else do it? I mean, what is so unique about Vector?</td></tr><tr><td>Visu</td><td>Yeah, that’s an interesting question Shubham. So, most of the times, this leverage point is masked by the conflicts. Or let me put it this way that we have taken the conflicts for granted. And that is why in Vector, we have the second element of our guiding framework, understanding the conflicts behind chronic unresolved issues. This means in reality, there are no contradictions or conflicts, we firmly believe there are no conflicts or contradictions. When we deep dive and surface out and challenge all the assumptions holding the contradictions or the conflict. We see the harmony hidden underneath. I think I should explain the same through an example as well.</td></tr><tr><td>Shubham Agarwal</td><td>Sure.</td></tr><tr><td>Visu</td><td>Once I was conducting a session with one of our clients, the session was happening on the fifth floor where I was discussing the same point exactly. Then one gentleman stood up in the middle of the session and asked me, Visu can you prove this now through a live example. So, I thought for a while, I picked up two gentlemen from the audience, and sent them out to measure the height of the building where we were. After a while one person came up with the height of 100m while the other person came up with the height of 75m. I responded by saying that both could be right. The audience laughed at me stating how come Visu? One building can have more than one height. Either both are wrong, or either one is right. But both can never be right. So, in deeper inquiry with these two gentlemen, we understood that one person did not include the basement car park in his height measurement.</td></tr><tr><td>Shubham Agarwal</td><td>Oh, interesting. Yeah.</td></tr><tr><td>Visu</td><td>So having understood the wrong assumption, that the harmony was hiding under this wrong assumption, and hence the conflict is broken.</td></tr><tr><td>Shubham Agarwal</td><td>Right. That’s a very interesting example to, you know, put forth your point. But Visu if these two guiding elements of the framework speaks volumes of uniqueness about the Vector’s approach, is that all we need or is there something else to the story as well?</td></tr><tr><td>Visu</td><td>No, it is not the end of the story Shubham, having understood these two-guiding framework with our experience, we must clearly state a word of caution. The word of caution is during these two-guiding framework, leverage point analysis and breaking the conflict. One should not be distracted by fundamental attribution.</td></tr><tr><td>Shubham Agarwal</td><td>Okay. And could you explain what is fundamental attribution to us, please?</td></tr><tr><td>Visu</td><td>Yeah, definitely, Shubham definitely, the fundamental attribution is the biggest obstacle for successfully imbibing above Vector’s frameworks I just explained.</td></tr><tr><td>Shubham Agarwal</td><td>Okay, you mean to say fundamental attribution error.</td></tr><tr><td>Visu</td><td>Yeah, so if you see in reality, systems that’s where we are doing systemic analysis based out of synthesis approach. They do not speak for themselves, right?</td></tr><tr><td>Shubham Agarwal</td><td>Yeah</td></tr><tr><td>Visu</td><td>But we can understand the system only by talking to the people who manage the systems. If we fall into the trap of judging the people, rather than understanding the system, then we cannot do judicious systemic analysis. Hence, the best way to insulate ourselves from this trap is by not attributing personality traits, or the attributes or bad intentions of specific people as a reason for business issues.</td></tr><tr><td>Shubham Agarwal</td><td>So, Visu I think, very interesting, you know, how we explain the Vector’s framework. So, I think we understand the Vector’s framework, and, you know, we get to how, we are different and unique in our approach. But what is so unique about the framework for the clients? What do the clients get out of this framework when we implement this?</td></tr><tr><td>Visu</td><td>Yeah, that’s a good question. There must be something for the client as well. And that is a much, much bigger thing for the client Shubham. So, we at vector have experienced with almost all our clients, that any situation of stagnation can be turned into a rapid growth by Vector’s innovation process. The above way of synthesis-based diagnosis helps us to innovate interventions, to bring our clients out of stagnation. That’s where we get unlimited potential, which is hidden underneath the mismanagement of systems, which is fourth element of Vector’s guiding framework, Shubham.</td></tr><tr><td>Shubham Agarwal</td><td>Wonderful Visu, I think that was a great discussion. And it clearly depicts and, you know, details out how we are different, how we are unique in our approach, and how that helps the clients that we have implemented the solution at. And I think that’ll help a lot of our listeners to understand what’s so unique about Vector. And probably people would have questions. If they do so they can always write to us. So, for all the listeners, if you have any questions or doubts, you’re very welcome to write to us, and we would love to respond to them. That’s it for this episode. We’ll keep bringing more such episodes with interesting topics. Until then, this is Shubham signing off, bye.</td></tr></tbody></table></figure>

BAHASA Listen Now

Unlock the secrets of Systemic Analysis and Holistic Intervention in Business in this 50th episode of our podcast. Learn what sets it apart from traditional methods and discover the unique approach of Vector Consulting. Tune in for unique insights and solutions!

Vector’s Decisive Competitive Edge in the Consulting Industry

Vector Consulting Group India's Leading Supply Chain Management Consultant

BAHASA&nbsp;<figure class="table"><table><tbody><tr><td>Shubham Agarwal</td><td>Hello and a very warm welcome to the Counterpoint Podcast. I’m Shubham Agarwal. The world is full of new ideas. Everywhere you go, every person you meet, will have tonnes of ideas. Observe any casual meetings of three or four friends over drinks, and you will have at least three or four startups open and shut down on the same evening. The important question then is, why do these out of the world ideas never see the light of the day? Well, in our experience with numerous clients across domains and sectors at Vector Consulting Group, we saw the problem rampant with almost every organisation. There were endless ideas with no real results, because those brilliant ideas never got implemented and executed. We identified the core reason behind this, it is the gap between coming up with an idea to the implementation of it. Let us discuss this in detail. Why getting agreement is so important for the ideas that you have. For the discussion we have with us Visu, a senior consultant at Vector Consulting Group, someone who has successfully implemented many great ideas across clients. So, let’s speak to him. Hi, Visu. Welcome to the counterpoint podcast. How are you?</td></tr><tr><td>Visu</td><td>Oh, I’m doing fine. Thank you. Shubham. Thanks a lot.</td></tr><tr><td>Shubham Agarwal</td><td>Great. Great to have you Visu here. So, so let’s start with our discussion. You know, like I was saying in the in the introduction, also, that the ideas that we have are not, do not really see the light of the day. And I could think of a possible argument why ideas alone are not enough, you know, I would, because I would need help and support from other people around me. Their agreement in their faith on the idea is also very important, right, and not might be as high as I have. So, I would have to explain the idea to them very well. Whosoever is concerned, right, isn’t it?</td></tr><tr><td>Visu</td><td>Not exactly. Shubham. Okay. So basically, now like the I really like the introduction, so according to Thomas Edison, now having a vision for what you want is not enough vision with without execution is hallucination. So, ideas must materialize into an execution with our vast experiences among various companies across multiple sectors Shubham we understood there are no dearth of ideas, but interestingly, most of the ideas rarely gets into execution. The main reason Shubham that significant disconnect between an idea or vision versus an agreement to execute the same. So let me explain you in detail. An idea however, big, or innovative, if it does not solve the client’s current problem or current limitations, it will find no takers in execution. but agreement on the direction of solution and benefits from the suggested solution itself does not guarantee implementation Shubham. Okay.</td></tr><tr><td>Shubham Agarwal</td><td>If an idea does not solve a problem, it will not have takers. I remember one conversation with you, where you also added that the problem has to be significant and a chronic one rather&nbsp;than a minor problem. But crossing that barrier is also not enough for a successful implementation?</td></tr><tr><td>Visu</td><td>See from over experience, hand holding the client through the agreed solution during its implementation is different ballgame altogether. Oh, and handholding is a necessity condition for a successful execution of an idea,</td></tr><tr><td>Shubham Agarwal</td><td>Can you take us the take us through the process of how we handhold what are the steps, and you know, how do we.</td></tr><tr><td>Visu</td><td>That’s an interesting question Shubham. So, we as vector Consulting Group, have mastered this skill and hence, So for any suggested solution, in addition to solving the existing problem or limitations, it must pass through three scanners. Okay, the scanner number one, what are the negative reservations about implementing the suggested solution? The idea here is not only to be aware, but also to prevent it from happening by adding additional elements along with a suggested main solution. Okay. So let me take an example to drive home the point. This is similar to your doctor prescribing anesthesia medicines before the surgery to prevent unbearable pain during the actual surgery okay. And then scanner number two is what are the obstacles preventing the implementation of the suggested solution. So, this is again, similar to before subjecting your patient to surgery, some of his body conditions like blood pressure, pulse rate, sugar, etc. to be brought to a prescribed or a controllable level. Otherwise, surgery itself cannot be performed at all. Right, then the scanner number three, what are the personal and hidden fears of managers in the implementation of the suggested solution? They are unverbalized.</td></tr><tr><td>Shubham Agarwal</td><td>Okay, that’s interesting</td></tr><tr><td>Visu</td><td>is very crucial. This particular scanner is very, very crucial because not every time these unverbalized fears can be identified or understood clearly in executions.</td></tr><tr><td>Shubham Agarwal</td><td>Right. Right. So, I think that’s a very interesting term unverbalized fear. How does one identify their unverbalized fears?</td></tr><tr><td>Visu</td><td>Since it is unverbalized, detection is difficult. We can understand that an unverbalized fear is at play by looking at delays in deploying a task. When a manager does not move on implementation. He says he will do it but does not do it – you know something is wrong. The typical approach that it used is “usage of brute” force by using top management power. That is very damaging – it can lead to superficial implementation or non-sustainable implementation and worse a big disharmony in the transformation process. Things can become political as well. So, it is important to surface and handle unverbalized fears accordingly.&nbsp;We have developed a 4-block test to unearth the unverbalized fear of individual managers and understand the why behind their resistance.</td></tr><tr><td>Shubham Agarwal</td><td>okay. So, now, you mentioned using a 4-block test, what does this 4-block test mean? How does it work? Can you take us through that process? Yeah,</td></tr><tr><td>Visu</td><td>surely see these four block tests which we have developed in at home consists of four questions a deeper level questions, okay, first one is whether this person has a logical buying to execute the task.</td></tr><tr><td>Shubham Agarwal</td><td>And can you explain what is a logical buying? Probably?</td></tr><tr><td>Visu</td><td>Yeah, logical buying means has he understood the operational know way of a particular task to be implemented? That is what we call as the logical buying. Okay. And second deeper question is whether this task to be implemented is in his or her list of priorities. Right? And third question is, does he or she have the required knowledge, tools, and resources to perform the task?</td></tr><tr><td>Shubham Agarwal</td><td>Is he or she fully equipped or not?</td></tr><tr><td>Visu</td><td>Exactly. Okay. And then the fourth, the deeper question is, does he or she have the authority to execute the task? Right, right. And our experiences Shubham shows that almost all the tasks when scanned through the above scanners get executed in their true spirit.</td></tr><tr><td>Shubham Agarwal</td><td>So, this is great, I think we would have covered all you know, all the all these squares, we’ve covered 100% Right, is it.</td></tr><tr><td>Visu</td><td>Yes, this is what is called handholding. Be a coach and counsellor to every key manager in the transformation journey rather than using brute force. Get them to agree to start and ensure results comes. Once the results come, we get the emotional buy-in of the manager. When results along with transformation of individual work life happens, the same manager becomes an evangelist and then we slowly develop the critical mass of more and evangelist. Making it easier to deploy the next steps. So, it is important properly sequence out the solution design.</td></tr><tr><td>Shubham Agarwal</td><td>That is interesting point – what is proper sequence.</td></tr><tr><td>Visu</td><td>A big idea implemented in full go can reduce the available capacity to do current work. Such increase in workload creates a strong resistance. Most ideas forget the importance of proper implementation sequence design and land flat on the face of resistance to change. A proper sequence is one small step, that when deployed not only delivers quantum benefits but also releases existing capacity of managers and stakeholders from current workload – the release of capacity and results creates the ground for next step. So don’t ever try big bang – go in sequence. Else you will be building a flyover on a congested road – a great idea but it deteriorates the congestion during the time the flyover is built – that is a bad sequencing. Change initiatives cannot be implemented the way flyovers are built in many Indian cities.</td></tr><tr><td>Shubham Agarwal</td><td>You know, Visu, I think, in principle, it looks and sounds so good to hear and easy to implement as well. And I think our experience has told us, but if only, but if only life was so simple, you know, where everything went as planned. We would have all achieved nirvana, you know. So how do we tackle the ongoing obstacles the ongoing challenges when the implementation is being is being undertaken?</td></tr><tr><td>Visu</td><td>Exactly. That’s a that’s a very well, very good question. So, with our extensive implementation experience, now, we have learned that there is no surprise about having surprises in the project. This means what a change of reality in client’s environment since the start of implementation, for example, change of boundary conditions, change of the team itself, change of market dynamics, change of execution relevance, you can add on continuing to help the client without recognizing these changes, and without incorporating the modifications is an injustice to the transformation journey Shubham. So hence, in Vector, we believe, in revisiting the running engagements, periodically, by a set of experts who are independent of those involved in the project, we are very clear, they should be independent, because fresh perspective, without any baggage can be added in and do a systemic analysis. With a reference to the initial project plan, versus the deliverables, the deliverables here, I mean, both quantum as well as time. So, through this above carefully crafted enablers we at Vector Shubham, we help our clients in converting ideas into full-fledged execution, whatever it</td></tr><tr><td>Shubham Agarwal</td><td>takes, right, right. Very interesting. I think the last part that you mentioned, you know, periodically, assessing it and evaluating it by independent people within the within the organisation, I think brings new perspectives to the solutions that you’ve already crafted exactly, you know, we can also build in the intricacies that were not probably thought or have new, been added into the environment, very new, the client environment. So great. I think that was a great discussion, a short discussion, which really helped us understand the difference or the journey from the idea to the execution or the successful implementation of an idea. So, thanks a lot Visu for that.</td></tr><tr><td>Visu</td><td>My pleasure. My pleasure, man. Thank you.</td></tr><tr><td>Shubham Agarwal</td><td>Thank you. And for all the listeners. This was just another discussion from on the counterpoint podcast. If you have any questions, please write to us. We’ll keep bringing such episodes to you. Again, and again. Thank you, this is Shubham, signing off.</td></tr></tbody></table></figure>

In a conversation with Visu, Senior Consultant Vector Consulting Group, we uncover the secret of turning ideas into reality in this episode. Learn why great ideas often fail and discover key strategies for effective implementation. Perfect for dreamers and doers alike. Tune in for transformative insights!

BAHASA Idea and its Execution – What’s the missing link?

<figure class="table"><table><tbody><tr><td>Shubham Agarwal</td><td>Hello and a very warm welcome to the Counterpoint Podcast. I’m Shubham Agarwal. The world is full of new ideas. Everywhere you go, every person you meet, will have tonnes of ideas. Observe any casual meetings of three or four friends over drinks, and you will have at least three or four startups open and shut down on the same evening. The important question then is, why do these out of the world ideas never see the light of the day? Well, in our experience with numerous clients across domains and sectors at Vector Consulting Group, we saw the problem rampant with almost every organisation. There were endless ideas with no real results, because those brilliant ideas never got implemented and executed. We identified the core reason behind this, it is the gap between coming up with an idea to the implementation of it. Let us discuss this in detail. Why getting agreement is so important for the ideas that you have. For the discussion we have with us Visu, a senior consultant at Vector Consulting Group, someone who has successfully implemented many great ideas across clients. So, let’s speak to him. Hi, Visu. Welcome to the counterpoint podcast. How are you?</td></tr><tr><td>Visu</td><td>Oh, I’m doing fine. Thank you. Shubham. Thanks a lot.</td></tr><tr><td>Shubham Agarwal</td><td>Great. Great to have you Visu here. So, so let’s start with our discussion. You know, like I was saying in the in the introduction, also, that the ideas that we have are not, do not really see the light of the day. And I could think of a possible argument why ideas alone are not enough, you know, I would, because I would need help and support from other people around me. Their agreement in their faith on the idea is also very important, right, and not might be as high as I have. So, I would have to explain the idea to them very well. Whosoever is concerned, right, isn’t it?</td></tr><tr><td>Visu</td><td>Not exactly. Shubham. Okay. So basically, now like the I really like the introduction, so according to Thomas Edison, now having a vision for what you want is not enough vision with without execution is hallucination. So, ideas must materialize into an execution with our vast experiences among various companies across multiple sectors Shubham we understood there are no dearth of ideas, but interestingly, most of the ideas rarely gets into execution. The main reason Shubham that significant disconnect between an idea or vision versus an agreement to execute the same. So let me explain you in detail. An idea however, big, or innovative, if it does not solve the client’s current problem or current limitations, it will find no takers in execution. but agreement on the direction of solution and benefits from the suggested solution itself does not guarantee implementation Shubham. Okay.</td></tr><tr><td>Shubham Agarwal</td><td>If an idea does not solve a problem, it will not have takers. I remember one conversation with you, where you also added that the problem has to be significant and a chronic one rather&nbsp;than a minor problem. But crossing that barrier is also not enough for a successful implementation?</td></tr><tr><td>Visu</td><td>See from over experience, hand holding the client through the agreed solution during its implementation is different ballgame altogether. Oh, and handholding is a necessity condition for a successful execution of an idea,</td></tr><tr><td>Shubham Agarwal</td><td>Can you take us the take us through the process of how we handhold what are the steps, and you know, how do we.</td></tr><tr><td>Visu</td><td>That’s an interesting question Shubham. So, we as vector Consulting Group, have mastered this skill and hence, So for any suggested solution, in addition to solving the existing problem or limitations, it must pass through three scanners. Okay, the scanner number one, what are the negative reservations about implementing the suggested solution? The idea here is not only to be aware, but also to prevent it from happening by adding additional elements along with a suggested main solution. Okay. So let me take an example to drive home the point. This is similar to your doctor prescribing anesthesia medicines before the surgery to prevent unbearable pain during the actual surgery okay. And then scanner number two is what are the obstacles preventing the implementation of the suggested solution. So, this is again, similar to before subjecting your patient to surgery, some of his body conditions like blood pressure, pulse rate, sugar, etc. to be brought to a prescribed or a controllable level. Otherwise, surgery itself cannot be performed at all. Right, then the scanner number three, what are the personal and hidden fears of managers in the implementation of the suggested solution? They are unverbalized.</td></tr><tr><td>Shubham Agarwal</td><td>Okay, that’s interesting</td></tr><tr><td>Visu</td><td>is very crucial. This particular scanner is very, very crucial because not every time these unverbalized fears can be identified or understood clearly in executions.</td></tr><tr><td>Shubham Agarwal</td><td>Right. Right. So, I think that’s a very interesting term unverbalized fear. How does one identify their unverbalized fears?</td></tr><tr><td>Visu</td><td>Since it is unverbalized, detection is difficult. We can understand that an unverbalized fear is at play by looking at delays in deploying a task. When a manager does not move on implementation. He says he will do it but does not do it – you know something is wrong. The typical approach that it used is “usage of brute” force by using top management power. That is very damaging – it can lead to superficial implementation or non-sustainable implementation and worse a big disharmony in the transformation process. Things can become political as well. So, it is important to surface and handle unverbalized fears accordingly.&nbsp;We have developed a 4-block test to unearth the unverbalized fear of individual managers and understand the why behind their resistance.</td></tr><tr><td>Shubham Agarwal</td><td>okay. So, now, you mentioned using a 4-block test, what does this 4-block test mean? How does it work? Can you take us through that process? Yeah,</td></tr><tr><td>Visu</td><td>surely see these four block tests which we have developed in at home consists of four questions a deeper level questions, okay, first one is whether this person has a logical buying to execute the task.</td></tr><tr><td>Shubham Agarwal</td><td>And can you explain what is a logical buying? Probably?</td></tr><tr><td>Visu</td><td>Yeah, logical buying means has he understood the operational know way of a particular task to be implemented? That is what we call as the logical buying. Okay. And second deeper question is whether this task to be implemented is in his or her list of priorities. Right? And third question is, does he or she have the required knowledge, tools, and resources to perform the task?</td></tr><tr><td>Shubham Agarwal</td><td>Is he or she fully equipped or not?</td></tr><tr><td>Visu</td><td>Exactly. Okay. And then the fourth, the deeper question is, does he or she have the authority to execute the task? Right, right. And our experiences Shubham shows that almost all the tasks when scanned through the above scanners get executed in their true spirit.</td></tr><tr><td>Shubham Agarwal</td><td>So, this is great, I think we would have covered all you know, all the all these squares, we’ve covered 100% Right, is it.</td></tr><tr><td>Visu</td><td>Yes, this is what is called handholding. Be a coach and counsellor to every key manager in the transformation journey rather than using brute force. Get them to agree to start and ensure results comes. Once the results come, we get the emotional buy-in of the manager. When results along with transformation of individual work life happens, the same manager becomes an evangelist and then we slowly develop the critical mass of more and evangelist. Making it easier to deploy the next steps. So, it is important properly sequence out the solution design.</td></tr><tr><td>Shubham Agarwal</td><td>That is interesting point – what is proper sequence.</td></tr><tr><td>Visu</td><td>A big idea implemented in full go can reduce the available capacity to do current work. Such increase in workload creates a strong resistance. Most ideas forget the importance of proper implementation sequence design and land flat on the face of resistance to change. A proper sequence is one small step, that when deployed not only delivers quantum benefits but also releases existing capacity of managers and stakeholders from current workload – the release of capacity and results creates the ground for next step. So don’t ever try big bang – go in sequence. Else you will be building a flyover on a congested road – a great idea but it deteriorates the congestion during the time the flyover is built – that is a bad sequencing. Change initiatives cannot be implemented the way flyovers are built in many Indian cities.</td></tr><tr><td>Shubham Agarwal</td><td>You know, Visu, I think, in principle, it looks and sounds so good to hear and easy to implement as well. And I think our experience has told us, but if only, but if only life was so simple, you know, where everything went as planned. We would have all achieved nirvana, you know. So how do we tackle the ongoing obstacles the ongoing challenges when the implementation is being is being undertaken?</td></tr><tr><td>Visu</td><td>Exactly. That’s a that’s a very well, very good question. So, with our extensive implementation experience, now, we have learned that there is no surprise about having surprises in the project. This means what a change of reality in client’s environment since the start of implementation, for example, change of boundary conditions, change of the team itself, change of market dynamics, change of execution relevance, you can add on continuing to help the client without recognizing these changes, and without incorporating the modifications is an injustice to the transformation journey Shubham. So hence, in Vector, we believe, in revisiting the running engagements, periodically, by a set of experts who are independent of those involved in the project, we are very clear, they should be independent, because fresh perspective, without any baggage can be added in and do a systemic analysis. With a reference to the initial project plan, versus the deliverables, the deliverables here, I mean, both quantum as well as time. So, through this above carefully crafted enablers we at Vector Shubham, we help our clients in converting ideas into full-fledged execution, whatever it</td></tr><tr><td>Shubham Agarwal</td><td>takes, right, right. Very interesting. I think the last part that you mentioned, you know, periodically, assessing it and evaluating it by independent people within the within the organisation, I think brings new perspectives to the solutions that you’ve already crafted exactly, you know, we can also build in the intricacies that were not probably thought or have new, been added into the environment, very new, the client environment. So great. I think that was a great discussion, a short discussion, which really helped us understand the difference or the journey from the idea to the execution or the successful implementation of an idea. So, thanks a lot Visu for that.</td></tr><tr><td>Visu</td><td>My pleasure. My pleasure, man. Thank you.</td></tr><tr><td>Shubham Agarwal</td><td>Thank you. And for all the listeners. This was just another discussion from on the counterpoint podcast. If you have any questions, please write to us. We’ll keep bringing such episodes to you. Again, and again. Thank you, this is Shubham, signing off.</td></tr></tbody></table></figure>

Idea and its Execution – What’s the missing link?

Vector Consulting Group India's Leading Supply Chain Management Consultant Launches the Second Edition of the Business Novel "Apparent in Hindsight"

Welcome to Counterpoint Podcast.Many of our implementations in Operations release capacity in the plant surprise the client with anywhere between 20 to 50% more Output while improving delivery. This raises a fundamental question – why are our clients surprised? Why is this inherent capacity not intuitively understood? What makes capacity opaque and hidden in many organizations? To talk about it, we have Achal Pande, Senior Partner with Vector Consulting Group.The world has become highly competitive, so everyone wants to achieve more with whatever they have to win. Increasing efficiency utilization of available resources and improving productivity are critical for organizations to survive. Asset Sweating, exploring innovative ways to exploit the available resource capacity, is the new norm for survival and growth.But do you know companies, in most cases, do not even know they have ~20-25% hidden capacity, which they are oblivious to?And we can only improve productivity if we can,<ol><li>Establish the real capacity of the manufacturing system and</li><li>Exposing ‘Hidden Capacity’ and extracting impairing the manufacturing system visible to us may not be the ‘Real Capacity’ of the system.</li></ol>Therefore we need to ask two key questions which are essential for capacity management<ol><li>What is the ‘Real Capacity’ of the manufacturing System/Set-up?</li><li>Is there a ‘Hidden Capacity’ in the system, and where is it hidden?</li></ol>These two broad challenges have to be addressed to arrive at an effective way of managing the capacity.How do we do this? What is this ‘Real Capacity’? And how do we unleash it? All these and more in today’s discussion with Achal Saran Pande, a Senior Partner at Vector Consulting Group.<figure class="table"><table><tbody><tr><td>Shubham Agarwal :</td><td>So, let us seek the answer to the first question. What is the problem with how capacity is defined/monitored/assessed in a typical manufacturing system, and What is ‘Real Capacity’?</td></tr><tr><td>Achal Pande :</td><td>Capacity is defined as the ‘Maximum Acceptable Output’ of a manufacturing system in a certain defined time horizon. This is the standard way of defining capacity. The ‘Acceptable Output’ is commonly defined as units produced, denoted as Units/hr, pieces /hr, etc.&nbsp;The world is highly competitive, and the demand for customized products is increasing each day. This is leading to product proliferation and a significant increase in the variety of products being manufactured.When operating with a large variety of products, the wide variation in Output provides a ‘Contrarian View’ of available capacity. For instance, If we take a lean product mix (a mix consisting of products with shorter cycle times), the Output increases significantly, giving an impression that we have huge available capacity. In contrast, in a not-so-lean mix (mix skewed towards products with larger cycle times), we get the impression of a lower available capacity.Many organizations and equipment suppliers define capacity in terms of the median product mix to establish a “Reference Capacity” that would serve as a benchmark for the manufacturing system. But such a benchmark still needs to establish the real capacity in a varied product mix environment.The ‘Mix of Operations’ further aggravates this. Operational Mix is defined in terms of various operations in a manufacturing system. Let’s take an example. Typical Sheet Metal Operation has Press Shop, Weld Shop, Finishing Operations and Assembly operations. It is an amalgamation of various operations, and each operation is characteristically different from the others. The capacity of the press shop is defined in terms of the number of stock per/hr; the weld shop capacity is defined as the number of welds per/hr; the finishing operation’s capacity is defined as finished pieces/per hr, and assembly capacity is defined as assemblies/hr. Therefore, in such a mixed environment, defining the capacity at an overall system/plant level is challenging. In such a scenario, the maximum ‘Experienced output (credit to the plant warehouse)’ or ‘Experienced dispatches to the customer’ often becomes the ‘Reference Capacity’/’Benchmark’ for operations.Due to the ‘Mix of Products’ and ‘Mix of Operations’, the real capacity of the manufacturing system is not ‘Exposed’. In the absence of visibility of ‘the real system capacity’, the only way to ensure that the overall manufacturing facility maximizes Output is to maximize Output (therefore utilization) of individual work centres/work set-ups/job shops constituting the manufacturing set-up.</td></tr><tr><td>Shubham Agarwal :</td><td>But maximization of Output at individual work centres could cause new concerns, like every work centre would try to produce whatever they can produce the maximum, regardless of the priority. This could convert into a high inventory accumulation, impact OTIF poorly, and there will be chaos across the shop floor. Isn’t it?</td></tr><tr><td>Achal Pande :</td><td>This is a vicious loop – Real System Capacity is not visible – maximize Output at work centres to maximize system output – Delays and Poor OTIF-Impression of lack of capacity- Invest in more capacity.&nbsp;The key thing to understand is that the ‘Real capacity is invariant’. Therefore ‘Mix of Products’ and ‘Mix of Operations’ should not have any impact on the same. The idea is to establish the Real capacity and monitor the throughput against the same.</td></tr><tr><td>Shubham Agarwal :</td><td>Let’s assume that we have established the ‘Real Capacity’ of the manufacturing system. How do we extract the additional throughput from the system?</td></tr><tr><td>Achal Pande :</td><td>This will be interesting. The ‘Real Capacity’ established is with the assumption of product cycle time (for different products) at work centres. There are two scenarios/cases often observed 1. Case 1: The operating cycle time is more than the established cycle time of the product (during NPD and commercial production). Past operational experiences (increase in Output deteriorated a certain operational parameter and, therefore, an optimal point of operation is arrived at). 2. Case 2: The potential to reduce cycle time is much more than the established cycle time of the product (during NPD). At times all possibilities, permutations and combinations of parameters are not evaluated fully to arrive at the right combination of operational parameters.In both cases, the potential to operate at lower cycle times are available, but due to certain reason, the full potential is not realized. This happens when a specific operational parameter is in direct conflict with the Output of the system. When the Output is increased, the other parameter deteriorates and vice versa. This we term ‘Capacity Conflict.’&nbsp;For instance – Quality vs Output, Machine Performance (Breakdowns etc.) vs Output (elaborate with example), Organizational/labour Policy vs Output etc. Let us try to elaborate with an example.Case 1: The first case is largely visible with manufacturing set-ups operating with relatively older/aged machinery.Aged/old machinery is associated with wear and tear over a period of time. Wear and Tear of parts may cause repetitive breakdowns such as misalignment, part/component damages/breakages, hydraulic failures etc. (elaborate). At higher operating speeds and feed rates, such breakdowns may increase, bringing down productivity significantly. Therefore, a ‘Sweet Spot’ is arrived at, a compromise between operating machine speed and breakdowns. Such a compromise increases the operating cycle time and reduces the effective capacity of the work centre.Such operational conflicts reduce the capacity of the system, and the effective capacity is much lower than the real capacity of the system.Many times these conflicts are accepted as an operational norm and never questioned. Therefore, many such conflicts remain hidden and unresolved until they are questioned. Each conflict hides a certain capacity; therefore, the number of hidden conflicts in a manufacturing system is ‘indicative of the hidden capacity’. The key is identifying and resolving such conflicts to obtain substantial gains in Output. Hidden capacities have been observed to be anywhere from 30% to 60% within the manufacturing system.</td></tr><tr><td>Shubham Agarwal :</td><td>That is interesting to see how capacity conflicts hide capacities. Is there hidden capacity somewhere else in the system as well?</td></tr><tr><td>Achal Pande :</td><td>Yes. There is one more area where we have hidden capacities. We can term that area as ‘Capacity De-Rating’.</td></tr><tr><td>Shubham Agarwal :</td><td>What is capacity De-Rating?</td></tr><tr><td>Achal Pande :</td><td>In a typical manufacturing environment, capacity is de-rated to accommodate certain categories of losses. These could be Set-up Losses, Breakdown Losses, Admin Losses and many other category heads. For instance, if installed capacity is 100, then effective working capacity could be 75%, assuming that certain losses will always happen and cannot be reduced. Therefore 70% is taken as the operating norm instead of 100 for the manufacturing system. The losses are accepted as a norm and are rarely questioned/investigated. Such losses can de-rate a capacity by 20%-25%. This is huge. The significant potential is available to reduce such losses by deploying efficient working methods.</td></tr><tr><td>Shubham Agarwal :</td><td>Once we have established the ‘Real Capacity’ and exposed the ‘Hidden Capacity’ of the system, the two challenges that we opened the discussion with, is there any other challenge we need to be cautious of?</td></tr><tr><td>Achal Pande :</td><td>Great discussion. We shall come back in the next episode to discuss in detail the process and tactics for calculating the ‘Real Capacity’ in the system unleashing the system’s ‘Hidden Capacity’. Thank you, Achal.Great. • Not knowing the bottleneck due to more than critical inventory • Trying to define capacity by average Output • Or de-rating capacity • Accepting work expansions as a new norm&nbsp;And the way out is to use the available theoretical time to define capacity and find wastages of work expansion and interruptions against that.</td></tr></tbody></table></figure>

In this episode, Achal Saran Pande, Senior Partner, Vector Consulting Group, talks about the unseen potential in manufacturing. He explains how companies can tap into 20-25% hidden capacity. A must-listen for industry professionals seeking efficiency!

Find the hidden capacity in manufacturing plants

Manufacturing companies tend to be unaware of the ‘Real Capacity’ of their plants. In this podcast, Achal Saran Pande, Senior Partner at Vector Consulting Group, discusses common misconceptions in calculating the ‘Real Capacity’ of a plant and sheds light on how to unearth hidden capacity in almost all plants.

Find the hidden capacity in manufacturing plants - vectorconsulting

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Vector Consulting Group primarily focuses on implementing pull-based systems across sectors in operations, sales, distribution, engineering and project domains. In essence, it implies that the creation and movement of inventory of physical goods or knowledge across work centres or warehouses are based on immediate demand pull rather than predefined forecasts, project plans or targets.&nbsp;The management styles which support push-based operations are not conducive to supporting pull-based operations. Pull-based operations require different leadership and people management paradigms to sustain the process. Very few organizations run on pull systems, while a vast majority have push systems. Hence, the conventional experiential know-how of most managers is from the traditional world of push systems.&nbsp;Counterpoint is a series of animated videos explaining management leadership paradigms essential to supporting and sustaining pull-based operations. They are common sense but are contrarian to the standard practices in organizations. Each video provides a unique insight and can be viewed in isolation. However, the insights across videos are dependent on each other. It provides a viable alternative to a typical top-down pyramidal organization, prone to chronic conflicts across departments and hierarchy.&nbsp;Three chapters have been released, and the subsequent ones will be realized soon. Watch this space for updates.&nbsp;

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A video series to explain paradigm changes essential in Leadership to support and sustain pull-based operations in operations, sales, distribution, engineering, and project domains.

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