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Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
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“Operations can be a source of competitive advantage”
Huge cost-overruns & functionality shortfalls have plagued firms for years. But what can be done about these problems and the way they can damage a firm’s operations?
Issue Date - 08/09/2011
ITC, a mid-sized soy bean buyer decided to change things. They began to equip small villages with cheap access to the Internet to allow farmers to see prices for soy across the world, and offered farmers the alternative of bringing soy directly to its own well-run depots for better prices. They also provided the farmers with education on best growing practices and the importance of certain kinds of quality in their beans. In doing so, they improved the quality of the produce coming in to ITC, raised in-farm productivity by 20%, and received great loyalty from farmers as they built a relationship of trust with them.

Throughout the project, farmers always had the freedom to do things the old way, reinforcing the atmosphere of trust. ITC even made sure that the unscrupulous middle-men had a role to play in the new system, by having them facilitate transport and various other activities in the supply chain. This ‘no-one loses’ approach overcame many of the barriers to value-chain re-invention that we see in the West. Ultimately, ITC’s business blossomed and farmers at last had some disposable income.

ITC has now re-invented the soy supply chain, and the new technology-enabled operation touches many thousands of villages and many millions of people. It has provided a chance for the young people of those villages to use the technology, to be better off than their forefathers, and to certainly look forward optimistically to a future of opportunity.

Each of these brief examples of the research work we are carrying out underscores the power of operations. They show that business means much more than sophisticated financial trickery, deceptive marketing and the exploitation of the poor of the world. They show that making and delivering a product and service well still matters. What you can actually do makes a difference. This not-so-revolutionary, but oft-forgotten idea is not only important to shareholders, but also to the rest of us, as we enjoy the benefits offered by truly effective operations.

Coordinated By : Sanchit Verma

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