Archive for October, 2010

Being a Judoka !!

October 24th, 2010 by under Uncategorized. No Comments.

How can you compete with stronger rivals who have size, strength and history on their side? The answer lies in a strategy we discussed in our Game Theory course, which prevents opponents from bringing their full strength into play and emphasizes skills rather than size. The strategy is named after the martial art of judo where a combatant uses the weight and the strength of his opponent to his own advantage rather than opposing blow directly to blow. Similarly smaller companies aim to turn their opponent’s resources, strength and size against them. The focus is on avoiding head to head struggles and instead relying on speed, agility and innovative strategies to make it difficult for stronger rivals to compete. The judo players base their strategy on some of the key elements of this approach as introducing new products or pricing models to move rapidly to new markets and uncontested ground, using leverage to turn opponent’s strategic commitments and investments to their advantage and hence using the weight of opponents against them, and being flexible in embracing and extending rivals’ smart moves. There are a lot of companies which have used these strategies successfully to penetrate the new markets. Palm successfully used the strategy to introduce its operating system by first entering the market with its PDA Pilot devices, and keeping Microsoft from identifying Palm as an urgent threat. Moreover, they were organized for speed by relying on outsourcing, using concurrent engineering, and keeping designs simple in order to get products out fast. Juniper shifted the battleground by focusing on adding intelligence to silicon chips for their routers instead of software driven routers. Sega used leverage to underpin its attack against Nintendo’s eight-bit machines by launching faster 16-bit machines turning Nintendo’s investments into hostages. Similarly, Southwest Airlines offered about 50 percent lower fares below competitors’ leveraging on the higher cost of maintaining the assets for their competitors.

In a highly competitive environment, simply opposing force to force is not a wise move especially when the competitor is much larger and stronger. Thinking in terms of judo helps the managers understand the competitors and target their weaknesses that lurk among their strengths.


X-Treme Supply Chain Management

October 10th, 2010 by under Uncategorized. No Comments.

We are living in a time where natural disasters and extreme events are on the rise. Modern media and heightened news reporting make the trend look even worse. In 2010 only, we have already seen some of the worst disasters in history; earthquakes in Haiti and Chile, floods in Pakistan and China, blizzard in US and Iceland volcanic ash clouds among many others. No one would ever want to experience any such calamity. No one even wants to think about them. Yet, they happen. Some come with a warning like a storm before the flood. Others like earthquakes strike you in no time. Welcome to the modern world and feel sorry for the self-inflicted man-made disasters; oil spills, pipeline explosions, toxic wastes and leaks, and terror attacks. We all are wary of them, we sometimes see them coming, but often we fail to act and are caught off guard.  We may never be able to prevent and prepare for all potential disasters, but once a catastrophe occurs, all we can do is cope. The science of emergency management and extreme supply chain management help our ability to plan for avoiding the aftermath of these events.

This week, Smith School CIBER organized a special event to highlight the importance of emergency management in managerial responsibilities and businesses. The lecture featured distinguished speakers; Disaster and Emergency Operations Specialist, John Schulte, Radiological Program Analyst for USDA, Gordon Cleveland, founding co-Director of the University of Maryland’s Robert H. Smith School of Business’ Supply Chain Management Center and author of “X-SCM: The New Science of X-Treme Supply Chain Management”, Dr. Sandor Boyson, and Associate Dean for Undergraduate Programs at University of Maryland’s Robert H. Smith School of Business, Patricia Cleveland. The students learnt about all the work being done in the Federal Government and at the Smith School to address the extreme volatility, shocks to the supply chain, and other emergencies facing modern managers and their communities.

The speakers discussed different calamities as Gulf Oil Spill, Katrina Hurricane, 9/11 Terror attacks and virus outbreaks like SARS, H5N1 and Exotic Newcastle Disease. They explained how supply chain issues arise in such emergencies with time sensitive actions required. For example, in case of Columbia shuttle disaster a shortage of personnel to perform search and recover the debris created severe problems, during 9/11 attacks a shortage of PPE (Personal Protective Equipment), dust masks and other specialized tools restricted the rescue work, and during the very recent BP Gulf Oil Spill there was a severe shortage of equipment like booms and skimmers. Speakers also highlighted the external problems faced during such situations that further complicate the supply chain issues; language and cultural differences, unpredictable social behavioral factors and real time international media covering every minute of action and scrutinizing every decision made.

The discussion then shifted its focus to ICS: Incident Command System, a set of personnel, policies, procedures, facilities, and equipment, integrated into a common organizational structure designed to improve emergency response operations of all types and complexities. ICS provides a common framework within which people from multiple agencies can work together effectively. The system is designed to give standard response and operation procedures to reduce the problems and potential for miscommunication on such incidents. Some of the key concepts of ICS are Decentralized Decision Making, Use of Common Terminologies, Unity of Command and Modular Organizational structure.

The event touched upon a topic which is often ignored in competitive business environments, and yet is a very sensitive and important issue for a modern day manager. The world may not end in 2012, but until it does, we need to play our part to keep the flow of life on this planet uninterrupted.