July 25, 2017

Leading and Managing Company Transformation

Transformation is  drastic change in the strategy and derived processes. How can you get the affirmative consent of the associates and do the change effectively. Certain problems are expected, but how do you recognize them early and solve them before they become major stumbling blocks for the transformation effort.

BCG has prepared a guidance book for you and sharing it with you through free download. Download it, read it and benefit from it.



Related Videos

Transformation of Organizations

5 ways to lead in an era of constant change

Jim Hemerling

Jim Hemerling is a senior partner and managing director in the firm’s San Francisco office. He is a leader of the People & Organization and Transformation practices and a BCG Fellow.



An imperative to transform
Lars Faeste
Lars F├Žste is a senior partner and managing director in the Copenhagen office of The Boston Consulting Group and the global leader of the Transformation practice.

Managers have to be paranoid.
Constantly question yourself - Is this good enough? Can I do more?



July 24, 2017


SAP IBP is the next generation technology enabler for supply chain planning.
It is developed on HANA and cloud platforms.
It supercedes SAP's MRP, ERP and APS

The key functional modules are:
IBP Demand
IBP Inventory
IBP Supply
IBP Control


Overview of SAP IBP



Building a Roadmap to Adopt SAP Integrated Business Planning (IBP)

Develop a Framework for a Modern and Fully Mature Supply Chain
How SAP Integrated Business Planning Fits as a Final Piece to the Puzzle
by Sylvain Faure, North America Supply Chain Solution Lead, HCL Technologies
October 26, 2015

About SAP Hana

SAP HANA Geo-Spatial Features

Gitacloud SAP IBP Workshop Information



SAP IBP workshop is a four day virtual event, conducted across two weekends. It is split into three parts:


Business Context: Maturity Models, S&OP evolution into IBP (why is IBP needed?)
IBP Business Processes & Key Capabilities
SAP IBP Platform Overview
Overview of SAP IBP Solutions (Demand, Inventory, Supply & Response, S&OP, Control Tower)

SAP IBP Model Configuration: mock implementation - build an IBP S&OP model from scratch against specific requirements
Model Activation, Data Load
Advanced Topics:
Statistical Forecasting / Demand Planning
Rough Cut Supply Planning
Planning Area Maintenance
Attribute Transformations
Planning Operators
Security & User Administration concepts

SAP IBP Implementation Considerations: Industry specific use cases, SAP IBP Model Design Best Practices, Implementation Methodology
Case Study: See how raw business requirements and data files from a customer are turned into a working prototype
Certification Exam



25 July 2017

Updated  26 July 2017,  17 June 2017, 5 June 2017

July 22, 2017

Application of Artificial Intelligence Based Agents, BBots and Systems in Business - 2017 State of Affairs

Application of Artificial Intelligence Based Agents, BBots and Systems in Business - 2017 State of Affairs

July 2017

Business bots (BBots) are now being used in businesses. Chatbots are the popular bots in this category. Chatbots are able to understand speech and reply in pronounced words and people are happy to have dialogue with them.

ERIK BRYNJOLFSSON & ANDREW MCAFEE authored an article "THE BUSINESS OF ARTIFICIAL INTELLIGENCE: What it can — and cannot — do for your organization" in HBR of July 2017 and explained the potential of artificial intelligence in business applications. There are good number of applications at this movement. But still their business and revenue impact is limited. The potential is very high. But business reimagination is needed to come out with a business concept using the AI that will have a significant revenue and business impact.

Important points made in the article

The term artificial intelligence was coined in 1955 by John McCarthy, a math professor at Dartmouth and he organized a  conference on the topic in 1956.

Up to the present time, the biggest advances have been made in two broad areas: perception and cognition. In the former category, voice recognition and image recognition are developed to become practical applications in Siri, Alexa, and Google Assistant. The driverless car uses image recognition in real life high risk practical application.

In the area of cognition  and problem solving, machines are beating human players in games like chess, poker and Go. Google’s DeepMind team has used ML systems to solve optimization problem and improve the cooling efficiency at data centers by more than 15%, after optimization efforts  by human experts.

Uniqueness of Machine Learning
Machine learning represents a fundamentally different approach to creating software. It does not use explicitly specified rules. Instead, the machine learns from examples. The learning when guided by successful answers is the most fruitful at the moment. Hence, most of the successes occurred in supervised learning systems, in which the machine is given lots of examples of the correct answer to a particular problem accompanied with lot of input data.

Another category of learning problems is emerging, reinforcement learning systems. In reinforcement learning systems the programmer specifies the current state of the system and the goal, lists allowable actions, and describes constraints. The system has to combine, the allowable actions, and the outcomes subject to constraints and  figure out how to get as close to the goal as possible.

Designing and implementing new combinations of technologies, human skills, and capital assets to meet customers’ needs requires large-scale creativity and planning. This is the task of entrepreneurs or  business managers employed to think like entrepreneurs. So the age of machine learning provides at the present moment, great rewarding opportunities entrepreneurs or  business managers.

Risks of employing machine learning systems include,  the machines' hidden biases, derived not from any intent of the designer but from the data provided to train the system.

The authors conclude that in their  view, artificial intelligence, especially machine learning, is the most important general-purpose technology of the present our era. The innovations developed using the new technology will be direct applications as well as complementary innovations.

If entrepreneurs and managers aren’t doing many experiments in the area of machine learning, they aren’t doing using their time devoted to strategic planning properly. Over the next decade, entrepreneurs and managers who understand and use AI effectively and efficiently will replace those who don’t.

If you are an entrepreneur or a business process/model manager register for a course of machine learning immediately if you have not done yet.



Andrew Ng: Artificial Intelligence is the New Electricity
Stanford Graduate School of Business



Davos WEF 2017 Panel Discussion on Artificial Intelligence

Published on 17 Jan 2017
As business opportunities for artificial intelligence multiply, how can industry leaders design the principles and technical standards into their products that benefit society as a whole?

- Ron Gutman, Founder and Chief Executive Officer, HealthTap, USA
- Joichi Ito, Director, Media Lab, Massachusetts Institute of Technology, USA
- Satya Nadella, Chief Executive Officer, Microsoft Corporation, USA
- Ginni Rometty, Chairman, President and Chief Executive Officer, IBM Corporation, USA

Moderated by
- Robert F. Smith, Chairman and Chief Executive Officer, Vista Equity Partners, USA



Davos WEF 2016 Panel Discussion on The State of Artificial Intelligence

How close are technologies to simulating or overtaking human intelligence and what are the implications for industry and society?

-Matthew Grob, Executive Vice-President and Chief Technology Officer, Qualcomm, USA.
-Andrew Moore, Dean, School of Computer Science, Carnegie Mellon University, USA.
-Stuart Russell, Professor of Computer Science, University of California, Berkeley, USA.
-Ya-Qin Zhang, President, Baidu.com, People's Republic of China.

Moderated by Connyoung Jennifer Moon, Chief Anchor and Editor-in-Chief, Arirang TV & Radio, Republic of Korea.





MIT Open courseware Lectures 2010 - Playlist


July 14, 2017

Manufacturing Policy - Review and Modification

Business strategy changes and manufacturing policy and strategy have to change. Wickham Skinner advocated the concept of focused factory. Focused factories reflect the business strategy of the organization. So when business strategy changes what happens to the focused factory. It can change and it has to change, asserts Prof. Wickham Skinner in a recent paper published in the journal, Production and Operations Management (October 2015). The paper describes the experience of  Hewlett Packard's plant for computer servers in Germany. It successfully changed its focus in line with the change in environment and the consequent business strategy.

Hendrik Brumme, Daniel Simonovich, Wickham Skinner, and Luk Van Wassenhove present new ideas and understandings about review and modification of focused production operations developed from insights derived from an historical analysis of the evolution of Hewlett-Packard’s (HP) award winning plant for computer servers in Germany. The plant was restructured from an innovation factory to an operational excellence factory and  then  to a solutions factory. The brings out the right timing of focus changes and discusses the critical structural and infrastructural changes required during the focus transitions as well as cross-functional coordination and leadership challenge. The production and related operations constitute a system and even as a focused factory or production system, it can adapt to disruptive change.  The article also lists out seven myths regarding focused factories and rebuts them.

The content is the paper is also reflected in this Knowledge @ Insead post.

July 9, 2017

Quality Management Principles and Actions

ISO Quality Management Principles

 “ Quality management principles (QMP) ” are a set of fundamental beliefs, norms, rules and values that are accepted as true and can be used as a basis for quality management.

The seven quality management principles are :

QMP1 – Customer focus
QMP2– Leadership
QMP3 – Engagement of people
QMP4 – Process approach
QMP5– Improvement
QMP6 – Evidence-based decision making
QMP7 – Relationship management

QMP1 – Customer focus

The primary focus of quality management is to meet customer requirements and to strive
to exceed customer expectations.

Actions to be taken
•  Recognize customers: Recognize direct and indirect customers as those who receive value from the organization.
•  Research the needs and expecations of the customers (current and potential): Understand customers’ current and future needs and expectations.
•  Organizations objectives have to reflect customer needs: Link the organization’s objectives to customer needs and expectations.
•  Wide dissemination of customer requirements in the organization: Communicate customer needs and expectations throughout the organization.
•  Utilize customer needs understanding in developing products and services: Plan, design, develop, produce, deliver and support goods and services to meet customer needs and expectations.
•  Measure post purchase and use customer satisfaction: Measure and monitor customer satisfaction
and take appropriate actions.
•  Utilize customer feedback: Determine and take actions on interested parties’ needs and expectations that can affect customer satisfaction.
•  Maintain relations with customers: Actively manage relationships with customers
to achieve sustained success.

Customer focus is a part of market orientation.

QMP2– Leadership

Leaders at all levels establish unity of purpose and direction and create conditions in which people are engaged in achieving the organization’s quality objectives.

Managers at all levels have to create conditions in the work areas and the organization under them the conditions conducive to practice of quality principles.

Actions to be taken

• Communicate the organization’s mission, vision, strategy, policies and processes throughout
the organization. In the context of quality, quality policy and processes are to be communicated.
• Create and sustain shared values, fairness and ethical models for behaviour at all levels
of the organization. Quality must be a value in the organization.
• Establish a culture of trust and integrity. When any person in the organization provides an output to a customer, the quality is checked and confirmed by that person or he checks whether some other designated person has checked the item from quality angle. Self inspection by an operator is also valid quality check.
• Encourage an organization-wide commitment to quality.
• Ensure that leaders at all levels are positive examples to people in the organization. Every person in the organization follows the quality policy and processes.
• Provide people with the required resources, training and authority to act with accountability. The people are to be educated and trained in the quality processes and necessary tools are to be provided to them. Adequate authority is to be given to them to correct any item if a defect is found at any time.
• Inspire, encourage and recognize people’s contribution. People are economic people as well as social people. Positive social messages through verbal and body language, small rewards and awards will keep up the spirit of the people to engage in the activities of the organization energetically and happily.

Source: ISO Quality Management Principles


ISO 9001 is an internationally recognized Quality Management System standard published by ISO (International Organization for Standardization). A Quality Management System, as described in the current ISO 9001 Standard, helps an organization to implement streamlined processes and improve operational efficiency  based on the Quality Management principles.


Deming’s 14 Principles or Commandments for Total Quality Management

Create constancy of purpose for improving products and services.
Adopt the new philosophy.
Cease dependence on inspection to achieve quality.
End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.
Improve constantly and forever every process for planning, production and service.
Institute training on the job.
Adopt and institute leadership.
Drive out fear.
Break down barriers between staff areas.
Eliminate slogans, exhortations and targets for the workforce.
Eliminate numerical quotas for the workforce and numerical goals for management.
Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
Institute a vigorous program of education and self-improvement for everyone.
Put everybody in the company to work accomplishing the transformation.

The list of 14 commandments is basis for  total quality management philosophy and thus is the foundation for TQM and its successor, quality management systems.

Juran’s 10 steps for Quality management and Quality improvement 

Build awareness of opportunity to improve.
Set-goals for improvement.
Organize to reach goals.
Provide training
Carryout projects to solve problems.
Report progress.
Give recognition.
Communicate results.
Keep score.
Maintain momentum by making annual improvement part of the regular systems and processes of the company.

Phil Crosby's Prnciples

The definition of quality is conformance to requirements (requirements meaning both the product and the customer's requirements)
The system of quality is prevention
The performance standard is zero defects (relative to requirements)
The measurement of quality is the price of nonconformance
The principle of "doing it right the first time" (DIRFT).

Total Quality Management: Focus on Six Sigma - Review Notes

Top Management Challenges

This article is part of #AtoZChallenge 2017 for Blogging Posts. My Theme for the Challenge is Top Management Challenges - Full List of Articles  http://nraomtr.blogspot.com/2016/12/a-to-z-2017-blogging-challenge-top.html

Updated 11 July 2017, 20 April 2017

July 8, 2017

Business and Management Innovations - 2017

July 2017

Walmart is building giant towers to solve the most annoying thing about online ordering

Siemens inaugurates showcase digitalized factory in India

An inside look at 10 real-world digital transformations
CIOs at StubHub, HD Supply, JetBlue and other leading organizations are spearheading digital initiatives to drive business growth. Here’s a look at their evolving digital transformations.

July 7, 2017

Facilities Planning and Organizing

PPT of Salah R. Agha, Professor Industrial Engineering, Islamic University of Gaza on Facilities Planning and Materials Handling

Indicates role of IEs.

Facilities Planning

James A. Tompkins, John A. White, Yavuz A. Bozer, J. M .A. Tanchoco
John Wiley & Sons, 19-Jan-2010 - Technology & Engineering - 864 pages

When it comes to facilities planning, engineers turn to this book to explore the most current practices. The new edition continues to guide them through each step in the planning process. The updated material includes more discussions on economics, the supply chain, and ports of entry. It takes a more global perspective while incorporating new case studies to show how the information is applied in the field. Many of the chapters have been streamlined as well to focus on the most relevant topics. All of this will help engineers approach facilities planning with creativity and precision.


Organization Behavior – History of Development of The Discipline

Organization Behavior Article Series

The academic field of organizational behavior has been around for at least the past thirty to forty years (Luthans, 2005). This statement motivated me to trace the development of ‘Organizational Behavior’ as a subject in this article.


The academic field of organizational behavior has been around for at least the past thirty to forty years (Luthans, 2005). This statement motivated me to trace the development of ‘Organizational Behavior’ as a subject in this article.

Classical Theory of Organization

The following questions were important in organizing work.

How should work be divided by departments and by individuals?
How much authority should be given to the incumbent of each position?
What should his duties be?
What mean of coordination should be provided?

Both managers and writers on management had in the past tried to discover principles to answer the questions and the quest is continuing now also.

Fayol’s analysis of management and principles that he stated regarding organization became the basis for many writers to develop their thinking on this issue. The most commonly stated principles from this approach are expressed as OSCAR: Objectives, specialization, coordination, authority, and responsibility (Dale, 1965). This thinking of this group of writers who followed and developed Fayol’s thoughts is termed as classical theory of the organization.

The criticism of the classical theory includes the opinion that it is too mechanistic. The theory seems to assume that top management only needs to know what is to be done or what it wants to be done. It will arrange for an organization in which all roles are exactly dovetailed. It will issue the necessary orders down through the chain of command, and hold each person accountable for the performance. Each person is spurred into appropriate action by the hope or reward and fear or penalties. Classical school expressed the belief that, if these steps are followed, the organization will function harmoniously and effectively. No doubt, they laid stress on the principle of esprit de corps, but its implication was not explored.

Behavioral Theory – Organization Behavior

The criticism of classical theory as too mechanistic results in a new theory of organization that emphasized that organizations are made up of human beings and orders and policies will be subject to reinterpretation in the light of psychological “set” of those who transmit them or carry them out as well as the social environment. The people in the organization are motivated by many forces beside those taken into account by the classicists and employees of an organization are often seeking goals different from those expressed in the organization manual. Theory developed in the field of organization design and management based on behavioral variables of human beings in the subject of organization behavior. Chester Barnard was probably the first of the behavioral theorists of organization (Dale, 1965).

Chester Barnard

Barnard stressed the influence of psychological and social factors on organization effectiveness and emphasized that the economic motive, on which business organization depends for incentive, is only of those that influence human beings, even when they are part of organizations as employees after signing a contract. 

Chester Barnard’s book, The Functions of the Executive was published in 1938(Barnard, 1938).

Herbert A. Simon

Barnard’s theories were further developed by Herbert A. Simon in his book Administrative Behavior (Simon, 1957).

E. White Bakke

Bakke pointed out that the individual in organization hopes to use the organization to further his own goals, while the organization attempts to use the individual to further its goals. In the process of working, the organization to some degree remakes the individual and the individual to some degree remakes the organization (Bakke, 1953).

Bakke put forward the concepts of personalizing process and fusion process in organizations. The attempt to make the formal organization a mean of accomplishing the personal goals of its employees is the “personalizing process” and the fusion or integration of the personalizing process and the “socializing process” of the organization is “fusion process.”

Likert’s Motivational Approach

Behavioral theorists take a motivational approach to the company structure and management. They are concerned with the ways in which the goals of individuals and those of the organization can be made to fuse, or at least coincide to some extent. But Rensis Likert has christened a special approach as motivational approach. He said,

“ …management will make full use of the potential capacities of its human resources only when each person in an organization is a member of one or more well knit, effectively functioning work groups that have high skills of interaction and higher performance goals.”

Early Books in Organization Behavior

Bennis, Warren G. (1966), Changing Organizations, McGraw-Hill, New York.

Filley, Alan C., and Robert J. House (1969), Managerial Process and Organizational Behavior, Scott, Foresman and Company.

Luthans, Fred (1973), Organizational Behavior, McGraw-Hill, New York.



Barnard, Chester, The Functions of the Executive, 1938

Luthans, Fred, Organizational Behavior, Tenth Edition, McGraw-Hill, 2005

Simon, Herbert A., Administrative Behavior, 1957


The Historical Roots of Organizational Behavior Management in the Private Sector The 1950s-1980s
Alyce M. Dickinson PhD Western Michigan University , USA
Journal of Organizational Behavior Management 

Volume 20, 2001 - Issue 3-4, pp. 9-58.

Article originally posted in


July 6, 2017

International Trade Theory and Issues

International trade is going on for ages. There are conventional reasons for the existence for trade among kingdoms or nations.

Conventional Sources of international trade:

1. Diversity in conditions of production

Tropical reagions are suitable for certain products and temperate regions are suitable for certain other products.

2. Decreasing costs due to scale

Due economies of scale, a country which has taken lead in production of a product can increase scale of production and reduce costs further. Thus other countries may buy that product from this country lower cost of production.

3. Differences in tastes

The people of a country may have taste for a product and for the shortfall in the availability of their country may import from another country.

Unconventional Reason: The principle of comparative advantage

Each country will specialize in the production and export of those goods that it can produce at relatively low cost. This principle is unconventional because, this proposition brings out the idea that even though one country is absolutely more productive or efficient in all the items compared to another country, it is better off by exporting items in which it has relatively higher productivity advantage and importing products in which it has relatively lower advantage.

This makes trade between a developed and developing country possible.

The principle was first explained by David Ricardo.

Illustration: USA is a unit of food costs 1 hour of labor and a unit of clothing costs 2 hours of labor.
In Europe, one unit of food costs 3 hours of labor and a unit of clothing costs 4 hours of labor.
This means that  1 unit of food is equal to 0.5 units of cloth in USA.
1 unit of food is equal to 3/4 units of cloth in Europe.
Cloth is exported to USA and food is bought with it till relative prices are equal. Let us say relative price become equal at 2/3. It means in USA 1 unit of food buy 2/3 units of cloth. In Europe also one unit of food is equal to 2/3 times of cloth.

In the situation of after trade, the USA persons have to spend only 2 and half hours to get 1 unit of food and one unit of cloth. Earlier, before trade he has to spend 1 hour for food and two hours for cloth. So he is better of.

Similarly the European needs to spend only 6 and 2/3 hours for 1 unit of food and 1 unit of cloth instead of 7 hours. So he is also better of.

Absolute and Comparative Advantage



Paul Samuelson and William D. Nordhaus, Economics, 13th Edition, McGraw-Hill, 1989

Updated 8 July 2017,  23.12.2012, 11 December 2011

Exchange Rates: Markets Regulation and International Financial System

International trade is beneficial as it increases real wages. This idea is based on the benefits of trading based on comparative advantage. But payments in international trade are based on two different currecies. A person in USA has to pay a British seller pounds to buy goods. It means a US person has to first buy pounds using his dollars. The number of dollars a US citizen has to pay for each pound is the exchange rate for pound expressed in terms of dollar.

On 24.12.2012, one pound requires 1.62 dollars. Any US person who wants pounds has to buy pounds at this exchange rate.

How are there rates (exchange rates) determined?

For foreign exchange also there are markets like there are markets for various commodities. The markets operate on the basis of demand and supply for a currency. The demand for British pounds with respect to dollars come from the people who want to buy  British goods, services and assets. Supply of pounds come from British people who want to buy US goods, services and assets. The equilibrium price for the currency is at the intersection of these two curves at any point in time.

Changes in Demand Curve

The demand for British pounds from US citizens can change due to various reasons. Like, if there is better substitute produced locally in US itself, the demand for British item may go down and consequently, the demand for British pound will go down. The demand curve will shift to the left and exchange rate for Pound will go down.

The balance of supply and demand for foreign exchange determines the foreign exchange rate of a currency. It can fluctuate day by day and period by period.

When a country's foreign exchange rate has declined relative to that of another country, we say that the domestic currency has depreciated while the foreign currency has appreciated.

Government try to regulate exchange rates. When a country's official exchange rate (or policy rate) is lowered we say that the currency has undergone a devaluation.

Three major exchange rate systems are the gold standard, pure floating exchanged rates and managed floating exchange rates.


Paul Samuelson and William D. Nordhaus, Economics, 13th Edition, McGraw-Hill, 1989

Introduction to Exchange Rates and Forex Markets


Jason Welker

Updated 8 July 2017, 11 December 2011

July 3, 2017

Improve Strengths and Become Extraordinary Leader

Remember, if you really want to make a difference within your organization, it's your strengths that will lead the way. Give them the attention they deserve. - Scott K. Edinger, a consultant, author, adviser and speaker, of Edinger Consulting Group, Inc. is a recognized expert on leadership.

16 leadership behaviors

Displays honesty and Integrity
Exhibits technical/professional expertise
Solves problems and analyzes issues

Practices self-development
Focuses on results
Establishes stretch goals
Takes initiative

Communicates powerfully and broadly
Inspires and motivates others to high performance
Builds relationships
Develops others

Collaborates and fosters teamwork
Develops strategic perspective
Champions change
Connects the group to the outside world

Develop 5 behaviors to outstanding level and you will be in 91 percentile of leaders.

Zenger Folkman


Jim Clemmer