MARKETING AND DISTRIBUTION STRATEGY OF HCL INFOSYSTEM

EXECUTIVE SUMMARY
Size matters in a supply chain. HCL operates one of the IT industrys largest and most complex. Each year, HCL purchases approximately !" #illion of products, materials and ser$ices from suppliers around the %orld. The sheer size of this operation represents an immense opportunity & not only to create leading'edge products at competiti$e prices #ut also to promote social and en$ironmental responsi#ility. That is %hy HCL has de$eloped guidelines to help multinational companies implement social and en$ironmental standards throughout their glo#al supply chains, right do%n to the smallest suppliers. The guidelines ha$e #een pu#lished #y the (anish Commerce and Companies )gency *(CC)+ in a report titled & Small Suppliers in ,lo#al Supply Chains. It is #ased on an exhausti$e study of -! of HCLs suppliers #ased in the Czech .epu#lic, Hungary, India and /oland. HCL, together %ith industry experts, pro$ided training and ad$ice to first and second'tier suppliers in these countries. The companies, including suppliers of pac0aging components, plastic and sheet metal parts, gained access to training and ad$ice on management systems, occupational health and safety topics, and sound en$ironmental practices. 1ith the right 2tools, in place, they %ere a#le to lin0 general #usiness o#3ecti$es to corporate social responsi#ility in ne% %ays. Specifically designed to help small and medium'sized suppliers, the pro3ect ' called CES. *Central European Supplier .esponsi#ility+ ' %as funded #y the European Commission. 4n'site assessments, management and %or0er inter$ie%s all played an important role. )nother $alua#le element %as a forum, in %hich the supplier community could share #est practices and help each other %ith pro#lem sol$ing.

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CONTENT
-. 7. <. >. !. @. A. B. C. -". I5T.4(6CTI45 HCL (IST.I86TI45 )5( 9).:ETI5, ST.)TE,; LITE.)T6.E .E=IE1 C49/ETIT4. /.4?ILE .ESE).CH 9ETH4(4L4,; ?I5(I5, )5( )5)L;SIS C45CL6SI45 .EC499E5()TI45 8I8LI4,.)/H; )55ED6.E & E6ESTI455)I.E

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INTRODUCTION
Hcl has strengthened its processes and applied its 0no%'ho%, de$eloped o$er 7B years into multiple practices ' semi'conductor, operating systems, automo#ile, a$ionics, #io'medical engineering, 8orn in -CA@, HCL has a < decade rich history of in$entions and inno$ations. In -CAB, HCL de$eloped the first indigenous micro'computer at the same time as )pple and < years #efore I89Fs /C. (uring this period, India %as a #lac0 #ox to the %orld and the %orld %as a #lac0 #ox to India. This micro'computer $irtually ga$e #irth to the Indian computer industry. The B"Fs sa% HCL de$eloping 0no%'ho% in many other technologies. HCLFs in' depth 0no%ledge of 6nix led to the de$elopment of a fine grained multi'processor 6nix in -CBB, three years ahead of Sun and H/. HCLFs .G( %as spun off as HCL Technologies in -CCA to mar0 their ad$ent into the soft%are ser$ices arena. (uring the last eight years, HCL %ireless, telecom technologies, and many more. Today, HCL sells more /Cs in India than any other #rand, runs 5orthern IrelandFs largest 8/4 operation, and manages the net%or0 for )siaFs largest stoc0 exchange net%or0 apart from designing zero $isi#ility landing systems to land the %orldFs most popular airplane. HCL Infosystems Ltd is one of the pioneers in the Indian IT mar0et, %ith its origins in -CA@. ?or o$er Huarter of a century, %e ha$e de$eloped and implemented solutions for multiple mar0et segments, across a range of technologies in India. 1e ha$e #een in the forefront in introducing ne% technologies and solutions. In the early A"s a group of young and enthusiastic and am#itious technocrats em#ar0ed upon a $enture that %ould ma0e their $ision of IT re$olution in India a reality. Shi$ nadir and fi$e of his colleagues got together and -CA! set up a ne% company 9IC.4C49/ to start %ithI they started to capitalize on their mar0eting s0ills. 9icro comp mar0eted calculators and %ith in a fe% month of starting operation, the company %as out selling its ma3or competitors.

4n --th )ugust, -CA@ HI5(6ST)5 C49/6TE.S LI9ITE( %as incorporated as 3oint $enture #et%een the entrepreneurs and 6/SCE, %it an initial eHuity of .s.-.B< Lacs.

Vision Statement
JIt is the most preferred employer and principal ta0ing leading edge IT products and ser$ices to the masses through sustained excellence.K

Mission Statement
J1e shall increase the shareholders $alue #y impro$ing the /)T through free cash flo%, reducing the 8. cycle, in$entory le$els, %astage.

Quality Policy Statement

J1e %ill deli$er defect'free products, ser$ices and solutions to meet the reHuirements of our external and internal customers the first time, e$ery time.K

HC DISTRI!UTION AND MAR"ETIN# STRATE#Y

The case examines the supply chain management practices at HCL, the leading retailer in the %orld. The case explains in detail ho% HCL managed $arious components of the supply chain including procurement, distri#ution, logistics and in$entory management. It co$ers ho% the use of inno$ati$e IT tools has helped the company in impro$ing the efficiency of supply chain. The case concludes %ith a discussion on the #enefits reaped #y HCL due to its efficient and effecti$e supply chain management system The Indian'#ased HCL ran0ed first in the glo#al ?ortune !"" list in the financial year 7""-'"7 earning re$enues of 7-C.B- #illion *.efer Ta#le I+. HCL %as the largest retailing company in the %orld. The company %as much #igger than its competitors in the 6S ' Sears .oe#uc0, :' 9art, LC /enney and 5ordstrom com#ined. In 7""7, HCL operated more than <,!"" discount stores, SamFs Clu#s and Supercenters in the 6S and more than -,-A" stores in all ma3or countries across the %orld. The company also sold products on the Internet through its %e#site, HCL.com. HCL %as one of the largest pri$ate sector employers in the %orld, %ith employee strength of approximately -.7B million. The companyFs founder, Sam 1alton *1alton+ had al%ays focused on impro$ing sales, constantly reducing costs, adopting efficient distri#ution and logistics management systems and using inno$ati$e information technology *IT+ tools. )ccording to analysts, HCL %as a#le to achie$e a leadership status **.efer Exhi#it II++ in the retail industry #ecause of its efficient supply chain management practices. Captain =ernon L. 8eatty, aide'de'camp to the commander, (efense Supply Center, Colum#us, 4hio said, MSupply chain management is mo$ing the right items to the right customer at the right time #y the most efficient means. 5o one does that #etter than HCL.M 8ac0ground 5ote1alton %as #orn in -C-B at :ingfisher, 40lahoma, 6S. )fter graduating from the 6ni$ersity of 9issouri in -C>", 1alton %or0ed for the famous retailer, L C /enney. In his first 3o#, 1alton had displayed the Hualities of a good salesman. He realized the
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importance of #uilding loyalty among customers as %ell as employees. In the mid -C>"s, 1alton ga$e up his 3o# and decided to set up his o%n retail store. He purchased a store franchise from 8en ?ran0lin in 5e%port, )r0ansas. It %as here that he learnt his first lessons in retailing ' offering significant discounts on product prices to expand $olumes and increase o$erall profits. The #usiness %as successful and 1alton soon acHuired a second store %ithin three years. 8ac0ground 5ote Contd...1alton not only loo0ed for opportunities to open stores in other small to%ns #ut also explored the possi#ility of introducing inno$ati$e practices such as self' ser$ice. )s the need for people to manage his stores increased, 1alton tried to attract talented and experienced people from other stores. 8y -C@C, 1alton had esta#lished -B HCL stores, reporting an annual sale of >> million. In mid -CA"s, HCL acHuired -@ 9ohr'=alue stores in 9ichigan and Illinois. 8y the late -CA"s, the retail chain had esta#lished a pharmacy, an auto ser$ice center, and se$eral 3e%ellery di$isions. In the -CB"s, HCL continued to gro% rapidly due to the huge customer demand in small to%ns, %here most of its stores %ere located. Commenting on the gro%th of HCL, 1alton saidN M1hen %e arri$ed in these small to%ns offering lo% prices e$ery day, customer satisfaction guaranteed, and hours that %ere realistic for the %ay people %anted to shop, %e passed right #y that old $ariety store competition, %ith its >! percent mar0 ups, limited selection and limited hours.M HCL stores %ere located at a con$enient place in a #ig %arehouse'type #uilding and targeted customers %ho #ought merchandise in #ul0. Customers could #uy goods at %holesale prices #y #ecoming mem#ers and paying a nominal mem#ership fee. 8y -CB>, there %ere @>" HCL stores in the 6S, generating sales of a#out >.! #n and accruing profit of o$er 7"" mn. HCL suffered a set#ac0 in -CC7, %hen 1alton died after a prolonged illness. 8ut it continued its impressi$e gro%th in the -CC"s, focusing more on esta#lishing its stores o$erseas. In -CC7, HCL expanded its operations in 9exico #y entering into a 3oint $enture %ith Cifra.

T%o years later, the company acHuired -77 1oolco stores from 1ool%orth, Canada. 8y -CCA, HCL had #ecome the largest $olume discount retailer in Canada and 9exico. In -CCA, HCL acHuired the 7-'store ,erman hypermar0et chain, 1ert0auf. 4ther international expansion efforts included the purchase of 8razilian retailer Lo3as )mericansF >" percent interest in their 3oint $enture, and the acHuisition of four stores and additional sites in South :orea from :orea 9a0ro. In Lanuary -CCC, HCL expanded its ,erman operations #y #uying A> stores of the hypermar0et chain, Interspar. The stores %ere acHuired from Spar Handels ),, %hich o%ned multiple retail formats and %holesale operations throughout ,ermany HCL al%ays emphasized the need to reduce its purchasing costs and offer the #est price to its customers. The company procured goods directly from manufacturers, #ypassing all intermediaries. HCL %as a tough negotiator on prices and finalized a purchase deal only %hen it %as fully confident that the products #eing #ought %ere not a$aila#le else%here at a lo%er price. )ccording to Claude Harris, one of the earliest employees, ME$ery #uyer has to #e tough. That is the 3o#. I al%ays told the #uyersN F;ou are negotiating for your customer. )nd your customer deser$es the #est prices that you can get.

(onFt e$er feel sorry for a $endor. He al%ays 0no%s %hat he can sell, and %e %ant his #ottom price. F1e %ould tell the $endors,F (onFt lea$e in any room for a 0ic0#ac0 #ecause %e donFt do it here. )nd %e donFt %ant your ad$ertising program or deli$ery program. 4ur truc0 %ill pic0
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it up at your %arehouse. 5o% %hat is your #est priceOM. HCL spent a significant amount of time meeting $endors and understanding their cost structure.... The 8enefits .eaped HCL strongly #elie$ed and constantly emphasized on strengthening its relationships %ith its customers, suppliers and employees. The company %as $ery $igilant and sensed the smallest of changes in store layouts and merchandising techniHues to impro$e performance and $alue for customers. The company made efforts to capitalize on e$ery cost sa$ing opportunity. The sa$ings on cost %ere al%ays passed on to the consumers, there#y adding $alue at e$ery stage and process. HCL also en3oyed the #enefits of lo% transportation costs since it had its o%n transportation system %hich assisted HCL in deli$ering the goods to different stores %ithin *or sometimes less than+ >B hours IT industries in$ol$e the sale of ne% or used goods to end consumers for personal or household consumption. Cut'throat competition is #ecoming tougher in HCL space %ith gro%ing supply and demand. Hyper'mar0ets and Super'stores are #attling each other on e$ery ma3or corner %hile direct mar0eters *including catalogs and online sites+ are stealing customers from stores. 4nline selling at deep discounts is e$en ma0ing immense inroads into consumer purchases of automo#iles and tra$el. (irect selling through online HCL, catalog companies and home' shopping tele$ision channels continues to increase. Sales $ia the Internet rose dramatically in 7""! glo#ally. To continuously impro$e on the process and le$erage on the core competencies, there is a need for a foundation that pro$ides accurate information %here$er and %hene$er reHuired. This calls for a need for strategic management of supplies and in$entory as far as HCL industry in concerned. To change an in'store paper #ased en$ironment of registering sales in HCL shops to an online shopping en$ironment, there needs an integration of the data to increase customer satisfaction, increase producti$ity and li#erate sales people from registering chores and extend mar0et #eyond traditional #ounds. Enriching category, item planning, streamlining product introductions and other #usiness strategies alone are not sufficient to sustain and o$er'gro% in the mar0et place. .eal'time
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$isi#ility to sales and order status, in'store 0ios0s, and ser$ice des0 enhancements and strategic technologies to trac0 in$entory ha$e #ecome the call of the hour to impro$e the customer experience and further differentiate the #rand. 5e% efficiencies in managing stoc0 and colla#orati$e forecasting and replenishment help ensure that the products customers %ant are readily a$aila#le on store shel$es. Strategic methods and tools li0e =endor 9anaged In$entory, E./ and SC9 are recognized $ery much these days. Se$eral Indian companies ha$e already come up %ith either a home' gro%n E./ or SC9 model or they use pac0ages from %ell'esta#lished firms. There is a need for a strategic colla#oration of the internal process %ith the #usiness process of the suppliers and customers. Hence, this paper %ould aim at ans%ering the Huestion, MHo% HCL need to organize their supply chain strategically to compete in consumer mar0etOM 4ur team has, therefore, tried to analyze the present scenario of HCL industry and has come up %ith some suggestions as possi#le strategies in Supply Chain 9anagement for HCL

industry. 1e are proposing the follo%ing model for information integration in a HCL industryN

' The strategic inno$ation should ideally start from identifying important supply chain mem#er %ith %hom it is critical to lin0, thus, ma0ing %ay for a spatial con$enience. ?ocusing on pro$iding dynamic $isi#ility to the supplier a#out the status of the in$entory, and using techniHues to gather the consumption pattern of products, and there#y forecasting to a num#er nearer to accuracy, %ould form part of our suggestions.

Int$o%uction
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(eli$ering right product at the right time for the right price %ith the least possi#le cost through strategic planning of demand and supply and effecti$e utilization of in$entory, distri#ution, %arehousing and transportation seems li0e a complex scenario of unattaina#le le$el. 1ell, this statement is nothing #ut the idealistic state. 5earing %hat is 0no%n as perfection needs continual impro$ement and timely inno$ations. Timely inno$ations and strategic mo$es can #ecome disrupti$e many a times. Ta0e the case of 1)L'9).T effect. 1hat seemed %ay #ac0 in -C@7 as a small outlet in the remote part of )r0anses, is no% the legend of )merican HCL #usiness. Excellent in$entory trac0ing system and efficient distri#ution coupled %ith reduced price for consumers is %hat made 1)L' 9).T the hallmar0 of HCL sector. In this paper, the urge for a HCL industry to go for %ays to impro$ise and maintain its supply chain along %ith suggested %ays for the same are discussed.

C&allen'es in HC
The follo%ing are the 0ey areas that may pose a threat to those HCL companies that ignore the impacts of gi$ing less importance to manage their demand and supplyN ' ?orecasting and In$entory 9anagement for LIT replenishments of products. /ea0 Season (emand Handling. 4rder 9anagement in case of HCL %ith multiple outlets. 1arehouse 9anagement in case of multiple outlet.

Nee% (o$ Mana'in' Su))ly C&ain

) Supply Chain can #e considered as the set of entities that collecti$ely manufactures a product and sells it to an end'point. *Stern et al, 7""-, p.!-<+. To enhance ser$ice through time #ased deli$ery and ma0e'to'order a HCL industry should loo0 at %ays of #uilding a relationship %ith suppliers through enhanced Supply Chain 9anagement. Le$eraging

information as a ser$ice can ena#le staff to respond Huic0ly to mar0et opportunities and gain ne% insight from existing data. This calls for a system that efficiently trac0s information and %hich is put to use strategically. MThere is tremendous competition in the HCL space,M explains :en (schan0ilic, Enterprise )rchitect, Canadian Tire Corporation. MTo 0eep our edge, %e must continuously impro$e our processes and le$erage our core capa#ilities in ne% %ays. To do this, %e need a solid foundation that pro$ides accurate information %here$er and %hene$er its needed.M

*lo+ o( In(o$mation in t&e Ma$,et an% -o$, o( SCM

*i'u$e. *lo+ o( In(o$mation *?igure modified. SourceN Stern et al, 7""-, p.BC+ The area that has #een highlighted %ould form part of our interest and the information that need to flo% #et%een the %hole'saler and the HCLr, and the information #et%een the consumer and the HCLr are of importance. The strategies proposed mainly %ill deal %ith ho% to effecti$ely handle the a$aila#le information and utilize them.

A$eas o( Com)etiti/e Im)o$tance

01 *ul(illment.

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Stoc0 filling is ta0en care of at #oth customer end *end product+ and at the end of shel$es at the shop. .eaching the customer at the right time and constant chec0 on stoc0s and ma0ing sure right Huantity is ordered at the right time. 21 o'istics. Safe and relia#le transport at as much lo% price as possi#le. Constant contact %ith distri#ution teams *truc0s, trains, etc.+ and trac0 %here material is. /artnership %ith transportation firms so that cost and transport can #e shared if the shipment does not occupy the %hole truc0 space. 31 P$ocu$ement. 4=endors side points to ta0e care+ Strong .elationship Information sharing and updating plan change Com#ine $endors #y minimizing transportation cost Choose $endors in proximity 4ptimum lot size ta0ing $endors into confidence

51 P$o%uction. Line should run smoothly %ithout delays due to ordering and transportation *fulfillment and logistics ha$e to #e met first

61 Re/enue 7 Sales.
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Sales should not #e lost due to empty shel$es. SC9 gi$es an edge to companies to #e flexi#le to the unforeseen demands. 81 Costs. Increase in$entory turno$er, control Huality #oth internally and externally #y reducing failure costs. :eeping the cost of purchased parts an products at acceptance le$el. 91 Co:o)e$ation. Mutual !ene(it Scena$io at a Small Scale HC Outlet 8efore %e proceed in detail, let us ta0e an example of a purchase scenario in a relati$ely small HCL outlet in any tier city *say, D;P HCL+.

Im)lications.
)larming in$entory. Shortage faced in case of > items of certain #rand. If in$entory not re'filled, sales is lost.

Nee% o( t&e Hou$.

Immediate communication to the supplier *(istri#utorQ 1holesaler Q %arehouse+. Call for a transporter %ho %ould %or0 at the reHuired speed and pace. .elationship %ith the supplier has to #e smooth enough to as0 for his help at any time of the day.

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Mo%el in Detail Inte'$ate% Deman% Mana'ement.

The sales in the outlet is 0ept trac0 of #ill after #ill hour after hour. Store register %or0 is made online and paper %or0 is done %ith. ?orecasting made %ith data on past consumption and present mar0et trend. 4ptional forecasting is made in case of seasonal reHuirements. /eriodic offers and incenti$es are made a$aila#le to the customers to generate demand.

Inte'$ate% Su))ly C&ain Mana'ement.

Here comes the main course, and the strategies that %e propose for a HCL industry can #e summed up in > pointsN ' -. !ul,:!$ea,in'. 4rders can #e done in smaller lots %ith a good understanding %ith the supplier. This can #e achie$ed #y follo%ing %aysN ' Spatial Con$enienceN Strategically locating the outlet %ith distri#ution net%or0s and %arehouses located proximally. Supplier holds in$entory. 7. Ven%o$ Mana'e% In/ento$yN In this case, the $endor himself is gi$en the responsi#ility to handle the in$entory. ) space for the $endor is rented in the outlet, and he ta0es care of the shel$es and the space. It is a 7'%ay agreement %herein the $endor gets the space to mar0et his product #y interacting one'to'one %ith the customers. <1 Point o( Sale In(o$mation SystemN )s soon as one stoc0 0eeping unit mo$es out of the store %hen purchased #y a customer, the information readily flo%s to the supplier. He is gi$en access to the in$entory data#ase.
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 ) re'order point can #e imposed #ased on consumption pattern and the supplier is as0ed to fill the shelf upon in$entory reaching the re'order point. >1 SRM : Su))lie$ Relations&i) Mana'ement. .elationship %ith supplier should not #e a marriage of con$enience. Supplier has to act in %ays more than %hat is reHuired. 8y pro$iding special offers, discounts and incenti$es, the supplier sa$ors the relationship. This also ser$es as a promotion strategy for the outlet. The complexities of getting material ordered, manufactured and deli$ered o$erload most supply chain management *SC9+ systems. The fact is, most systems are 3ust not up to handling all the $aria#les up and do%n the supply chain. ?or years, it %as thought that it %as enough for manufacturers to ha$e an 9./ or E./ system that could help ans%er fundamental Huestions such asN 1hat are %e going to ma0eO 1hat do %e need to ma0e the productsO 1hat do %e ha$e no%O 1hat materials do %e need, and %henO 1hat resourcesQcapacity do %e need and %henO 9anufacturers need to 0no% a lot more today to ha$e a truly effecti$e supply chain. There are a num#er of fundamental %ea0nesses in the old system logic. 9any planning and scheduling systems in use today assume that lead times are fixed, Hueues do not change, Hueues must exist, capacity is infinite and #ac0%ard scheduling logic %ill produce $alid load profiles and good shop floor schedules. These assumptions are totally illogical, and follo%ing them causes many schedule compliance pro#lems. )n effecti$e fix is first to streamline operations and then to apply predicti$e, pre$enti$e forms of ad$anced planning and scheduling. SC9 in$ol$es t%o flo%s. Information flo% signals the need to start the flo% of material. In a supply chain, the fast flo% of high'Huality information and material is inextrica#ly lin0ed and of paramount importance to SC9 success. 6ntimely or lo%'Huality information $irtually guarantees poor performance.

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9anufacturers need to de$elop flexi#le supply chain processes that can adapt to the needs of $arious customer segments. They must also de$elop supply chain strategy, processes and supporting systems that conform to current and future reHuirements. ,enerally, an effecti$e SC9 approach must focus onN

?lexi#le supply and production processes that can $ery Huic0ly respond to changing customer demand

) short'cycle, demand'dri$en order'to'deli$ery process )ccurate, rele$ant information that is a$aila#le on demand throughout the supply chain

Throughout the supply chain, there are some a#solutely critical and predicti$e Huestions your system should accurately and Huic0ly ans%erN

1hen %ill specific orders really shipO 1hich orders %ill #e lateO 1hy %ill these orders #e lateO 1hat are the specific pro#lems that are delaying the scheduleO 1hat are the future schedule pro#lems and %hen %ill they occurO 1hat is the #est schedule that can #e executed no%O

If management can ans%er predicti$e Huestions, its decisions %ill greatly impro$e. /re$enti$e actions can offset %hat %ere once unforeseen pro#lems. The supply chain %ill #e managed more effecti$ely and impro$e chances of gaining a competiti$e ad$antage. In the early -CB"s, %ith the introduction of 3ust'in'time production to the 6nited States, many %ere con$inced that pull signals *0an#ans+ and instant material deli$eries %ould eradicate the need for 9./. The announcement of 9./Fs death %as premature, except for firms %ith simple products and a#solute control of supplier deli$eries. Those %ith more complex
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products reHuiring more supply sources for more parts disco$ered that longer lead times and demand and supply $aria#ility %ere still issues to #e dealt %ith. Simply put, the more di$erse your product line and the more complex your products, the more $alua#le 9./ is for planning ra% material needs. This is not to say pull logic is not useful for ra% material planning, #ecause it is. ;et for most, it is not necessary *or desira#le+ to put e$ery part num#er from e$ery supplier on a pull system. Scheduling production %ith 9./ push logic, ho%e$er, is li0e pushing a rope. ;ou donFt 0no% %hat direction it %ill go. /ull systems %ill e$entually dominate the entire supply chain ' to customers and from suppliers, as %ell as internal material mo$ement. ;et, 9./ can, and must, coexist %ith pull scheduling. Cycle time compression should #e the first o#3ecti$e in the order'to'deli$ery process. 9idrange manufacturers often ha$e limited clout %ith suppliers, ma0ing across'the'#oard mandatory lead'time reductions unli0ely. 1hile there are many %ays to %or0 out mutually #eneficial and necessary impro$ements %ith suppliers, the real enemy is time. The alternati$e is to %or0 selecti$ely on supply impro$ements %hile using a rationalized in$entory deployment strategy to support the first o#3ecti$e ' reducing order'to'deli$ery cycle time. ,ood colla#orati$e forecasting, good planning and realistic replenishment scheduling are essential to effecti$e SC9. ?urther impro$ements come from redesigning supplier lin0s to ma0e them firm, fast and flexi#le for the #enefit of the entire supply chain. (uring the transformation, companies ha$e learned the $alue of minimizing cycle time and ha$ing predicta#le schedules, especially %ith mass customization. 8oth are necessary for effecti$e supply chain performance The oldest concern of human race has #een to cope up %ith %rath of nature. )dded to that, in past centuries, is the disasters inflicted on its fello%s #y the human itself. Still it is surprising to see ho% less the research and co$erage has #een gi$en to this issue. It is no% %ell understood that the field is not only important for loss of persons #ut also has #usiness implications.

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In past years emergency management has seen a flurry of research dealing %ith sociological issues. 1hat is pro#a#ly lost out is the efficient and effecti$e resource utilization in the face of emergency. ) lot of research and case studies are carried out regarding disaster preparedness, ris0 mitigation and post'reco$ery. Ho%e$er much of the research deals %ith issues li0e organizational structure, safety norms, infrastructure, etc #ut most of %hich is %ishful thin0ing and policies. 4nce disaster has struc0 supply chain issues li0e disaster relief, e$acuation and managing supply and logistics ta0e a front role. This highly important issue is not #een dealt %ith detail and much of the literature is still fragmented. In this paper, %e ha$e tried to de$elop a frame%or0 %hich %ould #e useful in #uilding a responsi$e supply chain in the face of disaster. 1e ha$e dra%n inferences from $arious cases, go$ernment policies and 5,4 experiences. 1e ha$e tried to tie them up in a professional decision ma0ing tool that is highly needed for the Huic0 response and coordination. Still it is far from complete and the complexity can only #e tapped #y ha$ing an acti$e research in the field.

Disaste$ Mana'ement
(isaster is a serious disruption of functioning of a society, causing %idespread human, material or en$ironmental losses, %hich exceed the a#ility of affected society to cope using only its o%n resources. ) disaster can #e natural or manmade *as in terrorism or %ar+. Emergency management *or disaster management+ is the discipline dealing %ith and a$oiding ris0s. It is a discipline that in$ol$es preparing, supporting, and re#uilding society %hen natural or man'made disasters occur. It is the continuous effort #y $arious indi$iduals, groups, go$ernments to a$oid or reduce the impact of $arious natural or man'made disasters.
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)ctions ta0en depend in part on perceptions of ris0 of those exposed. (isaster management plan can #e di$ided into < #road stagesN ' P$e:c$isis P&ase. In this stage need for disaster management is e$aluated, identifying current preparedness and $ulnera#ilities, de$ising disaster plans, coordinating people during a crisis and managing its aftermath. C$isis P&ase. The steps in$ol$ed in this stage areN ta0e chargeI understand the

circumstancesI define the pro#lemI ran0 the optionsI mo$e decisi$elyI eliminate the causes andI pre$ent recurrence. In the e$ent of a crisis, a central committee shouldidentify a clear command centre that represents a single point of responsi#ility for decision'ma0ing and information management. Such centers are critical coordination mechanism, that helps facilitate a unified crisis management effort. Post:c$isis P&ase. )fter a crisis, the disaster committee should also turn its attention to the reco$ery and learning. )t the same time, attention must #e gi$en to the long'term conseHuences of a crisis such as rectifying damage to the en$ironment, or dealing %ith go$ernment or legal in$estigations.

Im)o$tance o( Su))ly C&ain Mana'ement in Disaste$ mana'ement

Importance of o$erall logistical acti$ity in disaster management is immense. )ccording to 6nited 5ations Emergency .elief Coordinator Lan Egeland, MLogistics is often the linchpin in disaster response, the ma0e or #rea0. ,etting help to people in need is critical and for this %e need a smooth supply chain. )greements %ith the pri$ate sector can help ma0e this happen.M Till no% most of the research has #een de$oted to pre'disaster forecasting, %arning and e$acuation and post'disaster management in$ol$ing communications, search and rescue, medical and psychiatric assistance, pro$ision of relief and sheltering, fire'fighting, etc.I %ith some emphasis on organizational structures as %ell as cost'#enefit analysis in postcrisis phase. )ll these research is from social science perspecti$e.

18

1hat has #een missed out is de$eloping professional 3udgment frame%or0 to cope %ith the conditions of uncertainty during the crisis phase7. Here %e try to pro$ide a decision ma0ing frame%or0 in in'crisis and post'crisis phases %ith emphasis on supply chain issues. This frame%or0 is generic and needs to #e modified for specific hazard and geographical location. Ho%e$er in this paper our focus %ill remain on supply chain issues related to e$acuation and post'disaster relief as these are.

Decision *lo+ (o$ Disaste$ mana'ement Su))ly C&ain

,oal of the disaster management system is to protect life and property of population and restoration of normalcy at the earliest. This is constrained #y uncertainty, a$aila#le funding, time, interaction, political %ill, complexity and other sociological issues. Creati$ity fostered #y rational design is essential to o$ercome the complexity of emergency en$ironment. ) typical decision pro#lem can #e transformed into follo%ing type of decision hierarchy.

Supply chain decisions at $arious le$els should follo% a hierarchical approach as sho%n #elo%. Le$el - denotes typical strategic decisions a#out $arious locations, #ased on each hazard. *E.g., ?or city of 9um#ai, Tsunami is high impact hazard, %hich is irrele$ant for city of (elhi+. )fter supply chain decisions are ta0en according to le$el - strategic frame%or0 *as explained #elo%+, further decisions regarding supply chain at le$el 7 after ris0 assessment *E.g., ?or a typical flood hazard, #oth e$acuation and relief plans are to #e charted out in detail at le$el 7 and it %ould include decisions li0e facility location, in$entory management, transportation and logistics, etc.+
19

St$ate'ic *$ame+o$, (o$ Disaste$ Miti'ation

(ue to constraints on infrastructure and people, it is important to classify $arious hazards so that managerial efforts should #e targeted to%ards proper type of disaster and location. This is different from o$erall preparedness %hich is reHuired to promptly respond to any type of disaster %ithin minutes of its occurrence. This is e$en more important in Indian scenario %hich is characterized #y population density of $arious locations, infrastructure a$aila#ility, and #ureaucratic structure of politics. 5atural classification of disaster %ould #e #ased on impact and freHuency of occurrence.

)s sho%n in the figure a#o$e, for each particular hazard, $arious locations can #e placed in the a#o$e graph #ased on o$erall assessment of the t%o parameters. The strategy mentioned in each #ox shall apply to these set of location'hazard com#inations.

20

Classification can also #e considered in smaller area *cities or districts+ or area'%ise *=ulnera#ility )tlas in case of earthHua0es, floods, etc.+ 8asing the classification on these parameters %ould help in identifying typical locationsQarea %hich needs to #e prepared for effecti$e disaster management. 8oth the methods *pointQarea+ ha$e %idespread applications ranging from national le$el planning to a local le$el facility planning decisions. Supply chain issues pertinent in this caseN This type of identification has follo%ing #enefitsN ?or facilities location planning a#out storing supplies or eHuipments as the case may #e (ecision a#out possi#le e$acuation sites in case reHuired (ecisions a#out routing and traffic management, specific to city planning

Classi(ication o( Ha;a$%s ($om Su))ly C&ain Pe$s)ecti/e 4Resou$ce < In(o$mation Mo/ement=
)nother type of classification can #e done specifically targeted to%ards addressing to%ards supply chain issues. )s our focus in this paper is on e$acuation and post'disaster relief, follo%ing classification %ould #e useful.

21

Note: In the discussion to follow, supply of people (trained medical staff, relief workers) has been considered as a different category.

Su))ly C&ain Issues < P$o)ose% Solutions

)ll the three *refer to note a#o$e+ classes of disaster management operations consider #oth people and supplies to #e a part of supply chain and it is a complex supply chain as the material mo$ement is #oth %ays *as opposed to industrial supply chain %here flo% is predominantly one directional+.

E/acuation < Rescue Plan

(ifferent e$acuation plans should exist for different locations and different hazards. Ho%e$er the common issues in any case shall #e follo%ingN ' Euic0 re$ie% of situation and location of exit routes ?ast decision regarding mode of transport Estimation of #uffer space for people and distance from disaster hit area Effecti$e Communication

22

 Coordination %ith local #odies (emarcation of area of operation so as to pre$ent duplication as %ell as interference (ecision regarding deployment of rescue teams *formation+ )ction 9anaging people ' prioritization on the #asis of urgency These decisions shall #e contingent upon the area of impact of disaster, population density of the area, age profile of the affected population, post'e$ent transport infrastructure and other factors as gi$en. ?or example, in a cro%ded area %ith $ery limited exit route a #uc0et'#rigade li0e formation shall #e ideal, %ith fastest %or0er nearest to the disaster area and hence at each step ta0ing people further a%ay from the disaster area. ) decision regarding size of transport $ehicle may also come in handy. The transport $ehicles shall #e arranged locally so as to minimize the lead'time and maximize the people turnaround time. This can #e understood more clearly #y the matrix sho%n #elo%. The performance metrics shall #eN ' Lead time in starting the operation *shall #e compara#le in all the cases+N Lead time sho%s ho% much is the responsi$eness of the design of supply chain *rescue process in this case+ Turnaround time in terms of people'0mQhr as %ell as peopleQhr *ho% many people ho% far from area+N Here people'0mQhr is used as efficiency measure, %hile peopleQhr is used as effecti$eness measure. .atio of these t%o metrics can #eappr oximately ta0en as the safety distance to %hich people need to #e e$acuated Cost, time and other usual #usiness metrics as applica#leN These measures are used to control the %asteful expenses that might occur *suita#le impro$isations needed for particular case.+ Eg. /er person e$acuation cost should #e #elo% certain le$el %hich %ould ensure that people do not carry unnecessary personal #elongings.

23

Relie( Plan
The relief plan for affected people shall in$ol$e decisions to effecti$ely procure and dis#urse relief supplies. The non'perisha#le supplies can #e 0ept in a local %arehouse as in$entory and utilized as needed %hile perisha#le goods as mil0, %ater and food shall #e arranged in Huic0est possi#le manner. This %ill in$ol$e a $ery responsi$e supply chain partnership %ith local #odies and #ecomes strategic in relief operations to stranded people. The decisions in$ol$ed are N Location and size of %arehouse )mount of in$entory to #e 0ept in %arehouses *#ased on population density parameters+ Strategic partnerships as %ell as legal support to gather supplies Huic0ly R Includes supplier selection and facility location decisions R Euality chec0s and pac0aging are important criteria Euic0 and effecti$e transport again local transport agencies need to #e partnered %ith 1ay of dis#ursement of supplies /erformance shall #e measured onN Lead time to start operations TimeQunit rescue #ag S Supplies effecti$ely dis#ursed The generic strategy map is sho%n in the figure #elo%N '

24

)fter disaster has struc0, emergency relief should #e #ased on a thorough assessment of sur$i$ors needs and capacities. Ho%e$er, numerous e$aluations ha$e sho%n that agencies often #ase initial relief distri#utions on guess%or0, %ithout esta#lishing accurate information on needs. The reasons for this includeN competition #et%een agencies, pressure from the media and donors, and the arri$al of planeloads of relief items %hich need shifting into the field. )s a result, the needs of some $ulnera#le groups can #e missed. ) 0ey lesson from the tsunami is that agencies must find #etter %ays of com#ining emergency response %ith rapid, participatory needs assessments<. This can #e achie$ed #y follo%ing measuresN ' 1idespread training programs *may #e a part of #asic curriculum+ Ha$ing Mpeople in$entoryM as a list of $olunteers %ith all time reacha#le contact

information ) ro#ust and dedicated information channel *reser$ed #and%idth in mo#ile phones+ ) Huic0 transport from $arious parts This is certainly much more difficult than it sounds as political %ill and social ties carries a lot of %eight in this decision. In this paper %e ha$e tried to #rea0 a disaster management decision into $arious le$els of hierarchy and ha$e loo0ed at each le$el from the lens of supply chain. 1e ha$e tried to
25

pro$ide a decision ma0ing frame%or0 at $arious le$els for rele$ant supply chain issues in face of an emergency hazard. The frame%or0s allo% a highly complex situation to #e analyzed in a professional manner and ma0e a #etter coordination #et%een $arious agencies possi#le.

T&e Su))ly C&ain o( T$aine% Peo)le

(isaster relief experts ha$e long struggled to deli$er aid Huic0ly to remote disaster areas immediately follo%ing a catastrophe %hen o$ercoming transportation and logistics challenges can mean the difference #et%een life and death. This issue is more complex than any other issue related to supply chain in emergency, for the simple reason that people can not #e trained in a flash. )lso unli0e other relief material people ha$e an element of M%illingnessM. Hence, the issues faced areN ' o Ha$ing trained people o Locating them at the same time o Transporting them to the right place o Transporting them in fastest possi#le manner

26

ITERATURE REVIE) supply chain or logistics net%or0 is the system of organizations, people, technology, acti$ities, information and resources in$ol$ed in mo$ing a product or ser$ice from supplier to customer. Supply chain acti$ities transform natural resources, ra% materials and components into a finished product that is deli$ered to the end customer. In sophisticated supply chain systems, used products may re'enter the supply chain at any point %here residual $alue is recycla#le. Supply chains lin0 $alue chains. ) typical supply chain #egins %ith ecological and #iological regulation of natural resources, follo%ed #y the human extraction of ra% material and includes se$eral production lin0s, for instanceI component construction, assem#ly and merging #efore mo$ing onto se$eral layers of storage facilities of e$er decreasing size and e$er more remote geographical locations, and finally reaching the consumer. 9any of the exchanges encountered in the supply chain %ill therefore #e #et%een different companies %ho %ill see0 to maximize their re$enue %ithin their sphere of interest, #ut may ha$e little or no 0no%ledge or interest in the remaining players in the supply chain. 9ore recently, the loosely coupled, self'organizing net%or0 of #usinesses that cooperates to pro$ide product and ser$ice offerings has #een called the Extended Enterprise

Su))ly c&ain mo%elin'

There are a $ariety of supply chain models, %hich address #oth the upstream and do%nstream sides. The SC4. *Supply Chain 4perations .eference+ model, de$eloped #y the Supply Chain Council, measures total supply chain performance. It is a process reference model for supply'chain management, spanning from the supplierFs supplier to the customerFs customer. T<U. It includes deli$ery and order fulfillment performance, production flexi#ility, %arranty and returns processing costs, in$entory and asset turns, and other factors in e$aluating the o$erall effecti$e performance of a supply chain.

27

The ,lo#al Supply Chain ?orum *,SC?+ introduced another Supply Chain 9odel. This frame%or0 T>U is #uilt on eight 0ey #usiness processes that are #oth cross'functional and cross' firm in nature. Each process is managed #y a cross'functional team, including representati$es from logistics, production, purchasing, finance, mar0eting and research and de$elopment. 1hile each process %ill interface %ith 0ey customers and suppliers, the customer relationship management and supplier relationship management processes form the critical lin0ages in the supply chain.

Su))ly c&ain mana'ement

In the -CB"s the term Supply Chain 9anagement *SC9+ %as de$eloped, to express the need to integrate the 0ey #usiness processes, from end user through original suppliers. 4riginal suppliers #eing those that pro$ide products, ser$ices and information that add $alue for customers and other sta0eholders. The #asic idea #ehind the SC9 is that companies and corporations in$ol$e themsel$es in a supply chain #y exchanging information regarding mar0et fluctuations, production capa#ilities. If all rele$ant information is accessi#le to any rele$ant company, e$ery company in the supply chain has the possi#ility to and can see0 to help optimizing the entire supply chain rather than su# optimize #ased on a local interest. This %ill lead to #etter planned o$erall production and distri#ution %hich can cut costs and gi$e a more attracti$e final product leading to #etter sales and #etter o$erall results for the companies in$ol$ed. Incorporating SC9 successfully leads to a ne% 0ind of competition on the glo#al mar0et %here competition is no longer of the company $ersus company form #ut rather ta0es on a supply chain $ersus supply chain form. The primary o#3ecti$e of supply chain management is to fulfill customer demands through the most efficient use of resources, including distri#ution capacity, in$entory and la#or. In theory, a supply chain see0s to match demand %ith supply and do so %ith the minimal in$entory. =arious aspects of optimizing the supply chain include liaising %ith suppliers to eliminate #ottlenec0sI sourcing strategically to stri0e a #alance #et%een lo%est material cost and transportation, implementing LIT *Lust In Time+ techniHues to optimize manufacturing flo%I maintaining the right mix and location of factories and %arehouses to ser$e customer mar0ets, and using locationQallocation, $ehicle routing analysis,
28

(ynamic programming and, of course, traditional logistics optimization to maximize the efficiency of the distri#ution side. There is often confusion o$er the terms Supply Chain and Logistics. It is no% generally accepted that the term Logistics applies to acti$ities %ithin one companyQorganization in$ol$ing distri#ution of product %hereas the term Supply Chain also encompasses manufacturing and procurement and therefore has a much #roader focus as it in$ol$es multiple enterprises, including suppliers, manufacturers and retailers, %or0ing together to meet a customer need for a product or ser$ice. Starting in the -CC"s se$eral companies choose to outsource the logistics aspect of supply chain management #y partnering %ith a </L, Third'party logistics pro$ider. Companies also outsource production to contract manufacturers. There are actually four common Supply Chain 9odels. 8esides the t%o mentioned a#o$e, there are the )merican /roducti$ity G Euality CenterFs *)/EC+ /rocess Classification ?rame%or0 and the Supply Chain 8est /ractices ?rame%or0. Critics has Huestioned the $alidity of all these models.

29

COMPETITOR ANA YSIS

SAHARA COMPUTER
Esta#lished in -CCA Sahara Computers assem#les and mar0ets computers G peripherals through a glo#al distri#ution net%or0 that co$ers esta#lished and emerging mar0ets. The company is o%ned #y Sahara Holdings, a fully 8road'8ased 8lac0 Economic Empo%ered entity, and is #ased in Lohannes#urg, South )frica. It is the official distri#utor and 4riginal EHuipment 9anufacturer *4E9+ for a $ariety of top international $endors. )n accredited mem#er of the /roudly South )frican campaign, the Sahara #usiness net%or0 stretches across South )frica to include Cape To%n, (ur#an G /ort Eliza#eth. The company has esta#lished a strong presence glo#ally, %ith offices across E9E), including 5airo#i G 9om#assa in :enya and 8ots%ana, (u#ai, the 6.: and China. Sahara Computers is currently the largest operation of its 0ind in Southern )frica. 4%ned #y Sahara Holdings group, company #oast an annual turno$er o$er -.> #illion .and. Sahara Holdings strictly adheres to the principles of 8road'8ased Economic Empo%erment and esta#lished itself among the frontrunners of empo%ered organizations %ithin the ICT sector %hen it confirmed its participation in an empo%erment deal $alued at .@>" million in 7""@. ?or the deal Sahara Holdings sold 7AS of their shares to a ne%ly esta#lished consortium represented #y mining and mineral resource ,roup 9$elaphanda Holdings */ty+ Ltd. chaired #y To0yo Sex%ale, and )fripalm Consortium, a local in$estment company chaired #y Lazarus Pim. The deal incorporates su#sidiaries and associates of Sahara Holdings including Sahara Computers /ty Ltd., Sahara Systems /ty Ltd., Sahara Consuma#les /ty Ltd., Sahara (istri#ution /ty Ltd. and )nnex (istri#ution /ty Ltd. This $enture signals a ne% era in the transference of the #enefit and $alue associated %ith technology, through to communities and indi$iduals. It also reinforces Saharas pledge to pro$ide access to high Huality, afforda#le communication technology and infrastructure. It is the competency and dynamic attri#ute of Sahara Computers that has %on it the confidence of many ma3or IT suppliers, representing 0ey product and component ranges.
30

T&ese Inclu%e Inte$nationally Reno+ne% ea%in' !$an% Names Suc& As.

9icrosoft, the glo#al leader in soft%are, ser$ices and peripheralsI ?oxconn, a leading manufacturer of connectors and ca#le assem#lies in the %orldI Samsung, technology giant, Creati$e La#s, glo#al leader in /C entertainment products, Intel, %orlds leader in /C microprocessorsI )9(, the fastest gro%ing C/6 $endorI S9C, total net%or0 solutions pro$iderI 9axtor, leading hard dis0 and storage solutions pro$iderI Symantec, %orld leader in internet securityI and Epson and Lexmar0, high Huality printing industry giants. Thus, 1ith $ast expansion goals set to #y the Sahara team, and a strategic roadmap plan for expansion this multinational group of companies is set to #e an explosi$e force in the future of IT in )frica and )sia. Indeed aiming to #e 2The ultimate in /Cs.

SAHARA AMD PC>S.:

Mo%els

DT902?:*C )9( )thlon@> V <!""W C<C' )9( )thlon@> <!""W C<C' /in /in ,enuine 1indo%sX /rofessional Edition !-798 /C>"" ((. < D/ ,enuine 1indo%sX Home Edition !-798 /C>"" ((. D/

P$ocesso$

OS Memo$y V#A #$a)&ics Ha$% D$i/e

-@",8 A7""rpm

-@",8 A7""rpm -@D (ual 1riter Layer (=(

O)tical D$i/e -@D (ual Layer (=( 1riter

31

DE

COMPUTER

(ell Inc. listens to customers and deli$ers inno$ati$e technology and ser$ices they trust and $alue. 6niHuely ena#led #y its direct #usiness model, (ell sells more systems glo#ally than any computer company, placing it 5o. 7! on the ?ortune !"". (ellFs clim# to mar0et leadership is the result of a persistent focus on deli$ering the #est possi#le customer experience #y directly selling standards'#ased computing products and ser$ices. .e$enue for the last four Huarters totaled !A.C #illion and the company employs approximately AB,A"" team mem#ers around the glo#e. (ell %as founded in -CB> #y 9ichael (ell, the longest'tenured executi$e to lead a company in the computer industry. The company is #ased on a simple conceptN #y selling computer systems directly to customers, (ell could #est understand their needs and efficiently pro$ide the most effecti$e computing solutions to meet those needs. This direct #usiness model eliminates retailers that add unnecessary time and cost, or can diminish (ellFs understanding of customer expectations. The direct model allo%s the company to #uild e$ery system to order and offer customers po%erful, richly'configured systems at competiti$e prices. (ell also introduces the latest rele$ant technology much more Huic0ly than companies %ith slo%' mo$ing, indirect distri#ution channels, turning o$er in$entory in 3ust fi$e days on a$erage.

T&e Dell E((ect

?or more than 7" years, (ell has re$olutionized the industry to ma0e computing accessi#le to customers around the glo#e, including #usinesses, institutional organizations and indi$idual consumers. 8ecause of (ellFs direct modelYand the industryFs response to itYinformation technology is more po%erful, easier to use and more afforda#le, gi$ing customers the opportunity to ta0e ad$antage of po%erful ne% tools to impro$e their #usinesses and personal li$es. (ell has demonstrated this effect time and again as it enters ne%, standardized product categories, such as net%or0 ser$ers, %or0stations, mo#ility products, printers and other
32

electronic accessories. 5early one out of e$ery fi$e standards'#ased computer system sold in the %orld today is a (ell. This glo#al reach indicates our direct approach is rele$ant across product lines, regions and customer segments.

COMPAQ COMPUTER
CompaH Computer Corporation %as an )merican personal computer company founded in -CB7, and no% a #rand name of He%lett'/ac0ard.The company %as formed #y .od Canion, Lim Harris and 8ill 9urto Y former Texas Instruments senior managers. The name MC49/)EM %as deri$ed from MCompati#ility and EualityM, as at its formation CompaH produced some of the first I89 /C compati#le computers. 4nce the largest supplier of computing systems in the %orld, pre$iously regarded as perhaps the most reputa#le manufacturer of mid'range hard%are it existed as an independent corporation until 7""7, %hen it merged %ith He%lett'/ac0ard.

0@A?s
CompaH %as founded in ?e#ruary -CB7 #y .od Canion, Lim Harris and 8ill 9urto, three senior managers from semiconductor manufacturer Texas Instruments. Each in$ested -,""" to form the company. Their first $enture capital came from 8en .osen and Se$in'.osen partners. Li0e many small startups %ith uniHue #eginnings, the original CompaH /C %as first s0etched out on a placemat #y the founders %hile dining in a local Houston restaurant, House of /ies. In 5o$em#er -CB7 CompaH announced their first product, the CompaH /orta#le, a porta#le I89 /C compati#le personal computer. It %as released in 9arch -CB< at 7CC!, considera#ly more afforda#le than competitors at the time. The CompaH /orta#le %as one of the progenitors of todayFs laptop. It %as the second I89 /C compati#le, #eing capa#le of running all soft%are that %ould run on an I89 /C.

33

Des,)$o
4n Lune 7Bth -CB> CompaH .eleased the CompaH (es0pro, a -@'#it des0top computer using an Intel B"B@ microprocessor running at A.->9Hz. It %as considera#ly faster than an I89 /C and %as, li0e the CompaH /orta#le, also capa#le of running I89 soft%are. This %as the first of the CompaH (es0pro line of computers.

Des,)$o 2A8
In -CB!, CompaH released the CompaH (es0pro 7B@, a -@'#it des0top computer using an Intel B"7B@ microprocessor running at B 9Hz and capa#le of supporting up to A 98 of .)9. It cost 7""" for the >"'98 hard dis0 model. It %as considera#ly faster than an I89 /C )T %hich ran at @9Hz at that time and %as, li0e the CompaH /orta#le, also capa#le of running I89 soft%are.

Des,)$o 3A8
1hen in -CB@ CompaH introduced the first /C #ased on IntelFs ne% B"<B@ microprocessor, the CompaH (es0pro <B@T-U, they #egan a period of increasing performance leadership o$er I89, %ho %ere not yet using this processor. )n I89 machine e$entually reached the mar0et se$en months later, #ut #y that time CompaH %as the <B@ supplier of choice and I89 had lost its image of technical leadership

System)$o
This technical leadership and the ri$alry %ith I89 %as emphasised %hen the Systempro ser$er %as launched in late -CBC ' this %as a true ser$er product %ith standard support for a second C/6 and .)I(, #ut also the first product to feature the EIS) #us %hich %as designed in reaction to I89Fs 9C) *9icroChannel )rchitecture+.

34

0@@?s
)t the same time as they #egan to dominate the ser$er mar0et, in the early -CC"s CompaH entered the retail computer mar0et %ith the /resario, and %as one of the first manufacturers in the mid'-CC"s to mar0et a su#' -""" /C. In order to maintain the prices it %anted, CompaH #ecame the first first'tier computer manufacturer to utilize C/6s from )9( and Cyrix. The price %ar resulting from CompaHFs actions ultimately dro$e numerous competitors, most nota#ly I89 and /ac0ard 8ell, from this mar0et.

PC P$o%ucts
CompaH )rmada 9<"" CompaH /orta#le CompaH (es0pro CompaH LTE CompaH /resario CompaH /roLinea CompaH /roLiant CompaH )rmada CompaH E$o i/)E CompaH /rofessional 1or0station )/>"" Tc-""", a ta#let note#oo0

35

RO E O* ADVERTISEMENT
)d$ertisement plays an important impact on consumers to purchase destop pcs of #rands. 5o% a day %e see that each and e$ery company endorsing #rand am#assadors so that to attract customers and ma0e their customer #ase more G more. I89 has signed Saif )li :han to endorse his products Shahru0h 0han %as endorsed #y compaH so that more G more computes can #e sold out.

PC Ma$, In%ia to S&o+ DouBle #$o+t& t&an t&e -o$l%

/C mar0et in India %ill li0ely gro% at 7"S, almost dou#le of glo#al /C mar0et this year, as per ,artner, the research firm. Ho%e$er, the gro%th in Indian /C mar0et %ill #e fi$e percentage'points lo%er in comparison to %hat it %as last year *7""@+. ,artner forecasts that /C ma0ers %ill ship 7!!.A million units %orld%ide this year, a -".!S increase from 7""@. .e$enue, on the other hand, is pro3ected to increase only >.@S to 6S 7-<.A #illion, as a$erage selling prices continue to drop. In 7""A, %orld%ide shipments of /Cs are expected to increase -".!S from last year to reach 7!!.A 9illion units. 4n the other hand, the re$enues are anticipated to gro% 3ust >.@S and reach 6S 7-<.A 8illion %ith continuous decline in a$erage selling prices. Emerging mar0ets %ill play a 0ey role in this gro%th.JEmerging mar0ets and mo#ile /Cs %ill continue to pro$ide gro%th. Ho%e$er, falling a$erage selling prices *)S/s+, slo%ing replacement acti$ity, and further declines in mature mar0et des0'#ased /C shipments %ill 0eep /C $endors under pressure to rationalize their operations or exit the mar0et,K as per ,eorge Shiffler, research director %ith Client /latforms 9ar0ets ,roup of ,artner (ataHuest. The statement appeared in IndiaTimes Infotech on 9arch 7-, 7""A. )s said #y I(C, /C shipments in India increased 7!S in 7""@. JThe consumer and the S98 segments %ill #e the ma3or dri$ers of the Indian mar0et. High demand for mo#ile /Cs #olstered the gro%th, o$erta0ing sales in the des0'#ased segment. In addition, %ith a greater focus gi$en to e'go$ernance, the go$ernment spend is expected to propel the mar0et furtherK, said ,artner Indias principal analyst, (iptarup Cha0ra#orti %hile commenting on Indian
36

mar0et. IndiaTimes Infotech pu#lished this statement on 9arch 7-, 7""A. )s per the .5C4S report J/orta#le Electronics 9ar0et ' 1orld%ide *7""@+K, J) fundamental mo$e to%ard mo#ile computing going on in the mar0et is ma0ing significant contri#ution to the top line gro%th.K

Ma$,etin' St$ate'ies o( Eac& com)any to att$act Custome$s

5o% a days e$ery companies playing strategies so as to attract customers and increase re$enues and also customer #ase./ent'up demand, attracti$e price points and economic sta#ility propelled /C gro%th. /Cs are acting as entertainment centres %ith T= functionality, supported #y the digital sound experience and large screen displays Some O( T&e St$ate'ies T&ey A$e Playin' =ista and 4ffice 7""A hit the mar0et 9icrosoft has opened the doors for consumers to purchase latest 4perating System, 1indo%s =ista, and 4ffice 7""A %ith a grand launch across A" countries. 9icrosoft released the latest $ersion of its operating system 1indo%s =ista and 4ffice 7""A for corporate customers in 5o$em#er 7""@. 5o% it has launched the soft%are for the masses, i.e. non corporate consumers. The consumer launch too0 place on <"th Lanuary across A" countries. 1indo%s =ista is the first ma3or 1indo%s launch #y 9icrosoft since the launch of 1indo%s D/ in 7""-. These products are launched to 2%o% customers %ith features li0e enhanced security, #etter search, impro$ed parental control and an all ne% interface. )ccording to .a$i =en0atesan, Chairman, 9icrosoft India, JThis is the launch of the decade for 9icrosoft and the #iggest for us in India, %ith the design of this product %e ha$e dealt %ith the security issues.K In India, 4E9s including HCL, H/, Leno$o, Sahara, 1ipro and Penith are launching =ista compati#le /Cs. its

37

1indo%s =ista and 4ffice 7""A %ill #e made a$aila#le to the pu#lic in se$eral editions. The consumer editions are 1indo%s =ista 6ltimate, 1indo%s =ista Home /remium, 1indo%s =ista Home 8asic and 1indo%s =ista Starter. =ista is #eing shipped in -B languages including Hindi. Extending the Indian language support, 9icrosoft %ill ha$e -< more Indian languages including Telugu and 9arathi and support for these is expected #y early 7""B. 4ffice 7""A comes in t%o consumer editionsY4ffice Home G Student 7""A and 4ffice 8asic 7""A.

*UTURE SCOPE
4n the commercial front, 9unglani feels that decision cycles are still slo%, #ut there is a definite increase in Hueries and tenders. He feels that go$ernment funded pro3ects need to increase, and points to the recent )ndhra /radesh schools pro3ect, %hich pulled in more than !,""" units, as a good example of %hat go$ernment enthusiasm for IT can do.In conclusion, going #y %hat the industry feels and %hat the num#ers re$eal, reco$ery is definitely ta0ing place in the industry, though caution is still the pre$ailing sentiment. Ho%e$er, the #ottom line is that the days of super gro%th seem to #e o$er. 1hile I(C has predicted 77.< percent gro%th in 7""<, not e$eryone in the industry seems to #e ready to 3oin in the chorus. H/s Sai Chandrase0har says that their assessment is an expectation of -"'-! percent gro%th, %hich he feels is $ery realistic. JIt is unli0ely that the mar0et %ill return to the heady days of <" percent gro%th,K he explains. :ochhar of S0och seconds that %hen he says, J1e can no longer loo0 at heady gro%th rates li0e >" percent or @" percent...the mar0et has #een gro%ing more in single digit to lo% t%o digit gro%th rates.K )nd that seems to #e the future that Indias /C #rigade faces'#ut %ell, surely e$en lo% t%o digit gro%th rates are #etter than negati$e gro%th, and thats the reason for the cautious smiles on the faces of /C $endors. Hopefully, the next Huarter %ill #ring e$en #roader smiles.

38

PARTY TIME *OR !RANDED PC P AYERS

The /C mar0et is roc0ing %ith #randed /C $endors gra##ing mar0etshare from the assem#led players, says :usum 9a0hi3a The o$erall mar0et for des0top personal computers registered a 7B.7 percent gro%th during calendar year 7""> as compared to the pre$ious year. 1hat is significant is that #randed /Cs continue to ma0e impressi$e gains against the grey mar0et. )ccording to I(C, the share of #randed /Cs gre% from <@.7 percent in 7""< to >C.7 percent in 7"">, registering an impressi$e gro%th rate of A>.< percent. Interestingly, the grey mar0et remained flat, registering a gro%th of 7.7 percent, %hile the total des0top /C mar0et registered a gro%th of 7B.7 percent

."EY PARTNERSHIPS

39

Ma$,et S&a$es o( /a$ious Playe$s in t&e In%ian PC Ma$,et

HCL Compaq

8.4% 7.9% 57.5% 7.0% 4.2% 3.7% 1.0% 1.6% 3.5% 3.3%

Zenith IBM Acer Hewlett-Packard Wipro Vintron Siemens #ell $thers% i!dor"

1.9%

?rom the a#o$e graph it is clear that in Indian Hard%are Industry the HCL Infosystems Ltd. share is highest in all #randed companies. 8ut still $ery high portion a#out !A.!S is in fa$our of un#randed local companies, %hich is still a challenge to%ards all. The share of the unorganised sector has #een falling steadily %ith the fall in price of #randed /Cs. ) recent phenomenon has #een the increasing share of Tier 7 to%ns and cities in the /C sales there#y indicating increased /C penetration into the hinterland. Sales of note#oo0s ha$e a$eraged around !",""" in the past t%o years. /rinters ha$e #een traditionally the fastest gro%ing segment of the /C peripherals mar0et. E$en %hen /C sales %ere increasing #y <CS, printer sales increased #y >-S. The slo%do%n affected printer sales too and in 7""-'"7, the increase %as 3ust -S. In that year, B<@,-77 printers %ere sold and that
40

included in03et, laser and dot matrix. The momentum is expected to pic0 up in 7""7'"< and the printer mar0et %ould gro% at BS to reach C"",""" printers. (ue to falling prices, Laser printer sales are gro%ing fastest. In future, HCLs hard%are sales to the institutional segment are li0ely to remain sta#le, %ith sustained hard%are spending #y all the $erticals, especially the #an0ing and financial ser$ices sector. 8esides, in retail hard%are sales, a continued reduction of price points, facilitated in part #y the recent reduction in excise duties on /Cs, is li0ely to reduce the price ad$antage of the small assem#lers, and augur %ell for #randed /C manufacturers li0e HCL. In the medium term, HCLs margins, despite its sales tax ad$antages, may #e affected #y the li0ely remo$al of duty protection on manufactured /Cs from the year 7""!. 1ith imported /Cs #ecoming cheaper, it may #e critical for HCL to esta#lish an alternate supply chain #ased on imports of finished /Cs. 5onetheless, its financial ris0s are mitigated #y its lo% gearing, su#stantial liHuid in$estments and unutilised %or0ing capital limits. I(C declared its num#ers for the Indian /C mar0et for financial year 7""!'"@ today. The year recorded an impressi$e gro%th in terms of unit shipments ' the mar0et gre% <"S o$er financial year 7"">'"! to exceed the >.@ million'mar0, according to I(CFs India Euarterly /C 9ar0et Trac0er, -E 7""@, 9ay 7""@ preliminary release.

MAR"ETIN# STRATE#Y
REVISITIN# THE O-:COST PC MAR"ET

41

) computer at nearly one'third of current prices is a dream for most Indians. )nd yet, #uyers are not holding their #reath for these de$ices. ?or experience has pro$ed that expectations are seldom met. Ho%e$er, this time around, those propagating lo%'cost computing solutions ha$e ta0en a different route. Chris )nn ?ichardo ela#orates on the difference . The #uzz is in the air again. /C manufacturers are excited. 6sers are expectant. E$en institutions li0e the IITs are enthusiastic. The reasonN Indias dream of an afforda#le /C *priced #elo% .s -","""+ is ready to hit the mar0et. ?or nearly a decade this dream has struggled to #ecome a reality. India Inc. has made many note%orthy attempts in the past to introduce lo%'cost computing solutions, #ut in $ain. 8e it 1ipros Lanata /C, i5a#ling Technologies e'mail de$ice, iStation, or the much'tal0ed a#out handheld de$ice, the Simputer Yall #rilliant concepts that ha$e not Huite made it commercially yet. The company netcore is doing ground#rea0ing %or0 to ma0e possi#le the .s !,""" /C *!:/C+, says that if the price point of a /C comes do%n #et%een .s !,""" to -",""" per user, India has the a#ility to a#sor# -"'7" million /Cs a year for the next se$eral years. This potential gains further significance %hen one realises that the present mar0et size is 3ust t%o million /Cs a yearZ In the last 7" years the installed #ase has #arely crossed six million /Cs in India. )ccording to .ichard 8ro%n, director for International 9ar0eting at =I) attri#utes this sudden interest #y $endors to the Mreal gro%th potentialM of the lo%'cost /C mar0et. MI remem#er fi$e to se$en years ago %hen the first -,""" /C appeared *introduced #y CompaH+, people %ondered if the price point %as for real. )nd since then there has #een a continuous push do%n in the price points for /Cs, %hich is a sign of commoditisation of the industry. ?or a long time the industry has resisted mo$ing to lo%er price points, and no% they are actually seeing that there is demand in that space and they are #uying into it,M he says.

CHAN#IN# TRENDS IN PC MAR"ET

42

1ith prices of /Cs #eing slashed, the education sector is expected to see a high demand for personal computers.

Consumers are shifting their focus of /C computing from an a$erage system to one that is closer to a high'end system and up%ards.

The need for the most po%erful multimedia computers is increasing. Linux might gain ground in the go$ernment and defence sectors. Customers, #oth in the consumer as %ell as in the commercial space %ill demand #etter ser$ice le$els from $endors. Ser$ice and support is going to #e a critical aspect of $endor strategy. (epreciation period of IT products should #e reduced to further #oost gro%th. The des0top space %ill see more and more entertainment'oriented features getting integrated into the normal /C. The enterprise space %ill %itness more stress on security, TC4, managea#ility and multiple le$els of redundancy, among others Companies, %hich %ill offer afforda#le inno$ation %ill gain mar0et share. 6nicode %ill dri$e /C penetration into rural mar0ets S9E %ill continue to #e a ma3or segment. The industry has standardised on B" ,8 H((s.

T$en%s EC)ecte% In 2??@

43

In the future, %ith more duty cuts expected, analysts #elie$e #randed /C players %ill gain further against assem#led players. .etail may get a rene%ed thrust. 4#ser$es .a3 Saraf, Chairman and 9anaging (irector, Penith Computers, J1e ha$e-<"" retail outlets today, %hich %e hope to gro% to -!""" #y the end of 7""C.K

1hile $endors are #undling in Linux to #ring do%n costs, analysts see des0top Linux confined to the go$ernment and education sector. Linux on the des0top is unli0ely to ma0e inroads in the enterprise. /rices of computers ha$e #een falling rapidly, #ut $endors do not thin0 prices of /Cs %ill fall significantly in 7""C. 1hile 7""A sa% strong demand emerging from select sectors such as the go$ernment and 8/4 outfits, 7""B could #e relati$ely flat as most 8/4 firms are in the process of consolidation and not gro%th.

PC MAR"ET. TOP TRENDS

/C mar0et re$i$al may happen in second half of this year. /ost'8udget /C prices %ill remain constant or rise marginally. Indian #rands %ill sur$i$e, #ut they need to decide on an unam#iguous competiti$e pitch. Thrust into the 8 G C class to%ns %ill #e aggressi$e, #y Indian and 95C players ali0e. The note#oo0 mar0et %ill sho% significant gains in 7""7'"<. If you %ant to 0no% %hat the future holds for the Indian /C industry, the one fact you cannot afford to ignore is the current slo%do%n not 3ust falling gro%th, or a gentle trough, #ut the horri#le spectre of negati$e gro%th. The near panic the industry %itnessed in the %a0e of this terri#le time %as reflected in the price slashes and #undling offers anything to 0ic0 start stagnating sales graphs %as accepta#le. )nd that too0 the /C to almost commodity status in India

PRICES DO AN A!OUT:TURN
44

Immediately after this years 8udget, most /C $endors said /C prices %ould remain constant, and some e$en pointed out that prices %ould rise, than0s to increasing memory prices. That should #e one of the 0ey differentiators #et%een last year and the financial year ahead /C prices are not li0ely to come do%n, and in all pro#a#ility, %ill actually see marginal rises. Says =asu Srini$as of I(C India, J1hile the initial response to the slo%do%n %as to slash prices, %hen it #egan to hurt, /C $endors #egan to ta0e a profita#ility approach. They are no% see0ing out the more profita#le deals and aiming for #etter prices %ith lo%er $olumes.K )nother factor that %ill contri#ute to sta#le prices is the mo$e #y the #ig distri#utors to cut credit periods do%n the line from <" to -! days. This mo$e, coming in the %a0e of #ig defaults among IT channels, %ill discourage speculati$e and rash pricing and margin policies that result in price %ars the industry can ill afford.

TRIUMPH O* THE MNC !RI#ADE

In recent times, one of the most important trends in the Indian /C #usiness is the sight of 95C $endors turning leaders. ;es, HCL Infosystems, the leader in the des0top segment, is as Indian as they come, and the companys leadership position seems in no immediate danger, #ut its not insurmounta#le either. )ll it %ill ta0e is the H/'CompaH deal going through in the 6nited States, and HCL %ill #ecome 5o 7 to an 95C #ehemoth that %ill then control almost dou#le of HCLs mar0et share, %hich currently stands at B.@ percent, according to ,eorge /aul, head'mar0eting, HCL Infosystems. 1hile e$eryone admits that the mar0et share of 95C #rands has gone up, and mostly at the expense of Indian #rands, this issue generates a lot of heat and passionate arguments.

!I# !UYERS MATTER

45

1hile the mo$e to 8 G C class cities attracted attention, the #iggest #uyers of /Cs pretty much remained constant, and theyre expected to continue to #e the sa$iours of the #eleaguered /C industry this year too. The honours go to the go$ernment #oth at the Centre and the states, and the #an0ing and financial sector mainly /S6 #an0s. )nother segment expected to contri#ute significantly to /C #uying this year is the telecom sector.

MO!I E COMPUTIN#D ANYONE

9o#ile computing is also expected to ha$e some effect on the /C mar0et in the coming year. )nd in many %ays, this may 3ust #e the #eginning of things to come in the Indian /C mar0et.

OUT OO"
1hen %ill the good times start rolling againO The pundits ha$e differing opinions. I(C India says the /C industry is expected to gro% #y !.- percent in 7""7, and adds that /C #uying is expected to re$i$e in 7""<, %hen a gro%th rate of 7" percent is forecasted. :ochhar of S0och says this year %ill see some re$i$al, though he %arns that heady gro%th rates %ill not return %ithout policy measures li0e -"" percent depreciation from the go$ernment. 9)IT is hoping that the slight upturn in the L?9 Huarter is a portend of things to come, e$en though it re$ised industry sales pro3ections for 7""-'"7 do%n%ards from 7.>! million units to -.@! million units.

THE DECISION MA"IN# PROCESS

(ecision ma0ers, %ho are used to depending on their past experiences, must ma0e decisions and ta0e actions in the rapidly changing %orld %e face today. In this tur#ulent en$ironment, the a#ility to successfully $ie% the current situation through the traditional Mgood 3udgmentM $ie%point is %ea0ened through increasing external noise *a multitude of information sources on multiple topics+ and changing.

46

CUSTOMER RE ATIONSHIP MANA#EMENT 4CRM=1 -HAT IS CUSTOMER RE ATIONSHIP MANA#EMENT 4CRM=E

C.9 is a term that is often referred to in mar0eting. Ho%e$er, there is no complete agreement upon a single definition. This is #ecause C.9 can #e considered from a num#er of perspecti$es. In summary, the three perspecti$es areN

01 CRM ($om t&e In(o$mation Tec&nolo'y Pe$s)ecti/e1 ?rom the technology perspecti$e, companies often #uy into soft%are that %ill help to achie$e their #usiness goals. ?or many, C.9 is far more than a ne% soft%are pac0age, the renaming of traditional customer ser$ices, or an IT'#ased customer management system to support sales people. Ho%e$er, IT is $ital since it underpins C.9, and has the payoffs associated %ith modern technology, such as speed, ease of use, po%er and memory, and so on.

47

21 CRM ($om t&e Custome$ i(e Cycle 4C C= Pe$s)ecti/e1 The Customer Life Cycle *CLC+ has o#$ious similarities %ith the /roduct Life Cycle */LC+. Ho%e$er, CLC focuses upon the creation of and deli$ery of lifetime $alue to the customer i.e. loo0s at the products of ser$ices that customers need throughout their li$es. It is mar0eting orientated rather than product orientated. Essentially, CLC is a summary of the 0ey stages in a customerFs relationship %ith an organization. 31 CRM ($om t&e !usiness St$ate'y Pe$s)ecti/e1 The 8usiness Strategy perspecti$e has most in common %ith many of the lessons and topics contained on this %e#site, and indeed %ithin the field of mar0eting itself. The diagram #elo% sho%s the 9ar0eting Teacher 9odel of C.9 and 8usiness Strategy. 4ur model contains three 0ey phases ' customer acHuisition, customer retention and customer extension, and three contextual factors ' mar0eting orientation, $alue creation and inno$ati$e IT.

48

CRM MODE

A commonly cite% %e(inition o( CRM is t&at o( CRM 4U"= t% 42??2=D as (ollo+s. Customer .elationship 9anagement is the esta#lishment, de$elopment, maintenance and optimization of long'term mutually $alua#le relationships #et%een consumers and organizations. The relationship deli$ers $alue to customers, and profits to companies. The relationship is supported *#ut not dri$en+ #y cutting edge IT. The #usiness strategy is #ased upon the recruitment, retention and extension of products, ser$ices, solutions or experiences to customers. This is the core of C.9.

49

S-OT ANA YSIS STREN#THS.

HCLs strengths are many, to mention a fe% N a= #loBal P$esence.

Its colla#orations and 3oint $entures %ith international companies such as /erot
System, and partnership %ith %orld leaders li0e Ericsson, Toshi#a, 5o0ia, 4racle and 9icrosoft, ena#le it to #ring the #est technology a$aila#le %orld %ide to its consumers.

B=

7> locations in -@ countries. ?ast paced and flexi#le %or0 culture %hich pro$ides its employees autonomy to accomplish the tas0 %ithout much pressure from the higher authorities. Thus, employees are moti$ated to gi$e their #est to the organization.

c=

The core strength of HCL is the talent and inno$ati$eness of its people %hich ena#les it to pro$ide the Jright solution at the right time.K

%=

The mass mar0ets handled through a chain of dealers, resellers and retailers %hich helps #ring technology usage closer to the indi$idual. It has $ery strong distri#ution net%or0.

e=

Its pool of competencies N Hard%are, Soft%are, Training, 5et%or0ing, Telecom and System Integration.

(= '= &=

)#ility to understand customerFs #usiness and offer right technology. Long standing relationship %ith customers. /an India support G ser$ice infrastructure.
50

-EA"NESSES.
a= B= )fter sales ser$ice. Less promotional campaigns.

OPPORTUNITIES.
a= B= c= %= e= IT industry #ooming at a rate of >!S e$ery year. Increasing consumer a%areness a#out IT and its use. Tremendous untapped potential of IT products in India. Increasing competition. Tie ups %ith $arious 95Cs ena#le to extract their core competencies.

THREATS.
a= B= c= Local assem#lers are #iggest menace for the company. Entry of 95Cs i.e. I89, CompaH gi$ing direct competition. ,o$t. insta#ility has a long term repercussions affecting companys policies G its gro%th. %= Technological shift as a result of research G de$elopment. (aily ne% technologies are emerging. Concluding the S.1.4.T. analysis in %ords that prosperity lies ahead for HCL. In order to retain its position as Indias 5o. - IT conglomerate, it has to come out %ith the state of art as %ell as futuristic technologies to its consumers %ell #efore time.

51

RESEARCH METHODO O#Y

O!FECTIVE O* THESE -OR".
-. To critically analyze the mar0eting strategy in this highly competiti$e Indian scenario and also its competiti$e product portfolio. 7. To o#tain consumers response and #eha$ior to%ards the /roducts Line of Hcl Infosystem. <. To o#tain the distri#ution strategy of different IT products in Indian mar0et %ith SC9 mechanism.

RESEARCH METHODO O#YN

9y research %ill includeN P$ima$y Data. Inter$ie%s and Euestionnaires %ith some of the officials and employees of Hcl Infosystem. Secon%a$y Data. 5e%s /apers, 8oo0s, Internet, .eports, 8usiness magazines

52

*INDIN# AND ANA YSIS

-. 1hat type of computers do you useO 8randed )ssem#led <A -B

6sing #randed computers hospitals &sin' (randed 6sing assem#led computers comp&ters

hospitals &sin' assem(led comp&ters

It %as o#ser$ed that almost @AS of the people use #randed computers or other gadgets for their #usiness purpose. Hence can #e concluded that more people %ant #randed products as they are not ready to compromise %ith the Huality and ser$ices #eing pro$ided.

53

7.

1hat #rand computers do you useO Total 5os. A -> -< 7-

8rand used H/ HCL )cer 4thers

HP HCL acer others

This o#ser$ation sho%ed that HCL is among the top used #rands. 9a3or part under the pie' chart goes to HCL. So HCL should continue ma0ing efforts to attract ne% mar0et and sustain the existing mar0et.

54

<. 1hat is the num#er of installed des0topsO Installed des0tops [ -! -!'!" !"'A! A!'7"" 7""'!"" Total 5os. -C 7-< -

)*+ *+-+, +,--+ -+-.,, .,,-+,,

9ost of the sur$eyed and found the use of computers %ithin the -!'!! range. So it can #e inferred that the main target mar0et is %hich lies in the middle range. Thus %e targeted mainly on S9E *small and medium enterprise+.

55

>. 1hat is the num#er of used ser$ersO

Ser$ers used 7 <'! \!

Total 5os. -" -7-<

* . / to + 0+

?rom this o#ser$ation, it %as concluded that num#er of ser$ers %ere directly proportional to the num#er of des0tops used.

!. 1hat is the num#er of installed laptopsO

56

5um#er of laptops -'! !'-! -!'<" \<"

Total 5os. 7" 77 B !

* to + + to *+ *+ to /, 0/,

It %as o#ser$ed that maximum computers and laptop users ranging #et%een !'7!. This area can #e focused.

57

@. 1hat is the #rand used for laptopsO

Laptops #rand HCL Toshi#a Lenno$o 4thers

Total 5os. --C -< -7

HCL 1oshi(a lenno2o others

4#ser$ation sho%ed that Toshi#a %as the ma3or #rand used in laptops. =arious other #rands li0e H/ and Samsung etc. are also used. HCL has also a good mar0et share.

58

A. (o you ha$e )9CO

Total 5os. Hospitals place ha$ing )9C Hospitals place not ha$ing )9C <" 7!

hospitals ha2in' AMC hospitals not ha2in' AMC

)ccording to a#o$e graphical data interpretation, that is the most important places %here computer has #een used and it has #een o#ser$ation and sho%ed that less than @"S hospitals ha$e their )9Cs. This area can also #e considered.

59

B. 1hat type of company is ha$ing the )9CO

Type of )9C company )uthorized regional office Local players

Total 5os. 7> @

re'ional o""ice o" the compan3 an3 local pla3er

That the a#o$e graph sho%s that the use of )9Cs in regional office and local players prefers authorized regional offices to select for the ser$ice rather than going for a local player.

60

C. )re you facing any pro#lem %ith current used product lineO Total 5os. ?acing pro#lem 5ot facing pro#lem 5ot faced pro#lems yet -! -B 77

hospitals "acin' pro(lem ?acing pro#lems hospitals 5ot facingnot pro#lems "acin' pro(lem 5ot yet enco&ntered encountered not 3et

That the a#o$e graph sho%s that the a#o$e o#ser$ation sho%ed that ma3or num#er of users are either not facing any pro#lem or they ha$e not #eing encountered %ith any.

61

-". )re you planning to ma0e any ne% purchaseO /lanning a#out ne% purchase /lanning to purchase 5o planning 5ot yet planned Total 5os. C -A 7C

plannin' to p&rchase no plannin' not 3et planned

That the a#o$e graph sho% that the most of the users ha$e not planned a#out ma0ing a purchase and a $ery fe% are planning to ma0e a #uy.

62

--. Ho% do you find the HCL productsO

.eaction a#out HCL products 4: ,ood Satisfactory 4utstanding Not t$ie% yet

Total 5os. < -7 -C A 0?

$4 'ood satis"actor3 o&tstandin' not tried 3et

)ccording to a#o$e graph sho%s that the maximum of HCL user are satisfied %ith the products and ser$ices pro$ided. =ery fe% ha$e not tried yet HCL on a #usiness scale, #ut most of them ha$e an experience a#out HCL.

63

-7. (o you %ant to 0no% more a#out HCL productsO 1anted 0no%ledge a#out HCL ;es 5o Total 5os. >7 -<

want in"o a(o&t HCL no in"o wanted

That the a#o$e graph sho%s that the o#ser$ation and the most of the people are interested in 0no%ing more a#out the #rand and ha$e the urge to #uy.

64

-<. (o you reHuire demo for any productO Total 5os. Interested in demo 5ot interested in demo 7> <-

interested demo hospitalsin interested in

demo

interested demo hospitalsin not interested

in demo

This o#ser$ation sho%ed that almost >!S of the sample %as interested in demo.

65

->. (o you %ant to #uy any productO *Commercial proposal+ Commercial proposal ;es 5o 5ot yet decided Total 5os. B -C 7B

Interested in commercial proposal hospitals interested in 5ot interested in commercial hospitals proposal not interested 5ot yet planned

commercial proposal

in commercial proposal not 3et planned

That the a#o$e graph sho%s that the a#o$e o#ser$ation sho%ed that almost a huge chun0 of hospitals sur$eyed either doesnt %ant or they ha$e not planned for any commercial proposal.

66

CONC USION
E$ery pro3ect has some limitations e$en the researcher came across some limitations %hile %or0ing on the pro3ect %hich made the analysis a little inappropriate at times. Some of the #asic limitations faced during the research are listed #elo%N 4nly limited num#er of authorized, companies and other areas %here it has #een found !! players %as co$ered in the study. 9ost of the research %as #ased on cold calls, so then $isited many places i.e. authorized and local areas and %here it had not responded much. There %as a #ias on the part of the respondents. Companies that %ere contacted through telephone at times did not gi$e correct information to the researcher. The IT manager or the person heading the IT (epartment did not ha$e the rights to gi$e the authorized official information to people other then the mem#ers of the official itself and the high officials. )t times there %as a pro#lem of non response from the hospitals, companies and other authorized and unauthorized areas %hich affected the result of the pro3ect #eing done #y the researcher. India is the %orlds se$enth'largest country in terms of area, %ith a ma3ority of the population li$ing in rural areas. .eaching this fragmented and dispersed mar0et significantly increases the complexity of distri#ution for companies in India. 8ut according to some companies, addressing potential consumers is perfectly feasi#le. JE$en %ith the lac0 of infrastructure there is actually a $ery %ell de$eloped distri#ution system in India, right do%n to the three' %heelers that go into $illages %ithout any roads,K according to a leading ?9C, company,

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J8ut it is a complex system, and you ha$e to understand that complexity.K Transport is a 0ey constraint. The state high%ay net%or0 is limited, although a ma3or impro$ement is in the pipeline %ith the expected completion in 7""A of the 2,olden Euadrilateral pro3ect of high%ays lin0ing (elhi, :ol0ata, Chennai and 9um#ai. Commercial freight transport is mo$ing a%ay consistently from rail and on to the roads. Indias rail transport system is deteriorating, and the proportions of many categories of goods transported #y rail ha$e hal$ed o$er the last -! years, according to the 1orld 8an0s most recent in$estment climate report. The Centre for 9onitoring the Indian Economy *C9IE+, an independent economic research company #ased in 9um#ai, has calculated that total logistics costs in India amount to #et%een -" percent and -7 percent of ,(/. The C9IE estimates that in$entories in the entire economy amount to o$er 6S 77 #illion, eHui$alent to around 77 percent of total annual sales in the economy. In the IT sector company li0e HCL , factors contri#uting to high in$entory are the fragmented mar0et, and the high proportion of retail #usiness ta0ing place in the 2unorganized sector & often informal #usinesses in rural areas that may #e many miles from pa$ed roads & %hich leads to much higher le$els of 2safety stoc0s than in organized retailing. The state sales tax regime encourages local stoc0 points in each state, say companies. The transport and %arehousing industry is fragmented and lac0s scale & the a$erage load carried #y truc0s in India is lo% #y glo#al standards, at around se$en tons. Third party logistics is also unde$eloped, and most #usinesses manage distri#ution and logistics themsel$es. J) #ig distri#ution pro#lem is the lac0 of cold storage chains,K comments an industrialist. J/ri$ate logistics companies should #e coming in and offering refrigerated transport, #ut they are not. So if you %ant to sell ice cream, say, you ha$e to ha$e your o%n $ehicle fleet, and that is not necessarily the most cost effecti$e %ay to go to mar0et.K Companies say that the large geographical area of India together %ith its relati$ely %ea0 infrastructure are the most important constraints on distri#ution. In an inter$ie%, one HCL Logistic manager, JIndia is not li0e one country, it is li0e 7! different countries.K The Huality of third party distri#ution ser$ices is also a concern, says a
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senior executi$e of a logistics company. JThe distri#ution pro#lem in India is nothing to do %ith the state of the road surface, it is to do %ith the lac0 of distri#ution capacity.K The lac0 of a de$eloped hu#'and'spo0e distri#ution structure is also of concernN most companies attri#ute this to taxation #arriers #et%een states that act as #arriers to efficient regional distri#ution #ase and as a domestic mar0et. .egulatory controls on foreign direct in$estment *?(I+ ha$e relaxed considera#ly in recent years. Ho%e$er, %hile retailing currently remains closed to ?(I, this is an area of ongoing de#ate. This means that foreign retailers and consumer goods manufacturers can only participate in the retail mar0et through indirect access strategies, such as %holesaling, franchising or licensing, or #y ha$ing a manufacturing #ase in India, or in #usinesses upstream of retailing. Ho%e$er, the Indian go$ernment has indicated in 7""! that li#eralization of direct in$estment in retailing is under acti$e consideration. /rice controls ha$e #een progressi$ely li#eralized since -CC7, #ut a small num#er of items remain fully controlled. There are also extensi$e controls on pac0aging, la#elling and certification. In terms of HCL Information sharing %ith supplier is $ery positi$e side #ecause as %e mentioned HCL is recently launch its first product through distri#utor %ith expenses of !" S. 1hile for the Huestion of purchasing of ra% material is a strategic issue or not the result is not $ery surprising %hether out of >" respondent maximum -< people #elie$e that HCL gi$ing 9oderate of higher emphasis on that i.e. form the financial perspecti$e company try to use cost optimization theory %hether the Huestion %ill as0ed #y financial team there sharing information %ith $endor or distri#ution channel HCL #elie$e that in long term they try to use these capacity. Euestion as0ed #y the mar0eting and financial team for their use of cost reduction in terms of Information technology reHuirement HCL is not using till yet any soft%are or e SC9 for using #etter efficient supply chain net%or0. HCL is also not concentrate o$er the Customer #ase #ecause company didnt 0no% %hat all the customer #ase that they ha$e primarily company using their net%or0 on eastern 6/ and
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#ihar or 8angal on there the product reach a#ility is not $ery high and customer also not focusing the #rand of HCL . HCL is using for process management is control charts that is $ery old method for distri#ution of net%or0 of any product %hile in this scenario there is maximum num#er of chance a#out the product failure %hich is generally happened %ith HCL also. )nd form (istri#utor to $endor @"S %or0 of HCL is done #y the only control charts. )lso HCL company depend on there ra% material production and procured form that product outside i.e. -"'<"S mostly financial and supplier suggest that company using ra% material for their product is Lyetri for s0in care and source from outside in the mar0et.

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RECOMMENDATION
Efficient (istri#ution net%or0 /ro$ide management has the potential to help pro$ide higher returns to shareholders. ;et only a small percentage of companies use this function to manage o$erall financial performance. The C?4 must ta0e a leadership role in ma0ing the financial' logistics connection. It is recommended that the C?4 ma0e this connection using a three step, top'do%n approach %hichN #enchmar0s 0ey financial metrics and $alues gapsI maps gaps to SC9 #usiness processes, acti$ities, and :/IsI and uses this information to explore and prioritize initiati$es to impro$e SC9 #usiness processes and strategies. It is also recommended that $aluation of gaps in 0ey financial metrics #e extended to SC9 related information found in many #usiness intelligence tools. These tools often pro$ide detailed information at the acti$ity and :/I le$el. ,aps in these acti$ities and :/Is can #e $alued similar to the approach sho%n in ?igure and used to prioritize areas that %arrant further in$estigation. ?inally, impro$ing most logistic and financial professionals financial acumen is a critical factor in ma0ing the financial'SC9 connection. SC9 professionals must understand ho% SC9 #usiness processes and strategies impact 0ey financial metrics and contri#ute to returns to shareholders

HCL is ha$ing large num#er of channel partners #ut it is not supporting G ta0ing care all of them eHually %hich results in increasing discontentment among ne% channel partners #ecause its not possi#le for company to support all of them eHually. Company should ta0e some positi$e action against it.

Company executi$e should $isit dealers on regular #asis. They Should pay proper attention to%ards chec0ing of $arious components of /C #efore end user deli$ery. 4ther%ise it tends to%ards defame of #rand name in comparison to ri$als.
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5eed to expend customer care center as the consumer #ase of HCL Infosystem is increasing %ith tremendously fast pace.

/roper attention should #e paid for ad$ertisement planning other%ise it may lead to pro#lem for dealer as %ell as for company.

Company should tie up %ith some e$ent management company to organize $arious promotional acti$ities li0e canopy, Carni$al.

Company should ma0e policy for fixed end user price for all dealers so that fair game %ill #e played G dealer %ould not to compromise on their margin.

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!I! IO#RAPHY
/hilip :otler, 9ar0eting 9anagement, T)T) 9C ,ra% Hills /u#lishing Co. Ltd, (elhi 8usiness 1orld 8usiness Today The ?inancial Express The Times of India The Hindu %%%.hcl.in %%%.indiainfoline.com %%%.google.co.in %%%.hp.com %%%.saharacomputer.com %%%.acer.com %%%.dell.com %%%.i#m.com %%%.hclinfosystem.in %%%.alta$ista.com %%%.0ho3.com
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ANNEXURE
QUESTIONNAIRE
-. 1hat type of computers do you useO *a+ 8randed 7. *#+ )ssem#led

1hat #rand computers do you useO *a+ H/ *c+ )CE. *#+ HCL *d+4thers

<.

1hat is the num#er of installed des0topsO *a+ [-! *d+ A!'7"" *#+ -!'!" *e+ 7""'!"" *c+ !"'A!

>.

1hat is the num#er of used ser$ersO *a+ *c+ <'! *#+ 7 *d+ !

!.

1hat is the num#er of installed laptopsO *a+ -'! *c+ -!'<" *#+ !'-! *d+ \<"

@.

1hat is the #rand used for laptopsO *a+ HCL *c+ Lenno$o *#+ Toshi#a *d+ 4thers
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A.

(o you ha$e )9CO *a+ ;es *#+ 5o

B.

1hat type of company is ha$ing the )9CO *a+.egional office of the company *#+ )ny other local player

C.

.)re you facing any pro#lem %ith current used product lineO *a+;es *#+5o *c+5ot yet

-".

)re you planning to ma0e any ne% purchaseO *a+ ;es *#+ 5o *c+ 5ot yet planned

--.

Ho% do you find the HCL productsO *a+ 4: *d+ 4utstanding *#+ ,ood *e+ 5ot tried yet *c+ Satisfactory

-7.

(o you %ant to 0no% more a#out HCL productsO *a+ ;es *#+ 5o

-<.

(o you reHuire demo for any productO *a+ ;es *#+ 5o

->.

(o you %ant to #uy any productO *Commercial proposal+ *a+;es *#+ 5o *c+ 5ot yet decided

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