A study of operation strategies of selective Indian companies in lock down era - Research Paper

A study of operation strategies of selective Indian
companies in lock down era – Research Paper

Authored by Dr. Sachin Bhide, Founder and Strategy Designer at Eha Management Consultancy
and Shubhada Narsale, Worked as Summer Intern at Eha Management Consultancy.

Sr.No	Table of Contents	Sr.No	Table of Contents	Sr.No	Table of Contents
1	Abstract	2	Keywords	3	Introduction
4	Introduction to Operation Strategy	5	Scope of the research	6	Research Methodology
7	Literature review	8	Research gap	9	Case studies
10	Findings	11	Conclusion	12	Limitations of research
13	Annexure	14	References

First published on 22 June 2020 by Eha Management Consultancy

www.ehamanagementconsultancy.com

Dr. Sachin Bhide asserts the moral right to be identified as the author of this work

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ISBN 978-93-5407-628-2

Abstract

The researchers explored operational challenges and strategies of selective companies based in India. In the lockdown of April and May 2020 businesses other than essential businesses were shut down across the world. Continuing operations for businesses was very tough in the lockdown era. In lockdown era many companies provided work from home and many companies could not opt for work from home due to nature of their work like production, material handling and so on. The study mainly focused on product or service design, quality maintenance, demand for product, sourcing processes and operational difficulties.

Keywords

Operation strategy, Strategic planning, manufacturing sector, service sector.

Introduction

The main purpose of writing this research paper is to understand operations strategy of selective companies in lockdown era. In lockdown companies are trying to acquire market and focusing satisfaction of customers about product or service. The exact demand for any product cannot be defined at this moment to carry out further processes of manufacturing products. To know the demand companies should follow strategic framework to acquire long-term capabilities. In this pandemic producing of demand is a difficult task with understanding all aspect of current situation.

The outbreak of covid-19 pandemic and the following lockdown lead to operational challenges to companies of all sizes. The primary concern for many companies were getting funds for cash flow. The focus will be the immediate future, and one of the biggest areas’ companies will try to understand as part of that is what consumer spending and corporate investment will look like as business resumes. Various functions such as production, transportation, supply chain, logistics, e-commerce businesses were affected. Many companies have now started their operations by taking all the necessary precautions and with less employee strength. Manufacturing industries faced numerous challenges in producing goods while keeping check on cost, flexibility, speed, quality and customer demand. In lockdown, some essential products were high in demand and some products had less or no demand. Companies which carried lot of inventory, their inventory carrying cost increased. It is imperative dwell into the Operation Strategy concept to understand the overall scenario.

Introduction to Operation Strategy

Organizations producing product and delivering, depend on handful manufacturing processes to get product manufactured properly and delivered on time. This is act as an operation of the company. Operation strategy gives the direction to specified framework to carry out all operational functions.

Operations strategy is the pattern of decision making which outline the long-term capabilities of any type of operation and input to the overall strategy.

Consist procedure to formulate operations strategy:

a. Defining a primary task:

Primary task defines the purpose of the organization. What firm is doing in their business and determine the competitive arena. In lockdown to run the organization it is very necessary to define primary mission to accomplish targets. Amazon and Flipkart serve their customer by providing home delivery of needy products such as groceries with easiest and fast service in lockdown.

b. Assessing core competencies:

Core competency of the organization is what a firm does better than those of competitors. core competence of firm can be high quality, low cost, fastest delivery, special service. Dominos have come up with taking all precautions of hygiene of their employees and customers daily by making fastest delivery within 30 mins with best quality food in covid-19 pandemic.

c. Determining order winning and order qualifiers:

It determines the which factor is influences customer decision to buy product. Order qualifier is the feature of product or service that qualifies for purchase by customer. Order winner is a reason for consumer purchasing the product or service. In current situation it is important to take all precaution to be safe and healthy. When purchasing of vegetables from market by determine the price first (order qualifier) and quality of vegetable with hygiene (order win) within specified price limit.

d. Positioning the firm:

Defines the uniqueness of the firm that will deliver to the customer.

The researchers had identified specific scope for this paper as follows.

Scope of the research

The study was conducted to understand the operational strategies of selective Indian companies in lockdown era in the month of April and May 2020. The scope of this study includes secondary and primary data where researchers has interacted with few respondents from manufacturing and service sector industry whose location base in India. Functional scope of this research is researching product or service design, quality maintenance, demand for product, sourcing processes, operational difficulties of selected companies in lockdown era. Period scope of this study is financial year of 2020.

Objectives

To study operational challenges and strategies faced by Indian companies in covin-19 pandemic.
To identify the demand for product or service is same as pre-lockdown.
To know is maintain quality of product is challenging for organization in current pandemic

Research methodology

Type of research

This is a descriptive type of research. Research method followed is a case study method. Primary data was collected through questionnaire and telephonic interview. Secondary data collected through Research papers, news articles, books and other sources.

Data collection

There are two ways to collect data as follows

Primary data:

For this research, selective Indian companies in India were contacted. The responses were collected through Questionnaire and telephonic interview. The data was collected from five selective companies to get feedback.

Secondary data:

Secondary data collected through Research papers, news articles, book, case study, websites.

Sample size

Qualitative as well as quantitative data is collected for this research. Since this research is not following survey method therefore no sample size defined. Considering case study method multiple case studies are accepted in holistic research.

Type of questionnaire

Qualitative data is collected from the respondents based on structured questionnaire by interview. In this research respondents were known about the study and questions were structured open ended. The purpose to use open ended questions is that every organization has different strategies to deal with problems so researchers couldn’t bound to specific limit.

Geographic scope of research: Selective companies based in India

Literature review

Mr. Amit Sharma, Dr Ashish Dutt Sharma (2013) studied the information about optimization strategies of manufacturing companies to stay competitive and cost cut in past decades due to slow down in automation industry. Companies are trying to move more closer to the customer to increase footfall and flexibility to indeterminate demand and requests by improving product quality, delivery service, optimized cost. Optimization strategies designed on the basis of: Priorities of the customer. Globally local operation serves customer needs and demand. Adopt different models and diverse channels to have supply network flexibility. Reliable and easily transportable equipment used. For sustainability customers should have perceptibility of product life cycle. Challenging to reassemble manufacturing and supply network in short period of time to rebalance lifecycle. Companies finding solution about adapting new abilities to address the rebalancing of supply network and manufacturing from most of the respondents. The researcher’s analysis concluded that increase in industrial output considered to be substitution of capital labour in almost all states. Before globalization industries practiced rise in returns to scale and after diminishing returns to scale.

Pradip P. Patil, B.E. Narkhede, Milind M. Akarte (2016) purpose is to examine competitiveness of firm by implementing manufacturing strategies. Performance benchmarking will guide various firms to take current decisions based on it. The integrated outline helps to quantify and compare the present manufacturing performance result to facilitate the misaligned manufacturing decisions need to be focused for higher competitiveness. Growing sales and satisfaction of customer measuring business performance. Result analysed in two groups: first group evaluate the manufacturing strategy implementation within the firms who participated in research. Second measures the manufacturing decisions and its relationship with business performance and manufacturing output among all groups. In this research to demonstrate manufacturing strategy implementation in plants by classifying them in four groups: Less implementor, high implementor, strategically oriented, strategically focused via cluster analysis method. Concluded that higher level of strategy implementation possesses higher manufacturing output.v

G.S. Dangayach, S.G. Deshmukh (2002) conducted a survey of Automobile, process, machinery and electronics industries and discussing about manufacturing strategy issues: Order winners, competitive priorities and activities of improvement. Amongst 1950s and 1990s industrial development of India was categorized by regulations. In 1980s Inflow of foreign materials includes entry to the foreign market. In 1990 Indian economy restructured and in 1991 manufacturing industries facing difficulties of competitive situation. Manufacturing strategies considered to survive in market are cost, product quality, innovation, delivery, flexibility, product range, design and distribution. This research concluded that most of the companies focuses on improving process quality, product and delivery of product on time. Limitations to this survey is not included IT and service sectors for study.

Revathi R, Madhushree, P.S. Aithal (2018) studied case about L&T InfoTech is one of the leading IT company in India. The headquarter is in Mumbai, Maharashtra. L&T offers services in various security and insurance sectors. L&T provides business solutions with recent innovative concepts and technologies to their customers across the world. Highlighted some operation strategies to deal with product design, location, process layout, job design, quality management, maintenance, schedule and procurement. Company operates in different countries to help their clients uses cloud computing solution, IoT, application management, SAP etc to improve the profitability, reputation and productivity of company. Business strategy contain optimum resource allocation, finance generation. This case study represents CSR practice of the organization and business strategies analysed through SWOT technique.

Nurul Aida, Abdul Malek, Khuram Shahzad, JosuTakala, Stephan Bojnec, Drago Papler, Yang Liu (2015) studied that manufacturing businesses adapting new technological developments of products and processes. Survival in competition is an important factor mainly focusing on core competencies and manufacturing approach. Emphases on competitive priorities and operation strategies to survive in market by outperforming other. Business unit focuses on critical attributes quality, time, flexibility, cost to measure operational strategies. In result analysed present and future sustainable resource allocation of Hydro power company case to achieve competitiveness. This research only contributes the comparison of business unit under one case company.

Roma Priya (2020) studied the outbreak of covid-19 pandemic followed social distancing, lockdown, all the businesses are incurring losses no matter how much they are well established. It is very difficult in current situation to generate revenue. Impacted mostly on small and medium scale enterprises as they smaller margin of finance to manage these kinds of slumps. As businesses are not making money it affects GDP rate of Indian economy. To survive in this era some of the measures should be taken as tracing of fixed and variable expenses in contradiction of revenue status to get idea about where is businesses standing. Track of feasibility of business model according to market cost and revenue. Plan policies for next few months to survive. Be persevering while securing investments. To be connected with customers to enhance business in lockdown.

Prof. R. Jayaraman (2020), Manufacturing industry has been hit due to corona effect in lockdown. Low production. Less manpower on the shop floor reduces the operation scale. Effects on quality, production volume and cost. Turnover goes slow down to trickle. Logistics supply stopped. No transportation available to supply goods. Operations risks increases. Banking operation slows down, shorten working hours leads to delay in money transactions enriching monetary risks. To have more sales and profit after lockdown three strategies mentioned: Cost reduction, Higher revenue, New product.

Suketu Shah (1^st may 2020), ICAEW Insights speaks with Suketu shah about meeting the challenges of sales, cashflow, communication during lockdown. Shah said that working from home is a bit challenging for employees to keep record on day to day activities and execution of plans. But they have structured a day in two halves. First focused on conference calls and discussions. Second half is reserved to execute plans. Supply chain and sales teams are in touch with their counterparts to confirm once lockdown is done, they are ready for the business. Major problem they are facing currently is network issue due lot of traffic on internet. Since April no business activity has done therefore difficult to manage cashflow in lockdown. He does not perceive any major risk until June.

Semila Fernandes (2013) The scope of this study was to discuss the concept on glocal communication strategy accepted by various Indian and global companies while entering in foreign market. Indian companies such as Dabur, Tata Group started their operational activities in foreign market by grasping opportunities to the required market skills. Dabur started with packaging household groceries and later expanding market in foreign country by selling hair oil. Tata group has many plants like Tata motors, Land rover, Tata steel, Tata chemicals, Taj hotel, Tata power located in foreign countries. Foreign companies are investing capital in India after seeking of large market place to do business. Companies includes Coco-Cola, McDonald’s, Wal-Mart, Kellogg, Music Tv Network (MTV), Toyota, LG electronics who started business in India.

Mohamad Amin Kaviani, Mehdi Abbasi, MohamadMehdi Yusefi, MohsenZareinejad (2014), Importance-performance analysis technique used to decide long term strategy for business unit using fuzzy AHP of cement industry in Iran. Strategic planning required for development of firms. Methods used to have idea about behaviour and performance are performance metric, Importance- performance analysis. Hybrid method is used to determine various operation strategies to improve performance of cement industry. Performance measured based on following criteria: cost, flexibility, quality, speed, dependability.

Research gap

Based on the literature reviewed, the researchers identified the gap to conduct this study with reference to the all the cases mentioned above is the study of operation strategy in lockdown era.

Case studies

In this research data is qualitative and analysed according to referee’s response to the questionnaire.

Based on primary data

The researchers interviewed Ajai Gupta who is a Dealer of Indian oil Corporation Ltd and running petrol pump. Working in a service sector said, “Service design has changed as per the government guideline considering the areas which come under red, orange and green zone. He has modified sourcing processes to maintain hygiene according to the employee kinds and as per customer fortune of the respected area. He finds it challenging to maintain quality by maintaining social distancing and hygiene of employees and customer. Demand is very low as petrol pumps are not working because of lockdown. Company is facing difficulties to drive day to day operations. Employees are working in a different shift to maintain quality circle of work in this pandemic. Public transportation is not available in lockdown so they face difficulty to manage proper schedule like pre lockdown. Time management is a major challenge to do routine activities.”

HR manager from aerospace manufacturing industry interviewed by researchers who preferred to be anonymous said, “Aerospace manufacturing have two more verticals: infrastructure and consumer. All products for aerospace industry are manufactured for major customers. There is no specific change with service design because all contracts and manufacturing or a start-up contract has freeze on a contract point so not able to change service design as everything is depend on design. Not modified any sourcing processes. Quality department is working with limited employee strength. It’s not full level of operations and it will be challenging to meet targets. It is difficult to maintain quality in the lockdown period. The company works with a long-term contract with its clients and hence there is not much immediate impact as such. Transporting the products outside India was a challenge due to closure of airspace. Some of the important operational difficulties faced were not getting human resources and transportation. Aerospace industry requires only a quality work product and meeting those quality standards was challenging in the lockdown period.”

The researchers interviewed CEO and Co-Founder of the company which makes the software for insurance companies said, “We were working with customers in Indonesia, Vietnam, Singapore and India. No product or service design was changed. Earlier people used to travel onsite due to lockdown the work happened mainly on Zoom conference calls. We have not modified sourcing processes. As a company making software for insurance industry did not find challenging to maintain quality. Productivity and demand have increased in lockdown. In current situation, insurance companies have more demand therefore to collaborate with them our service demand goes up. The only difficulty is we are not able to travel to customer locations.”

In views from one graduate engineer trainee who is recently joined telecom industry wished to be anonymous said that, “No change in service design in current pandemic. we did not modify any service or any sourcing processes. We majorly deal with the fusion middleware domain and widely come under the cyber security domain. Working from home hasn’t affected the work in any way or the resources required. Pertaining to the security domain demand has not changed. The only difficulty that some of us face is network outage due to the load of many network users in this lockdown period.”

The researchers interviewed one Software Developer &Analyst working in a service industry wished to be anonymous said that, “No change in service design in current pandemic. Our company did not modify any of the services or any sourcing processes. Our team is working in health-care domain where we need hardware machine to deploy code. Currently working from home hasn’t affected work in some area. It might affect in future because of machine dependency. The demand is very high for service in this Covid-19. The most difficult thing is we are not able to test our code properly and sometime some of us facing network issue.”

In views of engineer trainee working in a JCB India Ltd manufacturing industry said that, “No change in product or service design in current pandemic. Yes, we modify sourcing process by working from home for software development. It is difficult to maintain quality of data sharing and interaction with teams. Product demand is dropped as products are not selling in lockdown. There is no team coordination to share information due to social distancing. Very less employees working in office so production is not reaching up to the level of pre covid-19.”

Based on secondary data

Now let’s look at some of the generic operation strategies of some companies as follows:

Maruti Suzuki case study

Maruti Suzuki has marked an action plan to resume operations post covid-19 pandemic including detailed Standard Operating Procedure (SOP) on maintaining hygiene, social distance and employee safety. Managing Director of Maruti Suzuki Kenichi Ayuzawa said, “Under this situation as per government guidelines and national policy we will resume operations in graded manner by taking all necessary precautions to stay safe. SOP includes usage of canteen, behaviour at workplace and other common facilities, guidelines in case of illness and health emergency. Wellness Mitra is a mobile app for Maruti Suzuki family will help them to stay connected and updated about progresses associated to covid-19. Maruti Suzuki started operations with 50% employee strength by keeping all preliminary precautions and social distancing. Employees divided in shifts and alternate day rosters with staggered shift start and end timings. No overlaps of shifts to maintain safety.”

TCS case study

Tata consultancy services is one of the leading IT services providing company. CEO Rajesh Gopinathan of TCS said, “We launched a massive action plan to ensure continuity of business using secure borderless work places infrastructure. TCS associates working from home facility both onshore and offshore for employee safety and continuity of business. This enables staff to service consumers securely.

TATA MOTORS case study

Tata motors is an India’s leading automobile brand restarted their manufacturing operations of some plants. Employees safety and wellbeing is first priority of tata group. Considering all precautions at all plants restarted operations with limited and essential employees. Operations are scaled in graded manner by means of enabling whole ecosystem of suppliers, customers, dealers, vendors to speed up activities. In lockdown provides new digital learning by giving servicing and supporting to customers. Tata motors extended all probable technical support such as timeliness of vehicle warranty, tata Suraksha, free services AMC to keep run vehicles during lockdown for commercial vehicles. Tata motors have recently launched an end-to-end online platform ‘click-to-drive’ to select and buy vehicles. All the activities reduced where manpower contact required such as documents and policies (Insurance) are accepted through mails, servicing and repairing of vehicles first sanitised then handover to employees.

Samsung case study

Samsung is an electronic product producing and service company. Samsung come with the varied strategies to rebalance the business with the safety measures. As per the government guidelines company started their operations through online portal in Green and Orange Zone 4th May 2020 onwards by keeping hygiene of all the employees. Samsung provides work from home to their employees in lockdown. Company announces some additional offers and cashback to their customers.

LG case study

LG electronics India Pvt ltd provides all kinds of home appliances and electronic products. In May 2020 LG began its operations by pre booking offer process for their products with some terms and conditions. For pre booking LG offers some gift vouchers for specified price limit along with priority delivery and installation. Providing covid-19 insurance on purchase of LG home appliances. In lockdown if anybody’s warranties and AMC’s expiring between 15th March 2020 and 31st May 2020 were extended till 14th June 2020.

Ambrosia Resort case study

During covid-19 pandemic the challenging time Ambrosia Resort & Spa remains focused while serving hot food safely and hygienically by following all the prescribed precaution protocols. In lockdown people cannot able to visit restaurants therefore Ambrosia resort started home deliveries of food. People can order from Zomato and Swiggy as well ensuring safe food delivery.

ICICI Bank case study

In this tough time of covid-19 pandemic, ICICI stands for their customers in this crisis. ICICI extend the instalments or payments for credit cards, loan, working capital facilities with reference to RBI’s covid-19 relief package for next three months from 1 June 2020 to 31 August 2020. Customer had to apply every month online to have benefit of this relief package. ICICI provides facility for shopping essentials and medicines with more convenience. Helps to find a store selling essentials from their store locator facility. This is how ICICI operates their operations in lockdown with better solutions to help customers.

CENTRAL case study

CENTRAL mall in mid of May 2020came with offers of pre-booking shopping at special price. In this offer CENTRAL provides certain vouchers on pre-book for their products and products will be available whenever stores reopen across the India. In this tough time to run business CENTRAL giving exciting offers for men, women’s & kids apparel, footwear, and handbags. CENTRAL working strategically on this offers as this offer valid for customers first 30 days of store opening across India for specified price.

Lenskart case study

In lockdown to sustain in competitive market Lenskart operated by shipping all their products across India – contact lenses, sunglasses, eyeglasses with pre-lockdown distribution times. Lenskart provides online booking for their products in lockdown era. In current pandemic it is very necessary to keep ourselves safe and healthy from infection keeping this as a challenge Lenskart delivering fully sanitised robotically manufactured eyewear to customers door step in current lockdown. All products, packaging and material are handled manually with less human intervention. Lenskart subsidised product prices by 30% during this challenging time.

Findings

The researchers identified the strategies adopted by selective Indian companies in lockdown era of covid-19 pandemic. By comparing with the collected data from respondents found that Manufacturing and service industries did not change their product or service designs frequently. In lockdown era manufacturing firms found challenging to maintain quality of the product due to less employee strength and unavailability of source. Service industry people can work from home so not found problem of quality issue. Low customer demand for product or service for manufacturing in lockdown. Most of the companies facing issues of transportations, network issue, import and export of product, logistics. Organizations have developed strategies to keep run their day to day activities. Companies required to develop strategic plan to survive in current lockdown.

Conclusion

This research identified that Manufacturing sector running very hard in current pandemic to endure in the market due to less employee strength at workplace and no demand for product. In lockdown no availability of raw material and services to produce finished goods. This study found that some companies are excess with inventory produced pre-lockdown but no consumer demand becomes insolvent business. Strategic planning and implementation required to keep drive the organization. Those companies who have understood challenges and adopted operational strategies well producing higher output in lockdown era as well. Performance is measured through competitive priorities. This research gives analysis of operation difficulties, product demand, challenges for company to define strategies, maintenance of quality, source process.

Limitations of research

This study has a geographical constrained that is only restricted to selected companies whose location base is India
This study does not include foreign companies located outside India.
This study does not cover all the companies which are located in India.
This study only covers operational strategies.