Sunday, December 4, 2011

The 29th CSSI Endowment Lecture, IIT Madras

“Improving Productivity” by Mr K. Ananth Krishnan


The 29th IIT Madras CSSI Endowment Lecture, IIT Madras, was organised this year by the Department of Management Studies. This edition of the annual lecture series saw the presence of Mr K. AnanthKrishnan, CTO, TCS as the Chief guest, Prof. K. Ramamurthy, the Dean(Academic Courses) at IIT Madras, Mr V Thiagarajan, Vice-President – EFSI
Prof G Srinivasan, HoD, DoMS, welcomed the guests and gave an introduction of the department. With over 140 MBA students, 100 plus research students, 24 faculty members, DoMS encourages student initiated entrepreneurship. Talking about Productivity and Technology, he said that productivity, in simple, can be defined as input required to produce per unit of output; while mentioning technology, he said that it has brought speed, but he questioned whether would it be possible to increase productivity at the same pace. He also said that India is moving towards services, and hence, production in services should not be ignored.
Prof. Thiagrajan highlighted EFSI and its work. He said that following the steps of ILO (International Labour Organisation) which required organisations that specialized in industrial relations, labour policies, labour management etc., in separate countries, Madras Labour Union was founded in 1918. EFSI has its presence in 4 southern states of India, and during its Golden Jubilee in 1970, the Endowment Lecture series was commenced.
Prof. Ramamurthy then took over the stage and gave a brief introduction about Mr. K. Ananth Krishnan, who joined TCS in 1988 and is currently serving as the CTO, India. He is also the head of Corporate Technical Board and a consultant for various companies. The lecture that Mr.Ananth Krishnan delivered was titled “Improving Productivity
Mr.Ananth Krishnan commenced the lecture by defining productivity as the ratio of useful output per unit of input. He mentioned that productivity can have various definitions, and these definitions extend from individual to group, to firm, to industry and nations. He said that it is useful to correlate Quality to Quantity for any unit process. But in case of aggregate processes, economic factors should not be ignored. He also explained how important measurement and analysis were for success. Now, considering measurement, he said that there are two ways of carrying it out
1.       Standard metric : here we simply consider single factor like unit cost.
2.       Portfolio metric: which constitutes the aggregation of multiple factors like employee economics, customer economics etc. We eventually carry out factor analysis from this.
He said that since a number of factors are beyond any individual’s capabilities. the biggest problems that companies face is: how to judge R&D production? He also mentioned that investment in R&D sector form just 1% of the total GDP of India, which is not a very encouraging figure. Though, he said that, the economic cost of doing research(i.e publications per unit cost incurred) in India is among the lowest in the world.
Moving on to analysis, he explained by giving a very simple example: If we consider single factor analysis, we shall find that the output per unit input, or turnover decreases as we move up in the seniority level ladder. This does not give a very clear picture, and thus, we need to enter into the next level of detail and consider factors like value addition, experience etc.
After highlighting Measurement and Analysis, he moved on to the very stimulating topic of Customers. He said that since the customer is of the highest priority for any business, the need arises to classify them properly. There are 2 major categories in which customers can be broadly divided : Low maintenance customers and High maintenance customers( further categorized to direct and indirect). Any organisation needs to have a good proportion of both these types, as each is important for the organisation’s success.
The first type of industry that Mr Ananth Krishnan explained was manufacturing. He stated that any manufacturing company has broadly the following main functioning areas:
Supply Chain Management: includes inbound requests notifications, monitoring the production information and cash flows etc.
Dash Board: KPIs, plant efficiency, work-order backlogs etc.
Inventory: includes checking material stock levels, floor inventories, shelf life alerts.
Real Time manufacturing: Downtime notifications, threshold based alerts, monitoring KPIs on real time, production status on the go etc.
Changeover notifications: consists of threshold based alerts, predictive notifications to prepare material parts at the right time.
Warehouse: Shelf life notifications, tracking of high valued products etc.
Quality: Rejection alert notifications, production decision making, maintenance requests.
Maintenance: receiving maintenance alerts or tickets, access to equipments history, troubleshooting, engineering drawing, part details, parts ordering etc.
He stressed on the procedure applied to proceed with challenges, the first step being identifying the biggest challenge and coming up with a list of all the challenges. And then, carrying out the Drill Down procedure shall help dealing with such challenges.
He drew a similar analogy taking into consideration the Insurance Value chain, which again consists of 12 different areas like product development and pricing, marketing and sales, underwriting, risk management, information technology, legal etc. Here, an approach of Balanced Improvement and application of Predictive Analytics becomes important along with carrying out drill down. Similarly, he talked about the IT Industry and the importance of further automation in this sector too.
Mr Ananth Krishnan highlighted that there are 3 pillars on which the Productivity of our country is based:
1.       Having a framework to institutionalize different areas and prepare a balanced scorecard
2.       Having a systematic innovation process in productivity, which involves continuous improvement, transformations and descriptions.
3.       Creating a culture that encourages people to be more productive. He called it “Culture of Creative Dissatisfaction”.
He concluded the lecture by asking us to adapt to “Big-box perception” and develop organisational capabilities. He also said that using social networks in a enabling manner is as essential as searching for ideas.
The entire lecture was extremely insightful and motivating, and presented a very clear idea about the current state of productivity in India, and how it can be increased manifold. It was indeed a pleasure for the audience to listen to Mr Ananth Krishnan.

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