As mobile services in Indian urban markets are reaching saturation, rural markets are becoming an important frontier for industry growth. However, due to low ARPU and the higher cost of providing services in rural areas, operators face the challenging task of serving these areas profitably. This report discusses the opportunities and challenges of rural markets, and effective strategies to serve these markets successfully.

Table of Contents

Executive summary

In a nutshell
Key messages
Low teledensity and strong socio-economic development
The addressable market is not huge in the short to medium term
There are structural challenges in delivering communications services
Profitability of the addressable market is key
A comprehensive rural strategy framework is required
Operators are taking various steps to address the rural market
Ovum view
Focus on market share, total revenues and profitability
Explore value-added services beyond agriculture
Explore opportunities from non-telecoms players and the government
Leverage the deployed infrastructure for non-telecoms usage
Rural India: opportunities and challenges
Huge population base and low levels of teledensity
Conducive socio-economic growth drivers
High aspirational and utility value of a mobile phone
Attention from non-market and non-telecoms players
Poor state of public infrastructure
Low literacy and media penetration
Ineffective public policies and regulatory support
A confusing maze of local governing bodies
Balancing first mover advantage and financial risks
Indian rural market segmentation
Inflated short- to medium-term expectations
Rural market segmentation
Socio-economic segmentation
Age-based segmentation
Geography-based segmentation
Occupation-based segmentation
Rural strategies for success
Framework for a successful rural market strategy
Products and services innovation
Availability
Affordability
Usability
Motivation and capabilities
Operational excellence
Energy consumption
Active infrastructure capex and opex
Passive infrastructure capex and opex
Sales, distribution, billing and customer-care expenses
Engage government bodies
Enable government initiatives and co-acquire customers
Effect conducive policy changes
Leverage government resources and infrastructure
Facilitate working with local government bodies
Engage non-profit organisations
Enable social initiatives and co-acquire customers
Capitalise on local knowledge and goodwill
Leverage micro-financing efforts to drive adoption
Partner with non-telecoms companies
Generate new revenue opportunities
Enhance understanding of rural needs
Leverage existing sales and distribution networks
Develop unconventional business models
Share capex and opex
Employ local entrepreneurs
Capitalise on local knowledge and goodwill
Reduce sales, distribution, billing and customer-care costs
Enhance customer experience
Indian rural strategies: case studies
Bharti Airtel
Coverage prioritisation
Joint venture with Indian Farmers Fertiliser Cooperative
Airtel Service Centres
Communicating with rural customers
Micro-financing initiative
Tata Teleservices
Sahayak service
Multi-faceted distribution strategy
Strategic partnerships
Reliance Communications
BharatNet
Grameen VAS
Machine-to-machine applications
Partnership with Krishak Bharti
Ericsson
Expander solution
Dynamic discount solution
Nokia Siemens Networks
Smart Site solution
Broadband Village India
Village Connection
Alcatel-Lucent
VillageNet
‘Green’ initiatives
Nokia Life Tools
Qualcomm’s Wireless Reach initiative

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Related Reports :

Rural mobile strategies: five key success factors
http://www.bharatbook.com/detail.asp?id=126246&rt=Rural-mobile-strategies-five-key-success-factors.html

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“Internet Weekly” reports: the beginning of 2006 by not a few days, Mr. Li will fly to the United States, to announce his men TTE (

TCL

- Thomson Electronics Co., Ltd.) has seen the effectiveness of the integration of the news. Li Dongsheng optimistically expected to usher in 2006, TTE will be a turning point in the performance. In 2005, Li Dongsheng year are under tremendous pressure, Li Dongsheng now finally see the opportunity to turn around.

2005 12 30 , TCL Group officially launched the annual Pre-losing announcement. If the annual report in April 2006 when the official out of a loss, then it should be a turning point for Li Dongsheng? From 1993 he served as general manager of TCL 13-year history after the first full year loss after only in 2002 In the year there was a slight decrease in profits.

Li Dongsheng has told its early years, even if the annual loss in 2005, and please do not panic, the world’s many large enterprises have had the experience of loss. But he still hoped that TCL can create a miracle in 2005.

Struggling TCL Group began selling its own part of the family property. December 10, TCL Group, a subsidiary of TCL announced the International Electrical (Huizhou) Co., Ltd and TCL Building Technology (Huizhou) Co., Ltd. were valued 1.45 billion yuan and 2.3 billion from the sale of Legrand to the French company. Business in the sale of electrical and building business before, TCL Group has suspended the 2.5G phone and cooling chips and other strategic acquisitions funding.

Most of these times will be adjusted Li Dongsheng TCL Group’s financial links with the link. However, Li Dongsheng TCL’s cash flow has always insisted there is no issue. He believes this is TCL sort of a proactive self-industrial layout adjustment, he hoped that the strategic adjustment of the sale and further optimization of resources, more focus on their core business.

Present, so that the reasons troubled Li Dongsheng TCL had come from the

Overseas markets

The two large acquisitions: acquisition of Thomson

TV

Alcatel’s business and acquisition

Mobile

Business. In 2004, these two acquisitions to Li Dongsheng fame. However, in 2005, Mr. Li began his experience of the past two years, scenery debt.

With the TCL Group and the company’s communications and multimedia company that the three joint venture companies as both a drag and continuous losses, the outside world on Li Dongsheng’s attitude quickly changed from the pursuit of the question. And Li Dongsheng themselves frankly stated that a lot of pressure, “The most scary thing is to see

Finance

Reports. ”

Thomson M & A before the TV business, Li Dongsheng, I may bring to this merger has a clear understanding of significant risks. “Interests with his life in order, not at the result of bad fortune to avoid becoming.” Phrase from his past experience at the time, Li Dongsheng, a heart for the acquisition of

TNC

Assets, is not the only excitement, a little worried.

In the first half of 2005, Mr. Li has reflect on their own time over the past year since the strategic thinking, he has to find many subordinates, and consultants

Consulting

Explore the views of the current state of TCL. In the end, his conclusion drawn is that while TCL’s situation is grim, but the international strategy and direction is really right. As soon as possible, if not globalization

Operation

, Just stick in the regional market, TCL’s color TV business difficult to develop.

“Only through such a test, TCL can really get more in the future survival and development space.” TCL Group, in an internal management meeting, Li Dongsheng cheer for the subordinates, “the current crisis, is dangerous, but also opportunities. As long as we firmly established the direction of walking, TCL will certainly develop into a truly international

Competition

Multinational force. ”

Li Dongsheng also borrowed Samsung,

BenQ

Examples of the two companies to encourage TCL staff morale, the two world-class companies have faced serious losses, but also are at a loss after the final grow into an excellent multinational companies.

Joint venture is by no means useless. After the establishment of the TTE, Li Dongsheng finally got his long-awaited

Sell

Scale, TTE market in Europe and the United States every year for the TCL bring about 20 billion in sales. Li Dongsheng has become a truly global TV boss, TCL in the global TV industry’s influence greatly improved.

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Back then, making travel plans involves many processes. You call up your travel agent and she supplies you with a list of possible hotels, room availability, rates and special offers. You pick the date for the trip and confirm your hotel preference. She then makes the booking through the computer system and off you go. Behind the scenes, she sends a confirmation fax to the hotel with your details. At the receiving end, the hotel will enter your details into their computer system. When you arrive at your destination and you check-in at the front desk, the hotel staff verifies your reservations, assigns you the room and hands you the keys.

Fast forward to today. Technology has caught up with the industry. As the travel agent issues a confirmation to your hotel about your reservation, the global travel distribution system (Amadeus, Galileo, Sabre or Worldspan) will connect to the hotel’s back office and make the appropriate entry, minimizing error and ensuring accuracy of customer’s details.

Hotels have also adopted a more sophisticated system for tracking customer information. Hotels now use data warehouses and data mining tools to better understand their customers’ individual preferences.

The Internet is used to communicate to their business partners — travel agencies, airlines, government tourism boards, cruise liners, car rentals and global distribution channels — and provide updates on room availability, rates and special offers.

Competition for a growing class of travel- and tech-savvy customers has forced hotels to adopt the latest technologies to ensure that partners are updated on the current hotel developments. The Internet has spawned a new segment of customers who use the Web to scout for hotel rooms and seek weekend bargains.

Key component

Chris Hartmann of global hospitality consulting firm, HVS International, said the technology used in the hotel industry has evolved. “To look at the state of technology in hotels and resorts today, it’s important to understand that ‘technology’ today is not simply a network infrastructure, computers and the IT department. Technology is a key component of every aspect of hotel ownership. Management of, and a comfort with, today and tomorrow’s technology is necessary in every department,” said Hartmann, who leads technology strategies for HVS.

Technology investments require well-defined objectives aligned with overall business strategy. Whether it is a hotel redevelopment, acquiring or repositioning hotel assets, scores of decisions require technology insight and operational understanding. Failure to take into account the importance of technology at the onset will result in substantial costs associated with retro-fitting, last-minute implementations, and ongoing operational challenges resulting from poorly selected systems.

CIOs believe that the business of running an IT organization has changed significantly from what it was ten or 15 years ago. Shane Izaks, general manager, information technology at the Hong Kong and Shanghai Hotels Limited (best known as Peninsula Hotels) said to be an effective CIO today, you need to understand the business you are in to get business units to buy into your ideas.

High expectations

“You not only need to understand hardware and software from a systems point of view but from also from a business point of view. This is how IT is able to drive the business. Technology and processes have matured in complexity to the point that understanding the business is paramount to ensuring the successful integration of IT into the business. The CEO, CFO and COO have high expectations of the role that technology plays in the business of running a hotel,” Izaks said.

Today’s business unit manager, CEO, and his management team – CFO and COO – understand the importance of IT and expect the CIO to understand the business so that there is a tighter integration of technology into the business. The technologies today are much more complex and the resulting integration makes for a more successful alignment of technology to business.

Izaks says the question is not whether technology is sophisticated enough to match the business process “The real challenge lies in the IT team’s ability to understand the interdependence of IT and business, and to build processes that would allow for the symbiotic co-existing of two different but interdependent systems,” he adds.

Years ago, hotels had isolated islands of systems that didn’t talk to each other. No one had a single view of the business; financial systems, CRM and bookings were on different systems that didn’t talk to each other, and data was often rekeyed in to spreadsheets to make sense of it. This was the only way for hotel chains with properties located in many parts of the world to have some picture of what the overall business was like.

At that time, no-one was able to know in real-time precisely what was happening in properties within the hotel chain, how the business performed during particular periods, or was able to view and share customers’ profile and service preferences.

Today, technology advances give us the ability to connect the different islands of information and enable us to understand what works, what doesn’t, who customers are and what their buying patterns are. The Internet has become an accelerator for the adoption of sophisticated technology that will enable the delivery of greater customer service and higher productivity.

The Internet and VPN have allowed the connection of different systems, bringing the data back into a central repository and be able to understand what it all means, in real-time.

Lifecycles and priorities

“Those hoteliers who view technology as a cost center and afterthought to the successful operation of any property risk becoming out of touch with their customers. More dangerous, however, is that those who don’t recognize and exploit today and tomorrow’s technologies for their competitive advantage will quickly be overtaken by those who do,” added Hartmann.

But just as Hartmann is right in his assessment of how business managers look at technology, CIOs like Izaks must continue to grapple with the issue of technology lifecycles and priorities. In good times and bad, budgets remain a constant in the life of a CIO.

Identifying the business priorities, evaluating and recommending one standard for the organization, and sticking to what’s been given budget approval are part of the challenge. Advances in technology offer numerous temptations to throw out what’s been approved. But most hoteliers will agree that changing the strategy mid-stream is not easily undertaken.

Technology is changing very rapidly. Things get replaced faster with each refresh and the rate of will even be faster in the future. Just as technology is an enabler of new business, it is also becoming an inhibitor. Izaks laments that the inhibitor then becomes getting the right technology into the business, even as that technology cycles through faster than our ability to integrate it in.

“This presents a challenge for the CIO: being able to identify the technology we need, as opposed to what we’d like to have, and allocating budget for it. We have a five-year budget cycle where we look at the technology we purchased last year and track its depreciation on our books. At the same time, we look at our business needs today and start preparing for technologies we might need three or four years into the future. To keep this picture top-of-mind as we work our annual budgets makes for challenging budget planning cycles.”

The hotel industry, like others in the hospitality business, is in a constant state of battle readiness. The two gulf wars, SARS, avian flu, and the Asian financial crisis have forever changed the way the industry looks at its future.

The industry is accelerating the adoption of technology to reap the benefits it has to offer in the shortest possible time. The challenge for managers like Izaks is to stay abreast of the changes, keep an open mind to the future, and be prepared to lead every day, 7×24.

Convergence in a hotel suite

Thanks to the mobile phone, guests today avoid using the hotel’s phone system to place international calls, causing a fall in hotel communication revenues. Because of this hoteliers have come to regard their voice communication infrastructure as a cost center rather than a profit center. In addition, with more business travelers demanding for Internet connection in the room, hotels have invested in data networking. But for how long will hotels keep spending on two different networks?

Shane Izaks believes that convergence is inevitable. “The Internet presents opportunities to introduce new ways to enhance customer experience and thus differentiate ourselves from the rest of the industry.”

Communication technologies allow a certain yet needed differentiation, by offering more and more personalized services to this new wave of guests coming from China, Korea or Russia. Therefore, hoteliers are looking at building up their competitiveness by improving guest services, increase staff efficiency and maximize their return on investment.

Marc-Alexis Remond, director of marketing and business development at Alcatel, points to three beneficiaries of a converging network.

“Hotel guests want personalized services, fast answers, first call resolution and access to advanced communications and entertainment applications. Hotel staff and executives need mobility and collaborative solutions that keep them connected and available, with access to information, in real time and easy interactions with guests and colleagues.

“Everyone wants a highly reliable data and telephony solution that provides consistent user services across the enterprise while benefiting from the maximum operational cost savings for the minimum investment.”

The trick is to identify the right technologies and applications and find vendor-suppliers with a strategy for deploying enterprise IP telephony solutions over any data network (LAN switches, routers, etc), whether provided by themselves or a third party. Staying with standards-based solutions will mitigate the risks of vendor lock-in.

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1. INTRODUCTION

DEFINATION AND MEANING

Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory are held in order to manage and hide from the customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials.

The reasons for keeping stock

All these stock reasons can apply to any owner or product stage.

Buffer stock is held in individual workstations against the possibility that the upstream workstation may be a little delayed in providing the next item for processing. Whilst some processes carry very large buffer stocks, Toyota moved to one (or a few items) and has now moved to eliminate this stock type.

Safety stock is held against process or machine failure in the hope/belief that the failure can be repaired before the stock runs out. This type of stock can be eliminated by programmes like Total Productive Maintenance

Overproduction is held because the forecast and the actual sales did not match. Making to order and JIT eliminates this stock type.

Lot delay stock is held because a part of the process is designed to work on a batch basis whilst only processing items individually. Therefore each item of the lot must wait for the whole lot to be processed before moving to the next workstation. This can be eliminated by single piece working or a lot size of one.

Demand fluctuation stock is held where production capacity is unable to flex with demand. Therefore a stock is built in times of lower utilisation to be supplied to customers when demand exceeds production capacity. This can be eliminated by increasing the flexibility and capacity of a production line or reduced by moving to item level load balancing.
Line balance stock is held because different sub-processes in a line work at different rates. Therefore stock will accumulate after a fast sub-process or before a large lot size sub-process. Line balancing will eliminate this stock type.

Changeover stock is held after a sub-process that has a long setup or change-over time. This stock is then used while that change-over is happening. This stock can be eliminated by tools like SMED.

Where these stocks contain the same or similar items it is often the work practice to hold all these stocks mixed together before or after the sub-process to which they relate. This ‘reduces’ costs. Because they are mixed-up together there is no visual reminder to operators of the adjacent sub-processes or line management of the stock which is due to a particular cause and should be a particular individual’s responsibility with inevitable consequences. Some plants have centralized stock holding across sub-processes which makes the situation even more acute.

The basis of Inventory accounting

Inventory needs to be accounted where it is held across accounting period boundaries since generally expenses should be matched against the results of that expense within the same period. When processes were simple and short then inventories were small but with more complex processes then inventories became larger and significant valued items on the balance sheet. This need to value unsold and incomplete goods has driven many new behaviours into management practise. Perhaps most significant of these are the complexities of fixed cost recovery, transfer pricing, and the separation of direct from indirect costs. This, supposedly, precluded “anticipating income” or “declaring dividends out of capital”. It is one of the intangible benefits of Lean and the TPS that process times shorten and stock levels decline to the point where the importance of this activity is hugely reduced and therefore effort, especially managerial, to achieve it can be minimised.

LIFO V/S FIFO

When a dealer sells goods from inventory, the value of the inventory reduces by the cost of goods sold(CoG sold). This is simple where the CoG has not varied across those held in stock but where it has then an agreed method must be derived. For commodity items that one cannot track individually, accountants must choose a method that fits the nature of the sale. Two popular methods exist: FIFO and LIFO accounting (first in – first out, last in – first out). FIFO regards the first unit that arrived in inventory the first one sold. LIFO considers the last unit arriving in inventory as the first one sold. Which method an accountant selects can have a significant effect on net income and book value and, in turn, on taxation. Using LIFO accounting for inventory, a company generally reports lower net income and lower book value due to the effects of inflation. This generally results in lower taxation. Due to LIFO’s potential to skew inventory value, UK GAAP and IAS have effectively banned LIFO inventory accounting.

SUPPLY CHAIN MANAGEMENT

A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.

Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and well-practiced relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The relationships are the strongest between players who directly pass the baton (stick), but the entire team needs to make a coordinated effort to win the race.

Below is an example of a very simple supply chain for a single product, where raw material is procured from vendors, transformed into finished goods in a single step, and then transported to distribution centers, and ultimately, customers. Realistic supply chains have multiple end products with shared components, facilities and capacities. The flow of materials is not always along an arborescent network, various modes of transportation may be considered, and the bill of materials for the end items may be both deep and large.

To simplify the concept, supply chain management can be defined as a loop: it starts with the customer and ends with the customer. All materials, finished products, information, and even all transactions flow through the loop. However, supply chain management can be a very difficult task because in the reality, the supply chain is a complex and dynamic network of facilities and organizations with different, conflicting objectives.

Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.

Unlike commercial manufacturing supplies, services such as clinical supplies planning are very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success. This results in overproduction of drug products to take care of last minute change in demand. R&D manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials. An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. Marketing’s objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization—there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.

Supply Chain Management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.

According to the Council of Supply Chain Management Professionals (CSCMP),

A professional association that developed a definition in 2004, Supply Chain Management “encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities”. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.

According to Cohen & Lee (1988)

Supply Chain Management is “The network of organizations that are having linkages, both upstream and downstream, in different processes and activities that produces and delivers the value in form of products and services in the hands of ultimate consumer.” Thus a shirt manufacturer is a part of supply chain that extends up stream through the weaves of fabrics to the spinners and the manufacturers of fibers, and down stream through distributions and retailers to the final consumer. Though each of these organizations are dependent on each other yet traditionally do not closely cooperate with each other. An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost.

According to Ganeshan & Harrison (2001)

Supply Chain Management is a “systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer.”

Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.

Some experts distinguish supply chain management and logistics management, while others consider the terms to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side by your supplier’s suppliers and on the customer side by your customer’s customers.

Supply chain management is also a category of software products.

2. SIEMENS

SIEMENS is one of the world’s largest companies and Europe’s largest engineering firm. Siemens has six major business divisions: Communication and Information; Automation and Control; Power; Transportation; Medical; and Lighting. Siemens’ international headquarters are located in Berlin and Munich, Germany. Siemens AG is listed on the Frankfurt Stock Exchange, and has been listed on the New York Stock Exchange since March 12, 2001. Worldwide, Siemens and its subsidiaries employ 480,000 people in 190 countries and reported global sales of €87.325 billion in fiscal year 2006

HISTORY

Siemens was founded by Werner von Siemens on October 1, 1847, based on the telegraph he had invented that used a needle to point to the sequence of letters, instead of using Morse code. The company – then called Telegraphen-Bauanstalt von Siemens & Halske – opened its first workshop on October 12.

In 1848, the company built the first long-distance telegraph line in Europe; 500 km from Berlin to Frankfurt am Main. In 1850 the founder’s younger brother, Sir William Siemens (born Carl Wilhelm Siemens), started to represent the company in London. In the 1850s, the company was involved in building long distance telegraph networks in Russia. In 1855, a company branch headed by another brother, Carl von Siemens, opened in St Petersburg. In 1867, Siemens completed the monumental Indo-European (Calcutta to London) telegraph line.

In 1881, a Siemens AC Alternator driven by a watermill was used to power the world’s first electric street lighting in the town of Godalming, United Kingdom. The company continued to grow and diversified into electric trains and light bulbs. In 1890, the founder retired and left the company to his brother Carl and sons Arnold and Wilhelm. Siemens & Halske (S&H) was incorporated in 1897.

In 1919, S&H and two other companies jointly formed the Osram lightbulb company. A Japanese subsidiary was established in 1923.

During the 1920s and 1930s, S&H started to manufacture radios, television sets, and electron microscopes.

Before World War II Siemens was involved in the secret rearmament of Germany. During the Second World War, like most big companies in Germany at the time, Siemens supported the Hitler regime, contributed to the war effort and participated in the “Nazification” of the economy. Siemens had many factories in and around famous extermination camps such as Auschwitz and used slave labor from concentration camps to build electric switches for military uses. In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the extermination camp, supplying the electricity to the camp.

In the 1950s and from their new base in Bavaria, S&H started to manufacture computers, semiconductor devices, laundry machines, and pacemakers. Siemens AG was incorporated in 1966. The company’s first digital telephone exchange was produced in 1980. In 1988 Siemens and GEC acquired the UK defense and technology company Plessey. Plessey’s holdings were split, and Siemens took over the avionics, radar and traffic control businesses — as Siemens Plessey.

In 1991, Siemens acquired Nixdorf Computer AG and renamed it Siemens Nixdorf Informationssysteme AG. In 1997 Siemens introduced the first GSM cellular phone with colour display. Also in 1997 Siemens agreed to sell the defence arm of Siemens Plessey to British Aerospace (BAe) and a UK government agency, the Defence Analytical Services Agency (DASA). BAe and DASA acquired the British and German divisions of the operation respectively.

In 1999, Siemens’ semiconductor operations were spun off into a new company known as Infineon Technologies. Also, Siemens Nixdorf Informationssysteme AG formed part of Fujitsu Siemens Computers AG in that year. The retail banking technology group became Wincor Nixdorf.

In February 2003, Siemens reopened its office in Kabul.[3]
In 2004, Siemens took over the mantle of official Formula One timekeeper, replacing TAG Heuer.

In November, 2005, Siemens signed a 12 year agreement with the Walt Disney Company to sponsor attractions in its Florida and California parks.

In 2006, Siemens announced the purchase of Bayer Diagnostics, which was incorporated into the Medical Solutions Diagnostics division officially on 1 January 2007.

In March 2007 a Siemens board member was temporarily arrested and accused of illegally financing a business-friendly labour association which competes against the union IG Metall. He has been released on bail. Offices of the labour union and of Siemens have been searched. Siemens denies any wrongdoing.

In April 2007, the Fixed Networks, Mobile Networks and Carrier Services divisions of Siemens merged with Nokia’s Network Business Group in a 50/50 joint venture, creating a fixed and mobile network company called Nokia Siemens Networks. Nokia delayed the merger due to bribery investigations against Siemens.

Through an American sub-organisation known as the Siemens Foundation, Siemens also devotes funds to rewarding students and AP teachers. One of its main programs is the Siemens Westinghouse Competition in maths, science, and technology, which annually grants scholarships up to US$100,000 to both individual and team entrants. According to the foundation website, Siemens awards a total of nearly US$2 million in scholarship money every year.

MAJOR CLIENTS OF SIEMENS

-KCR
-Novartis
-Edmonton Transit System
-Calgary Transit
-Deutsche Bahn AG ( German rail transport company)
-METRORail (Houston, Texas)
-Sacramento Regional Transit District
-Regional Transportation District TheRide (Denver, Colorado)
-LACMTA (Los Angeles County, California)
-Pittsburgh Light Rail
-San Diego Trolley
-MAX Light Rail (Portland, Oregon)
-Nederlandse Spoorwegen (the Dutch railways) (The Netherlands)
-Port of Rotterdam (Rotterdam, The Netherlands)
-Balkim Muh. Elk. Ltd. Sti.
-BBC
-Indian Railways
-Airtel
-Powergrid Corporation of India

Products

-Industrial Instrumentation (Sensors and Controls)
-Telecommunication Service Platform, the TSP 7000
-Combino, ULF, and Avanto trams
-Siemens-Duwag U2 LRV
-ER20 locomotive – MTR
-LHB/Siemens M1/M2/M3 Metro Mar. Pair
-Siemens-Adtranz LRV
-Duewag/Siemens 1435 mm Combino Low Flr LRV
-MX3000 Metro car for Oslo (SGP Wien works)
-S4000 metro
-Schindler/Siemens ABB Be 4/8 Low Floor LRV
-Metro 5001
-SWBSiemensr NGT 6D LRV
-Eurosprinter locomotive
-Desiro, ICE, and Transrapid trains
-Gigaset, Home entertainment products, including Gigaset M740 AV, a set-top box to receive -TDT and integrate it in a domestic network (using WLAN or cable), i.e. for home streaming media.
-Hicom Trading E
-Hicom 300
-HiPath
-HiQ 8000 Softswitch
-MSR32R
-EWSD telephone exchanges
-SPX 2000 small digital telephone exchange (rural)
-Siemens Gigaset cordless telephones
-Siemens Mobile Phones – divested to BenQ in 2005
-Siemens SPPA-T2000 Control System (formerly Teleperm XP)
-Siemens SPPA-T3000 Control System (For Electrical Power Generation Control)
-SIMATIC PCS 7 Process Automation System for Process and Hybrid industries
-Radio and core products for 2G and 3G Mobile Networks (GSM, UMTS, …)
-Gas & Steam Turbines
-Industrial programmable controls (including Simatic PLC, and Logo! microcontrollers)
-The Siemens Servo life support ventilator line
-MAGNETOM(TM) Espree
-SOMATOM(R) Definition CT
-SOMATOM(R) Sensation CT
-SOMATOM(R) Emotion CT
-AXIOM Artis
-AXIOM Sensis
-E.Cam Signature Series Gamma Camera
-Symbia TruePoint SPECT-CT
-Biograph TruePoint PET.CT
-Magnetom C!, a low field open MRI
-Magnetom Avanto, a Tim system MRI
-Magnetom Espree, a Tim system, open bore MRI
-Magnetom Trio, A Tim System, ultra high field MRI
-Windturbines, 1.3 MW, 2.3 MW, 3.6 MW
-Sinorix(TM)
-Sistore(TM)

Main competitors of Siemens are:

-ABB
-Alcatel-Lucent
-Alstom
-Automated Logic
-Bombardier
-Cisco Systems
-Computrols
-Eaton
-Ericsson
-General Electric
-Honeywell
-Johnson Controls
-Lantronix
-Nortel
-Philips
-Reliable Controls
-Rockwell Automation
-Samsung
-Schneider Electric

3. OBJECTIVES AND NEED OF SUPPLY CHAIN MANAGEMENT

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting.

Marketing’s objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns.

The result of these factors is that there is not a single, integrated plan for the organization—there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.

Moreover, shortened product life cycles, increased competition, and heightened expectations of customers have forced many leading edge companies to move from physical logistic management towards more advanced supply chain management. Additionally, in recent years it has become clear that many companies have reduced their manufacturing costs as much as it is practically possible. Therefore, in many cases, the only possible way to further reduce costs and lead times is with effective supply chain management.

In addition to cost reduction, the supply chain management approach also facilitates customer service improvements. It enables the management of:

- inventories,
- transportation systems and
- whole distribution networks

so that organizations are able to meet or even exceed their customers’ expectations.

The major objective of supply chain management is to reduce or eliminate the buffers of inventory that exists between originations in chain through the sharing of information on demand and current stock levels.

Broadly, an organization needs an efficient and proper supply chain management system so that the following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented.

1. Fulfillment of raw materials:

Ensuring the right quantity of parts for production or products for sale arrive at the right time. This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right quantities are ordered to replace stock.

2. Logistics:

The cost of transporting materials as low as possible consistent with safe and reliable delivery. Here the supply chain management system enables a company to have constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. The system can allow the company to track where the required materials are at all times. As well, it may be cost effective to share transportation costs with a partner company if shipments are not large enough to fill a whole truck and this again, allows the company to make this decision.

3. Smooth Production:

Ensuring production lines function smoothly because high-quality parts are available when needed. Production can run smoothly as a result of fulfillment and logistics being implemented correctly. If the correct quantity is not ordered and delivered at the requested time, production will be halted, but having an effective supply chain management system in place will ensure that production can always run smoothly without delays due to ordering and transportation.

4. Increase in Revenue & profit:

Ensuring no sales is lost because shelves are empty. Managing the supply chain improves a company flexibility to respond to unforeseen changes in demand and supply. Because of this, a company has the ability to produce goods at lower prices and distribute them to consumers quicker then companies without supply chain management thus increasing the overall profit.

5. Reduction in Costs:

Keeping the cost of purchased parts and products at acceptable levels. Supply chain management reduces costs by increasing inventory turnover on the shop floor and in the warehouse controlling the quality of goods thus reducing internal and external failure costs and working with suppliers to produce the most cost efficient means of manufacturing a product.

6. Mutual Success:

Among supply chain partners ensures mutual success. Collaborative planning, forecasting and replenishment (CPFR) is a longer-term commitment, joint work on quality, and support by the buyer of the supplier’s managerial, technological, and capacity development. This relationship allows a company to have access to current, reliable information, obtain lower inventory levels, cut lead times, enhance product quality, improve forecasting accuracy and ultimately improve customer service and overall profits. The suppliers also benefit from the cooperative relationship through increased buyer input from suggestions on improving the quality and costs and though shared savings. Consumers can benefit as well through higher quality goods provided at a lower cost.

4. ACTIVITIES/FUNCTIONS OF SCM IN SIEMENS

Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end-consumer. As corporations strive to focus on core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other corporations that can perform the activities better or more cost effectively. The effect has been to increase the number of companies involved in satisfying consumer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity.

Several models have been proposed for understanding the activities required managing material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the Supply-Chain Council. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.

(a) Strategic:-

-Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.

-Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.

-Products design coordination, so that new and existing products can be optimally integrated into the supply chain.

-Information Technology infrastructure, to support supply chain operations.

-Where to make and what to make or buy decisions.

(b) Tactical:-

-Sourcing contracts and other purchasing decisions.

-Production decisions, including contracting, locations, scheduling, and planning process definition.

-Inventory decisions, including quantity, location, and quality of inventory. Transportation strategy, including frequency, routes, and contracting.

-Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.

(c) Operational:-

-Daily production and distribution planning, including all nodes in the supply chain.

-Production scheduling for each manufacturing facility in the supply chain (minute by minute).

-Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

-Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory.

-Production operations, including the consumption of materials and flow of finished goods.

-Outbound operations, including all fulfillment activities and transportation to customers.

-Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. Performance tracking of all activities.

INTEGRATED SUPPLY CHAIN MANAGEMENT

An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost. Unlike commercial manufacturing supplies, clinical supplies planning is very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success.

This results in overproduction of drug products to take care of last minute change in demand. R&D manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials.

An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management. Implementation of ERP system (such as SAP) in R&D can have major ROI by an efficient supply and inventory management system and also by reducing overproduction.

-How Integration Is Achieved In Supply Chain?

Stage 1:

Complete functional independence where each business function such as production or purchasing does its own thing in complete isolation from other business function. For instance, production function seeking to optimize its unit cost of manufacture by long production runs with out regard for build up of finished goods inventory and advance impact it will have on the warehousing as well as working capital.

Stage 2:

Companies recognize the need of limited integration between adjacent functions such as distribution and inventory management or purchasing and material control.

Stage 3:

A natural extension of stage two, leading to establishment and implementation of end- to-end integration. A concept of linkage and coordination is achieved.

STAGE 4:

The linkage achieved in stage three is extended upstream to suppliers and down stream to customers. It represents true supply chain integration. This concept is also called ‘co-managed inventory’ (CMI).

Force of supply chain management is on trust and cooperation and the recognition that is properly managed ‘the whole cane be greater then the sum of its part’.

These refer to means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw material, semi-finished or finished goods. They can also be in-process between locations. Their primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supply chain operations. It is long term in the sense that top management sets goals. However, most researchers have approached the management of inventory from short term perspective. These include deployment strategies (push versus pull), control policies — the determination of the optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical, since they are primary determinants of customer service levels.

5. INVENTORY CONTROL MANAGEMENT

Inventory database

An important component of inventory planning involves access to an inventory database. It is a structured framework that contains the information needed to effectively manage all items of inventory, from raw materials to finished goods. This information includes the classification and amount of inventories, demand for the items, cost to the firm for each item, ordering costs, carrying costs and other data.

The task of inventory planning can be highly complex. At the same time it rests on fundamental principles. In doing so we must understand and determine the optimal lot size that has to be ordered. The EOQ (economic order quantity) refers to the optimal order size that will result in the lowest total of order and carrying costs and ordering costs. By calculating the economic order quantity the firm attempts to determine the order size that will minimize the total inventory costs. In examination of the two curves reveals that the carrying cost curve is linear i.e. more the inventory held in any period, greater will be the cost of holding it. Ordering cost curve on the other hand is different. The ordering costs decrease with an increase in order sizes. The point where the holding cost curve i.e. the carrying cost curve and the ordering cost curve meet, represent the least total cost which is incidentally the economic order quantity or optimum quantity.

PRODUCTIVITY

In the industries there will be a competitor who will be a low cost producer and will have greater sales volume in that sector. This is partly due to economies of scale, which enable fixed costs to spread over a greater volume but more particularly to the impact of the experience curve.

It is possible to identify and predict improvements in the rate of output of workers as they become more skilled in the processes and tasks on which they work. Bruce Henderson extended this concept by demonstrating that all costs, not just production costs, would decline at a given rate as volume increased. This cost decline applies only to value added, i.e. costs other than bought in supplies. Traditionally it has been suggested that the main route to cost reduction was by gaining greater sales volume and there can be no doubt about the close linkage between relative market share and relative costs. However it must also be recognized that logistics management can provide a multitude of ways to increase efficiency and productivity and hence contribute significantly to reduced unit costs.
In today’s more turbulent environment there is no longer any possibility of manufacturing and marketing acting independently of each other. It is now generally accepted that the need to understand and meet customer requirements is a prerequisite for survival. At the same time, in the search for improved cost competitiveness, manufacturing management has been the subject of massive renaissance. The last decade has seen the rapid introduction of flexible manufacturing systems, of new approaches to inventory based on materials requirement planning (MRP) and just in time (JIT) methods, a sustained emphasis on quality.
Equally there has been a growing recognition of the critical role that procurement plays in creating and sustaining competitive advantage as part of an integrated logistics process.

In this scheme of things, logistics is therefore essentially an integrative concept that seeks to develop a system wide view of the firm. It is fundamentally a planning concept that seeks to create a framework through which the needs of the manufacturing strategy and plan, which in turn link into a strategy and plan for procurement.

Inventory Flow:

The management of logistics is concerned with the movement and storage of materials and finished products. Logistical operations start with the initial shipment of a material or component part from a supplier and are finalized when a manufactured or processed product is delivered to a customer. From the initial purchase of a material or component, the logistical process adds value. By moving inventory when and where needed. Thus the material gains value at each step. For a large manufacturer, logistical operations may consist of thousands of movements, which ultimately culminate in the delivery of the product to an industrial user, wholesaler, dealer or customer. Similarly for a retailer, logistical operations may commence with the procurement of products for resale and may terminate with consumer pickup or delivery.

The significant point is that regardless of the size or type of the enterprise, logistics is useful and requires continuous management attention.

INVENTORY- related costs

Inventory carrying cost (ICC):

-Tax
-Storage
-Capital
-Insurance
-Obsolescence
-Ordering:
-Communication
-Processing, including material
-handling and packaging
-Update activities, including
-receiving and date-processing

Basic Inventory Decisions

There are two basic decisions that must be made for every item that is maintained in inventory. These decisions have to do with the timing of orders for the item and the size of orders for the item.

RELEVANT INVENTORY COSTS

Item Costs, Holding Costs, Ordering Costs, Shortage Costs,
Direct cost for getting an item. Purchase cost for outside orders, manufacturing cost for internal orders. Costs associated with carrying items in inventory. Storage and other related costs. Fixed costs associated with placing an order (either a purchase cost for outside orders, or a setup cost for internal orders). Costs associated with not having enough inventory to meet demand.

EOQ:

The EOQ can be calculated with the help of a mathematical formula. Following assumptions are implied in the calculation:
1. Constant or uniform demand- although the EOQ model assumes constant demand, demand may vary from day to day. If demand is not known in advance- the model must be modified through the inclusion of safe stock.
2. Constant unit price- the EOQ model assumes that the purchase price per unit of material will remain unaltered irrespective of the order offered by the suppliers to include variable costs resulting from quantity discounts, the total costs in the EOQ model can be redefined.
3. Constant carrying costs- unit carrying costs may very substantially as the size of the inventory rises, perhaps decreasing because of economies of scale or storage efficiency or increasing as storage space runs out and new warehouses have to be rented.
4. Constant ordering cost- this assumption is generally valid. However any violation in this respect can be accommodated by modifying the EOQ model in a manner similar to the one used for variable unit price.
5. Instantaneous delivery- if delivery is not instantaneous, which is generally the case; the original EOQ model must be modified through the inclusion of a safe stock.
6. Independent orders- if multiple orders result in cost saving by reducing paper work and the transportation cost, the original EOQ model must be further modified. While this modification is somewhat complicated, special EOQ models have been developed to deal with it.
These assumptions have been pointed out to illustrate the limitations of the basic EOQ model and the ways in which it can be easily modified to compensate for them.

The formula for the EOQ model is:
2 M Co
S Cc

Where M = is the annual demand
Co is the cost of ordering
Cc is the inventory carrying cost
S = is the unit price of an item.
Limitations of the EOQ formula-
1. Erratic changes usages- the formula presumes the usage of materials is both predictable and evenly distributed. When this is not the case, the formula becomes useless.
2. Faulty basic information- order cost varies from commodity to commodity and the carrying cost can vary with the company’s opportunity cost of capital. Thus the assumption that the ordering cost and the carrying cost remains constant is faulty and hence EOQ calculations are not correct.
3. Costly calculations: the calculation required to find out EOQ is extremely time consuming. More elaborate formulae are even more expensive. In many cases, the cost of estimating the cost of possession and acquisition and calculating EOQ exceeds the savings made by buying that quantity.
4. No formula is a substitute for common sense- sometimes the EOQ may suggest that we order a particular commodity every week (six-year supply) based on the assumption that we need it at the same rate for the next six years. However we have to order it in the quantities according to our judgment. Some items can be ordered every week; some can be ordered monthly, depends on how feasible it is for the firm.
5. EOQ ordering must be tempered with judgment- Sometimes guidelines provide a conflict in ordering. Where an order strategy conflicts with an operational goal, order strategy restrictions should be developed to permit honoring the goal.

Quantity discounts: In the EOQ analysis, it has been assumed that material prices and transportation costs were constant factors for the range of order quantities considered. In practice, some situations occur in which the delivered unit cost of a material decreases significantly if a slightly larger quantity than the originally computed EOQ is purchased. Quantity discounts, freight rate schedules and price increases may create such situations. These additional variables can also be included in the formula.

Cost of carrying inventory:

Carrying material in inventory is expensive. A number of studies indicated that the annual cost of carrying a production inventory averaged approximately 25% of the value of the inventory. The escalating and volatile cost of money has escalated the annual inventory carrying cost to a figure between 25% – 35% of the value of the inventory. The following five elements make up this cost:
1) Opportunity cost (12% -20%)
2) Insurance cost (2% – 4%)
3) Property taxes (1% – 3%)
4) Storage costs (1%- 3%)
5) Obsolescence and deterioration (4% – 10%)
Total carrying cost (20% – 40%)

Let us briefly look into these costs:

Opportunity cost of invested funds

When a firm uses money to buy production material and keeps it in the inventory, it simply has this much less cash to spend for other purposes. Money invested in external securities or in productive equipment earns a return for the company. Thus it is logical to charge all money invested in inventory an amount equal to that it could earn elsewhere in the company. This is the opportunity cost associated with inventory investment.

Insurance cost

Most firms insure the assets against possible losses from fire and other forms of damage.

Property taxes

This is levied on the assessed value of a firm’s assets, the greater the inventory value, the greater the asset value and consequently the higher the firm’s tax bill.

Storage costs

The warehouse is depreciated every year over the length of its life. This cost can be charged against the inventory occupying the space.

Obsolescence and deterioration

In most inventory operations, a certain percentage of the stock spoils, is damaged, is pilfered, or eventually becomes obsolete. A certain number always takes place even if they are handled with utmost care.

Generally speaking, this group of carrying costs rises and falls nearly proportionately to the rise and fall of the inventory level.

The ABC Classification:

Indicators that classifies a material as an A,B or C part according to its consumption value .The classification process is known as the ABC analysis.
The three indictors have the following meanings:
A-important part , high consumption value
B-less important , medium consumption value
C-relatively unimportant part , low consumption value

The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.

Reorder Point: The inventory level R in which an order is placed where R = D.L, D = demand rate (demand rate period (day, week, etc), and L = lead time.

Safety Stock: Remaining inventory between the times that an order is placed and when new stock is received. If there are not enough inventories then a shortage may occur.
Safety stock is a hedge against running out of inventory. It is an extra inventory to take care on unexpected events. It is often called buffer stock. The absence of inventory is called a shortage.

ABC Inventory Classification

The ABC classification process is an analysis of a range of items, such as finished products or customers into three categories: A – outstandingly important; B – of average importance; C – relatively unimportant as a basis for a control scheme. Each category can and sometimes should be handled in a different way, with more attention being devoted to category A, less to B, and less to C.

Inventory Control Application: The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.

Break-even analysis depends on the following variables:
1. Selling Price per Unit: The amount of money charged to the customer for each unit of a product or service.
2. Total Fixed Costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.
3. Variable Unit Cost: Costs that vary directly with the production of one additional unit.
Total Variable Cost The product of expected unit sales and variable unit cost, i.e., expected unit sales times the variable unit cost.
4. Forecasted Net Profit: Total revenue minus total cost. Enter Zero (0) if you wish to find out the number of units that must be sold in order to produce a profit of zero (but will recover all associated costs)

Break-Even Point in siemens: Number of units that must be sold in order to produce a profit of zero (but will recover all associated costs). In other words, the break-even point is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company.
where:
Q = Break-even Point, i.e., Units of production (Q),
FC = Fixed Costs,
VC = Variable Costs per Unit
UP = Unit Price
Therefore,
Break-Even Point Q = Fixed Cost / (Unit Price – Variable Unit Cost)

Stock control and inventory

Stock control, otherwise known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it.
It applies to every item you use to produce a product or service, from raw materials to finished goods. It covers stock at every stage of the production process, from purchase and delivery to using and re-ordering the stock.

Efficient stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain.

Supply chain vendor management inventory:

Allows supply chain partners to share critical order, demand and inventory information in real-time and uses both integrated and web based applications to reduce administration costs, shortening cycle times and help lower inventory levels. Our unique, managed supply hub requires little upfront investment, yet quickly starts delivering high performance in real time

Inventory Control Overview

Normal Inventory

As it sounds, this type of inventory item will be used for the majority of your parts. It will correctly track the inventory received and sold on a first in first out basis, will handle cost of sales, and will warn you when you’re out of stock.

Non-Inventory Type

This is used for selling things that are not really inventory items. For example, you could be selling warranty, but because you don’t have warranty in a box to sell, and you’ll never run out of stock, you won’t need to keep inventory control on it. As well, there is no cost of sale adjustments with non-stock items. The system will not calculate how much you paid for the item, and therefore will not try to remove that value from inventory in the general ledger. If you are selling something that does cost you money, you will have to handle these details manually.

Labor Parts

You (probably) don’t have technicians hanging from hooks in your back room, so like non-inventory items, the system will not try to remove them from inventory when you sell a labor item. The two differences between Non-Inventory items an Labor items are that you can optionally have the system ask you for the technician code that did the work so that you can print reports showing who did what work. As well, the system will optionally ask for a comment to explain what was done so that the description of the service work can be printed on the invoice.

Note too that you can optionally keep track of how much time was spent and how much time was billed for on a per job basis. At the end of the month, you can then print technician productivity reports to compare total time spent compared to billable hours. In the automotive industry, some mechanics can do the work faster than is what is billed because the billing is based on industry standards.

Consignment Items

Consignments can be used to keep track of inventory that you don’t own, but at the time you sell it, you must pay for it. You’ll be able to generate several reports, including a list of inventory that is on consignment but not sold and a list of inventory sold on consignment, but not yet paid for.

Floor Plan Inventory

Floor planning is very similar to consignment, except that you take possession and own the inventory when you receive it, but you don’t have to pay for it until it’s sold, or until it’s been in the store for a negotiated period of time. However, you do own the inventory and do have to pay for it sometime.

Some floor planning companies want the ability to check the inventory serial number by serial number for the larger items, and others may just want to count the number of each model number on hand. Regardless, Windward System Five can handle it.

On the accounts payable side, you will be able to keep track of who you owe the money too (Floor Planning Company) and who you actually bought the inventory from (Supplier) and generate proper histories of each.

Tire Inventory

Windward System Five has the ability to sort and categorize tires by their size, aspect ratio and rim size. In addition, you will also be able to search for the tires by just entering in some of the search criteria and having the system bring up a window of all matches.

When the list brings up a list of tires that can all fit the vehicle, the system can sort the list to show the items with the highest quantity in stock at the top of the list and the items that are out of stock at the bottom of the list. This will help you sell what you actually have to sell instead of creating special orders.

Product Inventory

Products are items such as vehicles that you might service or repair after selling them to the customer. That is, they are an item in the database that can be sold, and when sold, are automatically added to the customer’s list of products that can be worked on.

Examples are vehicles, trucks, recreational vehicles, fridges, air conditioners, and chainsaws. The system will let you keep additional information on these products, such as make, model, year, and other comments, and will also be able to list all the work or repairs performed between two dates.

Windward System Five can also track whole goods such as recreational vehicles by keeping track of the cost of the item before the sale, add ones and pre-delivery inspection items. In addition, the system can generate a “wash out” report one level deep to show the costs and income associated with the trade in.

Serialized Inventory

Those items that need to be tracked by their serial numbers can be marked as serialized inventory. For example, fridges, stoves, computers, and chainsaws might all be serialized. Note that if you plan on servicing these items in the future and keeping track of all work you do on them, they should be entered as products instead of serial numbers.

TYPES OF INVENTORY

Several different types of inventories are conducted, depending upon the type of materiel involved and type of information needed. Bulkhead-to-Bulkhead Inventory

A bulkhead-to-bulkhead inventory is a physical count of all stock materiel within the ship or within a specific storeroom.A bulkhead-to-bulkhead inventory of a specific storeroom is taken when a random sampling inventory of that storeroom fails to meet the inventory accuracy rate of 90 percent when directed as a result of a supply management inspection (SMI). It is also taken when directed by the commanding officer or when circumstances clearly indicate that it is essential to effective inventory control.

Specific Commodity Inventory

The specific commodity inventory is a physical count of all items under the same cognizance symbol, FSC, or that support the same operational function, such as- boat spares, electron tubes, boiler tubes, or fire brick. This inventory is taken under the same conditions as a bulkhead- to-bulkhead inventory; however, prior knowledge of specific stock numbers and item location is required to conduct a specific commodity inventory

Special Materiel Inventory

A special materiel inventory requires the physical count of all items that, because of their physical characteristics, costs, mission essentiality, and criticality, are specifically designated for separate identification and inventory control. Special materiel inventories include, but are not limited to, stocked items designated as classified or hazardous. Special materiel inventories also include controlled equipage and presentation silver

Advantage Inventory Control

The Inventory Control gives you the ability to handle your inventory your way. As one of the most flexible and comprehensive modules in the Advantage, you can choose the level of control that best suits your specific business needs. Your inventory can be valued on a LIFO, FIFO or Average cost basis. You can choose to use parts explosions, serialized inventory, parts allocations, vendors, warehouses and an audit trail. The system can also track the quantity sold for each item for the last 12 months and, using this data, provides a sales analysis report to help you better manage your stock. Financing is aided by the serialized aged report that shows which serialized items have been in your inventory the longest and how much you have outstanding. Pricing can be standardized by rounding to a given factor or by being set to a specific suffix. With the Below Minimum report, reordering stock is automatic and accurate. Inventory Control is a stand–alone module that can also be integrated with Purchase Orders, Point of Sale, Billing/Order Entry, Job Cost, Time Billing and Quick Sale.
21–character alphanumeric item number field
Lookup on item number, item description (21 characters) and group (15 character) fields
Tracks serialized items
Allows for superseded, preceded and substitute items
Unlimited additional descriptions can be added to items
Handles markup and gross profit cost basis
Can automatically update item pricing and discounts
Handles core pricing
Produces a re–order report based on minimum stock quantities
Tracks unlimited vendors per item and recommends a ‘best’ vendor
Tracks allocations including explosion allocations
Up to 254 discounts per item, including quantity break discounts
Unit conversions can be defined for each item for both buying and selling quantities
Allows for warehouse transfers and other quantity adjustments
Set up special sale dates for item discounting

Produces physical inventory forms
Imports physical inventory and received quantities from data collected with hand-held computers
Provides up to 255 levels of parts explosion to allow you to identify all components of your assembled stock
Automatically updates cost and price on explosion items based on subassembly changes
• Reports the best and worst selling items in each of eight different categories
• Tracks items by location or quantity in multiple warehouses
• Can automatically generate items based on a template item
• Utilizes Rapid Entry to facilitate entry of item data

Disadvantages:

• conveyor needs to be slightly declined for carton movement (one way);

• may require addition of powered booster units in some applications;

• cannot be used for inter-floor movement except for down travel;

• goods need to be manually pushed when horizontal;

• no positive control over moving carton;

• produces line pressure when accumulating.
• Require efficiency of land

We propose a method for valuing new, recoverable, and recovered assemblies (products, components, parts, etc.) in production systems with reverse logistics. Values of assemblies influence their opportunity holding cost rates and are hence essential for comparing inventory strategies in average cost models. We argue that the proposed method is ‘correct’ from a discounted cash flow (DCF) point of view. We refer to some previous results on valuing assemblies in systems without disassembly of returned products that seem to confirm this. Furthermore, we test the method for a specific example with disassembly of returned products. The simulation results indicate that the method indeed leads to (nearly) DCF optimal inventory strategies.

Packaging

In siemens, with its large product volumes, low margins and fierce competition, is constantly seeking efficiency improvements in its supply chain. The grocery retail industry uses an immense amount of packaging and is directly affected by packaging logistics activities. There is, therefore, a potential for efficiency improvements in the grocery retail supply chain through the integration and development of new systems of packaging and logistics. Packaging handling is identified as one of the main activities that has a strong impact on the overall logistical cost of chain. This research article investigates packaging handling evaluation methods and discusses how these are employed to benefit the industry from the industry, have been used to evaluate packaging and logistics activities. This work, together with a literature review, was used to identify the need for evaluative methods and the present availability of such methods. The results indicated a lack of sufficient and usable packaging handling evaluation methods in today’s grocery and packaging industry especially from a logistical point of view. The paper also highlights the lack of systematization among the few methods used and discusses how these can be used to build a systematic and multifunctional evaluation model in order to utilize the information from different studies to build a knowledge base for the future

Vendor-Managed Inventory

Siemens is a leading global manufacturer, focused on delivering operational services to high-tech companies, needed to take advantage of vendor-managed inventory (VMI) postponement and optimal fulfillment solutions to stay competitive in its low-margin manufacturing marketplace. Its objective was to find ways to reduce inventory redundancy, improve customer responsiveness by reduced cycle times and simplify supplier management and procurement administration. The manufacturer also needed to augment existing infrastructure, while reducing investments in additional personnel, facilities and systems

Vendor Managed Inventory (VMI)

Vendor Managed Inventory supports the efficient flow of materials into the market. Working closely with you and your suppliers, we automate the forecast management process with Web-based software that enables the flow of supply to more accurately mirror store – and even shelf-level – demand.
Move your inventory in and out of our distribution centers and manage demand planning. We can store and stage product for replenishment at our often freeing or limited store rooms. We provide forecast visibility, comparing actual demand against DC-on-hand, store-on-hand and in-transit inventory. When store or inventory falls below pre-determined levels, auto alerts are sent to you and your supplier to prompt replenishment.

Advanced Shipping Notices (ASNs) provide detail on in-transit inventory from suppliers so you have visibility to inventory deeper into the supply chain. This allows for confident commitment to orders based on this inbound flow.
Postpone inventory ownership until shipment to your site. Once your inventory is moved to the we work with your suppliers to transition inventory ownership until demand occurs.
Perform value-added services, allowing you to more efficiently manage the flow of goods into manufacturing or directly to market.

Vendor Managed Inventory (VMI)

Vendor Managed Inventory by Kuehne + Nagel supports the efficient flow of materials into the market. Working closely with you and your suppliers, we automate the forecast management process with Web-based software that enables the flow of supply to more accurately mirror store – and even shelf-level – demand.
Move your inventory in and out of our distribution centers and manage demand planning with Web-based applications. We can store and stage prod

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The new series includes the E90 communicator, the E65 slider, and the E61i. The E61i specializes in providing advanced email technology on a slim layout. The models offer some brilliant upgrades over the original E-series, as will be discussed further.

All three operate on quad-band GSM technology, allowing the user access to coverage all over the world. The models also sport 3G technologies, giving them a high-speed connection to data networks, where 3G coverage is available.

The E90 communicator adds WLAN technology to the picture, making it perfect for the home or business network. The user can connect the device to their network at home, enabling them to access the internet without using their mobile network.

The model is equipped with the Nokia S60 browser, which is capable of showing full web pages. Many similar models have partial, mobile browsers that can only display part of the site. The browser offers highly needed, increased functionality.

The communicator also sports a powerful 3.2 mega-pixel camera that has an auto-focus. This still doesn’t bring the device up to European standards, but makes it one of the most powerful available in the United States.

The E65 gives users one-touch access to their favorite applications thanks to programmable quick keys.

The model can also be easily integrated into corporate phone systems – Nokia Intellisync Call Connect for Cisco, Nokia Intellisync Call Connect for Alcatel and Avaya one-X Mobile Edition for Nokia solutions.

The Nokia E61i was designed specifically for users that need advanced email functionality. The device offers the ability to handle attachments and is capable of handling the editing of documents. The model has a full keyboard.

The E61i can run the following business email formats: Nokia Intellisync Wireless Email, Mail for Exchange, Good Mobile Messaging, Seven Mobile Mail, and BlackBerry Connect. The device is equipped with a 2.0 mega-pixel camera.

With these new devices, Nokia is establishing themselves once again as the true global leader of the cell phone industry. Nokia has been the world’s leader for over five years, and should continue to hold their share at least for a while.

Nokia currently holds 35.2 percent of the world’s cell phones market share, and have gained about a percent since last year.

Samsung and LG both lost considerable market share over the last year, losing out to Nokia and Motorola.

Sony Ericsson gained 2% over the last year, but holds only 8%.

Nokia is ahead of the game, and increasing their lead. Users love the powerful models that Nokia seems to be releasing with perfection. It is believed that Nokia can get to 40% market share within the next 2 years.

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3. Sat Nav Devices

“This is a typical scenario we encounter with many of our customers,” said Dr. Frank Gao, president of GAO Research Inc. â??By replacing the modem chipset in their design with GAO’s highly optimized software solution, CEIVA is able to achieve significant cost savings.”

Jim Sepe, Chief Technology Officer, at CEIVA logic said, “When CEIVA decided to upgrade our connected digital photo frames and switch from a hardware to a software based solution, we needed to ensure we retained functionality and remained highly competitive. Our choice of GAOâ??s software modem solution allowed us to do both.” Sepe also commented that, â??CEIVA is very pleased with the results. The optimization and performance of GAO software far exceeded our expectations and their after sales support is excellent.â?

GAOâ??s embedded soft-modem and fax packages include a full range of ITU-T compliant modem and fax data pumps and protocols. Modem data pumps include V.92, V.90, V.34, V.32bis/V.32, V.22bis/V.22, V.21, and other standards. Fax data pumps include V.34, V.17, V.29, V.27ter, and V.21 ch.2. GAOâ??s embedded modem and fax software are fully optimized to run on DSPs and microprocessor platforms including Texas Instruments C5000 and C6000 series, Analog Devices ADSP 218x and Blackfin, ARM7, ARM9/E, and Pentium among others.

About GAO Research Inc.

GAO Research Inc., www.gaoresearch.com, is the market-leader in embedded communication software products for DSP & Microprocessor environments, and one of the fastest growing companies in Canada. GAOâ??s embedded communications modules are used by telecommunications, semiconductor, and electronics manufacturers worldwide. GAO offers its VoIP & FoIP modules, V.92 & V.90 with all fallback soft-modems, Super G3 & G3 fax software and G.7xx speech codecs on the broadest range of DSPs and microprocessors. GAOâ??s customers include CEIVA, Motorola, Samsung, Alcatel, Philips, Telular, Telcordia, OKI, Marconi, Agilent, Siemens, Infineon, AudioCodes, ABB, LG Electronics, Toshiba and other global customers.

About CEIVA Logic, Inc.:

CEIVA Logic, Inc., www.ceiva.com, is the inventor of the digital photo frame and the provider of the worldâ??s first and only connected Digital Photo Framesâ?¢. CEIVA enables families and friends to display endless slideshows from camera memory cards via the frames built-in card reader and automatically receive photos sent by camera phone or through an online CEIVA account. Offering world-class personalized customer care, CEIVA Digital Photo Frames and the CEIVA PicturePlan® service is the only digital photo solution to allow effortless display, secure storage and sharing of digital photos. CEIVA products are available at ceiva.com and at select retailers nationwide.

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Chinese telecom equipment exports rank first the United States as the world’s largest importer of

According to the French “Les Echos” reported (www.lesechos.fr), a decade later, China has become the world’s largest telecommunications equipment producer, far ahead of other countries.

According to the Organization for Economic Cooperation and Development (OECD) statistics, China’s exports of telecommunications equipment from 1997 has been 2.7 billion dollars to 2007 of 845 billion dollars. The organization released a report this month, said: “10 years ago, China’s telecommunications equipment (telephone, Internet, cable, etc.) is lower than the OECD exports to major countries. By 2007, China’s exports than the The latter, almost three times more.

The United States is produced in China the largest importer of telecommunications equipment. China’s telecommunications equipment on the OECD’s total exports of 84.5 billion U.S. dollars, the United States the proportion of up to 40%.

A double reason: Overseas giant plant in China + China’s rise

One of the reasons for this phenomenon, in recent years a large number of Western companies invest and build factories in China. As the major telecom equipment manufacturers will move their investments, have set up factories in China.

The world’s largest mobile phone maker Nokia has five factories in China; Alcatel-Lucent’s 1.5 million employees in China, its products are mainly sold to emerging countries in Africa and Asia; Motorola mobile phones are the majority of production in China; Apple put the entire phone assembly is contracted out to a Foxconn, which only had 270,000 workers in Shenzhen, and at the same time Hewlett-Packard, Motorola and Nokia and other companies; headquartered in Singapore, Flextronics’s global 16 10000 that most staff in China, it is for Cisco and Sony Ericsson to provide processing services, and is responsible for the production part of the BlackBerry.

Another reason is that in order to Huawei and ZTE Corporation of China, represented by local manufacturers in Western markets become increasingly competitive. Huawei’s case, its 2008 signed a contract of 23 billion U.S. dollars in sales, 75% of the partner is a foreign company, or about 17.2 billion U.S. dollars from overseas markets.

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The 5230 Pink weighs just 113 grams and measures 111mm high, 51.7mm wide and 15.5mm deep. The handset has an internal memory of 70Mb for any music, video or photos to be stored on, however the addition of a microSD slot allows for memory to be expanded up to 16GB. The lithium ion battery gives up to 7 hours talktime, up to 432 hours standby time and up to 33 hours playback time for the music player. The Nokia 5230 Pink features an enhanced media player and Nokia Ovi Player, allowing you to manage tracks easily and efficiently. Access the Nokia Music Store to download from a huge selection of tracks, and the built in Stereo FM radio including RDS allows users to listen to their favourite radio stations.

Nokia messaging allows the user to nominate up to 10 email accounts to be viewed at one time on the phone. Access to social networking sites such as Facebook, is easy with Ovi Share, allowing you to stay in touch and be entertained from your handset. the built in GPS works with Ovi Maps giving easy access to directions etc. The 5230’s 2 mega pixel camera comes complete with an autofocus function and has the capability of shooting video clips at a resolution of 640 x 480 pixels (DVD quality) and at a capture rate of up to 30 frames per second. Features also include a handy photo editor for making the most of those impromptu snaps. As with Nokia N-series devices, The Nokia 5230 Pink runs symbian s60 v5 Operating System which means you can download applications from Ovi Store. Ovi Store is accessible from the home screen. It can be used for sending MMS, SMS, Emails and IM. It has bluetooth, GPRS and accelerometer and proximity sensors are included and also a handwriting recognition facilities which offers an alternative form of text and data entry Any headphones or portable speakers can be connected due to the inclusion of a 3.5mm stereo jack socket.

In conclusion, Nokia are offering a good-looking phone which is feature-packed. You’re given the option to change the look of your handset as and when suits due to the 5 different coloured battery covers available. The 5230 works well and boast impressive battery life and a fun and easy to use interface without to many unnecessary thrills.

The Nokia 5230 Pink and the Alcatel 303 Red are both available now.

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However is there reluctance a bad thing? if you are buying insurance or getting a mortgage then what are the differences other than the price? where as if you are choose a telecom provider that is going to look after what is undoubtedly the life blood of your business then who wants to go with the cheapest because when the cheapest can’t afford to provide the customer services when things go wrong it will cost you more money than you have saved! All this doesn’t mean their is no place for a telecoms comparison company as long as they stay independent and champion the customer instead of the phone company and be completely honest about who gives the best customer service, where customer service is based i.e Asia, UK, Eastern Europe, India, USA and please don’t be under any illusions they can base these call centres anywhere these days!

So we have discussed price and we have discussed customer service what else is there to consider? how’s about ‘what technology do I use?’  its a mine field the telecoms industry and its full of jargon most hardware providers will baffle you with all this until you submit and sign their order form for what they want to sell you, so this is another reason why a UK telecoms comparison company is most definitely needed.

So have I found one? YES!! a site has set up called CommsQuote.com it is UK based run by ex BT people that understand the technology, the industry and how a businesses need to communicate. They can give you quotes from multiple landline providers like BT, Chess Telecom, Daisy Telecom, OneBill Telecom, Utility Warehouse, Gamma Telecom and Opal, or mobile quotes from Vodaphone, 02, T-Mobile or Orange and if your business needs to replace a phone system or buy its 1st one then they will act as a broker between you and a network of national hardware installers who sell systems from manufactures like Nortel, Panasonic, Cisco, Avaya, Mitel, Siemens, Alcatel-Lucent and all of this is under one roof and they will even visit you face 2 face.

So in summary my advise is never go for the cheapest unless you really have to, and use this new site to do your shopping for you, choose an independent instead of another salesman with his own products to sell you whether you want, need or like them.

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A single piece of aluminium is used to create the body of the gorgeous looking HTC Legend. Not only does this material give the phone a classy look but it is also much more durable than many of the plastic handsets currently available. The metal on this phone is not only restricted to the shell, a new metal trimmed trackpad has replaced the trackball that you will find on many other android phones. This trackpad proves more responsive and ultimately provides a much more satisfying user experience. A glance above the trackpad and you will find the Legend’s impressive 3.2″ screen. This screen incorporates AMOLED technology, resulting in great image reproduction and vivid colours. The 320 x 480 resolution is adequate, despite being slighter lower than some of its competitors. The overall dimensions of the handset are 112 x 56.3 x 11.5, relatively compacts but still fairly standard for a phone of its type. Weighing 122 grammes, it is also a fairly average weight too.

The HTC Legend features an impressive camera function. Boasting a 5 mega pixel resolution, this facility is aided by the addition of an LED flash which sharpens up images in darker conditions. For those who want to be a little more “hands on”, the camera also has a host of additional option to allow you to get more from your photograph. For example there is a manual exposure control, a feature normally reserved for dedicated digital still cameras. 512Mb of internal memory is not a great deal to store these photos, however a microSD card slot is available, allowing for this memory to be expanded up to 32GB. Once taken and stored, photos can be easily transferred thanks to Bluetooth and USB facilities.

Despite its many fans, one criticism that was aimed at last years Hero is that at time it was a touch on the slow side. This has been addressed with the HTC Legend. The processor has been beefed up, now offering a 600Mhz affair and alongside a larger 384MB of RAM. These changes have resulted in an inevitable improvement in speed, apps are much quicker to open and the screen is super responsive to touch.

All in all HTC have taken alot on board with the design of the Legend. This fast, elegant and powerful handset is a joy to use and looks good at the same time. Browsing the web is a breeze and social networking fans will also be attracted to this handset for that reason.

The HTC Legend and the Alcatel 800 White are available now.

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