Maria Laach Abbey Essay Example | Topics and Well Written Essays - 750 words

Maria Laach Abbey - Essay Example A basilican axis is pressed between the towers of the structure, bordered by the traditional aisles and brightened by clerestory windows. A patio facing the west entryways provides a greater connection to the churches of the late Antiquity (Stalley, 1999). Such conventional aspects create a center to which have been inserted various additional components, most apparently the towers, insertions which it is simple to ignore or assume. Similar to numerous structures of the early medieval period, Maria Laach is a complex building, a combination of distinct elements, and a particular mission of the historian is to shed light on how the different elements became unified. In fact, a valuable way of examining medieval churches is to start by analyzing those components which have been inserted to the basilican nave. In the case of Maria Laach such would comprise the western set of towers, the crossing tower, the eastern stair steeples, the catacomb, the western cove, the long chancel, and the transepts (Torgerson, 2007). In order to make sense of the history and significance of these components, one should revisit the world three centuries ago, to the purported Carolingian Renaissance, a time of extraordinary development in the field of European architecture (Stalley, 1999). Maria Laach is a previous Benedictine abbey in Germany. It was known to be built in 1093, under the command of Palsgrave Henry II. It was handed over to the Cluniac Benedictines. It stayed in Benedictine possession for several centuries, becoming a hub for the monastic activities and in specific periods for education and literary arts (Torgerson, 2007). The Maria Laach Abbey is situated on the forested coastlines of a crater lake. The structure is regarded an essential model of German Romanesque architecture; due to its squatness and horde of towers, the church looks like an enchanted castle, highlighted by its panoramic, lakeside scenery. At the east end of the

Separation of a mixture of solids Essay Example for Free

Separation of a mixture of solids Essay Purpose: Purpose: To determine and execute the separation of mixture of solids through different means. Examples are magnetisms, evaporation, and filtration Procedure: I used a measuring device such as a scale, funnel, beaker, magnet, saucer, and graduated cylinder to determine the values for each measurement. Data Table: Experiment data Grams Percent of Mixture Iron filings 1.4g 1.4/4.5*100 = 31.1% Sand 1.3g 1.3/4.5*100 = 28.9% Table salt 1.0g 1.0/4.5*100 = 22.2% Benzoic Acid 0.8g 0.8/4.5*100 = 17.8% Total 4.5g 100% A. I would have used the magnet to separate iron fillings as suggested in the lab. But I would have used the filter paper second to separate sand from rest of the solution rather than evaporation. B. Major disadvantages would have been not all the benzoic acid would pass through the filter paper which would make our procedure more difficult. C. Contamination of the other substances left in the sand.D. I feel there are four errors;1. Not thoroughly moving iron out with magnet.2. When pouring acid salt mixture into funnel some of the acid crystals stuck to the cup which made it difficult to get all sample out.3. Some of the benzoic acid might have passed through the filter paper into the salt water mixture. 4. Not proper dissolving the salt when separating it from the sand leaving salt in the sand mixture. Conclusion: When using various means of separating a mixture (magnetisms, evaporation, and filtration) it is possible to get accurate measurements of each particular material. However there is a high chance of error if care is not taking due to several reasons enu merated above.

Does Africa Need Foreign Aid for Poverty Alleviation?

Does Africa Need Foreign Aid for Poverty Alleviation? By Carolyne Simiyu Foreign aid, is the transfer and loaning of funds, international goods or services from one country to another. It is often transferred from one developed economy to another developing country.[1] The main aims of aid, particularly in poor nations, are to alleviate poverty, give support to the needy such as internally displaced persons and refugees, reconstruct infrastructure, and revamp economy. However, the efficacy of aids for poverty alleviation in Africa has lost its objective. Since the 1950s, the idea that huge sums of donations can remedy poverty has dominated economic development discourses. More than half of the sub-Saharan Africa are poorer now than in the 1960s.[2] I do not deny the fact that many factors have contributed to poverty in Sub-Saharan Africa which include natural disasters such as famine, draught, and wars. But what about the huge overflow of foreign aid they have been channeling to this developing countries? What did they use it for? According to statistics, while progress has been made in other developing regions of the world, especially East Asia in the last six decades, the percentage of those living in extreme poverty increased in sub-Saharan Africa.[3] Such statistics can be both appalling and at the same time overwhelming. There are several reasons to why foreign aid is ineffective for poverty alleviation in Africa. The first reason is that poverty in African countries is not a vicious circle waiting to be broken by foreign assistance. Instead, poverty is created by economic institutions that systematically block the incentives and opportunities of poor people to make their lives better by themselves and their country.ÂÂ   Let us for instance the system of apartheid in South Africa which Nelson Mandela campaigned against. In this situation, apartheid was a set of economic institutions which was intended to work against the black South Africans. It contained rules that governed and dictated to people what they should do and what they should not do, including the incentives and opportunities they are entitled to.[4] In 1913, the South African government declared that 93 per cent of South Africa was for the white economy, while 7 per cent was for blacks (who constituted about 70 per cent of the popul ation). Blacks had to have a pass a national passport to travel to the cities for job opportunities in the white-controlled mines and industries. They could not own property, nor start a business there. Such economic institutions, which we call extractive sapped the God-given potentials and opportunities of the vast population of black South Africans and largely kept them in poverty. While the country was rich during this period, the wealth was in few hands and the majority were poor. As such, foreign aid would not remove such institutional violence that deprived the majority access to the national resources. It should be noted that people in poor countries have the same ambitions as those in rich countries. Just like those from developed nations, people from poor nations also need freedom of accessibility to economic resources, to have the same opportunities and chances to good health care, clean portable water in their homes and quality education for their children. The reason to why the poor remain poorer is because their basic ability including their talents have been denied the opportunity to grow by their various institutions in those countries. In Sub-Sahara African states, it is important to note that once you are wealthy, you are privileged because you are entitled to power while the poor on the other hand, are less privileged and at the mercy of those in power. By way of conclusion, the evidence from above examples and analysis have shown that poor people are trapped within extractive economic institutions and until these institutions undergo a radical reform, foreign aid and any development it seeks to achieve will only be a mirage, not only in Sub-Sahara Africa, but across all developing countries of the world. 1. Shah, Anup. Foreign Aid for Development Assistance. Global Issues: Sunday, September 28, 2014, http://www.globalissues.org/article/35/foreign-aid-development-assistance [2].ÂÂ   Daron Acemoglu and James A. Robinson. Why foreign aid fails and how to really help Africa. The Spectator. January 27, 2014. Accessed February 04, 2017. http://www.spectator.co.uk/2014/01/why-aid-fails/. [3]. Fosu, Augustin Kwasi. 2015. Growth, Inequality and Poverty In Sub-Saharan Africa: Recent Progress In A Global Context. Oxford Development Studies 43, (1) (Jan 02): 44-59, https://www.lib.uwo.ca/cgibin/ezpauthn.cgi?url=http://search.proquest.com/docview/1680154815?accountid=15115 (accessed February 4, 2017). [4]. Ronci, Donatella. 1973. Apartheid In South Africa: Exploitation and Superprofits. La Critica Sociologica 25, (0): 117-128, https://www.lib.uwo.ca/cgi-bin/ezpauthn.cgi?url=http://search.proquest.com/docview/60911505?accountid=15115 (accessed February 4, 2017). Acromegaly Case Study: Healthcare Needs Acromegaly Case Study: Healthcare Needs Changing Care needs through the life stages You are required to write an assignment based on a person who is in the late stages of adulthood. The person can be a family member, friend or client. The assignment requires you to write about in general the physical, intellectual, emotional and social development in later adulthood first and then compare it to the actual individual’s current well being and lifestyle using the PIES tool. You must explore your own personal prejudices, fears and anxieties about working with people in your care. What has influenced it? What has changed it? Included in the assignment should be any variations whether positive or negative that are affecting the individual as well as recommendations on how you can positively and confidently respond to the needs of the person during this stage of life. Specific conditions: You must seek permission from the adult before writing essay. You must change the identity of the person as well as respecting confidentiality of the person. The essay must cover the following headings P.I.E.S of development during late adulthood(10 Marks) P.I.E.S of development of individual as well as your own personal prejudices, fears and anxieties.(5 Marks) Variations/factors affecting individual at this stage of life(5 Marks) Recommendations to respond confidently to the needs of the person(10 Marks) Introduction For my assignment I have chosen a family member in the late stages of adulthood with a condition called acromegaly. For this assignment I will use the internet, books and information directly from my family member and her immediate family in order to complete this assignment. All names will be changed in order to protect the person’s privacy and confidentiality. Permission has been sought from my family member to do this assignment on her condition and her stage of development. Main Body Clients Name – Lucy Age – 67 Condition – Acromegaly ‘Acromegaly is a hormonal disorder that develops when your pituitary gland produces too much growth hormone’ (Mayoclinic.org, 2015) P.I.E.S of development during late adulthood Physical needs – During late adulthood our physical appearance is diminishing slowly this is due to cellular senescence (cells in our bodies start to decline) (Mark Stibich, 2015). Wrinkles start to appear as skin is losing elasticity. Our bones start to lose calcium and can become brittle (osteoporosis) and harder to heal. Certain illnesses are more likely to appear as one ages such as arthritis, heart disease, diabetes and respiratory problems. A good diet and regular exercise and most importantly a positive attitude in late adulthood can help greatly in prolonging these physical changes. However, even with a good lifestyle and a positive attitude, unforeseen circumstances may happen which triggers further degradation of a person’s health at this stage of development. Retirement and all it has to bring is in full swing. (Maslow, Hierarchy of Needs) According to Erik Erikson from the age of 65 we start to feel that our lives have become less productive. This indeed can be very true if we do n ot have a good retirement plan. With the more and more emphasis that is been put into place for retirement plans and groups that are been set up for the retired person this is helping greatly with these issues. Intellectual needs – As we age our cognitive ability declines. In late adulthood this can become apparent as our intellectual abilities start to decrease, some difficulties with memory and information processing (Paget). This is why it is crucial that adults in this stage keep their brain stimulated and active with certain activities. Even by keeping up reading newspapers, crosswords, bingo, and quiz’s.(Activity Theory) A lot of retirement groups that are being set up and there are courses that adults in this stage of development can do which will keep their minds busy and their brain stimulated which can have a domino effect on their mental health. Unfortunately illnesses may occur that have a negative effect to our cognitive ability such as dementia (Alzheimer’s, Lewy body, front temporal and vascular), Stroke or acquired brain injuries. Emotional needs – Erik Erikson stages of development describes late adulthood stage 65 + as a stage of Ego Integrity vs Despair. He believed that at this stage we look back on our lives so far and if we do not feel we accomplished everything we needed to at this stage of development we can develop a sense of despair which in turn will lead to feelings of depression. With this in mind this can be a very emotional time for some. At this stage of life it is imperative that we have family and friends that we can talk to and share our fears and feelings with. At this stage of development a person that has a life threatening illness may go through several emotions which is described by Elizabeth Kubler-Ross in her grief cycle. (Changingminds.org,2015) Social needs – At this stage of development it is crucial to have interaction with family and friends. As without these interactions a person in late adulthood can feel very isolated. A lot of people before this stage of development, are used to a busy social life, whether it is working or raising their families (Jung’s Theory on Ageing). It is very important that they are invited to family gatherings, social events and are visited regularly. This will help greatly with their physical, intellectual, and emotional needs which can have positive effects on the person’s health if they are kept socially active. It is also important that a person is encouraged to get involved with the various retirement clubs that are set up in their area.(Active retirement Ireland). P.I.E.S of development of individual as well as your own personal prejudices, fears and anxieties Physical needs – As Lucy is 67 and is in the late stages of adulthood her physical appearance is starting to diminish. Along with these changes unfortunately Lucy has to contend with other physical changes due to her condition acromegaly. A once average size woman Lucy has significantly shown signs of change physically. Her feet have gone from a size 6 to a size 9 shoe, her hands have grown bigger in size also and her weight has risen. She has had to deal with retirement and her condition all at once. A mother of 4 whom held down a full time job as a care assistant in a local nursing home in her area and kept her housework to perfection as she says her self she is a cleaning addict. At the age of 64 she discovered she had the condition acromegaly and in the last 3 years she has undergone surgery and radiotherapy to try and reduce the benign tumour on her pituitary gland. Unfortunately this was unsuccessful and Lucy has now to inject herself daily with Somavert 10mg, a medication to reduce the secreti ons of growth hormone by the pituitary gland. Lucy lives with her daughter, her daughter’s husband and their 2 children. I feel this is helping greatly with her physical needs as she still helps out with housework when she is well and she brings her grandchildren for walks to the park and playground. Intellectual needs Intellectually Lucy keeps her mind active by reading novels, and attending bingo when she is well enough. As part of her condition acromegaly she is part of a team in Beaumont Hospital whom are researching this condition that is affecting 400 people in Ireland. I feel this is helping her greatly intellectually as she is learning more and more about the condition and it is keeping her mind and brain active while doing so. Emotional needs Lucy’s emotions at this stage of her development and with the condition acromegaly can be all over the place. But with her family network around her and her close friends that she can talk to about her fears and anxieties this is a great help to her emotionally. I feel from talking to Lucy that she is very well informed by the research team at Beaumont and this is helping her greatly in dealing with her condition. From talking to her about her life so far I have gathered that she feels she has accomplished everything she needed to so far for this stage of development and I feel she can develop through this stage with a virtue of wisdom (Erik Erikson) Social needs – At this stage of development Lucy’s social needs are still of high importance. She still attends bingo with a close friend, family gatherings and family outings. Sometimes she feels that people she hasn’t seen in a while think she has put on weight by over eating but in fact it is because of her condition. She is a very outgoing person so this doesn’t bother her much as she just explains to them her condition. During her outings to Beaumont for research days she has got close to other people whom are at the same stage of development as her and also going through the same condition. My own personal fears, prejudices and anxieties at this stage of development Upon starting my work experience in a nursing home I had a fear that people in the late stage of adulthood development that were in a nursing home were left sitting in an arm chair all day with no interaction from other residents or staff. I realised the first day that this was not the case and that my nursing home had a activities coordinator that did SONAS activities with all residents. As part of the new HIQA standards person centred care approach this was a crucial part of standard working procedure. Variations/factors affecting individual at this stage of life At this stage of development Lucy is quite lucky as her daughter and son in law and grandchildren live with her and her sons live within a mile radius of her house. I feel this is a positive factor at this stage of life and with her condition as she has the comfort of a close knit family always there to help her at this stage and she has the added bonus of helping them too. With her condition acromegaly and the stage of development she is at I would worry that her medication daily (somavert) and indeed the condition itself would have adverse effects on her health (cardiomyopathy, diabetes mellitus and osteoarthritis) during this stage of her life. Lucy has informed me that the team at Beaumont are keeping a very close eye on her through many different tests including liver tests, blood tests and scans in order to keep a close eye on any adverse reactions to her medication and condition. Recommendations to respond confidently to the needs of the person In order for me as a HCA to respond confidently to Lucy’s needs I would need to have the correct information about her condition in order to help talk her through her treatments as I feel it is imperative to be able to confidently answer any questions she may have. I can research local support groups for Acromegaly sufferers and encourage her to join them and bring her family to help them further understand what changes are going on in her body. Using my interpersonal skills I can be a good listener and shoulder to cry on when she is feeling depressed and can take her on shopping trips to specialised shops that cater for women of larger stature. Lucy loves to write letters to family in Galway and England but finds it difficult, when her hands are paining her, therefore I can write dictations from her to keep her hobby. Even though she is not at risk of dementia from her illness, I feel it would be good to help her feel a sense of integrity about her life if we make a life book with her as she can visually see all that she has accomplished. (Erik Eriksson) Conclusion Upon researching for this assignment I have learned that the late stages of adulthood development can be an emotional rollercoaster for any individual. It is my duty going forward as a HCA to be able to understand the basic needs of a person going through this stage. In doing so I need to put myself in their shoes in my thinking and how I would like to be treated at this stage of development. References Anon, (2015). [online] Available at: http://google.ie/webhp?sourceid=chrome-instantion=1espv=2ie=UTF-8 [Accessed 3 Apr. 2015]. Anon, (2015). [Blog] Available at: http://nandahealth.blogspot.ie/2013/09/theories-of-aging-process-biology.html [Accessed 3 Apr. 2015]. Changingminds.org, (2015). The Kubler-Ross Grief Cycle. [online] Available at: http://changingminds.org/disciplines/change_management/kubler_ross/kubler_ross.htm [Accessed 3 Apr. 2015]. Cliffsnotes.com, (2015). Theories of Aging. [online] Available at: http://www.cliffsnotes.com/sciences/psychology/development-psychology/psychosocial-development-age-65/theories-of-aging [Accessed 3 Apr. 2015]. Headstrongbrain.com, (2015). What is Cognitive Decline?. [online] Available at: http://www.headstrongbrain.com/FAQ/~Q3-48/What_is_Cognitive_Decline [Accessed 3 Apr. 2015]. Independent.ie, (2011). Pituitary gland: The tiny gland that can cause very big problems Independent.ie. [online] Available at: http://www.independent.ie/lifestyle/health/pituitary-gland-the-tiny-gland-that-can-cause-very-big-problems-26776040.html [Accessed 3 Apr. 2015]. Mark Stibich, P. (2015). Senescence, Healthy Aging and Longevity. [online] About.com Health. Available at: http://longevity.about.com/od/whyweage/a/senescence.htm [Accessed 3 Apr. 2015]. Mayoclinic.org, (2015). Acromegaly Complications Mayo Clinic. [online] Available at: http://www.mayoclinic.org/diseases-conditions/acromegaly/basics/complications/con-20019216 [Accessed 3 Apr. 2015]. Mayoclinic.org, (2015). Acromegaly Definition Diseases and Conditions Mayo Clinic. [online] Available at: http://www.mayoclinic.org/diseases-conditions/acromegaly/basics/definition/con-20019216 [Accessed 30 Mar. 2015]. McLeod, S. (2007). Maslows Hierarchy of Needs. [online] Simply Psychology. Available at: http://www.simplypsychology.org/maslow.html [Accessed 30 Mar. 2015]. McLeod, S. (2015). Erik Erikson | Psychosocial Stages | Simply Psychology. [online] Simplypsychology.org. Available at: http://www.simplypsychology.org/Erik-Erikson.html [Accessed 30 Mar. 2015]. Medicines.ie, (2015). Somavert 10mg, 15mg and 20mg Powder and Solvent for Solution for Injection Summary of Product Characteristics (SPC). [online] Available at: http://www.medicines.ie/medicine/9530/SPC/Somavert+10mg,+15mg+and+20mg+Powder+and+Solvent+for+Solution+for+Injection/ [Accessed 30 Mar. 2015]. Rightdiagnosis.com, (2015). Aging Theories RightDiagnosis.com. [online] Available at: http://www.rightdiagnosis.com/genetics/aging.htm [Accessed 3 Apr. 2015]. OTHER USEFUL INFORMATION Healthcare Support1Edel Brew

A Farewell to Arms as a Classic Literary Work Essay -- Farewell Arms E

A Farewell to Arms as a Classic Literary Work      Ã‚   A classic literary work has been defined as a work "that lasts through generations because of its universality of theme, ageless symbolism, word choice and the ordering of detail."   A Farewell to Arms, by Ernest Hemingway should be considered a classic literary work due to the universal themes, ageless symbolism, word choice, and story detail.     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Although there were several themes in this book, a major theme seemed to dominate the story.   This theme is the importance of love and loss in a male emale relationship.   These two lovers were so absorbed in each other that they needed no one else in their life.      'Wouldn't you like to go on a trip somewhere by yourself, darling, and be with men and ski?'   'No. Why should I?'   'I should think sometimes you would want to see other people besides me.' 'Do you want to see other people?'   'No.'   'Neither do I' (Hemingway 297).      This conversation shows that Catherine loves him so much that she is willing to be alone just so he can be happy.   At the same time, Mr. Henry would probably like to go skiing but would never dream of leaving Catherine alone.   Death wins out over love.  Ã‚   TO CLARIFY WHO IS SPEAKING, PUT THE QUOTE INTO YOUR PAPER JUST AS IT IS WRITTEN IN THE NOVEL.   WHEN THE SPEAKER CHANGES BEGIN A NEW LINE.   .  Ã‚   THE PUNCTUATION SHOULD APPEAR AFTER THE PARENTHESES ONLY, NOT AFTER THE INSIDE THE QUOTE AND AFTER THE PAGE NUMBER.    'It is very dangerous.'   The nurse went into the room and shut the door. I sat outside in the hall. Everything was gone inside of me.   I did not think.   I could not think.   I knew she was going to   die and I prayed that she would ... ...d dialogue and story line makes this an easy to read and understandable ageless story.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚      Works Cited and Consulted Bloom, Harold. Introduction. Ernest Hemingway's A Farewell to Arms. Ed. Harold Bloom. New York: Chelsea, 1987. Hemingway, Ernest. A Farewell to Arms. New York: Simon and Schuster, 1957. Lewis, Wyndham. Twentieth Century Interpretations of A Farewell to Arms. Ed. Jay Gellens. Englewood Cliffs: Prentice, 1970. 56-64. Young, Philip. Ernest Hemingway. New York: Rinehart, 1952. Internet Sources Ernest Hemingway in His Time.   July, 1999. Universtiy of Delaware Library, Special Collections Department. 29 Dec. 2000 Flashback. July, 1999. The Atlantic Monthly. 29 Dec. 2000   Ã‚  Ã‚  Ã‚   Hemingway Campfire. February, 2000. Hemingway Nantucket Campfire. 5 Jan. 2001 http://hatteraslight.com/navy/Hemingwayhall/cas/448.html.

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INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and Challenges Pankaj Chandra Nimit Jain W. P. No. 2007-03-07 March 2007 The main objective of the working paper series of the IIMA is to help faculty members, Research Staff and Doctoral Students to speedily share their research findings with professional colleagues, and to test out their research findings at the pre-publication stage INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications The Logistics Sector in India: Overview and ChallengesPankaj Chandra Nimit Jain Indian Institute of Management Ahmedabad Vastrapur, Ahmedabad 380015 [email  protected] ernet. in, [email  protected] ernet. in Abstract The logistics industry in India is evolving rapidly and it is the interplay of infrastructure, technology and new types of service providers that will define whether the industry is able to help its customers reduce their logistics costs and provide effective services (which are also growing). Changing government policies on taxation and regulation of service providers are going to play an important role in this process.Coordination across various government agencies requires approval from multiple ministries and is a road block for multi modal transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customers. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making. In this paper, we provide a perspective on these issues, outline some of the key challenges with the help of secondary information, and describe some interesting initiatives that some firms & industries are taking to compete through excellence in managing their logistics.IIMA INDIA Research and Publications 1 Introduction The Indian economy has been growing at an average rate of more than 8 per cent over the last four years (Srinivas, 2006) putting enormous demands on its productive infrastructure. Whether it is the physical infrastructure of road, ports, water, power etc. or the digital infrastructure of broadband networks, telecommunication etc. or the service infrastructure of logistics – all are being stretched to perform beyond their capabilities.Interestingly, this is leading to an emergence of innovative practices to allow business and public service to operate at a higher growth rate in an environment where the support systems are getting augmented concurrently. In this paper, we present the status of the evolving logistics sector in India, innovations therein through interesting business models and the challenges that it faces in years to come. Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire inbound and outbound segments of the manufacturing and service supply chains.Of late, the logistics infrastructure has received l ot of attention both from business and industry as well as policy makers. However, the role of managing this infrastructure (or the logistics management regimen) to effectively compete has been slightly under-emphasized. Inadequate logistics infrastructure has an effect of creating bottlenecks in the growth of an economy, the logistics management regimen has the capability of overcoming the disadvantages of the infrastructure in the short run while providing cutting edge competitiveness in the long term.It is here that exist several challenges as well as opportunities for the Indian economy. There are several models that seem to be emerging based on the critical needs of the Indian economy that can stand as viable models for other global economies as well. Chandra and Sastry (2004) have pointed towards two key areas that require attention in managing the logistics chains across the Indian business sectors – cost and reliable value add services. Logistics costs (i. e. inventor y holding, transportation, warehousing, packaging, losses and related administration costs) have been estimated at 13-14 per cent of Indian GDP which is higher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal, 2006a). Service reliability of the logistics industry in emerging markets, like India, has been referred to as slow and requiring high engagement time of the customers, thereby, incurring high indirect variable costs (Dobberstein et. al, W. P. No. 2007-03-07 Page No. 3 IIMA INDIA Research and Publications 2005).However, the Indian logistics story is one with islands of excellence though there has been a general improvement on almost all parameters. It is this aspect that we explore further in this paper. The paper is organized as follows: the next section gives a brief introduction of some of the peculiarities of the Indian logistics sector. In section 3 we discuss the determinants of growth in this industry. In section 4 we prov ide some interesting initiatives that point towards a renewal of the sector. The challenges facing the sector are discussed in the last section. 2 Some Peculiarities of the Indian Supply ChainsThe Indian logistics sector has typically been driven by the objective of reducing transportation costs that were (and often continue to be) inordinately high due to regional concentration of manufacturing and geographically diversified distribution activities as well as inefficiencies in infrastructure and accompanying technology. Freight movement has slowly been shifting from rail to road with implications on quality of transfer, timeliness of delivery and consequently costs except for commodities which over long distances, predominantly, move through the extensive rail network. More on the infrastructure issues later.Figure 1 shows the relative value of transportation costs vis-a-vis other elements of the logistics costs in India. The transportation industry is fragmented and largely unorga nized – a large number of independent players with regional or national permits that carry freight, often with small fleet size of one or two single-axle trucks. This segment carries a large percent of the national load and almost all of the regional load. This fragmented segment comprises owners and employees with inadequate skills, perspectives or abilities to organize or manage their operations effectively.Low cost has been traditionally achieved by employing low level of technology, low wages (due to lower education levels), poor maintenance of equipment, overloading of the truck beyond capacity, and price competition amongst a large number of service providers in the industry. Often, one finds transportation cartels that regulate supply of trucks and transport costs. However, the long run average cost of transport operations across the entire supply chain may not turn out to be low. W. P. No. 2007-03-07 Page No. 4 IIMAINDIA Research and Publications Figure 1: Elements of Logistics Cost in India Trans por tation 40 War e hous ing, Pack aging & Los s e s 24 26 Inve ntor y Or de r Pr oce s s ing & Adim ins trative 0 5 10 10 15 20 25 30 35 40 45 percent contribution Source: Sanyal (2006a) Table 1 gives a breakup of the logistics cost across different sectors of the Indian industry and the changes therein over the last five years. It shows how the logistics spend is increasing, sometimes dramatically, across various industrial sectors. Steel, harmaceuticals, food & agro-business, and auto have also been the sectors that are growing most rapidly in the national economy – it is no surprise that their logistics costs have been increasing at a faster rate. A few observations are in order here. The low change in order processing & administrative costs in the cement sector could possibly be due to the use of call centers by various producers for order processing and dispatch planning. Steel and pharmaceutical sectors have seen maximum changes in compon ent costs.The distribution practice of pushing goods down the channel might be responsible for high increase in the inventory and warehousing costs in the pharmaceutical industry. Investments in new cold chains and losses might be the causes of high change in the warehousing, packaging & losses related costs. Warehousing, has also been typically dominated by small players with small capacities and poor deployment of handling, stacking and monitoring technologies. While it has had detrimental effect on almost all sectors, the food sector has been the one that has suffered the most due to low investment in cold chains and allied machinery.Erratic power outages have also meant low dependence on technology and a more manual operation. Another fact that has affected both the location as well cost of operating a W. P. No. 2007-03-07 Page No. 5 IIMA INDIA Research and Publications warehouse has been the â€Å"octroi tax1. † Firms have been locating warehouses outside city limits. Ta ble 1: Distribution of Logistics Costs across Some Sectors (2000-2005) Logistics Cost Components (in US $ mn) Transport ation Inventory holding Warehousing, packaging & loses Order processing & administrative Total Logistics cost SectorAuto Cement Consumer Durables FMCG Food Garment Pharmaceutical Steel Source: IAEIS 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 2000-01 2005-06 Avg. Change 285. 0 406. 5 20. 3 50. 6 55. 4 4. 8 331. 9 398. 9 11. 2 201. 5 280. 7 13. 2 398. 7 524. 5 21. 0 337. 3 454. 4 19. 5 174. 0 310. 0 22. 7 438. 3 693. 6 42. 5 171. 0 243. 9 12. 2 30. 4 33. 3 2. 9 199. 1 239. 3 6. 7 120. 9 168. 4 7. 9 239. 3 314. 7 12. 6 202. 4 272. 11. 7 104. 4 186. 0 13. 6 263. 0 416. 1 25. 5 185. 3 264. 3 13. 2 32. 9 36. 0 3. 1 215. 7 259. 3 7. 3 131. 0 182. 5 8. 6 259. 2 340. 9 13. 6 219. 2 295. 3 12. 7 113. 1 201. 5 14. 7 284. 9 45 0. 8 27. 7 71. 3 101. 6 5. 1 12. 7 13. 8 1. 2 83. 0 99. 7 2. 8 50. 4 70. 2 3. 3 99. 7 131. 1 5. 2 84. 3 113. 6 4. 9 43. 5 77. 5 5. 7 109. 6 173. 4 10. 6 712. 6 1016. 4 50. 6 126. 5 138. 5 12. 0 829. 6 997. 3 27. 9 503. 8 701. 8 33. 0 996. 8 1311. 2 52. 4 843. 2 1135. 9 48. 8 434. 9 775. 0 56. 7 1095. 7 1734. 0 106. 4 They delay moving goods into retail network as late as possible.It has also led to the development of a unholy business-government nexus to avoid the tax and extract rents. Use of technology is quite limited – both IT and engineering equipments in order to increase productivity and service. An in-appropriate evaluation of the diverse benefits of technology has led to higher usage of manual labour across the logistics industry whether An entry tax on goods coming into a city. The tax is a major source of revenue for city municipal corporations. W. P. No. 2007-03-07 1 Page No. 6 IIMA INDIA Research and Publications it is in the distribution activities or within pla nts.Many firms try to compete through the factor advantage of low wages which have necessitated hiring low or no skill personnel thereby sacrificing productivity related gains in the long run. Understanding the linkage between inventory and transport planning is a key to reducing operational cost of distribution. Chandra and Sastry (2004) identify transport & dispatch planning as an area of concern in a survey of manufacturing firms in India. Ninety eight per cent of sample firms in that survey have a contract with trucking companies for making dispatches and only 11 per cent own their own fleet of trucks.While 36 per cent of these firms use third party logistics (3PL) service providers for making dispatches, about 30 per cent use 3PL service providers for procuring their material from their suppliers. Somehow, transport planning has remained a unglamorous area within Operations despite the fact that about 10 per cent of the cost of sales comes through physical distribution (Sanjeev i, 2003). Transport planning (e. g. , optimal dispatch quantities & frequency of dispatch, vehicle routing, loading pattern in the trucks etc. ) does not appear to have received the required attention.For example, in the same survey, only 21 per cent of sample firms report the use of some software for scheduling dispatches. It is worth understanding the structure of the Indian supply chains, in aggregate, to get a better appreciation of many of the issues raised earlier. In Figure 2 Chandra and Sastry (2004) present the structure of the supply chain of a sample of firms. It can be seen that about 4 per cent of firms have less than five suppliers, about 85 per cent of firms have less than five plants, about 14 per cent of firms have less than five regional distributors, and about 9 per cent of firms have less than five retailers.A similar statistics is obtained for other ranges of suppliers, plants, distributors, and retailers. What is worth noting is that 63 per cent of firms have m ore than 100 suppliers, about 39 per cent of firms have more than hundred distributors, and 77 per cent of firms have more than hundred retailers. In addition, about 17 per cent of firms claim to have more than 500 suppliers. The same for distributors and retailers is 22 and 54 per cent respectively. This is perhaps where difficulties in managing logistics in India lie – larger the number of suppliers or distributors, higher is the cost of coordination.W. P. No. 2007-03-07 Page No. 7 IIMA INDIA Research and Publications Figure 2 : Structure of the Supply Chain of Sample Firms 90 80 70 Percent of Firms 60 50 40 30 20 10 5000-10000 1000-2000 2000-5000 500-1000 100-500 50-100 10-15 15-25 25-50 0 5-10 0-5 more than 10000 Range Suppliers Plants Approved Retailers Regional Distributors Source: Chandra and Sastry (2004) When we look at the spatial distribution of both plants and suppliers, the above statement becomes even stronger. Of the sample firms that operate more han one plant , 48 per cent of these plants are located more than 100 kilometers away from each other, 33 per cent of these plants are located more than 500 kilometers away from each other and 18 per cent of these plants are located more than 1000 kilometers from each other. Similarly, on an average, only 4 per cent of suppliers are located within 5 kilometers of the manufacturing plant, about 13 per cent are located within 5-25 kilometers of the plant, 16 per cent are located within 25-100 kilometers of the plant and about 67 per cent of suppliers have facilities that are more than 100 kilometers away from the plants.Location policies of the past may have forced some firms to locate plants away from each other. However, this may be coming to haunt today as the cost of coordination increases and the ability to provide quick response to customer requirements might reduce. This problem gets exacerbated with suppliers. Manufacturers have to either develop suppliers separately for each location (ther eby increasing the number and affecting consistency in quality, price & delivery times) else material has to travel longer distances if there is a common supplier to all plants. W. P. No. 2007-03-07Page No. 8 IIMA INDIA Research and Publications The logistics challenge in such an environment is immense – build the infrastructure, manage the requirements of a changing structure of various sectoral supply chain, change industrial policies to facilitate efficient production and movement of goods and services, deploy effective managerial practices and technology to enhance the competitiveness through better management of logistics networks, and develop new models for new sectors especially in the service sectors as well as traditional areas like agri-business etc.It must be mentioned that the logistics industry in India is transforming itself very interestingly despite its peculiarities by developing innovative business models and by chipping away at the such structural and polic y based rigidities. In a later section, we discuss some of these innovative initiatives that are leading the renewal of the logistics industry in India. 3 The Changing Logistics Infrastructure With rising consumer demand and the resulting growth in global trade, the role of infrastructure support in terms of rails, roads, ports & warehouses hold the key to the success of the economy.In this section we provide a quick overview of the status of the logistics infrastructure in India and the current initiatives, both private and public, in that area. Goods are transported predominantly by road and rail in India. Whereas road transport is controlled by private players, rail transport is handled by the central government. With the second largest network in the world, road contributes to 65 per cent of the freight transport (Rastogi, 2006). Road is preferred because of its cost effectiveness and flexibility.Rail, on the other hand, is preferred because of containerization facility and ease in transporting ship-containers and wooden crates. Sea is another complementary mode of transport. Ninety five per cent of India’s foreign trade happens through sea (Deccan Herald, 2006). India has 12 major ports, six each on the West and East coasts and 185 minor ports. Table 2 maps the various modes on different performance indicators, clearly indicating the vitality and importance of road transport in Indian economy. There is also evidence of an, across the board, increase in freight traffic for all modes indicating an increased logistics activity.For instance, the per cent change in road, rail, air and sea cargo traffic has increased, between 2001 and 2005, from 5 to 14 per cent, 4 to 7. 5 per cent, 6 to 20 per cent and 3. 5 to 11 per cent respectively (CMIE Database, 2006). W. P. No. 2007-03-07 Page No. 9 IIMA INDIA Research and Publications Table 2: Comparison Chart for Various modes Rail 214760 10. 66 0. 11 Road 3487538* 5. 12* 3. 34 Sea 806 7. 9 12 Number (wagons, tr ucks, ships) Freight Capacity(mn ton) Route Length (mn km) /Number of major ports Freight Revenue (US $ bn) 7. 00 coal, steel, petroleum, primary metals 38. 64 automobile, electronic items, garments etc. 304 iron ore, coal, petroleum (and industrial and consumer products on the outbound export) Major Products Source: IAEIS, 2005-2006, Financial Express, 2006a *This figure is for 2002-03 1 US$ = Rs 44 In keeping with the increasing demand for road transportation, the National Highway Authority of Indian (NHAI) has been strengthening and widening national highways in multiple phases. As part of the National Highways Development Project, the work on the development of golden quadrilateral (connecting Delhi, Mumbai, Chennai and Kolkata) and the North-South and East-West links were started in 1998.It will build 13000 km expressways that would connect the nation (Surabhi, 2006). NHAI is investing about $650mn towards the development of an Intelligent Transportation System (ITS) which will make transport services on the highways (like reducing congestion, advance signaling, medical assistance, accident management, etc. ) efficient and automating many processes like toll collection etc. (Sanjai, 2007). Because of the growing opportunity and potential for high revenue, the Ministry of Railways has been taking measures to expand the rail connectivity and recapture the market share of freight business.By focusing on improving wagon utilization, the Railways have managed to reduce the freight cost from 61 paise2 per net tonne km (ntkm) in 2001 to 56 paise per ntkm in 2005 (Rastogi, 2006). At present, goods train run on same 2 100 paise = 1 Rupee W. P. No. 2007-03-07 Page No. 10 IIMA INDIA Research and Publications railway tracks as passenger trains at an average speed of around 25 kmph (Gill, 2006). With the proposed dedicated west and east freight corridors, the goods trains are expected to run at 100kmph. The West and East rail corridor of 1469-km and 1232-km will be bu ilt with an investment of $2. 0 bn and $2. 40 bn respectively and will be equipped with the latest centralized traffic control systems (Acharya, 2006a). Indian Railways has also decided to collaborate with bulk users of freight transport to build the rail network in a Public Private Partnership (PPP) mode. The first project on this line comprises nine public and private sector companies that are building a 82-km rail line between Haridarpur and Paradip at a cost of $ 120mn (Telegraph, 2006). Recently several steel companies have also shown interest in linking iron and coal mines in Orissa with a 98-km rail line (Business Standard, 2006).Multi-modal transport in India was a monopoly of the Container Corporation of India till 2005. With licenses being given to 13 new private players (Acharya, 2006b), rail trade should improve considerably. In order to encourage trade by small scale industries, Indian Railways has started a â€Å"road-railer†system where container vehicles are c apable of running both on highways hauled by trucks and on rail (Guha and Sinha, 2006). In 199899, the Konkan Railway (one of the railway zones in South-Western India) pioneered the ‘roll-on, roll-off' (‘RO-RO') concept between Mumbai (Kolad) and Goa (Verna).Privately owned trucks are loaded with their goods which are driven on to a rake of flat cars and are carried (trucks and their cargo) to the destination. In 2005-06, the ports handled 456. 20 million tonnes of cargo traffic. This is expected to increase to 700 million tonnes by 2011-12. In keeping pace with the growing demand, the government plans to increase port capacities to around 1 billion tonnes per annum in the next six years (Raja, 2006). Under the National Maritime Development Programme (NMDP), the government is encouraging public-private partnership to build and maintain ports.This scheme will cover 276 port related projects at an investment of $12. 40 bn (Raja, 2006). With rising congestion levels at majo r ports and with high average turnaround time, the government has decided to develop minor ports in seven states to ease the traffic of major ports (Financial Express, 20006b). Tables 3 the operational performance of various ports in India – while there is an improvement in performance, the pace is slow. The estimated cost of this development is expected to be around $350 mn. Further, private sector is likely to invest $ 7. 67 billion over the next six years.W. P. No. 2007-03-07 Page No. 11 IIMA INDIA Research and Publications Table 3: Average Turnaround Time At Ports (in Days) Port Chennai Cochin Haldia Jawaharlal Nehru Kandla Kolkata Marmugao Mumbai New Mangalore Paradip Tuticorin Vishakhapatnam Average Source: IAEIS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 CAGR 6. 40 5. 80 5. 30 3. 70 4. 60 3. 80 (9. 90) 3. 23 3. 10 2. 37 2. 19 2. 22 2. 33 (6. 32) 5. 21 3. 96 4. 01 3. 02 2. 87 3. 00 (10. 45) 1. 72 2. 48 2. 34 2. 28 2. 04 1. 84 1. 36 6. 15 4. 72 6. 55 5. 94 5. 06 4. 62 (5. 56) 6. 59 5. 50 4. 71 4. 47 4. 29 4. 7 (8. 75) 4. 30 4. 25 2. 04 3. 86 4. 47 4. 35 0. 23 5. 60 5. 20 5. 47 5. 06 4. 10 4. 21 (5. 55) 3. 80 2. 89 2. 73 1. 90 2. 35 2. 96 (4. 87) 3. 89 4. 16 3. 99 3. 37 3. 42 3. 41 (2. 60) 6. 39 4. 10 4. 11 3. 59 2. 59 2. 66 (16. 08) 4. 75 3. 71 3. 51 3. 72 3. 33 3. 20 (7. 60) 4. 84 4. 16 3. 93 3. 59 3. 45 3. 38 (6. 92) Currently, fifteen private sector projects are operational at various major ports and four more projects are under implementation (Raja, 2006). One of them aims to build the deepest port in the world at an investment of $ 1bn (Financial Express, 2006c).This project is handled by a three-firm Chinese consortium with a Mumbai-based partner, Zoom Developers. Interestingly, firms like Ambuja Cement have been using barges for transport of clinkers from their factories to crushing and packaging plants all over the coast, thereby, reducing transport costs considerably. It can be seen that there is a fury of activity in enhancing the in frastructure capacities in the country. 4 Determinants of Logistics Growth in India The Indian logistics business is valued at US$ 14bn and has been growing at a CAGR of 7-8 per cent.As mentioned earlier, the logistics cost represents 13-14 per cent of the country’s GDP. The market is fragmented with thousands of players offering partial services in logistics; it is estimated that there are about 400 firms capable of providing some level of integrated service (Mahalaksmi, 2006). The economy is expected to grow around ten per cent over the next ten years and sectors like chemicals, petrochemicals (especially distribution), pharmaceuticals, metals and metal processing, FMCG, textile, retail and automobile are projected to grow the fastest.New business models are emerging as new firms, both domestic and foreign, enter the market. As a result of the ensuing competition, linkages with global supply chains and domestic market growth W. P. No. 2007-03-07 Page No. 12 IIMA INDIA Resea rch and Publications promise to change the face of logistics industry beyond recognition. In this section, we discuss how these are going to determine the growth of the sector. The scale of operations in manufacturing is changing and so are their markets and sourcing geographies.Growth in manufacturing in India has happened across clusters that are located in different parts of the country, e. g. , Ludhiana, NCR, Baddi and Dehradun in North, Rajkot, Jamnagar, Pune and Mumbai in West (along with Ankleshwar, Vapi, Aurangabad, and Kolhapur and most recently Kutch), and Coimbatore, Vishkahpatnam, Bangalore, Hosur, Chennai, Pudduchery and Sriperumbudur in the South. Assembly plants at these locations are being fed with raw materials and intermediate products from all over the country and abroad (as well as these locations).Moreover, distribution networks with emerging hubs in Indore and Nagpur (i. e. , Central India) supply all over the country and abroad. This is going to increase the n ature and extent of movement of goods and services across the country. This has been accompanied by the expansion of domestic production capacity (e. g. , ORPAT in Morbi has added capacity to produce 40,000 units of quartz clocks and time pieces at a single location) as well as a big MNC entry into the Indian manufacturing scene (e. g. NOKIA’s new factory at Sriperumbudur produces 1 million mobile phones per month). As the volume of production grows, so will the extent of movement of goods either to the ports for export or to the rest of the country. Some of the large players to enter (or expand significantly) the Indian market recently have been Reliance Retail, Big Bazaar Hypermart, Pantaloon and RPG in Retail; Nokia, LG, Samsung, Motorola, Sony, Blue Star in Consumer Electronics; Bajaj, Hero Honda, Maruti, Honda, Toyota, Audi,Volkswagen, Renault, Volvo in the Automotive sectors; Holcim in Cement; etc. It can be expected that their operations will drive the growth of logist ics industry. The liberalizing Indian economy is experiencing entry of large domestic and global firms in new businesses as well as enlargement of distribution network of many regional Indian firms. The announcement of large retail projects by Reliance and Bharti (in collaboration with Wal-Mart) will bring new technology, add additional warehouse capacity and will require fast and reliable movement of goods across the country.Reliance is thinking of establishing large warehouses in Thailand to take advantage of low cost sourcing from South-East Asia once the Free Trade Agreement with Thailand (as well as ASEAN) gets finalized. Similarly, regional food & grocery retail leaders like W. P. No. 2007-03-07 Page No. 13 IIMA INDIA Research and Publications Subhiksha who are present very extensively in the South Indian market are now entering the rest of the country with more than 600 new retail stores in 2007. Their logistics strategy and needs are transforming very significantly with this nationwide expansion.New retail chains are entering the non-metro towns and non-State capitals. It may be mentioned that the growth of the courier industry post-liberalization has helped change the parameters of service evaluation in the industry from cost alone to cost, time, and reliability. This sector has also seen a number alliances between regional and local players especially in the small package (less than 500 grams) market thereby creating networks of small players who are not only cost effective but also more flexible than the large national players.This segment of the industry has taken advantage of the large manpower and is gradually moving away from â€Å"Angadiyas† or manual inter-city couriers to a more organized network that shares transport infrastructure (and even consolidates sub-packages from various small couriers in a single large courier bag to be transported by air cargo or road transport rather than these sub-packages being carried by several manual couriers on the train; the courier firms are gaining on service and are sharing fixed costs).The entry of large third party logistics (3PL) carriers like Federal Express and DHL and the expansion of domestic networks of Indian firms like Gati and Shreyas Shipping is also transforming the nature of services and the business practices across the sector. Table 4 gives an idea of the investment plans announced by the various firms for the coming financial year and gives a sense of their increasing activity. Another trend driving growth in this sector has been the consolidation amongst the logistics player.Mergers & Acquisitions amongst Indian and MNC logistics firms is starting to increase the reach of MNC 3PLs in the domestic Table 4: Investment Plans of Major 3PL Service Providers Firms DHL TNT Gati *Shreyas Shipping and Logistics Investment Details/ Plans (2007-08) (in US $ mn) 260 115 200 350 Source: Baxi (2006), Sanjai (2006a) W. P. No. 2007-03-07 Page No. 14 IIMA INDIA Research an d Publications market while consolidating the business (e. g. , DHL acquired Blue Dart, TNT acquired Sppedage Express Cargo Service, Fedex bought over Pafex etc. ).Consolidation is expected to be beneficial to both the service providers as well as the consumers. Initially MNC 3PL firms were providing only custom clearance and freight forwarding facility to their international clients. With the logistics market growing we should see a shift in this trend. The complexity of managing the supply chain in the pre-consolidation era is illustrated through the following scenario at Nokia (Figure 3) . Logistics activity for Nokia’s India Hub was maintained by a large number of Figure 3: Typical Logistics Supply Chain of NokiaDHL, Panalpina Inbound logistics Nokia Hub in Sriperumbudur Gati, Blue Dart Domestic Outbound logistics UPS Warehouse in India Export Market International Outbound logistics DHL Source: Mishra et al. (2006 service providers. Coordination and handover was a problem at times. With DHL acquiring Blue Dart, it is now able to provide seamless end-to-end integrated supply chain solutions. Downstream distribution channels have also seen some consolidation.Manufacturing firms, particularly, in the FMCG sector have started to reduce the number of wholesalers (and at times, distributors) so as to increase the reach and consequently the returns to each wholesaler. This also induces them to invest in new productivity enhancing technology and effective managerial practices. Technology in the logistics chain is being upgraded bringing better visibility on customer off-takes (though an absence of cash registers and the accompanying regulatory discipline to avoid tax evasion stand in the way of automated data updation).Introduction of more efficient transport technology and mobile communication has the potential of changing the logistics practices in the industry. Increasing competition and the low penetration of IT also implies that the scope for change is immense and imminent. The agri-business sector’s supply chain, for example, has changed significantly with increasing investment in coldchains across the country. With this, fruits and vegetables are being transported long distances (often more than 1500 kms) and milk grid is able to pickup and deliver liquid W.P. No. 2007-03-07 Page No. 15 IIMA INDIA Research and Publications milk from and to remote areas more frequently. Here the role of cooperatives like AMUL has been exemplary both in increasing the size of the distribution network and also in reorganizing the supply network very efficiently along with enormous buildup of social capital – a pre-requisite for growth in emerging economies (Chandra and Tirupati, 2003). Low penetration of hand eld technologies for order processing and tracking, product tracking and material handling accessories, as well as IT for improved decision making can be seen as opportunities for growth. Mobile technologies also hold the potent ial for rapidly using information for real time decision making as well as for coordinating both the inbound and outbound logistics. Indian customers exhibit strong value and variety seeking behaviour hence developing capabilities in the process of product and service delivery will induce loyalty (i. e. , process loyalty).Government policies have been another driver of change in the logistics industry. The trend towards a higher road cargo traffic as compared to rail is going to require better logistics control and coordination. The golden quadrilateral road project and the east & west rail corridors are expected to change the reactiveness of Indian firms through shorter lead times as well as lower maintenance costs on the transport equipment. They also have the potential of reducing the procedural delays on highways by reducing the number of checks and related stoppages of vehicles.Its impact on perishable good will be most significant. Thirteen States and three UTs have already am ended the State laws allowing private sector participation in direct purchases of farm produce from farmers (Ahya, 2006) which is making procurement more efficient and is bringing better technology as well as products in the rural production and distribution network (e. g. , see ITC echoupal in the next section). Banks have developed venture capital funds for logistics players. Small Industries Development Bank of India or SIDBI, for instance, has invested $ 2. mn in the Mumbai based firm Direct Logistics (Baxi, 2006). The unbundling of the logistics supply chain (both the physical pickup, storage and movement of goods as well as allied services like invoicing, order management, freight forwarding, customs clearance, octroi tax management etc. ) will lead to business opportunities and add value to the customers. An interesting example is that of Reliance Connect Service Centres that have been established on Indian highways by Reliance industry along with petrol stations.The Connect Centres provide a place for truckers to relax (sometimes with overnight stay facilities), send information (including data) to parent firms on their location, completed transactions etc. , receive material/instructions from the firm, remit money to parent firm, W. P. No. 2007-03-07 Page No. 16 IIMA INDIA Research and Publications etc. It has become a one-stop shop for truckers and their companies to keep in touch. Similarly, once VAT is introduced, it will simplify the process of goods servicing and will lead to rationalizing of many operational decisions.The implication of the emergence of a strong service industry on logistics performance is not well understood. Perhaps, a new business segment will emerge that is technology driven and will help coordinate activities across business channels. For example, there is a need to integrate the flow of information, goods and services between a medical physician, a diagnostics center, hospitals & nursing homes, and retail medical outlets à ¢â‚¬â€œ all of which are un-coordinated independent entities at the moment.This could range from digital transmission of MRI scans from a diagnostics center to a computer to blood collection and delivery from physician’s various city centers to nursing homes/blood banks or directly to dispersed operation theatres. The role of a coordinating agency becomes, organizationally, valuable in such an environment. The need is to link physical logistics processes with communication technologies –building on the strengths of the IT and mobile communication industries. 5 The Renewal of the Sector: Some Innovative ExperiencesThere have been several instances of firms undertaking innovative re-design of their logistics systems or deployment of interesting business models to enhance the effectiveness of their networks in order to deliver value to their customers. Sometimes it was done to overcome an inherent disadvantage that may exist in the supply chain. In this section, we presen t a few such experiences both at the firm level and at the industry level, through brief caselets highlighting their innovative contribution. They also represent the renewal process that is transforming the logistics sector and the distribution strategy of firms.GATI3 Established at a time (in 1989) when firms in India hardly outsourced their logistics requirements, Gati has transformed itself from a cargo movement company to become one of the leading end-to-end logistics and supply chain solutions provider in India. Continuous innovation and high end technological investments to improve service 3 Source: www. gati. com, Sharma and Thakur (2006), Prowess (2006), Reddy (2007) W. P. No. 2007-03-07 Page No. 17 IIMA INDIA Research and Publications quality, speed and efficiency can be ascribed as the reasons behind their success.It is staring to connect with mass retail market in several cities through 1500 Customer Convenient Centres. It is also the first Indian company to operate in th e far-east market with its own subsidiary in Hong Kong. On the service front, there have been several firsts in India by Gati – a money back guarantee on cargo services, cash-on-delivery and a tollfree number for convenience of customers. Gati operates one of the largest road networks linking 594 districts out of a total of 602 districts in India at a turnover of $104mn in 2005-2006. It covers 3. 2 lakh4-km every day with a fleet size of 2000 trucks.Its automated shipment tracking ability has brought it closer to the customers – for example, the SMS based tracking system has allowed the customers to continuously get an update on the status of their consignment. Another feature also enables customers to get email based conformation of any delivery. Gati has also transformed the warehouse management practices in India with its modern system, WMS – a web based warehouse management system that provides both functionality and flexibility to customers in managing thei r warehouse operations. WMS enables Gati and its customers to track inventory status in real time.Along with its transportation related capabilities, this has allowed Gati to manage the entire outbound logistics (i. e. , warehousing, transport and dealer/retailer replenishment) of Blue Star for his home air-conditioning division. Order processing times and shipping errors have decreased and customer service levels have improved, as a consequence. Currently, Gati operates with 10 warehouses and plans to setup another 25 over the next three years at an investment of $100mn. It is designing these new warehouses with mechatronic systems that could lead to a paradigm shift in warehouse management in India.It has implemented CRM and ERP systems, using IT to full advantage delivering value to the customers. AMUL5 The Kaira District Milk Cooperative Union or better known as AMUL was established in 1946 in Anand in the western State of Gujarat with an aim to remove the intermediaries in the milk procurement and distribution process and thereby increase return to milk farmers. The milk farmers were mostly marginalized members of the society and most of 4 5 1 lakh = 100,000 www. amul. org; Chandra and Tirupati (2003) W. P. No. 2007-03-07 Page No. 18 IIMA INDIA Research and Publications hem barely poured a few litres of milk each day. They, however, depended on this for their livelihood and any money lost to the middleman or to uncertainty in the environment meant a threat to their existence. Thus was born AMUL (which means invaluable in Hindi)! The Story of AMUL is an extraordinary story of vision, effort and power of networks for the benefit of the poor. From being a net importer of milk in 1947 when India became independent, India has now emerged as the largest milk producer in the world. This remarkable story has been scripted by a network of cooperatives called AMUL.The AMUL network is coordinated by the Gujarat Cooperative Milk Marketing Federation (or GCMMF) which markets milk and milk products that are produced by 12 Milk Unions (each having several factories) one of which is AMUL at Anand. The Unions are spread in twelve districts of Gujarat. Each Union collects milk from farmers through cooperative Village Societies. (This structure is now replicated in almost all the States of India. ) In 2005-2006, GCMMF had a sales turnover of $860mn through milk and milk products (its Unions or plants produce 15 categories of milk products with several products in each category).The 12 Unions collect about 6. 3million litres of milk every day from 2. 5 million farmers through 11,962 Village Societies. (with an annual collection of 2. 28 bn litres in 20052006). Each village society may have 100 to 1000 member farmers who pour milk twice a day. Twice daily, about 500 trucks collect milk from these Village Societies and bring them to either of the five chilling centers or the processing plants (or Unions). The Unions process the liquid milk – produ ce milk of various types for consumption, convert some to powder as inventory and use both powder and liquid milk for producing milk products.These products are distributed to consumers through a channel comprising 4000 stockists (or distributors) and 5,00,000 retailers. It is not difficult to imagine the complexity of coordinating such a network of perishable products with an explicit social objective, in addition to a commercial one. The network realized the need for a unique model to deliver value to customers and through that serve the key objective of setting up of the cooperative – making a producer out of a poor consumer and helping her get better returns. W. P. No. 2007-03-07 Page No. 19 IIMA INDIA Research and PublicationsBriefly, we will illustrate the unique mechanisms used by this network to coordinate the complex supply chain through the intervention of a number of third party service providers (distributors, retailers, logistics service providers and IT support groups). The network practices frequent delivery and works with low inventory levels in the chain, supported by extensive information network and IT kiosks at the milk pickup locations that provide a variety of services. Payment to farmers for RM procurement is instantaneous (well, almost! ) – during the same or in the next pouring shift by the Village Society staff.Milk is carried in cans by trucks (twice daily) or in chilling trucks, once in a day, to the plants. The routes of the trucks are well established and the arrival timetables at each Society well known and rarely is there any delay. This helps provide visibility to every member of the chain and improves the return on investment in the channel. The network operates with a zero stock out through improved availability of products and quick delivery. Disciplined planning to reduce variability at each stage helps in maintaining timeliness in the channel.GCMMF coordinates the production plan between the twelve Unions and ensures matching of geographic markets with supplies. TQM and Hoshin Kanri are the key tools used to plan and implement daily production and change programmes – these have facilitated a six-sigma performance throughout the network and has led to a doubling of sales revenue in the last ten years. Most interestingly, AMUL has the largest market share in every product category that it competes in – its competitors are both large MNCs and large & small Indian firms.AMUL illustrates how good managerial practices can help bridge the gap between profits for the supplier and low cost, highy quality products for consumers – all through exceptional coordination of logistics operations across an extensive network. AMUL operates with one umbrella brand for products from all its member Unions – a testimony to strong quality and cost coordination across all Unions and Village Societies. In addition, its has been singularly responsible for pulling out several million o f its members from poverty, ill health and illiteracy through its business model (called Anand Pattern) and social programmes.For details on this case study see Chandra and Tirupati (2003). W. P. No. 2007-03-07 Page No. 20 IIMA INDIA Research and Publications The DABBAWALLAHs of MUMBAI6 The â€Å"dabbawallah’s† or the ‘lunch box delivery people’ of Mumbai pickup and deliver lunch boxes from homes or restaurants and deliver it to the customer’s office – all within a specified time frame – and then deliver the empty box back to the place of pickup. It is an example of how processes can play an important role in coordinating logistics of an important service industry in India.The Nutan Mumbai Tiffin Box Charity Trust of Mumbai was established in 1891 to provide pick-up and delivery of lunch for Britishers working in Mumbai. Since then it has become the leading lunch delivery cooperative in the city. It picks-up and delivers 200,000 lunch boxes in a standard container every day and returns the same to the place of pickup. The firm has an annual turnover of about $12 mn and employs 5000 people for pickup and delivery – almost all of them are uneducated. However, there are less than 10 boxes mis-delivered or un-picked in a month!We discuss, briefly, the processes that help make this logistics network errorproof and deliver such an astonishing performance. The operations of the group has attracted global attention and won them many awards. They represent a growing group of service providers that exist as an element of the logistics network, provide niche service and generate value in return for the customer. The Trust which is organized as a cooperative is operationally organized in hierarchical teams – pick-up teams, consolidation teams, delivery teams (and then the reverse logistics for empty boxes with reversing of the functions for the teams).Typically, each dabba or the lunch box passes through more t han four pair of hands and may be transported up to 60 km each way. Pickup is done between 7. 30am-9. 00am, delivery between 12. 00 and 1. 00pm and return between 2. 00-5. 00pm. These represent tight time-windows where a team of 20-25 members (and supervised by a team leader who also fills in as a pickup person in case of any absence) pick-up lunch boxes from homes – about 30 per pick-ups person. The boxes are carried in a specialized fixture on a bicycle to the nearest train station where the boxes are consolidated by destination.A consolidation team performs this task and carries the boxes (which may have been picked by members of different teams but need to travel to the same destination geography) into the train. Often tiffin or lunch boxes are un-loaded at intermediate train stations – re-consolidated with boxes coming from other locations (i. e, cross-docked) and carried on a third train to its 6 Lecture of Mr Megde, President of the Nutan Mumbai Tiffin Box Suppl iers Charity Trust at IIM Ahmedabad, 2003; Chandra (2004) W. P. No. 2007-03-07 Page No. 21 IIMA INDIA Research and Publications estination station. At the destination station, the lunch boxes coming from various origins/cross-docking destinations, are once again segregated by the building where the delivery is made. Finally, a delivery team picks up their boxes, i. e. , boxes that they will deliver to specific owners in specific buildings, carry them on their bicycles and deliver them in the office of the owner of the box. Later in the afternoon, the same person picksup the empty box and pursues the reverse logistics and the box is ultimately delivered at its point of origin – either a home or a restaurant.With this as the complexity, what may be plausible reasons for such low errors? Contextually, the group members see their role as very important – they are responsible for delivering food to their customers – socially, it enhances their commitment to their tas k and establishes a critical customer-service provider link. Operationally, the handoff is done successfully through simplification or breaking down of tasks, codification and repetition. The designed process is simple and easy to understand for each operator.More important, each operator has a limited yet definite role. This role is one of pickup, consolidation & transfer and delivery (and the similarly for reverse logistics). Each pickup operator does not pickup more than 25-30 boxes as that is the number of addresses etc. that he can remember accurately which helps in avoiding mistakes. The lunch box is enclosed in a standard container which carries a unique code for the destination station, the building where the box is to be delivered and the floor number in that building where the office of the customer is located.Each operator recognizes a limited set of codes that are relevant to him (and does not have to learn the entire coding scheme). And finally, repetition of the task ( i. e. , same pickup location, same place for cross docking, same delivery location etc. ) helps in making the task foolproof. Of course, what helps is the linear geography of Mumbai, the punctuality of trains, relatively stable demand and strong inter-dependence between operators. It is an example of how manual logistics systems can be organized to effectively deliver value to the customer.ITC e-choupal7 The e-choupal project was launched by ITC (a large diversified company with strong FMCG presence) in 2000 in the central Indian State of Madhya Pradesh (MP) to reorganize the distribution of soyabean in rural markets. Today e-choupal reaches out to Source: www. echoupal. com, Talk by the eChoupal CEO S Sivakumar at IIMA, 2003, Mitra (2004), MBS CS (2006) W. P. No. 2007-03-07 7 Page No. 22 IIMA INDIA Research and Publications more than 3. 5 million farmers in 31,000 villages through 5,200 internet enabled kiosks and now covers a variety of agri-business products.The e-choupal was a u nique venture which aimed to eliminate the middlemen from the agricultural commodity supply chain and reduce information asymmetry for the farmers. It is an extremely profitable rural distribution system with its unique design features. The e-choupal was started with an objective to re-organize the soybean trade which was operating in an inefficient manner. Farmers used to sell their produce through government mandated markets called â€Å"mandis. † Mandi trading was conducted by commission agents who bought and sold the produce.As the produce was sold through auction by these traders, farmers would find out the market price only upon arrival at a mandi. If the buyers had purchased enough for the day at this mandi then either the auction prices fell dramatically or the farmers had to wait for the next day’s auction. While all this may have been happening at one mandi, the farmers were unaware of the auction status at other mandis where there could have been shortages. The decision regarding the quality of the produce was also dependent on the trader.Similarly, distortions in price and quality effected agro-business trading firms like ITC who were, by government law, required to purchase from the mandi and through these traders and not directly from farmers. Under the e-choupal model, kiosks were setup in villages providing farmers information in local language on agricultural inputs, best practices in farming, market price realized at various mandi auctions, weather details etc. Nevertheless, it enabled ITC to purchase products directly from farmers (through a change in the law), enhancing quality of products and significant cost reduction (e. . , it saved $5. 40 per tonne on soyabean). The e-choupal now has just two service providers in its procurement chain – the sanchalak, a person between the kiosks and the farmers who inspects the produce and based on his assessment of the quality, the price of the commodity is decided (he gets 0. 5 p er cent commission on the volume sold) and samyojak, a person who manages the ITC warehouses (he gets 1 per cent commission on transactions). Samyojaks also handle much of the logistics at the procurement hub like storage management and transportation from the hub to processing factories.ITC was able to overcome the hurdles posed by infrastructure inadequacy in villages. It uses solar energy to power the batteries of the computer kiosks and has shifted from W. P. No. 2007-03-07 Page No. 23 IIMA INDIA Research and Publications dialup connection to satellite based technology (VSAT). Farmers are now able to make informed decisions as they understand the market better leading to higher productivity. Various seed and fertilizer companies are now able to reach wider market with lesser transaction cost.The e-choupal has provided a market for more than 64 companies (to name a few, Monsanto and Nagarjuna Fertilizers). This innovative direct procurement channel is a win-win mechanism for all the involved parties. ITC is now building a rural retail infrastructure on the foundation of the e-choupal network thereby changing the rural distribution landscape. Transforming the Auto-Component Replacement Supply Chain With changing government policies and consumer preferences, the distribution supply chain of Indian companies has been effected significantly. This poses new challenges for various channel partners.We illustrate this transformation process through the lens of the auto component replacement market supply chain and discuss its implications. We surveyed 21 manufacturers and 22 channel members (distributors, wholesalers and retailers) spread equally in Northern and Western clusters of auto component Industry in India for this purpose. The auto component industry produced parts worth $6. 7 billion (2004-05) with 57 per cent of the demand coming from the replacement market (ACMA, 2005). Low entry barriers have led to a large number of players in the replacement market.T here are about 400 firms in the organized sector and more than 5000 in the unorganized sector. Another feature of this sub-sector is the long duration of ownership of vehicles in India which leads to high requirement of parts. It is also found, anecdotally, that willingness to pay for parts decreases with the length of ownership. This has led to an intense segmentation of the parts market by price. Pre–1991, this industry was still in a nascent stage. It was characterized by few manufacturers and low demand. Consequently, the distribution network was flat (Figure 4a).Availability of spare parts was a key issue with long delivery lead-times and manufacturers sought large order sizes. This also led to the growth of un-branded parts or parts branded by regional producers (often supplied by small firms) in the replacement market. The product was sold chiefly on personal relationship with the buyer; quality, brand and price were not the selling propositions. Maruti Udyog Limited h ad created a W. P. No. 2007-03-07 Page No. 24 IIMA INDIA Research and Publications network of suppliers of quality parts for its vehicles.Hero Honda had done the same for its motorcycles. Post-1991, the liberalization of the automotive industry led to an entry of many foreign auto players. Because of the impending automobile industry boom and high margins for distributors, the demand for spare auto-parts was expected to grow. The distribution channel was modified with the entry of two more channel members, i. e. , wholesalers and semi-wholesalers (Figure 4b). The latter were smaller versions of the former and locally oriented. The period 1994-2007 saw a major transformation of the distribution structure (Figure 4c).OEMs started to operate in the replacement market through a parallel supply chain selling parts through their service stations. Additionally, the entry of large number of channel members caused semi-wholesalers to move out of the supply chain – they either moved up the chain to become wholesalers or moved down to become retailers. To strengthen the coordination of this extended supply chain and to buffer against the differential tax structure across states, companies started to operate with Carry and Forwarding Agents (C&FA). Transportation related activities are carried out by all the members of the supply chain.Manufacturers use services of 3PL for transferring their stock to C&FA and distributor locations. But thereafter, the transportation activity is solely managed by channel members themselves. An analysis of the available IT infrastructure and its usage pattern for all the channel members in our sample survey indicates that there is a high deviation in the usage of IT in the replacement market supply chain. Eighty seven per cent of the sampled firms use an ERP package – most of which is customized and developed locally. The main impediment in the use of a branded packages is the high cost of purchase and mplementation. These pac kages are used to generate sales report, order from suppliers, account for the financial transactions and track the level of inventory at plant and C&FA. Manufacturers order the stock from suppliers mostly through emails. In order to track inventory in the channel, firms also made IT investments both at C&FA and within the firm. Linking the C&FA to the company website enabled firms to check stock status at the C&FA and reduce the order processing and customer response times. Larger firms are also providing a similar setup to their distributors.Since the C&FA is mostly owned W. P. No. 2007-03-07 Page No. 25 IIMA INDIA Research and Publications and managed by the firms, manufacturers are also able to check the inventory status, dispatching status and customer records. Distributors have invested primarily in computers for keeping track of the inventory and updating accounting details. On the other hand, rest of the channel partners (wholesalers and retailers) don’t even own comp uters. Parts are ordered primarily on the phone. Interestingly, most distributors were found to be following periodic review olicy while the rest of the channel members were following continuous review policy because of their low sales volume. Post 2007, with the implementation of a uniform tax structure across all states, there will be some changes in the way firms operate. The C&FA will, perhaps, become redundant as most manufacturers will prefer to deal directly with distributors. The concept of an exclusive distributor is expected to vanish. It is expected that with the increase in variety of components, distributors might become wholesalers and will stock multiple brands for the same product.Two parallel distribution channels are expected to be in operation – the OEM chain and the non-OEM chain (Figure 4d). OEM network will primarily handle the passenger car replacement parts and the non-OEM distribution network will sell parts for Light Commercial Vehicles, Heavy Commer cial Vehicles, 2-wheelers and 3-wheelers as the car customer is becoming more brand conscious even while replacing parts which comes along with superior service. Further, we perceive that the more advanced automobiles, Free Trade Agreement with other Asian countries and VAT are going to change the way the replacement market operates.There will be a rationalization of this market in terms of number of firms competing thereby leading to an improvement in quality, delivery time and availability of parts. The size of the firms is expected to increase with an emergence of large national players (in addition to OEMs). This may reduce the number of producers exclusively focusing on the local markets. W. P. No. 2007-03-07 Page No. 26 IIMA INDIA Research and Publications Figure 4a Manufacturer Figure 4b Manufacturer Distributors Distributors Retailers Institutional Buyers SemiWholesalers Wholesalers Institutional Buyers RetailersGovernment Agencies & Transport Companies Garage-station Govern ment Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners Figure 4c Manufacturer Figure 4d Manufacturer Institutional buyers C&FA OEMs Institutional buyers OEMs Wholesalers Distributors Authorized Service Stations Authorized Service Stations SemiWholesalers Retailers Wholesalers Vehicle Owners Vehicle Owners Retailers Government Agencies & Transport Companies Garage-station Government Agencies & Transport Companies Garage-station Vehicle owners Vehicle owners W. P. No. 2007-03-07 Page No. 27 IIMA INDIA Research and Publications Challenges Ahead Several challenges remain before the Indian logistics sector and its future success will depend on the ability of the industry to overcome these hurdles. Some of these impediments are at the firm level while others are at the policy level. At the policy level, the issues of infrastructure and integration of the nation’s logistics network remain the two most critical areas that require attention. The growth of inf rastructure, since 1991, has been quite extensive (covering a wide geographical area) as well as strategic – linking the key industrial, consumption and transshipment centers.However, some imminent weaknesses need be addressed. Movement beyond the golden quadrilateral is required to bring goods from upcountry production sources to main shipment centers. The rate of growth of expressway has to increase. Poor road conditions increase the vehicle turnover, pushing the operating cost a

Case Analysis: Netflix

1.0 Problem Statement: This case analysis deals with â€Å"Loss of Revenues and declining growth of Netflix in the face of stiff competition.† 2.0Scenario: Founded in the year 1997 by Reed Hastings, the company started the DVD online service in 1999 and expanded rapidly to be the world’s largest Online DVD movie rental service in the year 2005, having 3.59 million subscribers as at the third quarter of 2005. The company has the exclusive advantage of proprietary software ‘Cinematch’ to provide subscribers with personalized movie recommendations. The company has 37 regional shipping locations to efficiently manage the logistics of the DVDs. Netflix has eight different subscriptions plans ranging from $9.99 to $ 47.99 for the customers to choose from with no time limit for the return of the DVDs, of course subject to a maximum number of DVDs the subscriber can hold at any point of time. The Company faces the problem of decline in profits due to lower subscription prices. To combat the competition from the nearest rival Blockbusters Neflix had to lower the subscription in its premium segment. The decline in revenues had made the company to put on hold its expansion plans to UK and Canada. 3.0 Analysis: The analysis of the case of Netflix presents three distinct problem areas relating to the structure and design of the organization which the company needs to concentrate on. They are: 3.1 Revision in subscription Rates: The company was rather forced to lower its subscription rates to cope up with the competition from the rivals. The reduction being in the most sought segment of $ 21.99 plan, has severely affected the revenue realization of the company. As a result the cost of revenues rose to 59.71 percent for the first nine months period of the year 2005 as compared to 54.61 percent for the year 2004. This has caused a decline in the gross profit. There is no significant change in the operating expenses to total revenues. The percentage of operating expenses remains at 41.5 percent for 2004 and 40.2 percent for the first three quarters of 2005. 3.2 Number of Subscribers: Though there is an increase in the number of subscribers the rate at which the subscriber list is expanding does not relate itself with the reduction in the subscription rates. This is evident from the fact that the subscriber acquisition cost has increased from $ 36.09 for the year 2004 to $ 36.92 for the broken period of 2005. In order to break even it is essential for the company to concentrate on increasing the number of subscriber base to result in enhanced rental revenues. Addition to the subscribers is at 75.5 percent for the year 2004, whereas it stood at 37.6 percent for the first nine months of 2005. Even considering the estimated increase to 4 million subscribers at the end of 2005 the percentage addition would still remain at 53.25 percent which is not working to the advantage of the company in terms of revenues. This may be due to the presence of competitors as well as other modes available to the subscribers for obtaining movie DVDs. 3.3 Diversification: Netflix has so far been only on the online rental of movie DVDs. The competition in this particular segment of the business is increasing with more players like Blockbusters and Green cine entering the business. Moreover the Video on Demand (VOD) and brick and mortar rental outlets like Gallery also pose a competition to Netflix’s business. Although it is estimated that the company would be able to get a subscriber network of 7 million by the end of the year 2007, unless the company takes steps to enhance its revenue from other sources still it may find it difficult to take advantage of the increased subscriber base. 4.0 Conclusion: The following are some of the issues that need to be attended to by the company Netflix to augment its revenue and the resultant profitability: Rate of increase the number of subscribers is not commensurate to increase the earnings The subscription rates are kept low to meet the competition which has caused an erosion in the earnings The company is facing competition from companies who offer other modes of providing the entertainment options. 5.0 Recommendations: Some of the suggestions for improvement in the earnings and ensure the growth are: Increase the number of subscribers by undertaking vigourous advertisement campaigns Reduce the number of options for subscribers from the present 8 options to 4, by rationalizing the subscription rates and adopting modified subscription structures which will increase the earnings for the company Have a look in to the other modes of offering DVDs by opening brick and mortar stores using the existing goodwill of the company. Additionally providing VOD services and rental of game DVDs may also be looked into.