Friday, October 10, 2008

60 Seconds Deep

The story of 4 standard sized lives. And 4 larger than life dreams.

Welcome to your life and mine. Welcome to our stories.

Let’s take a Journey that’s crazy and expensive and doesn’t know how the rules work. Maybe we’ll meet my parents and your uncle and drink coffee at our neighborhood Bakery. Sharing space is important, and so is sharing a bathroom. No nuisance allowed. Welcome to where you work and where I gave up my education for a career in cartooning. Welcome to a world where food is my expression…and love is my art. Let’s despair and fight and win a war together. Lets race each other to the nearest bank. Let’s be free. Let’s tie each other up.


Welcome to The City!


 (Contact Jaimini Pathak - 98200 77429)

Saturday, June 07, 2008

Once Upon A... Grrrowwll!

A dull rainy start to the day - with the rain washing away my tennis game - turned so cheerful as my 10-year old niece and I watched "Once Upon A... Tiger" at Prithvi this morning. Just what was needed to liven up two weary faces (her tennis semi-finals match at the academy had been washed away as well).

"Once Upon A... Tiger" is a free-flowing fun-filled play that attempts to educate kids and adults alike about the urgency of saving the tiger, saving the forests and restoring environmental balance. Three youngsters go on a jungle safari with their families accompanied by two forest guards. As the forest guards educate the kids about the dependence of human survival on the survival of forests and wildlife, the safari turns adventurous as the kids find themselves in heroic boots with a mission to save the tigers.

The simplicity of the script and the universal appeal of the theme ensured that everybody from the age of 5 to 50 was riveted to the action on stage. The show was full of singing and dancing and funny banter and the 100-plus kids in the audience had a ball of a time. Guard Chacha was the daaarling of the crowd and the children (Gauri, Mani and Baboushka - all played by grown-ups) lit up the jam-packed auditorium with their boundless energy. By the end of the show the entire audience - children and grown-ups had joined the chorus of "Will you? Won't you? Will you saaaave the tiger?"

More importantly, the show achieved its educational purpose. I know it worked coz my niece decided to forgo her usual cola (the burpy-cola factory takes away the water of the forest land) after the show and settled for a brownie (which, by the way, was left untouched as she scooped just the chocolate sauce off it).

Showtimes @ Prithvi
June 8, 28, 29 - 11.00 am
Go at 10 am - you WANT to be on the first row

Tuesday, April 15, 2008

Monday, April 14, 2008

CPOH - A Powerful Maxim Long Ignored

Traditional methods of maximizing profitability focus on maximizing margins through the levers of market price and product cost. These methods ignore the significant impact of difference in throughput between different products. A product with high margins but low throughput may fetch a lower gross profit than a product with low margins but high throughput. The impact on profits in such scenarios is illustrated in Figure 1.

Consider a capacity-constrained situation where market demand is greater than what we can service. For the sake of simplicity, let us assume that the market demand for both products are equal and each demand by itself is greater than capacity. How do we select the demand that we should service? Traditional decision making methods favour the demand that nets the highest margin. In our example, traditional decision making would choose to service demand for product B. Now our capacity to supply product B is 400 tons per day or 12000 tons per month. This translates to a profit of Rs.18 Cr in a month.

Fig.1a. Traditional decision based on margin maximization

Now consider what we would have made had we serviced product A. Our capacity to supply product A is 500 tons per day or 15000 tons per month, which will fetch us a total profit of Rs.20.5 Cr per month.

Fig.1b. Decision that accounts for throughput differences leads to higher profit

It is indeed very simple and intuitive to make a back of the envelope calculation and arrive at the profit-optimal choice when we are dealing with a limited number of products, simplistic market demand situations and a single source of supply. Suppose we are a medium-sized organization with 5000 different product variants and 800 customers in 15 countries. Our prices and costs would vary across different customer segments and geographies. How would we make the decisions to achieve the maximum profit?

To support decision making in such complex scenarios, there is a need for a simple measure that captures the impact of price, cost as well as throughput on profits. This new measure is Contribution per Operating Hour (CPOH). The simplistic definition of CPOH is

CPOH = Margin (Rs. per unit) x Throughput (units per hour)

The concept of CPOH can be understood better if we forget for a moment that we are selling products. We are not selling products. We are selling time. You have 24 hours every day. How would you encash these 24 hours to generate the maximum total profit? You would sell your first hour to the customer who pays the highest for that one hour. Then you would sell your second hour to the next highest payer. And so on until you run out of time.

CPOH allows you to compute exactly how much we would earn for each hour of our time by servicing a given demand. At a tactical level, CPOH should therefore be used to select which portion of the demand basket should be serviced from the limited supply. A simple way to do this is to plot a scatter of the demand as shown in figure 2. Against this scatter, plot isoclines (similar curves representing the tradeoff between margin and throughput* while maintaining the same CPOH) representing different CPOH levels. These isoclines are represented by the equation xy = c, where x is throughput, y is margin and c is CPOH. The gaps between isoclines give us CPOH bands that slice the demand basket into multiple segments.

* Computation of throughput in a real manufacturing environment can itself be a difficult exercise. A detailed discussion of how to compute throughput will be presented in later posts. A great concept-teacher on this subject is a bestseller named “The Goal: A Process of Ongoing Improvement” by Eliyahu M. Goldratt. For now, let us assume that we know the throughput of different products.

Fig.2a. Scatter of Demand Plotted Against CPOH Levels

We plan to service the demands in the highest CPOH band first (Ref. figure 2b). We then plan to service demands in the next highest CPOH band, and so on until we run out of supply capacity (in terms of hours of resource availability). This method will lead us to select the most profitable sales mix.

Fig.2b. Operational and Tactical Demand Selection using CPOH BandsAt a strategic level, you should use CPOH in conjunction with a cost-benefit analysis model to shape your customer-product portfolio for higher profitability. You can do this by plotting a bubble chart of your demand against CPOH isoclines. The size of each bubble represents the sales volume and market potential in each segment. This chart provides visual cues to suggest shifting of the customer-product portfolio towards a segment. The example in figure 3 shows options for shift in portfolio that can be considered for a cost-benefit analysis.

Fig.3. Strategic Decision Making using CPOH Bands

This decision making tool can be applied to a variety of business problems across different industries. Examples of application of this tool to some common problems are cited below:

  • A steel company may use CPOH to decide the minimum additional charge for supplying a non-standard grade or a difficult-to-make sheet size when entering into a contract with a customer.
  • A chemicals company may distribute capital expenditure to increase sales volume of those products for which the marginal increase in CPOH per dollar of cap-ex is highest.

  • A consumer goods company may use CPOH to rationalize product segments, by discontinuing those low-volume products that net low CPOH.
The problem definitions presented in this discussion are still simplistic compared with the real business challenges that most companies face. Practical considerations such as multiple sources of supply, cyclicity of demand, multiple bottlenecks, shifting bottlenecks, customer relationships etc. present greater complexity. These complex scenarios will be discussed in the next few posts. Watch this space.

Thursday, September 06, 2007


The euphoria was short-lived. It has given way to insomnia. My celebrations have been dampened by the realization that I have not even completed the first draft of my essays yet. I did outline some of the essays last month, but am at completele loss in figuring out what my strengths and weaknesses are. Maybe I can tell the adcom that lack of self-awareness is my weakness, so I don't know my weakness, but I don't think they will be humoured by my circular logic. Unless they're die hard Joseph Heller fans, of course. I will still have to write about my strengths, which is a bit embarrassing - Ah! that's my mental block I'm sure!

Friday, May 25, 2007

The Smartphone Gets New Friends

"Ask an american kid if you were to take his cellphone or his PC away, which one would he kill you for." - Scott McNealy, responding to a question on the future of personal computing.

So you review your powerpoint slides on your PDA while the taxi winds its way through traffic, but wish you could simply walk into the conference room and display them? Or wish you didn't have to rush out the room at the end of the meeting to get prints of the minutes?

If computing is getting condensed into mobile phones, other ubiquitous applications of the PC and the notebook cannot afford stay far behind. A combination of computing power, wireless broadband and advanced mobile OS's have allowed us to replicate e-mail, browsing, gaming, music and photo sharing in our phones. Yet, two powerful functions of PC / notebooks seem to be missing all the action - printing and projection. (The smartphone-toting exec in the Microsoft ad would probably have e-mailed the presentation to his colleague who carried his laptop to the meeting, and then used bluetooth to switch his slides back and forth.)

But innovations by three startup firms, and surprisingly not from Silicon Valley, are looking to put the monolithic office printer and projecter in your pocket as early as next year.

First up: ImagineOptix - a startup by professors and alumni of North Carolina State Univ - is working on handheld micro-projectors using a technology similar to Liquid Crystal on Silicon (LCoS) but is brighter. A cellphone-attachment is also in the works.

The second innovation is also in the cellphone projector space and uses the same LCoS technology. The creator - Light Blue Optics (LBO) - is a Cambridge based startup by a mix of Cambridge and Oxford alumni. As opposed to ImagineOptix's device, which uses mirrors to focus images, LBO's device uses an array of lenses that allows it a throw angle greater than 90 degrees. This means that the image size of LBO's device is is larger than that of ImagineOptix at the same distance from the projection wall. While nobody is disclosing the prices yet, press coverages of ImagineOptix expect a "low cost" proposition.

The third innovation is a very refreshing idea in the dull inkjet printing space - one that could create a whole new range of applications for printing devices. A Swedish firm called PrintDreams is developing handheld printers that can give you full A4 size prints - and without any paper jams. How does it do it? It's like a mouse that you can sweep over the printing surface with your hand and it prints underneath using a technology called RMPT, which stands for Random Movement Printing Technology. So you need not print only on A4 paper; you can print inside a notebook, on a birthday card and even on a t-shirt. Indeed, the company is working on a fun toy for kids called Whoosh that can print their favourite cartoon characters on drawing books as well as the walls of drawing rooms :)

Imagine the possibilities if it could also scan!

Monday, August 28, 2006

Bangalore Theatre Update

Chekhov's Mistress - Anecdotes and Hilarious Sketches from The Good Doctor by Neil Simon - @ Alliance Francaise, Aug 30 and 31, 7:15pm

Spotlight - a family driven by power, money and fear - @ ING Vysya House Auditorium, MG Road, Sep 2, 8:00pm