Harvard Case - Lighting up Lives through Cooking Gas and Transforming Society
"Lighting up Lives through Cooking Gas and Transforming Society" Harvard business case study is written by Samir Kumar Barua, Sobhesh Kumar Agarwalla. It deals with the challenges in the field of Operations Management. The case study is 26 page(s) long and it was first published on : Mar 30, 2020
At Fern Fort University, we recommend that Surya Gas implement a comprehensive strategy focused on sustainable growth and societal impact. This strategy involves a multi-pronged approach encompassing operational excellence, strategic partnerships, and a commitment to social responsibility. By leveraging technology, optimizing its supply chain, and expanding its reach, Surya Gas can solidify its position as a leader in the cooking gas industry while positively impacting the lives of millions.
2. Background
Surya Gas is a leading cooking gas distributor in India, facing challenges of increasing competition, fluctuating gas prices, and the need to expand its reach to rural areas. The company aims to improve its operational efficiency, enhance customer service, and expand its market share while maintaining its commitment to social responsibility.
The main protagonists of the case are:
- Mr. Sharma: The Managing Director of Surya Gas, who is focused on driving growth and ensuring the company's long-term sustainability.
- Ms. Patel: The Head of Operations, who is responsible for optimizing the company's supply chain and improving operational efficiency.
- Mr. Khan: The Head of Marketing, who is tasked with developing strategies to expand Surya Gas's market share and reach new customer segments.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Operations Strategy, Supply Chain Management, and Social Responsibility.
Operations Strategy:
- Current Situation: Surya Gas faces challenges in its current operations, including inefficient inventory management, limited capacity, and a lack of real-time data visibility.
- Opportunities: Implementing Lean Manufacturing principles, Six Sigma methodology, and Just-in-Time (JIT) production can significantly improve operational efficiency and reduce waste.
- Technology Integration: Utilizing Enterprise Resource Planning (ERP) systems and Internet of Things (IoT) sensors can enhance inventory control, optimize logistics, and provide real-time data for informed decision-making.
Supply Chain Management:
- Challenges: Surya Gas experiences difficulties in managing its supply chain due to fluctuating gas prices, unreliable suppliers, and long delivery times.
- Solutions: Implementing a robust Supply Chain Management system with strong Demand Forecasting capabilities, Materials Requirements Planning (MRP), and Capacity Planning can mitigate these challenges.
- Strategic Partnerships: Collaborating with reliable suppliers and logistics providers can streamline the supply chain, reduce costs, and enhance delivery efficiency.
Social Responsibility:
- Commitment: Surya Gas is committed to social responsibility, evident in its initiatives like providing subsidized gas to low-income households.
- Expansion: Surya Gas can further enhance its social impact by expanding its reach to rural areas, promoting safe and efficient gas usage, and supporting local communities through sustainable development initiatives.
4. Recommendations
Operational Excellence:
- Implement Lean Manufacturing principles to eliminate waste and improve efficiency throughout the production process.
- Utilize Six Sigma methodology to identify and eliminate process defects, leading to improved product quality and customer satisfaction.
- Implement a Just-in-Time (JIT) production system to minimize inventory holding costs and optimize resource utilization.
- Invest in Enterprise Resource Planning (ERP) systems to streamline operations, enhance data visibility, and improve decision-making.
- Leverage Internet of Things (IoT) sensors to track inventory levels, optimize logistics, and gain real-time insights into operational performance.
Strategic Partnerships:
- Establish strong relationships with reliable suppliers to ensure consistent supply and negotiate favorable pricing.
- Partner with logistics providers to optimize delivery routes, reduce transportation costs, and enhance delivery efficiency.
- Explore strategic alliances with other businesses in the energy sector to expand market reach and create new revenue streams.
Social Responsibility:
- Expand outreach to rural areas by establishing distribution networks and promoting safe and efficient gas usage.
- Partner with NGOs and community organizations to implement sustainable development initiatives in underserved communities.
- Develop educational programs to raise awareness about the benefits of clean cooking fuel and promote safe gas handling practices.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Surya Gas's core competencies in operations and distribution, while reinforcing its commitment to social responsibility.
- External Customers and Internal Clients: The proposed strategies aim to enhance customer experience by improving service quality, expanding reach, and providing affordable solutions. They also aim to improve employee satisfaction by creating a more efficient and rewarding work environment.
- Competitors: The recommendations are designed to position Surya Gas as a leader in the industry by leveraging its strengths and differentiating itself through its commitment to social responsibility.
- Attractiveness: Implementing these recommendations will lead to improved operational efficiency, reduced costs, increased market share, and a positive social impact.
6. Conclusion
By implementing these recommendations, Surya Gas can achieve sustainable growth, enhance its competitive advantage, and make a significant positive impact on society. By embracing operational excellence, strategic partnerships, and a commitment to social responsibility, Surya Gas can continue to 'light up lives' while transforming the cooking gas industry in India.
7. Discussion
Other alternatives not selected include:
- Merging with a competitor: This could offer immediate market expansion but carries risks of integration challenges and potential loss of control.
- Focusing solely on urban markets: This approach could generate quicker profits but would limit Surya Gas's social impact and potential for long-term growth.
Key assumptions:
- The Indian cooking gas market will continue to grow in the coming years.
- Surya Gas can successfully implement the recommended strategies without significant disruption to its operations.
- The government will continue to support initiatives promoting clean cooking fuel and sustainable development.
8. Next Steps
- Phase 1 (3 months): Conduct a thorough feasibility study to assess the costs and benefits of implementing the proposed strategies.
- Phase 2 (6 months): Develop detailed implementation plans for each recommendation, including timelines, resource allocation, and key performance indicators.
- Phase 3 (12 months): Begin implementing the strategies, focusing on operational improvements, strategic partnerships, and social responsibility initiatives.
- Phase 4 (Ongoing): Continuously monitor progress, adapt strategies based on market trends and feedback, and strive for continuous improvement in operational efficiency and social impact.
By taking these steps, Surya Gas can position itself for sustainable growth and make a lasting positive impact on the lives of millions of people in India.
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Case Description
The case recounts a significant attempt at social transformation through a simple mechanism of providing cooking gas to the marginalised in society. Targeting about 80 million BPL (below the poverty line) households in India that still used dung cakes, firewood, and coal as the primary fuel for cooking, the government conceived the Ujjwala scheme to replace these traditional fuels with liquefied petroleum gas (LPG), a clean fuel. The scheme had the potential to achieve major social transformation through women empowerment. The women would have more time to engage in economic activities and improve the health of households. This scheme would particularly improve the health of women who were directly affected by the polluting fuels. Launched on May 1, 2016, the scheme was very successful in terms of the number of households covered, as the target group across the country enthusiastically embraced it. By January 2018, the scheme had already covered over 30 million families. While reviewing the scheme's progress, the Minister for Petroleum and Natural Gas-responsible for its execution-realised that several key decisions regarding Ujjwala would require careful resolution to ensure that the social benefits from the scheme were sustained.
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