This article covers methods to identify Generative Texts created through Gen AI tools. It is becoming a common practice for employees, students, and the public at large to simply pass on their work to Chat GPT and ask it to write out everything from a letter to a farewell speech to even apology letters. There are ways by which you may detect if the text was written by a human or a machine. Some of these are explained and highlighted below.

What is generative text?

AI-generated text is text that is created with the use of Artificial Intelligence Systems. The most common type of such system is the Large Language Model or LLM. These AI-based systems are trained on very large datasets that allow these systems to learn how we compose sentences. They can mimic human communication structure, style, and methods to produce new text that is virtually indescribable from human-generated ones.

At the very core of such models is the large corpus of training data. The models understands grammer, context and subjective knowledge based upon this large corpus of text and adjusts it parameters to create new text based on the prompts.
▶ For instance, GPT-4, a popular LLM uses about 1.76 Trillion paramets

Human Identification

While AI has become increasingly sophisticated, humans can still spot certain patterns and inconsistencies that indicate AI-generated text. Here are some key indicators:

1. Lack of Nuance and Emotion: Overly formal or stiff language: AI often struggles to replicate the nuances of human emotion and expression.
2. Absence of personal anecdotes or experiences: Humans often share personal stories to connect with their audience.
3. Repetitive Patterns and Lack of Creativity: Repeated phrases or sentence structures: AI might overuse certain patterns due to its reliance on learned data.
4. Lack of originality or creativity: AI can struggle to come up with truly unique ideas or perspectives.
5. Inconsistent Tone and Style: Sudden shifts in writing style or tone: Humans tend to maintain a consistent voice, while AI might struggle with transitions.
   Unnatural or awkward phrasing: AI may generate sentences that sound unnatural or forced.
6. Factual Errors and Inconsistencies: Incorrect information or contradictions: AI can sometimes make mistakes or contradict itself due to errors in its training data.
7. Lack of Contextual Understanding: Difficulty understanding nuances or cultural references: AI may struggle to grasp subtle meanings or cultural context.
8. Specific Indicators: Overuse of certain words or phrases: AI might have a tendency to overuse specific words or phrases that it has learned from its training data.
9. Unnatural sentence structure: AI may generate sentences that are grammatically correct but sound awkward or unnatural.

Fingerprinting Methods

Another popular method is based on fingerprinting techniques that can utilize a pre-factor watermark embedded in the AI-based text. The intention is to have a non-identifiable trace in the text that humans may not realize but tools can detect these traces. It is similar to image watermarking used in documents.

Certain non-regular features are introduced in the text preemptively. For instance, OpenAI introduced a fingerprinting method to identify AI text through which it would incorporate texts with a slightly higher proportion of words starting with a certain letter than what is found in the natural text. These would eventually find usage in fields such as open banking and finance.

In a series of recent updates, all major LLMs have introduced invisible text markers in AI-generated text. Most commonly used markers are invisible spaces and em-dash. This type of fingerprinting and detection method is discussed in section 4 below.

AI-based tools to identify AI-generated text

Some of the publicly available tools to identify text are ZeroGPT and Turnitin. ZeroGPT need users to register for their service after which users can upload a document or paste text to identify it was generated by AI. Similarly, Turnitin which is an extremely popular plagiarism detection software can also be used. However, not all subscription plans of Turnitin has this feature.

Fingerprint-based detection methods for AI-generated text aim to identify unique patterns or characteristics that distinguish human-written content from AI-generated content. These approaches typically involve analyzing the text at a granular level, looking for specific features that are indicative of AI involvement. Here are some common approaches:

1. Statistical Analysis:

• Stylometric Analysis: This method examines the statistical properties of the text, such as word frequency, sentence length, and syntactic complexity. AI-generated text often exhibits different statistical patterns compared to human-written text.
• Burstiness Analysis: This technique measures the distribution of words and phrases in the text. Human-written text tends to have more bursts of repeated words or phrases, while AI-generated text may exhibit a more uniform distribution.

2. Machine Learning and Deep Learning Models:

• Neural Networks: Deep learning models, such as recurrent neural networks (RNNs) or transformers, can be trained to distinguish between human-written and AI-generated text. These models learn complex patterns and features in the data to make accurate predictions.
• Support Vector Machines (SVMs): SVMs are machine learning algorithms can be used to classify text based on its features. By extracting relevant features from the text, SVMs can effectively differentiate between human and AI-generated content.
• Generative Adversarial Networks (GANs): GANs can be used to generate realistic AI-generated text, which can then be compared to the original text to identify discrepancies.
• Autoencoders: Autoencoders can be trained to learn the underlying structure of human-written text. By comparing the reconstructed text from an autoencoder to the original text, it’s possible to detect anomalies that indicate AI-generated content.

3. Natural Language Processing (NLP) Techniques:

• Part-of-Speech Tagging: This technique identifies the grammatical function of words in a sentence. AI-generated text may exhibit different patterns of part-of-speech tags compared to human-written text which can be detected, albeit not that easily.
• Named Entity Recognition (NER): NER identifies named entities in the text, such as people, organizations, or locations. AI-generated text may contain errors or inconsistencies in named entity recognition.

4. Hidden markers in text

Plagiarism and submission of AI based text was highlighted as a major concern since the early days of AI. One of the commonly used techniques by LLM chatbots are hidden markers in the text. In a public statement by Hendrik Kirchner of OpenAI, it was mentioned that they were working on prototype for these types of markers as early as November 2022. Google DeepMind’s SynthID-Text was one of the first attempts at inserting these types of markers in text. They started deploying it in their public models of Gemini and Gemini advanced chatbots in around October 2024.

One of these types of markers are the zero width space (U+200B), zero width non joiner (U+200C), or zero width joiner (U+200D) that take up no visible space but are still valid Unicode characters that LLMs process. These can be seen in advanced text editors like Sublime. Another commonly used method is the use of long dash character that ChatGPT uses. It looks like this — . Now you know it when you see it next time. There are about 87 different types of invisible space characters that can potentially be used. Apart from these hidden characters, there could also be some unintended inclusion of Generative AI characters in the text. These are summarized below:

It’s important to note that these methods are not foolproof, and as AI technology continues to advance, new techniques may be developed to improve detection accuracy. Additionally, combining multiple approaches can often provide more reliable results depending on your goal setting.

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Discount coupons have long been a staple in the marketer’s toolkit, enticing consumers with the promise of savings and driving sales. In the ever-evolving landscape of mobile commerce (m-commerce), where smartphones have become virtual shopping malls, the role of discount coupons has taken on new dimensions. While these digital vouchers undoubtedly boost short-term sales, their long-term impact on customer loyalty and trust is a subject of ongoing debate and research.

The Allure of Discount Coupons in M-commerce

M-commerce apps have revolutionized how consumers shop, offering convenience and personalization at their fingertips. Discount coupons, often delivered through push notifications or in-app messages, have proven to be a potent weapon in attracting and retaining users. The appeal is simple: Consumers love saving money, and coupons provide a tangible incentive to make a purchase.

Research by Mishra and Sengupta (2024) indicates that coupons are particularly effective in m-commerce due to the personalized nature of mobile interactions. M-commerce apps can leverage user data, such as location and browsing history, to tailor coupon offers, making them more relevant and enticing.

Moreover, the immediacy of mobile coupon redemption, often facilitated by QR codes or unique coupon codes, adds to their allure. Consumers can instantly apply discounts at checkout, enhancing the overall shopping experience.

The Dark Side of Discounting

While the short-term benefits of discount coupons are undeniable, their long-term consequences are less clear-cut. Overreliance on discounts can create a “discount dependency” among consumers, where they become conditioned to expect lower prices and may hesitate to purchase at full price. This can erode profit margins and devalue a brand’s perceived worth.

Furthermore, it was also found that while coupons drive continued app usage, they can negatively moderate the relationship between customer satisfaction and continued usage. In other words, while satisfied customers are more likely to continue using an app, this effect is weakened when coupons are involved. This suggests that coupons may attract deal-seeking customers who are less loyal and more likely to switch to competitors offering better deals.

Building Trust and Satisfaction: The Long Game

To foster long-term customer loyalty and trust, m-commerce businesses must look beyond the allure of discounts. Mishra and Sengupta (2024) emphasize the importance of building trust through consistent positive experiences, reliable customer service, and secure transactions.

Customer satisfaction, driven by factors like perceived usefulness and confirmation of expectations, plays a pivotal role in trust formation. When users find an app easy to use, meets their needs, and delivers on its promises, they are more likely to trust the platform and continue using it, even without the constant lure of discounts.

Striking the Right Balance

The key to success in m-commerce lies in striking a balance between short-term sales promotions and long-term relationship building. Discount coupons can be a valuable tool for attracting new customers and driving occasional purchases, but they should not be the sole focus of a marketing strategy.

M-commerce businesses should invest in creating a user-friendly app, providing excellent customer service, and building a brand reputation that instills trust. By prioritizing customer satisfaction and trust, they can cultivate a loyal customer base that values the overall shopping experience, not just the discounts.

The Future of Discount Coupons in M-commerce

As technology continues to advance, the use of discount coupons in m-commerce is likely to evolve. We can expect to see more personalized and targeted coupon offers, leveraging artificial intelligence and machine learning to predict consumer preferences and behaviors.

Additionally, the integration of augmented reality (AR) and virtual reality (VR) into m-commerce apps may open up new avenues for coupon delivery and redemption, creating immersive and interactive shopping experiences.

However, the fundamental challenge remains the same: how to leverage discount coupons effectively without sacrificing long-term customer loyalty and trust. M-commerce businesses that can navigate this delicate balance will be well-positioned for success in the increasingly competitive mobile marketplace.

Key Points

• Discount coupons are effective in driving short-term sales in m-commerce.
• Over reliance on discounts can create discount dependency and erode profit margins.
• Building trust and customer satisfaction is crucial for long-term loyalty.
• M-commerce businesses should strike a balance between discounts and relationship building.
• The future of discount coupons in m-commerce lies in personalization and immersive experiences.

The article draws from an article published by the author Mishra and Sengupta (2024) and includes additional inputs from recent research and publicly available information.

References

Mishra, A. N., & Sengupta, S. (2024). Discount Coupons Versus Trust and Satisfaction—Which is Better for M-Commerce?. Management and Labour Studies, 49(1), 28-42.

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Boutique hotels are unique and differentiated from traditional hotels, offering personalized service and a memorable experience to their guests. However, managing a boutique hotel can be challenging, especially when it comes to meeting the diverse needs and expectations of guests. A recent large-scale study of online reviews has shed light on the key factors that drive guest satisfaction in boutique hotels. Based on the findings of this study, here are 10 tips for managing boutique hotels:

1. Prioritize the Ease of Booking: The study found that ease of booking is a critical determinant of guest satisfaction, particularly in the US market. Ensure that your hotel’s booking system is user-friendly, the process is streamlined, and check-in is seamless. This includes optimizing your website for mobile devices, offering multiple payment options, and providing clear and concise information about your hotel and its amenities.
2. Focus on Service Recovery: While high-quality service is expected, the absence of expected service quality significantly decreases guest satisfaction(Mishra et al., 2024). Therefore, it’s crucial to focus on service recovery. Train your staff to handle complaints effectively, empower them to resolve issues quickly, and go the extra mile to turn negative experiences into positive ones.
3. Personalize the Guest Experience: Boutique hotels are known for their personalized service. Tailor your services to the individual needs and preferences of your guests. This could involve offering personalized recommendations for local attractions, providing customized amenities, or simply remembering their names and preferences.
4. Maintain High Standards of Cleanliness: Cleanliness is a basic expectation for any hotel, but it’s even more important for boutique hotels that promise a luxurious and comfortable stay. Ensure that your rooms and common areas are spotless, and pay attention to details like fresh linens, towels, and toiletries.
5. Invest in High-Quality Amenities: While boutique hotels may not offer as many amenities as larger hotels, the quality of the amenities they do offer is crucial. Invest in high-quality bedding, towels, toiletries, and other amenities that will enhance the guest experience.
   
   
6. Offer Unique and Memorable Experiences: Boutique hotels should strive to offer unique and memorable experiences that guests can’t find elsewhere. This could involve hosting special events, offering unique packages, or partnering with local businesses to provide exclusive experiences.
7. Leverage Technology: Technology can be a powerful tool for managing boutique hotels. Use property management systems to streamline operations, customer relationship management software to personalize guest interactions, and reputation management tools to monitor and respond to online reviews.
8. Monitor and Respond to Online Reviews: Online reviews are a valuable source of feedback for boutique hotels. The research paper by Mishra et al., 2024 provides step by step approach to collect and analyze guest reviews. Monitor reviews on platforms like TripAdvisor and respond promptly and professionally to both positive and negative feedback. Use negative reviews as an opportunity to learn and improve.
9. Engage with the Local Community: Boutique hotels should strive to be a part of the local community. Partner with local businesses, participate in community events, and support local charities. This will not only enhance your hotel’s reputation but also provide unique experiences for your guests.
10. Continuously Innovate and Improve: The boutique hotel industry is constantly evolving. To stay ahead of the competition, you need to continuously innovate and improve. This could involve introducing new services, upgrading your amenities, or simply finding new ways to surprise and delight your guests.

How to make the guest experience more personal and memorable?

Personalization in boutique hotels is a key differentiator that elevates the guest experience beyond simply providing a place to sleep. It’s about crafting a unique and memorable stay that caters to individual preferences, fosters a sense of connection, and ultimately drives customer loyalty.

The Importance of Personalization in Boutique Hotels

Boutique hotels, by their nature, offer a more intimate and curated experience compared to larger, standardized chain hotels. This smaller scale allows for a greater degree of attention to detail and flexibility in catering to individual needs.

Personalization is more than just remembering a guest’s name or preferred room type. It involves understanding their interests, anticipating their needs, and tailoring every aspect of their stay accordingly. This could include personalized welcome amenities, curated local experiences, bespoke dining options, or even customized room décor.

The Benefits of Personalization

1. Enhanced Guest Satisfaction: When guests feel seen, heard, and understood, their satisfaction levels naturally increase. Personalized touches make them feel valued and appreciated, leading to positive reviews and word-of-mouth recommendations.
2. Increased Loyalty and Repeat Business: A personalized experience creates an emotional connection with guests. They are more likely to remember their stay fondly and choose to return for future visits, driving repeat business for the hotel.
3. Differentiation from Competitors: In a crowded market, personalization helps boutique hotels stand out. It gives them a unique selling proposition that resonates with guests seeking a more tailored and memorable experience.
4. Higher Revenue Potential: Personalized experiences often come with a premium price tag. Guests are willing to pay more for a stay that caters to their specific needs and desires, leading to increased revenue for the hotel.
5. Data-Driven Insights: Personalization efforts often involve collecting guest data, such as preferences, interests, and feedback. This data can be analyzed to gain valuable insights into guest behavior, enabling hotels to further refine their personalization strategies and offerings.

Examples of Personalization in Boutique Hotels

• Pre-Arrival Questionnaire: Gathering information about guest preferences before their arrival allows for personalized welcome amenities, room setup, and activity suggestions.
• Handwritten Welcome Notes: A personal touch like a handwritten note from the hotel staff can make guests feel special and appreciated from the moment they check in.
• Curated Local Experiences: Offering bespoke itineraries and recommendations based on guest interests ensures they have a unique and memorable experience exploring the destination.
• Personalized Dining Options: Catering to dietary restrictions and preferences, or even offering private chef experiences, creates a truly bespoke dining experience.
• Customized In-Room Amenities: Providing personalized toiletries, snacks, or even a curated playlist can add an extra layer of luxury and comfort to the guest experience.

By following these tips, boutique hotels can enhance guest satisfaction, improve their online reputation, and ultimately drive more bookings. Remember, the key to success in the boutique hotel industry is to provide a unique, personalized, and memorable experience that guests will cherish and share with others.

This article is based on research paper Mishra et al. (2024) published in the Journal of Computer Information Systems and can be found here: https://doi.org/10.1080/08874417.2024.2362824

Mishra, A. N., Li, J., Sengupta, P., & Oztekin, A. (2024). NLP-Driven Insights on Boutique Hotel Satisfaction. Journal of Computer Information Systems, 1-16 https://doi.org/10.1080/08874417.2024.2362824

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It took almost two decades for e-commerce to gain the same number of users that m-commerce gained in just five years. There are some key differences between e-commerce and m-commerce that has lead to this phenomena. There are several differences but most importantly, we have portability, ease of use, integration with other services and ease of communication. These are some differentiating factors that set m-commerce on a different growth trajectory.

M-commerce stands for mobile-commerce. It is a derivative of the term electric-commerce of e-commerce. M-commerce can be defined as the exchange of goods, services and money among entities such as firms, customers, government supported by the use of wireless devices such as smartphones or tablets. Another defining factor is the use of wireless communication like Wi-Fi or Telecom internet. On the other hand e-commerce does not have the limitation of either the type of device or of the mode of communication.

Benefits of m-commerce over e-commerce

Mobility

There are many advantages of mobile devices. Firstly, mobile devices are always available with the users. You can simply take out your smartphone from the pocket and click on the Amazon icon. Then, you can start using their mcommerce application. However, if you want to use their website (ecommerce) then you may have to wait until you reach back home or office. You need to have access to a computer. Secondly, mobile devices more handy. Sometimes the ideas that you may get to purchase an item, may be transient. You could forget it by the time you reach back home and open your laptop. On the other hand, you can instantly browse the app.

One of the driving forces for the adoption of m-commerce has been the increasing number of mobile devices. Also researchers have found strong correlation between the factors that enhance or inhibit the mobile adoption to the factors for m-commerce adoption. What this means in simpler language is that mobility is the key to m-commerce. As we see a higher penetration of mobile devices, we shall see higher proportion of users going for m-commerce.

Ease of use

It is far easier to flick out your smart phone and start browsing items on Amazon. A key difference between e-commerce and m-commerce is that of ease of use. You don’t need to open the laptop, boot the system, open the browser then type the address of ecom website. You can simply click on the icon of your favorite ecommerce app and search for the item you need.

Also, the way, mobile apps are designed, there is a lot more standardization. It is easier to navigate another new app compared to another new website. The interface and buttons are designed to make your purchase journey as easy as possible. Although the same approach is taken on a website as well. However, websites are still loaded with sidebars, comprehensive menus, etc.

Integration with other apps

All the apps work over a common operating system. Whether it is Android which is the world’s largest mobile operating system or iOS, they all have mechanisms of connecting the data between different apps. This is much easier to do in mobile platform than desktop platforms. You can have specific files that open with specific apps. Similarly, the services can also be shared between different apps.

For instance, try to imagine a scenario where you need to return some defective item. If you are using ecommerce, then it is cumbersome to attach images of the product to your complaint. However, you can simply using the same (mobile) device to click images and upload it instantly.

Seamless payment

It is far more easier to integrate payment interface with a mobile app. The transition between shopping app to the payment interface is seamless. If your bank sends you an OTP, you can easily access that on your phone as you would be already holding it. Also, automation is simpler. Many of the apps have the option of reading your OTP. This makes the processes so smooth as you don’t even have to bother to read and enter the correct numbers.

Also, most mcommerce applications allow the local storage of your banking credentials. This can make the payment system faster. Finally, you may also get a confirmation message from the bank on your phone itself. You can check whether the payment went through properly from your bank’s end.

Ease of communication

M-Commerce enables faster communication between players. Firstly, you can use features such as notifications. They are also known as push notifications. These notifications help you in directly communicating with your customers. It is evident that they have much higher read rate, click rate and conversion rate compared to emails. Also, timely response from user is an added bonus. Most users respond within one hour of notification.

Opening rate of notification is 90% as compared to 40% for emails.

– source: Moengage

Some major drawbacks of m-commerce

There are not just good things that make up the difference between e-commerce and m-commerce. We also have some drawbacks of m-commerce. It has been criticized for creating a consumerism culture, addiction, impulse buying and non-sustainable practices.

Culture of consumerism

Another drawback of mcommerce is the increase in the culture of consumerism. Individuals have increased the spending on shopping. Users spend more than 4 hours on the apps. This has resulted in a situation where over 70% of the sales have started coming in from mobile apps.

Over 70% of the sales have started coming in from mobile apps

– source: eMarketer

Addiction of m-commerce

As we have discussed earlier, users are spending more than four hours each day. This leads to addiction of m-commerce. One big difference between e-commerce and m-commerce is the addictive nature of m-commerce. It can lead to eye fatigue, strain injury to hands and wrist and even psychological disorders.

Impulse buying behavior

Since users can take our their smartphone any time, any where, it is very convenient. However, this convenience comes at a price. It increases the chances of unplanned buying. Impulse buying refers to the act of sudden purchase of a product or service based on whim or impulse. Mcommerce apps are deliberately designed to increase this type of behavior through constant notifications, UI design, promotions and other selling tactics.

Non-sustainable consumption

One outcome of increased buying and impulse buying is that we are buying more than we need. This puts immense pressure on the already strained environment. We are generating waste at an alarming rate. Instagram and Snapchat culture has made it fashionable to have more and more apparels, accessories and paraphernalia. All of these have some carbon footprint and we are increasing our footprint as we increase our level of consumption.

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It is very difficult to differentiate yourself when you make a product like an office chair. Also, competing on value proposition is not easy. The American furniture company, Herman Miller was able to pull this off, and they did it so well that they witness a 500% increase in productivity. One of their products is the Aeron chair which is one of the most recognizable office furniture in the United States. This is one of the many Kaizen examples in Manufacturing that we shall discuss here. Kaizen provided them a much-needed increase in quality, reduction in manufacturing cost, and improvement in production times.

Brief introduction to Kaizen

Kaizen is the Japanese term that signifies ‘small, continuous improvements.’ These improvements accumulate over time and lead to a major increase. Although, it sounds great in concept but challenging to implement in practice.

⚡ Check out our detailed article on explanation of the Kaizen ➤ Kaizen Model of Continuous Improvement

Kaizen examples in factory

Here we shall discuss two examples of Kaizen implementation in the factory:

1. Daily Kaizen – Toyota
2. Kaizen events – Motorola

Daily Kaizen at Toyota

Toyota was one of the first manufacturers who adopted the Kaizen philosophy. Later companies like GM attempted to emulate these practices. There are many kaizen examples in manufacturing from companies that later adopted this concept as well. However, Toyota was one of the first companies to implement the concept of daily kaizen. The daily kaizen principle says that every day is an opportunity for improvement. This is achieved in the following steps:

1. Continuously question the processes and workflows – The traditional factories such as Ford Motor Company is based on the concept of absolute productivity. Their goal was to minimize any down time for the assembly line. Any down time meant that they were wasting precious time and having lower output than capacity. On the other hand, companies such as Toyota were alright with downtime. Even to the extent that they encouraged their workers to stop the production any time they wanted. Toyota had an Andon cord at their assembly line. It could be pulled any time to stop the production.
   
2. Adopt visualization and monitoring tools – We use sophisticated tool for project management that helps us visualize the progress. However, most of these visualizations can be traced back to the humble hand made charts. Japanese used one such technique called the ‘Kanban.’ Kanban is a visualization method by which we can define the tasks and then reresent them in terms of their progress so that their completion can be assessed more clearly.
   
   A typical job or task is represented as a flag. This flag starts off from the ‘requested’ column. As the work begins on it, it is shifted to the ‘in progress’ column. This column is sometimes called Work in Progress or WIP. Next this task is taken on to the ‘done’ column.
   
3. Embrace small experiments – experiments are small changes that are tested out. When they are found to be successful, these changes are adopted else they are dropped. Toyota is an exemplar in the case of kaizen becuase it encourages the employees to experiment their ideas. An article by Takeuchi, Osono and Shimizu talk about the bold conceptualization of Toyota Prius. They decided to develop a car that had 100% improvement in fuel efficiency.
   
   After a lot of research, experimentation, failing and learning, they were able to launch the car in 1997. It became one of the world’s most popular hybrid vehicles and remained a favorite among environmentally concious buyers for a long time.

Kaizen event at Motorola

The first example of Kaizen in the factory is from Motorola. They introduced the concept of ‘Kaizen events.’ Kaizen events are the occasions of quality improvement. These offer us ways to look into the defects, issues, and challenges that we encounter in the factory. A brief summary of the Kaizen event is summarized below:

1. Formation of the discussion team – a small team from different areas come together to discuss. This panel discussion focuses on one specific process. Japanese taught us the value of bottoms up communication channel. Therefore, in these discussions we need to have people who are working on the shop floor as well as mid-level managers.
2. The Observation process – In the second step, the team is tasked with careful observation. Another page from the Japanese system of management. A walk to the shop floor is referred as ‘Gemba’ and the act is sometimes called as ‘going to Gemba’. Again, a bottom oriented management. It makes the mid and senior managers get physically close to the lower levels and see the real place where action takes place. No wonder, Gemba literally means ‘real place.’
3. Improvement – In the very beginning we talked about ‘small, continuous improvements.’ These improvements must be meaningful and come from the observed defects. Sometimes the suggestions for improvements are never taken seriously, especially when it comes from lower rungs of the organization. Second issue is inter-departmental policies and politics which can prevent the acceptance of good ideas. It is the job of quality manager to ensure that ideas are evaluated based on merit only.
4. Implementation and testing phase – once the ideas are accepted, they need to be tested for application. Some ideas may improve the current process while some may deteriorate it. Again, an impartial evaluation of these ideas will help the organization gain benefit from Kaizen.

Because of these approaches, Motorola remains one of the best Kaizen Examples in Manufacturing.

Kaizen examples in manufacturing

A soap company faced a peculiar problem. They had a fully automated plant where the soaps were cut, packed into retail packages, and then stacked inside reseller boxes. They were getting numerous complaints regarding empty boxes being shipped to the warehouses. This posed a threat to their quality perception. What could be done to eliminate such mistakes?

They hired an external consultancy to look into the problem. The consultants provided top-class services and thoroughly looked at the problem. They realized that the problem can be detected with the help of a sensitive X-ray machine that can scan the boxes coming out of the production line. If the workers saw that the boxes were empty, they would remove them from the conveyor belt. The company saw an immediate decline in the number of complaints after this sophisticated system was set into place. The senior managers were happy with the result.

$600,000 vs $100 solution

This was not the end of the story. It had been barely three weeks since the new system was in place that the production manager noticed that the system stopped giving any defects. He re-checked the data from his dashboard and thought that the system had developed some fault. After that, he walked to the shop floor to check out the issue before raising a support ticket with the company that had set it up. He could not find any problem with the machine. It was working absolutely fine. The manager even tested it by sending empty boxes which showed up on the X-ray screen correctly.

Nevertheless, the machine operator returned from her tea break and saw the bewildered expression of the manager. When he learned his predicament, she could not stop laughing. She did not believe that the company had spent $600,000 on the machine only to detect empty boxes. She took the manager to a point barely ten meters away from the machine to show her improvisation. Apparently, she was tired of looking at the X-ray screen the whole day long. Therefore, she had installed a small table fan right across the conveyor belt. Whenever there was an empty box that came across, the fan would blow it out of the way.

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Kodak was founded in 1888 in New York, USA. They dominated the camera market for over a century. However, Canon, a relatively less known Japanese company and also a late entrant, slowly and steadily captured a major part of the camera market. A major upheaval in the camera market took place in the early 2000s. Kodak’s market share gradually declined. It was just a matter of time and eventually, Kodak ran out of steam. They filed for bankruptcy in 2012. On the other hand, Canon saw an increase in the share of the market over the same time period. They fully embraced new technologies and continuously improved their product offerings. One of the key drivers of Canon’s success is its Canon Production System or CPS. CPS is Relatively less known compared to the more popular Toyota Production System. However, it is a remarkable example of using the Kaizen model of continuous improvement.

First, we shall take a look at the Kaizen model and try to understand why it is highly revered by managers worldwide. After that, we shall see some best practices to ensure the successful implementation of Kaizen. Finally, we shall take a deep dive to see how Canon has used the kaizen model of continuous improvement to stay relevant in a competitive market.

Kaizen – explained in plain English

The term Kaizen needs no formal introduction. It has percolated into the boardroom lingo. In the most literal sense, it means ‘good change.’ However, it encompasses a philosophy of finding ways to improve functions and processes with small, frugal, easy to implement changes. It has been accepted by the Oxford English Dictionary as an English work in the year 1993.
Another aspect of kaizen is ‘continuous improvement.’ This highlights that the importance of the aggregate impact of small increments. It is analogous to the concept of compounding. For example: let’s say that you have a hundred bucks with you and you are able to increase it by 1% every day. Then by the end of the year, you will have three thousand seven hundred bucks. Similarly, if you are able to find new ways to improve your business process by 1% every day you will see a thirty-seven-fold increase in performance. However, practically it is not possible to improve even at 1% every day. Nevertheless, every small improvement will get compounded and you will see meaningful results in the end.

Difference between Kaizen and Innovation

Is Kaizen the same as innovation? Although these terms are similar and have a similar end result in mind, they are very different ways to achieve organizational success. In the simplest sense, Kaizen is one of the approaches to managing innovation. Here are some differences between Kaizen and the traditional approach to innovation management:

Kaizen Model of Continuous Improvement

Kaizen can be best understood as a set of management concepts. These concepts highlight how we should use kaizen in our firms. We can use some common management principles to guide us in adopting the kaizen model of continuous improvement in our organization.

1. Plan-Do-Check-Act or PDCA – the PDCA cycle is hallmark of kaizen model of continuous improvement. PDCA represents the different stages of the quality management process. The first step is planning for the improvement. We need to find what are the potential areas for improvement. The second step or do, refers to the act of executing these changes. Subsequently, the third step of check refers to the monitoring of the changes. Finally, the fourth step or act refers to acceptance of the new system or process. In this stage, we accept the new norm and standardize them as a part of the operational process.
2. Process focus – the second aspect of kaizen is putting focus on the process of achieving quality rather than running behind the results. This is a major difference between kaizen and western concept of innovation. The original spirit of kaizen calls for driving these changes with the goal of improving things rather than running behind optimizing economic gains. Companies that are successful in implementing the true philosophy of kaizen embrace this zeal of improvement to make things better. It has long lasting impact because intrinsic motivation to improve things is better than external rewards. One of the ways of enabling creative thinking is through brainstorming which is important part of any project management.

Some common managerial issues with Kaizen Model

Saving up and building a corpus for retirement is a simple but effective way to create wealth. However, very few of us are able to set aside a good proportion of our earnings. Two key reasons prohibit us from doing this:

1. Motivation

2. Other commitments

In the same vein, Kaizen also suffers from a lack of motivation. It starts off a ‘flavor of the month’ thing. You will see excited mid-managers putting up posters around the firm calling everyone to join the ‘Kaizen’ movement. However, this does not last long, the focus shifts to some new ‘buzzword’ next month or next week. As we have discussed previously, successful Kaizen needs a long-term commitment. The solution is simple but difficult – treat Kaizen as a cultural goal rather than a performance goal. Japanese firms were excellent places to percolate cultural changes as the society has conformity.

Also, the group dynamics support a unified cultural adoption. It is not very easy to introduce such an organization-wide change in working philosophy in other geographies. Especially those where people have a lower sense of community-based thinking and places where there is a greater focus on end results rather than focusing on the process of getting the results.

Managing challenges associated with Kaizen

Canon Production System – an example of Kaizen Model

We had opened this article with the example of Canon’s exemplary success story. We had also credited their focus on innovation as one of the key drivers of success. However, innovation is not a one-off thing. Their approach to innovation management is based on the concept of continuous improvement or Kaizen. Here, we shall take a deep dive into how Canon manage their innovation through the CPS or Canon Production System. The various methodologies associated with Kaizen are employed by Canon. These include the following:

Total Quality Management

Most of us may not be aware of the rich legacy of quality management at Canon. It often gets overshadowed by the likes of Toyota as they get cited more often. However, avid readers may be aware that Canon was one of the pioneers of quality management. They coined the punchline ‘No claims, no trouble’ in 1964 and used this as a guideline to direct efforts into improving product quality.

Further, they operationalize the slogan through three working objectives. These can also be summarized as the 3S of canon quality:

The quality logo looks like a Japanese fan. The three blades are Safety, smartness, and Satisfaction. These three aspects have been summarized below. Their kaizen model of continuous improvement is based on the concept that these three must come together to ensure quality. This integrity of three S is represented by the apex of the fan shape where they meet. The diverging shape of the fan also represents the extended influence of their quality concepts. One of the common pitfalls of many quality programs is that they take a too narrow a view of the quality. CPS breaks this trend with a more holistic approach.

Kyosei at Canon

Kyosei represents a less popular but futuristic approach to community outlook. It integrates very well with the kaizen model of continuous improvement. Traditionally, we have looked at products as the point of focus for quality improvement. Then we started looking at improving the processes. Further, the concept of Kyosei extends this outlook outside the boundaries of the firm. In the simplest sense, Kyosei is the concept of inclusion where the organizations treat everyone equally regardless of their background.

The top executives at Canon noticed imbalances in their target markets as they expanded into new geographies. Some common imbalances are economic inequality, competitor practices, and political challenges. They strive towards management guidelines that reduce these imbalances. The second set of challenges are related to the sourcing of materials. Canon uses these different challenges as points of improvement for their products and processes. Their model is an example of many such successful implementations of this remarkably simple but effective management philosophy.

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Investing in stocks is a tricky business. You do it wrong and you lose money fast. You do it right and you can laugh your way out of the bank. Companies like Apple and Microsoft have been some of the fastest-growing companies riding on the wave of the third industrial revolution. If you invested in these companies in the 1980s, you would have had a multi-bagger in your portfolio. This is the reason people are looking into the best ai companies to invest in.

Artificial intelligence could be the next big thing. Companies that rely heavily on AI can offer good returns for the shareholders as this technology matures. Although there is no guarantee, however, research shows that companies that rely on technological innovations typically offer higher returns.  

Methodology

We employ an aggregated information approach for preparing the list of top companies to invest in. We used the information from six different sources to prepare the initial list of companies. Then we filtered the list based on the AI centricity of the company. We eliminated companies that are not primarily based on AI. We used the company homepage and the latest annual report to ascertain the AI-centricity of the firm. Then we tallied the number of sources citing these stocks as value AI investment. 

The top 3 AI companies to invest in 

1. NVIDIA 

2. IBM 

3. Amazon

NVIDIA (NVDA)

Nvidia is an American company known for its graphics cards or Graphical Processing Units (GPUs). The homepage of their website clearly demonstrates their commitment to artificial intelligence. The title of the page reads ‘Artificial Intelligence Computing Leadership from NVIDIA.’ NVIDIA has invested heavily into technologies that can drive the artificial intelligence platforms of the future. The tech-savvy readers may be aware that AI can benefit immensely from the use of GPUs. GPUs are far more optimum for AI type of computation when compared to CPUs or Central Processing Units. A modern GPU may contain over 1500 to 5000 processing cores while a CPU typically has about 4 to 12 cores. Also, the manufacturing of such sophisticated hardware has very deep dependencies. You can’t have an overnight competition from new entrants. Remember Porter’s five forces? 

There is a strong reason for the inclusion of NVIDIA in most of the lists presented above. Firstly, hardware is an essential player in any digital transformation. If we look back to the 1980s and 1990s, Major hardware players saw immense growth. The steam story can be repeated in this industrial revolution as well. NVIDIA is one of the largest companies in the world that is focused on making hardware for AI computing. Therefore, it will enjoy a decent market share in the foreseeable future.  

IBM (IBM) 

IBM is one of The Pioneers who jumped on the AI bandwagon. They have been marketing their AI supercomputer, which is the IBM Watson for over two decades now. It got a lot of media coverage when it defeated human players in the game of Jeopardy. However, it has now evolved into a full-fledged enterprise AI solution.  

On one hand, we saw how NVIDIA plans to create value through AI hardware products. On the other hand, IBM positions itself as a service company. IBM offers a host of software as a service or SaaS packages for AI-based applications. Some of the key offerings are: 

1. IBM Watson Assistant – multichannel communication solutions 

2. IBM Watson Discovery – data analytics platform 

3. IBM Watson Natural Language Understanding – text analytics 

4. IBM Watson Speech to Text – transcription services 

5. IBM Watson text to Speech – TTS engine 

6. IBM Watson Knowledge Studio – domain specific knowledge 

7. IBM Watson Language Translator – translation engine 

8. IBM MaaS360 with Watson – cloud unification 

They have built some specific industry or domain-specific tools and solutions. It encompasses everything from IT security to marketing automation.  

Amazon (AMZN) 

Although IBM was one of the highly revered companies of the 20th century, Amazon commands a similar respect today. We can safely say that it is not a startup anymore. Amazon has matured as not the largest marketplace in the world, but also a leading cloud service provider. It offers a host of AI as a service over its AWS or Amazon Web Services platform. Secondly, Amazon is also one of the leaders in AI assistants. Amazon Alexa is the third most popular virtual assistant after Apple Siri and Google Assistant. 

When we specifically talk about the enterprise AI solution, the first Amazon product that comes to mind is Amazon SageMaker. They try to differentiate it from other solutions by making it easier to build and deploy. This platform promises easy deployment of ML algorithms. They offer solution-specific algorithms related to Business process centers, marketing, document processing, fraud detection engines, media intelligence, data analytics, DevOps, and business transformation. 

Are there some other AI companies to invest your money?

Of course, there is no dearth of good investment opportunities. Firstly, this list focuses only on American companies. There are several AI companies located in different places in the world. Also, many new AI startups are coming up every day. It requires higher due diligence to invest in these smaller companies. You may need to closely follow the latest IPOs to catch these investments early. We shall be updating this list with such opportunities soon. However, in this list, we have only included the top three companies that are relatively safer bets. These companies are also diversified into many different business domains. This diversification of business means a lesser risk for the investors. Please feel free to share your thoughts in the comment section below.

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IDEO is a pioneering organization of design thinking (DT). They were forerunners of the user-centric design movement in the 1990s. This was even before the term ‘Design Thinking’ became a boardroom lingo. They have carved out a niche for themselves in terms of the quality of consulting and education when it comes to DT. Here we shall take a look at the IDEO Design Thinking Process. We shall also see how it can help us in creating user-centric products and services. Finally, we shall contrast it against an equally popular alternative: Stanford D.School’s design thinking process. This will give us an insight into the subtle differences between the two major schools of DT. 

What is Design Thinking ?

One of the most challenging tasks in business is creating something that works well for the firm, its customers, and other stakeholders. It’s a very narrow path to success. Design thinking is an approach where we try to create or optimize products. The main goal of design thinking is to make something that is extremely user-centric. Unlike other methods of new product development, here in DT, the focus is not on finding a correct solution. When we use the standard research and development process we strive towards making a perfect product. On the other hand, the goal of the design thinking process is to improve the products little by little every time. At the very core of these improvements is a relentless pursuit of customer satisfaction.

However, we have to keep in mind the firm’s profits as well as the technical feasibility of these improvements. Therefore, IDEO says that there are three concurrent goals of any design. These are: 

1. Economic viability – whether the changes are profitable for the firm?

2. Consumer desirability – what do the customers want?

3. Technological feasibility – is it possible with current technologies to incorporate these improvements?

These goals are extremely important to the success of any product or service. A lot of times we may have a product that may be extremely good at one of these three areas, but poor at the other areas. These kinds of products are not successful in the long run. The IDEO design thinking process prescribes some simple steps as discussed in the next section. 

IDEO Design Thinking Steps

IDEO university has pontified the six steps of the IDEO design thinking process: 

1. Frame a question 

2. Gather inspiration 

3. Generate Ideas 

4. Make Ideas tangible 

5. Test to learn 

6. Share the story 

You may see some variations of these steps on different websites. However, this is the correct form of the design thinking process as provided by the IDEO university. I shall be taking the example of Airbnb to explain these steps.

Frame a question 

One of the core principles of design thinking is customer-centricity. Framing the question is one of the most important steps of this entire IDEO design thinking process. In this step, the first question that we ask is who is our customer. It is also important to go beyond the traditional rhetoric of segmentation targeting and positioning we need to take a deep dive into the understanding of customers. This is especially important because we are trying to optimize a product or launch a new product in the market. Therefore we need to understand who is our target customer.  

The second question that we need to ask is regarding the customers’ needs. It is imperative that we understand that needs may not be manifested easily. Many companies run customer surveys to understand the explicit needs of the customer. Leading firms understand the value of going beyond the explicitly specified needs. Pin rightly said by Henry Ford that if he would have asked his customers that what did they want. He would have simply said that they wanted faster horses. Therefore we need to go deeper and understand that what are the pain points of the customer.  

In the case of Airbnb, the founders saw that in spite of traffic on their website few people were booking the rooms. They wanted to know the reason behind this. It could be due to some problem that the customers were facing. 

Gather inspiration 

The second step of the DT process is gathering inspiration. Phones that capitalize on the design thinking process also put in a lot of effort to understand the customer. We have got different means and mechanisms to gather inspiration for innovation. The first source of this inspiration can come from customer journey mapping. Customer journey mapping is a process by which we follow a customer in their shopping journey. On one hand, we can put ourselves in the shoes of the customer and try to replicate the entire purchase process. We can also follow a customer and see that what processes and touch-points they go through. When we close we follow our customers that can also give us some insights about the customers’ pain points.  

The founders of Airbnb put themselves in the shoes of the customer. Consequently, they were able to appreciate the problems that the customers faced on their website. Images that were displayed for the hotel rooms were not up to the mark. Of them were shot by smartphones. The rooms were badly lit. Therefore many users did not end up booking the rooms.  

Generate ideas 

Once you have the pain points of the customer you can try to find solutions to these pain points. There are two things to keep in mind in this regard. A lot of times we just try to find the first possible solution. Then we stop and that solution and don’t look for a better solution. It was a more robust approach would be to keep looking for an answer till you are satisfied.  You can try one of the three types of brainstorming to come up with fresh ideas.

The team at Airbnb wanted to find a solution to this problem. Obviously one of the easiest solutions would be to set up some rules and regulations. The room owners may be asked to upload better-quality pictures on the website. However, this solution may not work well. One of the reasons for this not working is that the owners may not be an expert in photography. Secondly, there would be no benchmark or reference point for them to target.  

Make ideas tangible 

This concept comes from the field of research and development. When we are trying to do R&D for a new product we design models and test them. These models are smaller or scaled versions of the original design. Therefore we can develop these models quickly and at a lower cost. These scale models are also known as prototypes. Once these prototypes are ready we can test them to find out the best one. 

The team at Airbnb decided that day should intervene and optimize the photographs for some of the hotels. This small-scale testing of their idea is just like a prototype. 

Test to learn 

Once our prototypes are ready we have to test them. For example, car companies make prototypes for their vehicles. These prototypes are crash tested to see whether they would stand the force of an accident or a collision. Once you have this data, you will know that what are parameters that you have to optimize. After which you can then build new prototypes that are better than the previous ones.  

In the same vein, the team at Airbnb also decided to test out their idea about the photographs. They visited live locations and took high-quality photographs with digital cameras. After they uploaded this photograph for those properties they started analyzing the data. This and instant increase in the number of booking for these properties. Therefore they were able to find support for their proposed changes. Dekho now ask each of the hotel owners to try to put a photograph that was similar to their photographs. The users had to simply light the room well and they would have to click photographs using proper angles and good quality cameras.  

Share the story 

This is the final step of the design thinking process proposed by IDEO. What’s the storyline for your solution are ready you have to share it with the relevant people inside the organization. This story should not just inform them about the potential solutions. It should also inspire them to serve the customer’s needs.  

Therefore the Airbnb founding team communicated their success story to the property owners. They shared the output of their experiment and asked them to improve the quality of photographs for their listings. In no time the company saw a massive increase in the number of bookings. Therefore by applying the principles of design thinking Airbnb was able to improve its market share. 

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The United States witnessed a major scare with the outbreak of a disease. This happened way before anyone had heard about coronavirus. We are talking about the typhoid outbreak of 2017. First, there were was one case in Texas then another, and so on. Soon hundreds of individuals were infected with this nasty bacterial disease. It took a while for the Centre for Disease Control to get a hang of this situation. They were finally able to connect the diseases to the supply chain of papayas and thereby trace the origin to a farm in Mexico.  Now, the question is: can we trace the origin of food much faster? Supply chain cryptocurrency can be our answer to this pertinent question. Read more to find out how this new technology can change our supply chains forever.  

Cryptocurrency 

We are dawning on a new era. The era of industry 4.0. Blockchain and cryptocurrency can play a major role in the fourth industrial revolution. The promise is to offer some new ways of doing transactions. 

At the most basic level, a blockchain is a way to store and verify the information. This information is spread out (decentralized) into the users’ computers. Also, the distributed data makes it very difficult to hack because the same data can potentially reside in thousands or millions of systems. This property of blockchain is called immutability.  

Two common applications of blockchain are cryptocurrency and smart contracts. Both of these are also used in the supply chain. However, one should keep in mind that blockchain is the technology, cryptocurrency is the application of this technology. Smart contracts are legal and financial tokens of mutual exchange that can be liked to a cryptocurrency or work on a blockchain. 

Cryptocurrency 

All our current transactions are managed using traditional currencies like US Dollars or Euros. Banks maintain the record of the account holders in ledgers. When we transfer $1000 to a friend’s account, basically it balances out our ledger with our friend’s. Our new account balance is reduced by $1000 + transaction charges. On the other hand, our friend’s account balance increases by $1000.  

Cryptocurrencies also work in the form of ledger bases records for such transactions. However, there are some key differences. The ledgers that track these balances are not kept in a bank. The cryptocurrency system basically creates multiple copies of this ledger and stores it on all the computers that use this technology. Therefore, all the users have a copy of this ledger. When any transaction takes place, it is updated on all the ledgers in the network. This makes it next to impossible to hack.  

Cryptocurrency can be exchanged directly between two parties without any intermediary. This reduces the transaction cost as well. In the later sections, we shall see how these new currencies help in making supply chains efficient, reliable, and secure.  

Smart Contracts 

Thirdly, let us briefly introduce the concept of smart contracts. Smart contracts are basically contracts that are based upon blockchain technology. It enables us to design systems where certain transactions are executed only by authorized parties under pre-established conditions.  

For example, a transportation agency may have a smart contract with a factory regarding the handover of consignment. In this case, let us say, once the consignments are received by the factory’s warehouse the items are automatically added to the trade payable and also to the internal goods inventory. The smart contract may enable automatic authorization for the payment against the trade payable. This would have required manual authorization in a non-blockchain-based system.  

Why do we need blockchain in the supply chain? 

The department of supply chain & operations is an early adopter of this upcoming technology. Currently, we manage the supply chains using enterprise resource planning software or ERP. These systems maintain a centralized system of managing assets, resources, and finances. However, there are certain limitations associated with these traditional systems. 

The traditional ERP systems are not designed to automatically handle conflicts or disruptions in the supply chain. Move to manually intervene to audit and correct certain problems. Also, these systems are more vulnerable to attacks and forgeries. Overall, they also slow down the decision-making process. 

One of the biggest contributions of blockchain is that it is going to integrate the informational and financial flow across the supply chain. The use of supply chain cryptocurrency will help us have real-time control over the systems. Therefore, we shall be able to manage three critical flows of the operations and supply chain department: 

1. Inventory flow 

2. Monetary flow 

3. Information flow 

Inventory flow 

The first step is the movement of raw materials from the suppliers to a firm.  On the other hand, we have the movement of finished goods from a firm to the customer. People in an automobile phone. The raw materials can be parts that they procure from suppliers. Is the vehicle which is dispatched to the wholesalers or retailers.  

Traditionally, ledgers were used to track the inventory flow. Although they are quite at keeping track of the movement of goods, they do not capture enough information to aid in real-time analysis and fault detection 

Financial flow 

We can also imagine the entire supply chain in the form of a financial flow. As the raw material moves from the suppliers to the firm. In this state, basically, we are adding some value to the raw materials. This value is being added when we create a good that is superior to the raw materials in terms of functionality.  

Similarly, the finished gold also changes hands from the firm to the suppliers and eventually to the customer. At each stage of the supply chain, there is a change in the value of the consumer goods and services.  

Information flow 

Similarly, there is a flow of information that takes place throughout the entire supply chain. Different managers have got different levels of access to this information. However, you can imagine that the flow of information takes place from the different stages or touchpoints to the firm’s database.  

For example, when a shipment is received by inland transportation, it gets scanned and recorded in the system. This information is reflected in the inventory management software. 

Integrating these three flows using blockchain 

Blockchain-based systems basically integrate all these different information flows into one coherent system. And we attach a cryptocurrency-based transaction to the supply chain, we are automatically ensuring that cost, quality, quantity variables are updated. Further, these variables are difficult to fudge because blockchain technology uses distributed ledgers.  

Advantages of using supply chain cryptocurrency

The use of cryptocurrency in the supply chain brings in a lot of advantages. As we have discussed earlier, the primary advantage is the integration of the three different types of flows. However, we also have other tangible benefits. 

1. The use of crypto currency reduces the amount of paperwork. When we go for a digital currency like crypto currency, we are automatically reducing the amount of paperwork that is involved in the transfer of ownership as the consignment is transported from one location to another. We can automate a lot of these steps. Therefore, we also reduce the paperwork involved. For example, there can be up to 30-50 change of hands for a consignment that travels across continent from a country like Vietnam to Norway. Each step can introduce some uncertainty and point of error when we use paper-based system. 

2. The use of blockchain also offers higher accuracy and reliability in tracking of the goods movement. As we have discussed in the earlier point, the news of blockchain also allows us to minutely monitor each step of the shipment. Although this can be done using RFID tags in dependently from the blockchain. However, when we attached the value of goods using cryptocurrency, then it includes a higher level of protection.  

3. Another advantage of using cryptocurrency in supply chain is that it deters privacy and counterfeit products. There are certain goods which are extremely valuable and also prone to piracy. For example, let us consider that a box of luxury shoes is shipped from Italy to Shanghai. It becomes impossible for the retailers to track where the goods came from and validity of the same. Similarly, we consider the case of diamonds. Using cryptocurrencies, we can track the origin of the goods. Later we shall see how certain cryptos allow us to do this. 

4. The use of cryptocurrency also increases the visibility of the movement. This helps us in monitoring the movement of goods in a more granular manner. It is extremely helpful in scheduling. For instance, when we had the COVID-19 pandemic. It led to widespread disruption of the supply chain. In these critical times, it became very important to understand where the goods were stuck in the supply chain process. Companies that have used modern tracking systems. Are able to track the movement of goods. This tracking becomes much more accurate when we use blockchain technologies like cryptocurrency and smart contracts. 

5. The use of cryptocurrency in supply chain also increases the resilience of the supply chain. Cryptocurrency also helps in the analytics. Firstly, it can reduce the time between the event occurrence and detection. Secondly, it also improves the speed of decision-making once we realize that there is some problem. Thirdly, it also helps in understanding where the fault lies and correcting it without human intervention. 

6. Finally, one of the advantages of using cryptocurrency in supply chain is that it helps us in origin tracing. Origin tracing is a method that we use to trace the point of origin for a product or for any longer. This has become extremely important when we see that there are certain problems associated with specific raw materials used in products. Apple had come under a lot of scrutiny for using conflict materials. Conflict materials are those materials that are sourced from countries which have problematic geopolitical situation or employ child labor or are detrimental to the environment.  

Supply Chain Cryptocurrency 

The most common cryptocurrencies are Bitcoin and Ethereum. However, we have a lot of other viable options. Some of the best cryptos to invest in are Raven coin and Binance Coin. However, here we shall take a closer look at some cryptos that offer supply chain-specific features natively. 

The cryptocurrencies that are used in the supply chain have caught certain small but meaningful differences from the traditional cryptocurrencies. These differences are primarily in terms of the number of parties involved and the kind of anonymity that the platform offers. 

1. Blockshipping Container Platform Token 

Blockshipping is a Danish firm that is also one of the pioneers of blockchain solutions in the supply chain. Their platform is called Global Shared Container Platform (GSCP) and their currency is called Blockshipping Container Platform Token or CPT. The crypto is internally traded by the partners and the benefits are shared as per the revenue sharing model.  

Their aim is to decentralize the shipping industry. Currently, most of the tracking and paperwork is handled by the shipping companies and ports. However, the cryptocurrency company is founded by senior executives from Maersk, so they may have greater control over the regulations regarding this cryptocurrency.  

2. VeChain 

Vechain is one of the leading corporate cryptos. Unlike consumer cryptos like Bitcoin or Ethereum, they are dedicated to offering features that can work with industry 4.0 technologies like IoT, AR, VR. They offer specific proof of concept models for supply chain applications such as food safety, lifecycle assessment, luxury and consumer goods, and automotive applications. 

For instance, they offer a unique solution called ‘Automotive Passport’. This offering works over their crypto and seamlessly integrates the different stages of the product life cycle of automobile production, supply chain, retail, and service. Interested readers may look up more information on VET and VTHO, which represent their offerings as useful for supply chain management. 

3. Ambrosus 

Ambrosus is a relatively smaller company but offers very specific products for the supply chain management. They offer permissioned blockchain-based management of resources. Currently, it is used by over 500 decentralized operators in their own networks. Some of their clients are in the pharma and food industry. It can help in keeping track of perishable items by monitoring aspects like freshness and quality.  

Ambrosus helps in integrating the futuristic data coming from channels like RFIDs and IoT devices into the traditional ERP systems. They call this system Ambrosus Network or AMB-NET. Their crypto is called AMB.  

4. Doftcoin 

Doft is also known as the Uber of the trucking world. It doesn’t really act as an intermediary between the logistic operators and customers who need trucking service. Presently there are about 400,000 truckers that work in the United States. Doft aims to integrate this entire nationwide network. The taxi sharing services like Uber, charge the taxi operators for each ride. However, Doft has a different payment model. They charge about 4.99% fees from both parties. 

One of the unique ways in which Doft aims to differentiate itself from the competitors is through the use of blockchain. They have introduced a new cryptocurrency called Doftcoin. Doft had their ICO or the initial coin offering around four years ago on 27th November. They highlighted some key advantages of this new cryptocurrency. Firstly, all the transactions that take place using this cryptocurrency will be immediate. Therefore, the truckers and the customers would be saving on the time that it takes for the transfers to take place from one bank to another. Secondly, the Daftcoin interface is designed to be scalable. Air for location and geography would not be a constraint in the expansion of the Doft network. 

Opening Example – Maradol Papayas 

Let us get back to our opening example of papaya borne typhoid outbreak. It may not seem alarming at first. However, such outbreaks are more common than one may think. Forbes reports that such outbreaks that happen because of food, kill around two million people each year worldwide.  

The adoption of supply chain cryptocurrency can help us detect such outbreaks earlier by tracking the supply chain. It can also save lives by early detection of the sources. Therefore, we can isolate such sources and prevent further damage.   

Therefore, the application of blockchain also reduces the economic risks associated with supply chains. In another case, we also saw another outbreak that could have been handled much better-using supply chain cryptocurrency. In 2015 there was an outbreak of E. Coli bacteria at Chiptole Mexican Grill in Washington. This outbreak led to a decline in stock prices by over 42%. The company had to shell out Dollar 25 million as a federal fine as well. 

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The stick and carrot theory is a well-known approach. Although some people think that this is a theory of motivation, this is actually a theory of compliance. Firstly, we shall take a look at this theory and try to understand what this is about. Then we will look at some real-life examples. 

What is carrot and stick theory? 

The carrot and stick theory says that there are two different approaches to controlling someone’s behavior. We can either encourage someone by providing a reward for favorable behavior. We can also encourage someone by providing punishment for an unfavorable behavior. However, when we take a deeper dive into this theory, we will understand that there is much more to it than rewards and punishment. 

The storm has been traced back to the 19th century. During those times, people used to race on donkeys. One of the surviving images shows that there was a unique approach taken by one of the jockeys. He hung a piece of carrot at the end of a stick and held it in front of the donkey. This encouraged the donkey to run faster than others. Meanwhile, other jockeys simply use the stick approach. They were beating their donkeys left and right in order for them to gain speed. Therefore, the jockey that used both carrot, as well as stick, was able to outperform others. 

In the modern context, the carrot and stick approach refers to the practice of using different techniques like rewards and punishment to encourage a specific behavior. This term is mostly applied in the field of management. However, it is also used in the field of politics. 

The theory behind this term 

One of the key traits of a leader is to make people follow them. One of the pioneering works in this area was done by Amitai Etzioni. He proposed that organizations can use three different means by which they can ensure compliance by the members.  

1. Coercion 

2. Remuneration 

3. Normative 

Coercion is a more severe form of control where the members are controlled by physical force or threat. You can also equate this with the different kinds of threats or punishments that can be meted out to an individual. Therefore, we can classify coercion as a form of ‘sticks’ approach.  

The most common form of remuneration can be money. Money is a powerful motivator and controller of behavior. At the most basic level, the salary of the employees is dependent on the organization. If the organization removes someone from their payroll, that would lead to financial hardship. When an employee behaves in a manner that is favorable to the organization, the organization rewards them with higher remunerations an increase in salary or an increase in position. 

Finally, we come to the normative form of control. This type of form is more symbolic in nature. Here we see that people are controlled by their loyalty or affection towards their organizations. People who are more compliant are typically regarded at a higher level than those people who are rebellious in nature. This in turn informs people’s behavior and keeps them in control. 

Punishment vs Rewards 

Not all punishments are equal in nature. Some of the punishments may be seen as a severe threat, while others can be neglected. In this regard, there are two different factors that can increase the power of punishment. 

1. Severity of punishment – When we perceive that the punishment is going to be severe, we have got higher motivation to comply. 

2. Certainty of punishment – Similarly, when we see that there is a higher probability of getting punished after the crime is caught. 

On the other hand, rewards are generally considered to be a more positive approach towards extracting higher performance. It does not just help people comply; it also keeps them motivated. However, we should also keep in mind that only rewards can get ineffective. Therefore, most managers use a combination of rewards and punishments. The most common benefits of reward are as follows: 

1. Improvement in performance. 

2. Increase in productivity. 

3. Higher creativity. 

4. Higher compliance. 

Why do we need carrot and stick theory? 

There’s a popular theory in management called the agency theory. This theory states that there are two kinds of entities. The first entity is called the principal. The second entity is called the agent. In an organizational context, the principle is the organization, and the agent is the member of the organization that has been hired to do some specific job. 

As per this theory, these members or employees will act to maximize their own benefits. This comes from the self-serving nature of any human being. Whenever they face a certain scenario when they have to choose between personal wellbeing and organizational wellbeing, they will choose personal wellbeing. Therefore, the use of sticks and carrot theory has been suggested. The provision of rewards makes the agent align their personal goals with the organization because they are getting some form of personal benefit in doing so. At the same time, punishments can deter people from some activity as it is personally harmful to them. 

The simplest example of this can be an employee who has been hired to sit as the security guard at the gate. The guard knows that if he is away from that post for long, then his job can be jeopardized. Therefore, he will ensure that he does not leave the post unattended. This thread to the job is like a punishment that will ensure that he diligently sits at the place. He only leaves when he sees that there is some other guard present at the gate. 

Another example of this can be a sales representative for a company. The sales representative has been offered a cut from the total sales that he brings. This incentive or reward will ensure that the employee puts in extra effort to sell the products. 

Deeper understanding 

You must have heard about the term intrinsic motivation. It is extremely important to understand it in this context. Chen et al. (2012), has discussed, the application of stick and carrot theory in the context of policy compliance. They have stated that motivation can have a continuum between autonomy and control. When the motivation is autonomous it means that it is derived from a person’s own interest. This type of motivation is also called intrinsic motivation. 

One of the points of criticism of the stick and the carrot approach is that this approach touches upon the controlled aspect of motivation only.  

Because of this bifurcation that we can find certain limitations to the stick and carrot theory. Firstly, we see that there are many limitations to the monetary rewards for the employees. 

1. Monetary rewards are typically short lived. They have a temporary effect and therefore when they are removed, the effect is also gone. 

2. It has also been seen, then monetary rewards can improve the quantity, but they don’t affect the quality of output. 

Autonomous motivation 

Therefore, we go back to the self-determination theory. This theory explains where does motivation comes from. It says that there are three basic needs that need to be fulfilled. The first need is the need for relatedness or social affiliation. The second need is the need for competence or personal efficacy. The third need is the need for autonomy or self-reliance. 

Controlled motivation 

Let us go back to the stick and carrot approach. We can look at it as a form of control motivation. The basic mechanism of control motivation works by working on certain fears and aspirations of individuals. Some of these aspirations are highlighted below: 

1. Fear of punishment. 

2. Guilt. 

3. Reward for good behavior. 

4. Uneasiness of doing something wrong? 

5. Personal gains. 

6. Expected returns and reciprocity. 

7. Pressure and coercion 

Therefore, we can say that controlled motivation that is conceptualized as the stick and carrot theory has got some major drawbacks. At least contemporary management looks at it with an eye of skepticism. Firstly, it reduces the overall motivation of an individual. Any motivation that is brought about externally or controlled manner will not sustain for long. Secondly, it also lowers the performance. It has been seen that rewards or punishments can work well in the short term, but they do not work well in the very long term. On the other hand, intrinsic motivation has been seen to provide much better results in some contexts. Thirdly, it also leads to a resentful environment in the workplace. Employees always feel that they are being monitored and assessed. It feels like sitting for an exam. Also, the concept of reward and punishment makes some team members superior to others. This leads to conflicts in the workplace. Lastly, it also ends up making people unhappy. It has been seen that this kind of work structure can reduce the well-being of individuals and stress them out. 

What is better than the carrot and stick approach? 

1. Research shows that feedback for improvement is much more important. Then the concept of rewards and punishment. 

2. A good manager follows the old adage ‘praise publicly, criticize privately. 

3. You can also plan to establish a healthy work environment by encouraging team goals.  

4. The personal goals of the employees need to be aligned to the professional goals. This has to be worked out by the manager by sitting down and understand the perspective of their subordinates. 

5. It’s also imperative to understand the importance of job ownership. It has been seen that employees who have a greater ownership in what they’re doing also perform better. 

6. Finally, there should be a clarity about the task that someone has to do. At the same time, there needs to be clarity about the reward that is associated with that task. Sometimes stick and carrot approach fails because the a person may lack clarity about these.  

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