HCLT Whitepaper: Responsive Efficient Customer- focused Creating Value Across The Supply Chain

AuthorsRakesh Churiwala

Sameer Nagpal

FEBRUARY 2012

© 2012, HCL Technologies. Reproduction Prohibited. This document is protected under Copyright by the Author, all rights reserved. 2

Abstract

Target Audience

The consumer services industry is changing fast and becoming a lot more competitive. Rapid technology changes combined with a hyper connected and evolving consumer, means that organizations need to be able to respond to these changes fast, and ensure a more dynamic decision making process. One of the key strategies organizations will need to adopt to survive and flourish in this environment, is to optimize supply chain planning to maximize return on investment.

An effective supply chain strategy will be imperative to not only address market challenges but also proactively meet fluctuations within the demand and supply chain. At HCL, we understand these challenges and the risks and provide solutions that enable Retail organizations to accelerate revenues and profits. By leveraging in-depth industry knowledge and insights, HCL provides end-to-end solutions that optimize processes across critical business functions such as merchandise planning, demand planning and replenishment. In addition, our solutions can be integrated with the core business processes to ensure that the business stays in line with the customer’s need.

Some of the key industry trends in Supply Chain:

?Customer-driven responsive supply shain?Shelf connected supply chain?Shelf analytics?Demand synchronization?Collaboration on forecasting and store replenishment

These will be looked at in detail later.

This whitepaper focuses on the key industry trends and challenges and how HCL’s service offerings delivered through the Supply Chain Center of Excellence helps address these changes.

Creating value across Supply Chain

This paper is targeted at professionals across the consumer services, supply chain, logistics and manufacturing industry such as:

?Operations/ retail business managers?Business and/or technology consultants?IT professionals

Increasing globalization of the supply chain and shortening product lifecycles means organizations will have to optimize their supply chain planning to maximize the return on investment. Getting the right product, at the right place, at the right time, and at the right price has become a basic necessity. Apart from these business challenges, organizations today are struggling to keep IT costs under control. Adding to this challenge is the lack of standards in a complex, highly customized IT environment, which leads to integration difficulties and makes any additional development cumbersome and expensive.

The critical risks organizations face today:

?Product complexity?Shortening of product life cycles?Extended supply chain ?Managing multi-channel operations?Process complexity?High demand volatility?Increasing lead times?Lost sales and brand erosion due to stock outs?Highly competitive and margin sensitive industry

It is vital to respond to these challenges and proactively meet fluctuations within the demand and supply chain.

Organizations can tackle supply chain challenges with the following strategies:

?Flexibility, scalability and integrated supply chain processes to manage the consumer-centric global supply Chain.

?Optimizing decision making processes across the supply chain by addressing the dynamic nature of demand, sub-optimized plans, and sub-standard customer service levels.

?Optimizing distribution and production planning with an enhanced Sales & Operation Plan (S&OP).

?Collaborative visibility into all critical functional areas for comprehensive optimization of processes

?Planning that is integrated and executable with total demand visibility.

Changing Landscape




?Leverage and extend the value of the current transaction system and seamless integration of the supply chain solution with the ERP or legacy system.

?Improve the customer service level, order fill rate, inventory availability and asset utilization.

?Decrease safety stock and overstock to optimize inventory and carrying cost

HCL offers a complete supply chain planning and optimization specialized suite with the right capabilities to enable a customer driven value chain. A customer driven supply chain begins with the right insights into the buying behavior. It also provides one view of demand to drive every single plan within an enterprise and across the value chain, ultimately enabling synchronized decisions by all stakeholders from manufacturing, distribution to store operations.

The objective of collaborative planning at the shelf for both retailers and manufacturers is to serve the consumer at an optimal cost.

This process calls for the retailer to conduct macro-level floor planning to determine the amount of shelf space required by supplier. This will help in quick responses to consumer choices at the shelf and across all buying channels. A shelf connected supply chain allows both manufacturers and retailers to maximize revenue, eliminate stock outs while removing any additional cost across the supply chain. To do this effectively, the industry needs a new breed of technology that can be scaled up cost-effectively to handle vast amounts of data across the value chain to drive accurate decision making. Organizations today are taking on new

Key trends across the supply chain and new strategies to keep pace:

Customer Driven Responsive Supply Chain

Shelf Connected Supply Chain


Integrated Business Planning

Co

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tion

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ma

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Su

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One Synchronized View

Collaboration, Visibility and Monitoring

ERP

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processes that connect the virtual shelf to the entire supply chain, enabling them to develop localized assortments, shorten cycle times, set profitable flow strategies, reduce inventories, trim costs and improve shelf availability.

Retailers frequently come across large gaps in order patterns resulting from their decision to change service levels, safety-stock settings, lead times, transportation modes and order parameters. Collaborating around replenishment policy and store-level forecasts allows both the supplier and retailer to better manage merchandise flow.

Retailers today are not just leveraging historic data, but are adopting new practices and solutions to analyze the shelf with an eye on the future. Root cause analysis to identify phantom/ghost inventory, inappropriate ordering parameters, inaccurate demand forecasts, insufficient shelf-space allocation and poor in-store execution is conducted to identify which items are likely to be out of stock. Leveraging this information, manufacturers can collaborate with retailers to adjust forecasting and replenishment parameters, and correct inventory inaccuracies.

HCL’s JDA Practice is a hub for knowledge sharing and capability building in domain areas such as retail, CPG, manufacturing, pharmaceuticals and automobile industries and for specific JDA product suites around supply chain planning, merchandising, store operations, category management, etc. In the product-based service offerings, HCL’s JDA Practice has been both fast and extensive, and is offering much-needed flexibility, productivity, cost and resource efficiency to companies in managing their branching global businesses. The solutions are focused on implementation, migration, health checks, application support and maintenance, and integration and development around supply chain planning and retail solutions.

Collaboration on Forecasting and Store Replenishment Strategies

Shelf Analytics

HCL Offering


© 2012, HCL Technologies. Reproduction Prohibited. This document is protected under Copyright by the Author, all rights reserved.

HCL works with industry specialists and customers through our Centers of Excellence in supply chain. Our involvement in the industry ranges from improving supply chain efficiency, streamlining store operations,

managing merchandise, maximizing customer loyalty to conceptualizing, building and managing eCommerce capabilities.

Benefit led Implementation

Application implementation for our customers is one of the key highlights of our supply chain practice. The implementation begins with a Business process analysis and reengineering, followed by the Design of Application which is aligned to the Business Processes. The aim of the implementation is to maximize usage of the standard features of the application, thereby restricting customization.

HCL has done many green-field implementations of JDA applications, with the standard implementation methodology. We also shorten the implementation cycle using the Solution Accelerators and Frameworks developed by our Center of Excellence.

De-risk Upgrade / Migration of JDA Solution

The upgrade / migration process starts with understanding the business processes of the customer and then aligning them to the features of the application. The processes are classified as (a) Standard processes handled through the standard functionality of the application, including the extensions and (b) Non Standard processes, where some development is required to deliver the functionality. The objective is to keep customizations to the minimum. The migration framework includes the latest checks and analytics to ensure that the business processes are configured in the right manner. HCL has an experienced team to develop accelerators and frameworks that shorten the entire lifecycle of the implementation / upgrade.



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Analysis Design Build OperateDeploy

Gap Fit

Analysis

Requirement

s Gathering

Project

Planning

Prototyping

Technical

Design

Business

Model

Design

CRP

Integration

Testing

Unit Testing

Customisation

Acceptance

Walkthrough

Deployment

& Training

Production

Set-up

Support

Project Management


Solution Differentiator

The “EZUpgrade™” framework is the perfect fit for the upgrade landscape as it incorporates the following capabilities:

?Besides being a technical upgrade, it increases the benefits for the customer by focusing on the business assessment, evaluation, business process redesigning, migration and program management etc.

?It leverages the Upgrade Methodology, ensuring faster go-live and quicker return on investment on JDA upgrade projects.

?It leverages the JDA Center of Excellence (CoE) repository of tools that facilitates seamless upgrade and minimizes business disruption.

The “EZUpgrade™” framework offers the following benefits:

?Reduction of the upgrade cost and overall time span as compared to a standard approach

?Accurate time and cost estimates at an early stage of the upgrade


Upgrade from 7.1 to 7.7

Forecasting Algorithms (FMCG/ Specialty Products/Retail)

Bulk New Product Introduction

Demand Classification

Demand Planning & Decision Support Workbench

Exception Graphs

Capture impact of events in Demand Planning

Reconciliation top-down & bottom-up (Special Features)

Tune Algorithms Automatically (Based on History)

Introduction of New Calendars for Supply Chain Planners

Smart & Informative Planning Workbench

New Enhancement in Consumption of Demand

Promotional SKUs (Supersession & Supplement Order introduction)

Better Handling of Display & Presentation Quantity

Constrained Planning to Aid Transport & Warehouse Management

Constrained Production Planning

Statastical Safety Stock Process ( Automated SS Calculation)

Order Pegging (Supply Demand Linking - For Planner's View)

Ability to specify ASAP shipping

Better Control for Planning & Management of Perishable Items

Advance Features for Priority Based Demand Allocation

Fair-share Distribution on Equal Priorities of Orders

Option to Allocate Reserved On Hand

More Constrained Based Replenishment Planning

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Accelerators

JDA Supply Chain Planning & Optimization Upgrade Framework

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and P

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nis

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ent P

lannin

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Setup for POCQuick DataAutomated Migration

Scripts

Pre-upgrade& Post-upgrade

checklist

Training Template

POC

Functional

Upgrade

Technical

Upgrade

JDA

CO

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Upgra

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?Estimation of the required effort is more accurate due to better visibility of the upgrade process

?Expedites the scoping and effort estimation ?Smooth execution of the upgrade project by leveraging

Knowledge base, Checklists and best practices. User-friendly, easy-to-use templates and accelerator to reduce manual activities, thereby reducing the overall effort and time.

?Accelerator of Quick Feature list comparison between various versions of application which help to evaluate the application feature and function to be implemented.

Some success stories:

?Migrated Manugistics Demand, Fulfillment, Collaborate, Delivery Manager for an Electrical Goods Retailer in UK from version 7.1 to 7.2.2.

?Migrated all the modules of Manugistics Demand, Fulfillment and Collaborate for a furniture retailer in Europe from version 6.x and DPEE to 7.4.2

Improve Supply Chain Performance by HCL Health-check / Package Evaluation

Companies must maintain the IT infrastructure for sustained stability and to optimally support their business. In this context, HCL carries out periodic assessments of the implementation to enable maximum utilization.

By leveraging leading retail industry best practices, functional expertise and extensive experience across the JDA suite of products, HCL enables retailers to transform their highest-value business processes, improve their business performance and maximize return on investment on the JDA suite. The following steps will help optimize the JDA system:

?Functional / technical assessment?Tailored training?New module implementation?Bolt-on and enhancement?System performance?Re-implementation

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HCL performs health checks to align JDA applications with business processes and to ensure the technical health of the applications. Below are a few examples:

?Performed health check for a large, Global food and confectionary company in the United Sates.

?Evaluated the supply chain package between JDA and the Oracle suite of products for a chemical manufacturing company based in the United States.

?Evaluated the package selection process (in the context of total cost of ownership) and delivered a comprehensive report on product selection.

Benefits:

?Health check recommendations to optimize batch processes results in:

?Decrease in end-user wait time by 31%.?Reduction in batch time by 12% - 15%.

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Application Support and Maintenance (ASM)

The JDA practice provides a mature onsite/offshore model for ASM. For example, HCL is currently supporting two of the largest Manugistics implementations in Europe. This covers support of Manugistics version 7.2.2 and 7.4.2. In the past HCL has supported almost all the versions of JDA applications from version 6.x to version 7.5.

HCL brings proven onsite/offshore model and in-depth knowledge of JDA products has helped in major customizations.

Benefits:

?Manugistics specific batch reporting tools that ensured 99% up-time of batch processes.

?Developed reusable scripts that resulted in effort savings of ~225 Man Hours.

?Adaptors on the JDA Manugistics suite of products – Demand Fulfillment, Market Manager and Collaborate.

?Developed Indian Taxation as shelf ware, standard interfaces to SAP/Oracle financials, and RAPID implementation framework to bring down TCO.

?Built an integration layer on Oracle PL/SQL for the Manugistics suites of applications for a furniture retailer in Europe. This was done by eliminating point-to-point interfaces and moving into a subscription/publish based integration layer.

?Supporting new developments on Manugistics version 7.x – Store Replenishment Planning, Days of the Week, Lost Sales, New Capacity Planning, Global Replenishment Planning, etc.

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Process&

Methodology

Tools, Technology &

Infrastructure

SLA ManagementFramework

&Reporting

Services

IntegratedDeliveryModel

Engagement & Project

Governance

The HCL Advantage

HCL is the first Indian IT vendor to forge a global strategic alliance with JDA in the space of professional services, product engineering, software license sales and GTM. HCL has formed a dedicated practice for JDA solutions, with more than 120+ consultants in domain, functional and technical areas. The practice is also backed by over 2500 retail consultants across various capabilities. HCL provides end-to-end consultancy, implementation, upgrade, rollout, training, development, maintenance and production support services on the JDA suite of products across geographies. The services are provided on JDA’s supply shain solutions – Manugistics and i2, Merchandise Management System (MMSi) and In-store solution (WinDSS).

HCL and JDA both have a strong Asia Pacific focus and have executed a large number of green field implementations in India for big retailers like Shoppers’ Stop, Essar Group, Piramyd (IndiaBulls), Heritage, and House Full. Extensive experience in JDA has helped HCL serve various lifestyle, specialty retailers and CPG companies such as Dixon, IKEA, Timberland, GSI Commerce, Heinz and Reckitt Benckiser.

JDA Practice Highlights

?HCL was the first Indian IT vendor to forger a global strategic partnership with JDA in 2005 and this partnership is still running strong.

?Strong relationship with JDA in the space of professional services, product engineering, software license sales and GTM, worldwide.

?First Indian IT vendor to have worked with JDA on product engineering / development space – “E3-Pro”, Java POS, JDA MMS and bolt-on on Manugistics Fulfillment.

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Implementation Services

Product Version Upgrade

Application Integrations & Development

Product Evaluation and Health Check

Application Support &

Maintenance

Solutions

Demand Management

Fulfillment Management

Sales & Operations

Planning

Merchandising

Store Operations

Category Management

Production Planning

& Scheduling

Inventory Optimization Hi-Tech

Subject Matter Expertise

JDA

AllIance

DomaIn

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2

3

4

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6

7

8Auto & Mfg Life Sciences Retail & CPG Tele

Communication

?Trained Consultants in domain, function and technology?Proven maturity to deliver optimized cost/value

implementation services?Early realization of product features with a framework for Rapid

implementation?Early movers in helping IKEA upgrade Manugistics version 6.x

to 7.4.2. This happened within a few months after JDA launched Manugistics version 7.4.2.

?Library of extensive plug-in features: Indian Taxation, Integrated Customer Order Management, Serial Number Tracking, OTB, Serial Number Tracking, Financial Interfaces to SAP and Oracle, etc.

?Developed reusable components and an implementation framework that can be deployed to shorten the implementation life cycle and the upgrade project cycle.

?300+ person months of experience in development and enhancements on JDA products

Through HCL’s proven methodology and deep industry knowledge, manufacturers and retailers can achieve the benefits of higher turnover, improved margin, optimized inventory and service levels and reduction in cost. Business benefits can be achieved in the following areas:

?Synchronized demand and supply plans to result in higher turnover.

?Consumer insights to determine the right products to be included in assortments, right pricing, and appropriate planning for different locations to improve the top-line and margin.

?The ability to sense demand signals all the way to the store and hence bring forecast accuracy improvements and better in stock levels.

?Optimized local market assortments for each retail store leading to a significant reduction of total supply network inventory and less out-of stock situations.

?Near real-time analysis capabilities for demand and supply that allows retailers to gauge impacts of trade promotions, consumer marketing activities, seasonality, and new products.

Case Study:

HCL helps a Global furniture retailer to revitalize its supply chain

The Global furniture retailer, with an annual turnover of € 22.7 Bn, is the leading market player with more than 300 stores in 30+ countries. Its supply chain spans across geographies, with China, Poland, Italy and

Business Benefits

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Germany contributing to over 50% of the total procurement. The furniture retailer needed to balance the pressure on lead times and optimal inventory level while maintaining reasonable flexibility within the supply chain. This also translates into the need for effective demand and supply planning, and visibility across the supply chain.

To support the complex supply chain planning process, the retailer used JDA Supply Chain suite of solutions, such as:

?JDA® Demand?JDA® Fulfillment?JDA® Market Manager?JDA® Monitor

Business Challenges

?Support growing complexity in business and increasing operation pressures.

?Complex forecasting model - High demand fluctuations and no single forecast model for the entire supply chain.

?Changes required in DFU hierarchy to support new ways of working.

?Lack of a platform to support higher business demands e.g. direct deliveries, global replenishment planning and store collaboration.

?Introduction of new integration solutions to communicate with external legacy systems.

?Performance management and support challenges such as multiple legacy applications, longer response and execution times, and insufficient performance in batches.

?Dependency on high cost JDA resources

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IKEA COE Setup

Support & Maint of Ver 6.x

Migration of 6.x to 7.x

Application Clustering

Development & Support of V7.x(Network Capacity Planning)

Supply Chain Planning Information Exchange(Integration Layer on Oracle PL/SQL)

Support for Demand & Supply Planning(Demand & Fulfillment v7.x)

Global RequirementPlanning

Store Replenishment Planning

HCL helps customer in leveraging JDA/Manugistics Center of

Excellence for their Supply Chain area.

Benefits• Development of scarce resources?Reduce JDA Consultant (Product

Company) dependency by 70%?Lower cost of resource (50% of total

are in-house trained)

• -7%• Cross-skilling (Demand &

Fulfillment) and multi-skilling (DBA, Sys Admin, Technical)

How HCL helped - Managed Services

HCL established a Center of Excellence for the Global furniture retailer to provide services across the JDA suite. The Services were delivered in a global delivery model, with the offshore resources located in India. HCL took the ownership of the retaier’s JDA platform and provided the following services:

?In order to help address the growing complexity of the business and increasing operational pressures, HCL took up implementation, upgrade and migration of the JDA modules. helped address This enabled the furniture retailer to upgrade and re-implement the JDA Business Solution from an older version (thin client) to the latest web based solution.

?Support of JDA version 6.x Production environment and the new Production environment on 7.4.2 - HCL supported all the JDA environments and version for the retailer. Once the new version of JDA was into production, HCL ensured seamless takeover from the implementation team to support the new production environment.

?Development of integration layer for JDA interfaces - HCL was involved in moving the retailer from point to point interfaces to the development of integration layer for JDA applications. The integration layer - Supply Chain Planning Information Exchange with was developed using the Oracle platform, with data residing in Oracle database.

?Infrastructure set up and configuration - The retailer moved from Oracle 9i to Oracle 10g while upgrading JDA. HCL helped the retailer in comprehensive infrastructure set up for JDA from the development and testing environment to the production environment. HCL also took the ownership of setting up all the Oracle RAC environments at the retailer for JDA and helped them set up 4-6 node Oracle RAC clusters, both on Ethernet 10g and Infiniband.

?Application clustering and performance tuning - HCL provided services for performing application clustering for JDA applications and conducted performance tuning to ensure good application response times and better batch timings.

?Advanced development, testing services and support of the custom developed environments on the JDA Platform - The furniture retailer was using the JDA Platform as a tailored solution for ensuring capacity planning and advanced replenishment planning. HCL was involved in development of Global Replenishment and Store Replenishment Planning. These solutions provided testing services, from the Test Center set up on JDA Platform, and helped perform System Testing, Integration Testing and Performance Testing on every solution they developed.

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Value Delivered

The key business benefits of this engagement:

?Improved global view of the business which led to 5-7% forecast accuracy in decision making

?Streamlined Demand Planning and Replenishment Planning?Reduced risk of imbalance between commitment and demand?Improved supply chain visibility and led to better collaboration –

movement towards CPFR?10 % YoY productivity benefit through effective incident and

problem management.?Lower TCO as the project was executed in the Distributed

(Onsite-Offshore) model ?Increased batch execution runtime by 20-30%?Reduction in total incidents by 15% leading to reduced support

expenses ?Reduction in the installation time from 30 man hours to 16 man

hours with least manual intervention through automated JDA patch installation scripts created by HCL

?Expandable architecture, thus improving maintenance, scalability and leading to a more efficient system

?Reduced TCO: Reduced cost of implementation, execution, and maintenance. This was possible due by aligning JDA centers of excellence, standardizing system landscapes and business processes; minimizing software installations, and following a strategy of managed, limited systems customization.

?Customer Focus: Ensuring active customer involvement with the core team, steering committee, and other stakeholders.

?Manage Performance: This was due to better insights into JDA product road maps and strategies. Standardizing system setups, minimizing the use of third-party applications and following standard upgrade plans also made this feasible.

The major trends and challenges we are witnessing across the industry have a deep impact on profits and revenues. While changes in the supply chain process will vary from company to company, they must freeze on these changes in advance and then implement them in stages. It is also important to remember that supply chain processes are interrelated, compelling companies to evaluate how optimization fits into their long-term solution architectures. An integrated process consisting of a

Real Results:

Conclusion

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customer driven responsive supply chain, shelf analytics, demand synchronization and collaborative forecasting and replenishment will maximize the revenue, eliminate stock outs with optimized inventory while reducing cost across the supply chain and improving ROI.

Rakesh ChuriwalaDeputy General Manager

Rakesh has over 19 years of experience in the retail domain and IT Consulting. Rakesh is an accomplished PMP practitioner and has been associated with the JDA practice, since its inception. He has been instrumental in forging the partnership with JDA, growing the practice and taking it to the Global level in a short period of time. He has served as program manager for many JDA projects and his focus over the last few years has been further developing the JDA relationship and capabilities.

Sameer NagpalDeputy General Manager

Sameer Nagpal has over 15 years of leadership experience with Fortune 100 companies in the area of Supply Chain Planning. Sameer is heading the JDA Practice at HCL and involved in the Delivery to many Key Accounts in the JDA Area. Sameer is season speaker and many of his papers are published in India and International forums. Sameer is a certified Supply Chain Professional (APICS – CSCP). Sameer is an Engineer in Production and Industrial Engineering and MBA in Supply Chain Management from NITIE, India.

About the authors

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HCL Technologies is a leading global IT services company, working with clients in the areas that impact and redefine the core of their businesses. Since its inception into the global landscape after its IPO in 1999, HCL focuses on ‘transformational outsourcing’, underlined by innovation and value creation, and offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. HCL leverages its extensive global offshore infrastructure and network of offices in 26 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. HCL takes pride in its philosophy of ‘Employee First, Customer Second’ which empowers our 83,076 transformers to create a real value for the customers. HCL Technologies, along with its subsidiaries, has reported consolidated revenues of US$ 3.9 billion (18,334 crores), as on 31 December 2011 (on LTM basis). For more information, please visit www.hcltech.com

ABOUT HCLHCL Technologies

HCL is a $6 billion leading global technology and IT enterprise comprising two companies listed in India - HCL Technologies and HCL Infosystems. Founded in 1976, HCL is one of India's original IT garage start-ups. A pioneer of modern computing, HCL is a global transformational enterprise today. Its range of offerings includes product engineering, custom & package applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of information and communications technology (ICT) products across a wide range of focused industry verticals. The HCL team consists of over 90,000 professionals of diverse nationalities, who operate from 31 countries including over 500 points of presence in India. HCL has partnerships with several leading Global 1000 firms, including leading IT and Technology firms. For more information, please visit www.hcl.com

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HCLT Whitepaper: Responsive Efficient Customer- focused Creating Value Across The Supply Chain

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