SCM 301

NPV Decision Rule

When choosing among investment alternatives, take the alternative with the highest NPV. Choosing this alternative is equivalent to receiving its NPV in cash today.

1. Dissatisfaction. Experiences that don't meet expectations evoke discontent. Bad experiences invite complaints. 2. Satisfaction. Experiences that meet expectations deliver satisfaction. 3. Delight. Experiences that exceed expectations achieve delight and lead to repeat business.

When customers buy something, expectations and experiences interact. Customer expectations are either confirmed (or not) and feelings of satisfaction (or dissatisfaction) emerge. Three outcomes are possible:

Every touch point between a customer and the company is a moment of truth.

Which of the following best describes a moment of truth (as defined by SAS' Jan Carlson)?

Perception Gaps Knowledge Gaps Service Quality Gaps Performance Gaps Translation Gaps Tube Gaps

Which of the following is not one of the value gaps that can undermine customer experiences and can damage relationships?

Why should you worry about this deficiency?

Without the right people, you won't be able to envision or execute winning SC strategies! That is, if you have the right people on the corporate bus, you will develop the right strategy and be able to drive the bus to your desired destination.

Which customer is most important to your company's success?

You need a complete portfolio of customers. Think about it this way. You need innovators and early adopters to create product buzz, helping you achieve a successful launch. You also need more mainstream customers—loyal pragmatists and conservatives generate sustained revenue. Even laggards contribute to the cash flow needed to invest in future products.

So, what do we document as gain? How do we justify the costs associated with helping our customers improve their own operations?"

You need to apply customer success strategies selectively—to "A" customers that offer a real return on investment.

1. Broken Trust. A misguided desire to satisfy customers can lead you to make promises that you cannot fulfill. When this happens, service failures inevitably occur. The result: Your company breaks a promise. Trust is damaged and deep dissatisfaction emerges. 2. SKU Proliferation. Your desire to meet every customers' needs promotes excessive product/service proliferation, undermining operating efficiencies and performance. 3. Unprofitable Relationships. Too much stress on satisfying customers has led even world-class firms to unknowingly invest in unprofitable relationships. 4. Historical Focus. You may focus too much on what has worked in the past and miss opportunities to disrupt expectations and steal rivals' customers.

You need to be aware of—and avoid—several weaknesses that are inherent to customer satisfaction strategies.

What is the SCOR model?

a framework that focuses on a basic supply chain of plan, source, make, deliver, and return processes, repeated again and again along the supply chain •The SCOR model is a tool used by leading companies around the world to improve operations and enhance value creation.

Each touch point between a customer and the firm is

a moment of truth—that is, a moment that may forever define how a customer views your firm

Which of the following is one of the eight factors used to assess quality?

a. Serviceability b. Reliability c. Conformance d. Durability e. All of the above

What is the NPV rule?

an investment should be accepted if the NPV is positive and rejected if NPV is negative.

According to the chapter, which of the following is NOT an example of a digital tool companies use to find products customers will buy? a. Customer profiling b. TV advertisements c. Crowdsourcing d. Social networking e. All of the above

b. TV advertisements

By providing customers remarkable experiences, you:

build stronger, longer-lasting, more profitable relationships.

Cross training

came into the spotlight with the emergence of lean manufacturing, which is built around a cross-trained, empowered, and responsible workforce Cross training only works when you 1) give workers the chance to make real decisions that make an impact and 2) reward them for the value they create.

your mind processes information—e.g., advertising and memories—for each experience, creating a learned expectation.

cognitive level

five criteria are common across most scorecards:

cost, quality, delivery, agility, and innovation

The key to process innovation is to:

cultivate a culture of experiementation and learning within the four walls of a company as well as across the supply chain. The benefits of these efforts include greater efficiency, enhanced quality, and faster cycles.

Value gaps undermine satisfaction and repeat business. You need to:

design for remarkable experiences that can be repeated time after time.

Great products come from:

diligent effort and disciplined product design processes.

The goal of Six Sigma is to

eliminate defects. Motorola launched it as their new quality program (6σ) is the gold standard in quality philosophy and practice

A theory that seeks to explain post-purchase satisfaction as a function of expectations, perceived performance, and disconfirmation of beliefs.

expectancy disconfirmation model

At its peak, approximately 3,000 maquiladora facilities had been established, employing 1.5 million people and _______________________.

generating the second largest source of foreign exchange (behind only oil).

The BCG matrix categorizes products based on:

market share and growth rates.

What is NPV?

net present value is the present values of future cash flows less the cost of the investment. If the NPV is above zero then it's a good investment.

Valued capabilities require careful resource orchestration. That is:

no company, including yours, possesses all of the resources and skills to do everything customers expect. Your company relies on a network of suppliers, service providers, and customers for needed skills to deliver on its value proposition.

Cash cows

supply funds for that future growth

What is supply chain management?

the oversight of materials, information, services, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer in synchronization to match the flow of customer demand.

A successful supply chain leader achieves key goals through:

the people you work with.

Orchestration is

the skill that enables companies to bring the resources of the network together.

1. Performing to the Common Denominator. Managers are always asking, "Would better service really be worth the extra costs and provide a strong ROI?" The emphasis on keeping short-term costs down leads to the lowest service levels required to remain competitive. You will qualify for many orders that you won't win. 2. Doing the Wrong Things. Because service strategies are operational and inward looking, you really don't know how customers perceive your service levels. Hitting industry standards is not the same as providing the service customers want. Remember: Customers don't give you credit for industry-leading performance if it is in the wrong areas. Simply put, if your service strategy loses line of sight to customer expectations, you create service gaps. You are wasting resources exceling at something customer don't value

when it comes to customer service strategies the two downsides to basic service strategies

Who Should be on a New Product Development team?

• Marketing • R&D/Engineering • Operations • Finance • Purchasing • Logistics • Customers • Suppliers

Effects of bullwhip

•Can be costly to all organizations in the supply chain •Excess inventory= waste •Lack of inventory= reduced lead time, poor customer experience, and lost of business •Most businesses use safety stock (reserve inventory) as a buffer against demand fluctuation

Deere's Training on the Team Process:

•Conflict Resolution: Team Operating Skills •Leadership Skills •Communication for Increased Collaboration •Team Effectiveness •Developing High Performance Teams •Team Effectiveness II •Effective Facilitation •Team Focus •Facilitator Skills •Team Problem Solving

Bullwhip Effect Causes

•Demand forecast updating (done individually by all members of a supply chain) •Order batching •Price fluctuation •Rationing •Gaming

Step 1: Classify Companies by Sales Step 2: Modify Classifications Based on Strategic Issues Step 3: Periodically Re-evaluate

"ABC" classification three-step process:

As a supply chain professional, your goal is to use operations to create customer experiences that drive revenue growth. You can grow the top line in two ways:

1. Acquire new customers. 2. Increase sales with existing customers. ***Retaining customers is often a more profitable approach.

At leading-edge companies worldwide, the indispensable SC manager is described as follows:

1. Cross-functionalist: A manager with deep functional skills who works fluidly with colleagues from other disciplines, understanding their needs and earning their respect. 2. Choreographer: A manager who sees the big picture and understands how individual pieces fit into the pattern. The choreographer rigorously analyzes design tradeoffs and executes with discipline while cultivating creative and collaborative relationships. 3. Coach: A manager who empowers others to ideate and initiate, inspiring both individual excellence and team cohesion. The coach praises often, corrects as needed, and teaches always. 4. Catalyst: A manager who not just embraces change when change is needed but helps drive the right changes throughout the organization. **In each instance, success depends on how well you achieve key goals through the people you work with.

The three outcomes of customer loyalty:

1. Defection. When customers endure a bad experience, they defect. If you don't have an effective service recovery program, your company loses business quickly. By the way, social media amplifies this effect as customers tweet, Facebook, Instagram, or Snapchat about both remarkable and bad experiences. 2. Indifference. Experiences that meet expectations deliver satisfaction. However, if rivals are just as good, indifference results. These experiences are an order qualifier not an order winner. Don't mistake convenience-driven customers for loyal customers. 3. Loyalty. Only uniquely positive experiences motivate customers to be loyal.

Economists often discuss value in terms of utilities; that is, what a "product or service does" for the customer. You need to manage operations to create or contribute to four utilities:

1. Form utility is the primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value. 2. Possession utility falls within marketing's domain and consists of efforts to communicate (i.e., promote) a product's value and then facilitate the exchange process. 3. Time utility emerges from effective management of all value-added processes that influence when a product is available for purchase. 4. Place utility is primarily the charge of supply chain managers who assure that products and services are where customers expect to find them—when they are needed.

You need to manage operations to create or contribute to four utilities:

1. Form utility is the primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value. 2.Possession utility falls within marketing's domain and consists of efforts to communicate (i.e., promote) a product's value and then facilitate the exchange process. 3. Time utility emerges from effective management of all value-added processes that influence when a product is available for purchase. 4. Place utility is primarily the charge of supply chain managers who assure that products and services are where customers expect to find them—when they are needed.

Cycle of satisfaction

1. Get deep insight into what customers need 2. Conceptualize & Develop a Product 3. Verify Financial Viability 4. Invest in next generation of customer-pleasing products

Three decision rules can help you determine how much weight to place on each value dimension as you design your operations.

1. Get into the Game. Almost always, cost and quality are the critical value dimensions. If you want to be taken seriously as a potential supplier, you have to offer high quality at low cost. However, high levels of parity often exist on these dimensions. Cost and quality thus tend to be order qualifiers. 2. Differentiate Yourself. Harvard's Michael Porter made a vital observation: Sustained success requires that you offer distinctive value; that is, something special.17 If your cost and quality are good enough for customers to consider you as a supplier, you need to differentiate yourself in one of the other dimensions. Customers must view your delivery, agility, and/or innovation as an order winner. 3. Avoid Disqualification. You must meet minimum requirements across all five value dimensions. Even if you rate well on cost, quality, and a differentiating characteristic, you could still disqualify yourself via unacceptable performance elsewhere. Your customers are keeping score. Having an order loser will make it impossible to earn enough points to win (or keep) a customer's business.

To meet customer needs better than the competition, you need to do two things:

1. Know their Needs. You need to know precisely what each customer wants, which is the reason you invest in a CRM system. 2. Perform to Promise. Knowing what customers want only matters it you can actually use your resources to create products and services that deliver a remarkable customer experience.

Eight factors that customers use to assess quality:

1. Performance—refers to a product's operating characteristics. 2. Features—are the unique characteristics that distinguish a product from rivals' products. 3. Reliability—defines the user's ability to count on the product not to fail. 4. Conformance—is how well a product conforms to design specifications. 5. Durability—refers to a product's life expectancy (also, mean time between failure). 6. Serviceability—is the speed and ease of repair when problems occur. 7. Aesthetics—are perceptions of fit and finish (also, artistic value). 8. Perceived quality—refers to a product or brand's quality reputation.

Identified eight factors that customers use to assess quality:

1. Performance—refers to a product's operating characteristics. 2. Features—are the unique characteristics that distinguish a product from rivals' products. 3. Reliability—defines the user's ability to count on the product not to fail. 4. Conformance—is how well a product conforms to design specifications. 5. Durability—refers to a product's life expectancy (also, mean time between failure). 6. Serviceability—is the speed and ease of repair when problems occur. 7. Aesthetics—are perceptions of fit and finish (also, artistic value). 8. Perceived quality—refers to a product or brand's quality reputation.

To reduce costs, companies pursue a combination of four strategies.

1. Process Improvement. The key to improving productivity is to promote learning.2 By minimizing work rules, increasing training, you can empower workers to find better ways to do things. 2. Automation. Technology makes process redesign possible.3 Many manual tasks have been automated. New technologies such as additive manufacturing (i.e., 3D printing) will continue to enable process redesign.4 You must constantly ask, "Can technology help us do this job in a better way?" 3. Offshoring. Improved logistics have reduced the total landed costs and delivery reliability of products made in distant lands. You can take advantage by locating manufacturing facilities in far-flung countries with low-cost inputs.5 4. Outsourcing. Sometimes another member of the supply chain can do a specific activity better than you can. When this happens, you can move from make to buy, outsourcing that activity to a supply chain partner so that your firm can focus on what it does best.

To reduce costs, companies pursue a combination of four strategies:

1. Process Improvement. The key to improving productivity is to promote learning.2 By minimizing work rules, increasing training, you can empower workers to find better ways to do things. 2. Automation. Technology makes process redesign possible.3 Many manual tasks have been automated. New technologies such as additive manufacturing (i.e., 3D printing) will continue to enable process redesign.4 You must constantly ask, "Can technology help us do this job in a better way?" 3. Offshoring. Improved logistics have reduced the total landed costs and delivery reliability of products made in distant lands. You can take advantage by locating manufacturing facilities in far-flung countries with low-cost inputs.5 4. Outsourcing. Sometimes another member of the supply chain can do a specific activity better than you can. When this happens, you can move from make to buy, outsourcing that activity to a supply chain partner so that your firm can focus on what it does best.

How would you communicate the need to put customers first? Consider two options:

1. Purpose for Our Work. Long before customer satisfaction became fashionable, L.L. Bean, the catalog outfitter, put customers at the center of its business model. His goal: To remind everyone that customers are the reason L.L. Bean existed. L.L. Bean's customer-service mantra has been adopted and adapted by companies worldwide. 2. Moment of Truth. When Jan Carlson became CEO of Scandinavian Airlines (SAS) in 1981, the company was losing money and ranked among Europe's worst airlines. Carlson put in place a training program called Putting People First. The goal: Empower front-line employees to solve customer problems on the spot—as soon as they arise. Carlson coined the phrase "moment of truth" to help employees grasp that each touch point a customer had with SAS was vital because that moment might be the experience that set forever customer feelings for the firm.1 Within two years, Air Transport World named SAS Airline of the Year.

Orchestration consists of three steps:

1. Select Team Members. Knowing what value you need to create, you identify the right players—those with key resources and capabilities—to be members of your value-added team. 2. Assign Team Roles. Knowing each player's skills, you assign each team member the right roles and responsibilities to maximize value creation and customers' positive perceptions. 3. Build Team Cohesion. Having the right players does not mean they will play well together. You need to cultivate chemistry to build the right relationships among team members.

Some of the key findings of high-leverage innovators:

1. Spending. How much money you spend on R&D does NOT determine success. How you spend it does. The remaining points focus on the how! 2. Strategy. Based on its innovation strategy, your company might be a Need Seeker, Market Reader, or Technology Driver. *Need Seekers go straight to customers to generate ideas. *Market Readers are fast followers—they monitor the market and incrementally improve the cool ideas. *Technology Drivers rely on their technological expertise to drive both incremental and breakthrough innovations. Alignment between strategy and practice is critical. 3. Deep Customer Insight. You have to know what your customers want—even if they can't articulate their needs. Deep customer insight helps you make the key trade-offs inherent in bringing new products to market. 4. End-to-End Process. Innovation is a cross-functional capability, involving all of the functions in your company. 5. Visibility. You need real visibility into what is going on throughout the NPD process. 6. Digital Tools. Big data and digital reality are beginning to give decision makers key insight into why customers behave the way they do.

Value Propositions serves two purposes:

1. They shape customer expectations. 2. They communicate what your company must do to earn a customer's business.

Customer Satisfaction Strategies in successful companies talk to customers. Their goal is twofold:

1. They want to learn about customer needs. 2. They also want to convince customers they are committed to fulfilling those needs.

To get the right people on the bus and empower them to get the job done, you need to cultivate a culture that does the following:

1. Values People as Your Most Valuable Asset. To build winning operations and supply chain capabilities, you will need to pursue a dramatically new approach to investing in people. 2. Invest in a Great Measurement System. To encourage and enable your people to work together to create customer value, you will need to put the right measures in place. Don't forget, what gets measured gets done.

Why is supply chain management now recognized as a hot business function? What's new?

1•Managers increasingly recognize that operations and supply chain management is the value creation engine of every organization. 2•Competition is getting even tougher.

Approximately what percent of new consumer products launched each year fail?

95%

Technology Adoption Life Cycle

A model that describes how people adopt new products. A marketing theory that proposes that when marketing a technology product, marketers must cross a chasm, or significant gap, between members of the early adopters segment and members of the early majority segment before a new product will become successful

You need to develop and manage ____________________ that can consistently bring customer pleasing new products to market.

A new product development (NPD) process

Design and Control Decision

A set of core decisions that you must manage to achieve world-class results. What makes them all successful is because they align their value-added processes to the specific products or services they produce and deliver. The goal: To create outstanding customer value.

A zettabyte is equal to 1,024 terabytes.

A zettabyte is actually 1,024 exabytes, so that statement is false.

What is the easy way to focus your efforts, you need to segment customers, classifying them based on importance; and then you can design the right service system to meet each customer's needs.

ABC Classification

the Pareto principle. Also called the 80/20 rule

ABC classification relies on

"A" Customers: Strategic key accounts—the most important 5-10% of your customers—typically make up a huge share of sales, profits, and growth. You do everything possible to make sure their experiences are remarkable. "B" Customers: Other key accounts that receive very high levels of service. "C" Customers: The remaining 80% of your customers. You provide them high levels of standardized service.

ABC classification typically places customers into one of three categories:

The popularity of maquiladora operations can be attributed to all of the following except,

Access to Mexico's leading-edge technology

Two types of touch points exist:

Acquisition touch points occur as customers learn about and make purchase decisions. Utilization touch points, by contrast, occur as you travel; that is, as you check in, board the flight, and pick up your luggage on arrival.

What are the two types of touch points?

Acquisition; Utilization

What are some types of team you are likely to encounter in today's supply chain decision-making environment?

Advisory Councils Commodity Team Customer Relationship Management Team Problem-solving Team Supplier Development Team

At the ___________, emotions drive the process, leading to a "gut" reaction to what you are experiencing.

Affective level

Who sets the price?

Although many companies' pricing power has vanished: • Customer Expectations • Competitors • Uniqueness

NPV profile

As a function of cost capital A graph that shows a project's NPV for different discount rates; Discount rate on the X axis, NPV on the Y; IRR is where the line intersects the X axis; The point where multiple projects intersect is called the crossover rate

What are the functional area that should be included in a well-designed rotation program designed to cultivate the cross-experienced supply chain manager?

Assembly line Production control Logistics Purchasing Finance

emotions drive the process, leading to a "gut" reaction to what you are experiencing.

At the affective level

According to Bruce Henderson, the lifecycle of a successful product goes as follows:

Begin as a question mark, grow into a star, mature into a cash cow, and decline into a dog

What tools are beginning to give decision makers key insight into why customers behave the way they do?

Big data and virtual reality

data, well-designed, customer contact, profitable customer

Blind trust in the ______ can be dangerous. Even so, a ___________CRM system can help you turn every __________ into an opportunity to create a ____________.

data capture, data storage, data analytics, and information display.

CRM systems consist of four primary technology systems:

Capital Equipment objective:

Capital equipment teams design and acquire needed equipment, defining necessary specifications, selecting suppliers, conducting negotiations, and installing and maintaining equipment.

_______________ processes influence how you deal with information; ________________ processes influence how you react to experiences.

Cognitive; Affective

Commodity objective:

Commodity teams develop the expertise and relationships to assure an uninterrupted flow of high-quality, low-cost materials to the operating system.

1. Targeted Promotions. Tesco began mailing beer coupons to shoppers who bought diapers. Why? Analysis revealed that new fathers who are stuck at home tending the baby drank more beer.6 On the Web, analytics make it possible for retailers to tailor their websites to show different visitors different products—and different prices. 2. Product Selection. Kroger started stocking hard-to-find brands like Alpen breakfast cereal to increase loyalty among high-margin demographics. Why Alpen? Health-conscious customers who purchase Alpen tend to fill their carts with a range of high-margin products. 3. New Product Development. Kroger introduced three-quarter-gallon milk cartons because they fit the needs of today's smaller families better than traditional half or whole gallon options.8 4. Pricing. Tesco lowered prices on 300 items to keep price-sensitive customers from being tempted to comparison shop at low-price rivals like Walmart's Asda.9

Consider how retailers are using the data to change the way they do business in the four ways:

Question marks

Convert into stars

What are the characteristics of an indispensable supply chain manager?

Cross functionalist Choreographer Coach Catalyst

Innovation is a ______________ ________________, involving all of the functions of your company.

Cross-functional capability

Digital Tools

Customer Profiling Crowdsourcing Social Network

What customer-service strategies focuses on meeting industry standards in key operational areas like product quality, productivity, product availability, on-time delivery, and service reliability?

Customer Service Strategy

Traditional market research engages customers to find out what they are thinking. What is an example of classic market research?

Customer Surveys Focus Groups Expert Panels In-depth Interviews

Technology is providing new insight into customer behavior. _________ has become one of today's hot new tools.

Customer profiling

Why do you need to know how your customers define value?

Customers make purchase decisions based on the value they expect to obtain. If your goal is to drive revenue growth—that is, obtain and retain customers—you need to deeply understand what customers value.

The six sigma goal is to use the _______________ and __________ to remove the sources of defects and improve quality to less than one percent______________.

DMAIC methodology, Statistical tools, defective parts

analytical capability is the bottleneck in translating data into customer knowledge. In competitive industry, remaining relevant to our customers is critical

Data Analytics

Your analysis is held captive by the quality of data you possess. E-commerce firms like Amazon.com have a distinct advantage over their bricks-and-mortar rivals Cookies allow Internet retailers to track every "click" you make while browsing their web sites. They even know how long you stay on each page.

Data Capture

What is a primary technology system employed in customer relationship management suites?

Data Capture and Data Storage

To make money off of data, you first need to make sense of them. You need to make hidden relationships visible to the decision maker. Today's computing power enables software to give you new and distinct views of the data. Two-dimensional landscapes are giving way to 3D topologies.

Data Display

What is the primary technology systems is needed to make sense of data by making hidden relationships visible?

Data Display

You can now rent data storage space in the cloud rather than buying server capacity. You can also access software from the cloud, treating software acquisition as a service—a practice called software as a service (SaaS).

Data Storage

Which of the following is a salient fact identified by Rey's effort to understand customer needs?

Dealers were frustrated by the need to carry large, expensive inventories.

Customer Relationship objective:

Dedicated customer teams work to meet the needs of specific customer, resolving problems and designing tailored services.

What is the key to making the right trade-offs you will encounter in creating new products?

Deep customer insight

What is the following is most important to R&D success?

Deep insight into customers' needs

How would you go about defining SCM?

Define(value-creation engine), Control, Design Strategy and Competitive Environment

Six Sigma follows the DMAIC methodology:

Define, Measure, Analyze, Improve, and Control—and applies statistical tools to identify and remove the causes of defects in value-added processes. and improve quality to less than one percent defective parts.

Product design, facility layout, facility location, and process design

Design Decisions involves:

The four quadrants are labeled:

Dogs, Cash Cows, Question Marks and Stars.

Let's make a final point regarding the five value dimensions:

Efforts to create value in one area influence the other areas.

The following functions all play key value-creating roles:

Executive Management Research and development Operations Logistics Marketing manages Human resources Accounting Finance Information technology

Toyota's lean production system has documented that there is a single best or perfect way to make things.

False

What makes OSCM?

Figure 1.1: A Simple Input-Output Model: 1.Purchasing acquires inputs. 2.Operations manages the black box; i.e., the transformation process. 3. Logistics moves materials into and out of the company.

introduction stage

Find a need and fill it

Control Decisions

Forecasting, Inventory, Scheduling, and Quality Control

Hand Crafted: Orrefors, the Swedish producer of fine leaded crystal uses an artisan-based, glass-blowing process. Assembly Line: Toyota mastered the pull system to automate massive assembly lines to build automobiles. Fixed Location: Embraer, the Brazilian aircraft manufacturer, uses semi-fixed assembly process to produce regional jets. Customer Engagement: Benihana engages customers in the preparation of delicious meals.

Four production-process types:

What are the six service value gaps?

Gap 1: Knowledge Gaps often exist between customers' real expectations and your perceptions of those expectations. You need to accurately assess what customers really want. Gap 2: Translation or Specification Gaps emerge when you focus too intently on industry standards or internal capabilities that are not aligned with customers' real needs. Gap 3: Performance Gaps emerge when you fail to execute to customer expectations—e.g., the customer expects 98% on-time delivery, but you only deliver 95% of shipments on time. Gap 4: Communication Gaps emerge when you overpromise and under deliver. These gaps sour a relationship quickly. Gap 5: Perception Gaps arise when customer metrics don't capture actual performance. Sometimes, customers treat you as if, "You are only as good as your last performance." Gap 6: Satisfaction or Service Quality Gaps occur when the customer's perception of service and expectations are not aligned.

Stars

Growth assure the future high share and high

According to the BCG matrix, to be successful, a company should have a portfolio of products with different ____________and different ______________.

Growth rates; market shares

What does Strategy&'s research really mean?

High-leverage innovators know that success depends on the quality of the innovation process. They invest in and carefully manage an end-to-end, collaborative idea infrastructure

A gigabyte is 1,024 megabytes A terabyte is equal to 1,024 gigabytes A petabyte is 1,024 terabytes An exabyte is 1,024 petabytes A zettabyte is 1,024 exabytes

If you don't speak the language of bytes, the basic translation follows:

growth stage

Increase advertising and promote positive word of mouth

By changing the manufacturing environment it is possible to achieve higher levels of performance across all value dimensions. Which of the following is a critical aspect of improving the environment?

Increase process visibility Better share information Build a flexible workforce

Information Systems objective:

Information systems teams design and implement the systems needed to collect and analyze information managers need to make great decisions.

You need to understand three fundamental facets of Toyota's investment strategy:

Job Enlargement, e.g. By giving workers more responsibility and then providing them with a challenging work environment, Toyota avoids the monotony of uninteresting, narrowly focused tasks. Workers are motivated to be both productive and creative. Job Empowerment, e.g. 1. View workers as an integral part of the value-added system. 2. Invest time and money in worker training 3. Delegate to workers diverse responsibilities and real authority. Personal Accountability, e.g.

Which value gap refers to a company's failure to accurately assess what customers really want?

Knowledge Gap

The following steps are critical to creating an agile, responsive culture:

Make agility a priority throughout the firm and across supply chain relationships. Map processes to make them visible and to identify agility enabling activities or decisions. Use your map to initiate risk-mitigation discussions and identify operating alternatives. Use information systems to monitor operations, link to customers, promote proactive environmental scanning, and share information on a real-time basis across the network. Cross-train workers and organize work in multifunctional teams. Design performance measures to value agility. Build learning loops into every process throughout the organization.

The goal of a basic customer service strategy can be stated as follows:

Managers hope that by meeting industry standards they are meeting customers' needs.

the data is readily available.

Most companies classify customers using sales figures because:

NPV formula

NPV = Sum of the PV of All CFs-Initial Outlay (i.e., design & launch costs) Total Present Value - Investment

What initiatives represents a true customer-success strategy?

New ways of working together

Can You Make Money With This Product?

Number of units to breakeven= Fixed Costs/ (Sales Price Per Unit- Variable Costs Per Unit)

_______________ and _______________ are primarily responsible for creating form utility.

Operations; Purchasing

driven by your most important 20% of customers.

Pareto principle observes that 80% of your sales are

What represents the dark side of modern data analytics and the trend toward customer profiling?

Past buying behavior does not always predict future behavior.

decline stage

Plan for spares, production-line transition to new products, and materials

How do you poorly designed jobs To remedy this, you may emphasize job enlargement, job enrichment, and employee involvement programs.

Poorly designed jobs comprised of tedious, narrowly defined tasks—alienate workers, reduce productivity, and stifle learning.

1. Looking Backward. Past buying behavior does not always predict future behavior. In today's mobile society, situations and lifestyles change quickly, transforming today's nuisance customer into tomorrow's preferred customer (or vice versa). 2. Looking Beyond the Mark. Don't forget, low levels of shopping activity may reflect more on your company's service offering than on the quality or profitability of a customer.

Predictive analytics tools and big data provide great insight into correlation, but not causality. You need to avoid two mistakes:

Product Development objective:

Product development teams ideate, design, and develop new products; that i.e., they reduce the time needed to bring a product from concept to market.

Profit Equation

Profit= Price per unit * Quantity [FC+VC *Quantity]

What is the supply chain task during the maturity stage of the product?

Provide product access at the lowest possible cost

maturity stage

Provide product access at the lowest possible cost

Why is teaming such a big deal?

Putting all of the right people in the same room and getting them to focus on a common goal changes the dynamics of decision-making. Properly designed and well-managed teams go a long way toward reducing turf protection and improving collaboration, which leads to better decisions that are more quickly implemented.

Quality

Quality is often defined as conformance to specs. A customer focus, however, means that quality is nothing more or less than meeting customer expectations.

Where is quality ranked in importance among the five value dimensions?

Quality is often more closely scrutinized than cost in purchase decisions and has been called the most vital factor in long-term success.

Customer Delight has been described as follows:

Satisfaction is based on fulfilling the expected; delight is based on fulfilling the unexpected positive surprise-based occurrences. Satisfaction is based on meeting or slightly exceeding expectations, while delight occurs from features that are not expected or that add unexpected utility

What is one of the fundamental steps in resource orchestration?

Select team members & Assign team roles

Advisory Councils objective:

Senior-level steering committees, customer advisory boards, and supplier councils provide feedback, expedite communication, and garner commitment for key initiatives.

What are examples of observational approaches to find out what customers want in a product?

Shadowing & Ethnography

So, what are companies learning via analytics?

Simply stated, they are learning how to increase customer satisfaction and profits.

What are the processes in the SCOR model/methodology?

Source Make Deliver Plan

Secrets of "High-leverage Innovators"

Spending: Does not determine success Strategy: Alignment is critical Deep Customer Insight End-to-End Process: Cross functional Use Digital Tools

Supplier Development objective:

Supplier development teams help suppliers upgrade process engineering, manufacturing, and quality capabilities.

Problem Solving objective:

Task forces are put together to solve specific problems (e.g., reduce costs, improve quality, or shorten cycle times), implement new technologies, or drive the adoption of strategic initiatives.

"Teams will provide the foundation of organizational design." What did Hammer mean?

Teams are now used to not just make critical value-added decisions but also to drive most strategic implementation projects

According to Strategy&'s findings, companies' innovation strategies fall under what?

Technology driver Need seeker Market reader

BCG growth-share matrix

The BCG matrix is a corporate planning tool used to determine require more investment. The matrix plots a company's product offerings on two dimensions: market growth and market share. Successful companies have products in all four quadrants.

BULLWHIP EFFECT

The BWE on the supply chain occurs when changes in consumer demand causes the companies in a supply chain to order more goods to meet the new demand.

Customer Success

The Goal: Help customers meet their customer's needs Focus: Forward / downstream looking Potential Downsides: Limited resources require that "customers of choice" be selected; that is, customer success is inherently a resource intensive strategy.

Customer Satisfaction

The Goal: Meet / exceed customer expectations Focus: Outward looking Potential Downsides: Ignore operating realities; Overlook operating innovations. To give customers what they say they want leads to product/service proliferation Maintain unprofi relationships Historical focus makes the company vulnerable to disruptive products / processes

Customer Service

The Goal: Meet / exceed industry standards Focus: Inward looking Potential Downsides: Measure performance inappropriately Fail to understand what customers value Expend resources in wrong areas Operational emphasis leads to service gaps

By constantly improving processes and carefully evaluating resource availability and supply chain capabilities, you can achive the ultimate goal of cost reduction:

The lowest total landed cost to your customer. As your cost competitiveness improves, your company can capture market share, increase scale economies, improve profitability, and invest in future capabilities. Cost improvements can drive a powerful cycle of competitiveness.

By constantly improving processes and carefully evaluating resource availability and supply chain capabilities, you can achive the ultimate goal of cost reduction:

The lowest total landed cost to your customer. As your cost competitiveness improves, your company can capture market share, increase scale economies, improve profitability, and invest in future capabilities. Cost improvements can drive a powerful cycle of competitiveness.

A new product development (NPD) process

The process used to ideate, evaluate, and bring successful new products to market.

Product life cycle (PLC)

The product life cycle describes the cycle of sales growth and decline that products experience. The PLC consists of four stages: Introduction, Growth, Maturity, and Decline.

Communication Gaps emerge when you overpromise and under deliver.

These gaps sour a relationship quickly.

Rey Uribe, President of Sony de Mexico, was caught completely off guard by corporate's decision to shut down Sony's Mexico operation in favor of producing in Southeast Asia.

This is a false statement

Rey and his management team ran into trouble because they too aggressively sought to develop a competitive advantage above and beyond a cost-based advantage. Huge investments in R&D and fast-cycle manufacturing provided a poor return, sapping Sony de Mexico's profitability—the reason corporate decided to shutter Mexican operations.

This statement is false

What do your findings mean on the scorecards?

To win customers' business, you must grasp the nature of these value dimensions and build the operating systems to create and deliver them.

Tools for Obtaining Deep Customer Insight

Traditional Market Research Customer Surveys Focus Groups Expert Panels In-depth Interviews Observational Approaches Shadowing Sales and Customer Support Feedback Cadence Calls with Sales Team Digital Tools Customer Profiling Crowdsourcing Simulations Social Network Analysis

An open systems view reiterates that companies operate in a dynamic, ever-changing environment, requiring managers to constantly adapt in order to remain competitive.

True

Teams in Modern Organizations:

Type of Teams: Advisory Councils Capital Equipment Commodity Customer Relationship Information Systems Problem Solving Supplier Development Product Development

key elements you need to consider as you design a service system to deliver remarkable customer experiences depicted in the expectancy disconfirmation model:

Value Propositions Moments of Truth

Value Analysis objective:

Value analysis teams study a product or process to determine how to produce the product at a lower cost or with improved quality.

Customer Satisfaction Strategy

What message does the following mission statement communicate? "Our customers are the most important stakeholder in our business. Therefore, we go to extraordinary lengths to satisfy and delight our customers. We want to meet or exceed their expectations on every shopping trip. We know that by doing so we turn customers into advocates."

The right Players and The right Relationships

What should you look for when you evaluate a supply chain map to determine whether or not a focal firm is positioned to compete and win?"