SCMT 465 Heim Exam1

Lean principles

* a supply and delivery network of firms capable of supplying the right product, at the right cost at the right time to the customer with as little waste as possible. -total elimination of all wastes -optimization of all resources -toolbox of methods for process improvement 1. Produce value: value defined by customer 2. Optimize the value stream: expose and remove barriers to optimizing value 3. Convert the process to flow: enable continuous flow of goods and service production 4. activate the demand pull: customer should pull product through system 5. perfection of all products, processes and services: continuously improve efficiency, cost, cycle times etc

Different classes of IT investments

*incremental innovation 1. low risk, operational IT (around 60%): core applications, commodity IT services that run daily business 2. Medium risk, differntiating (10-30%): focus on winning whatever game is being played in a business sector; points of differentiation for TODAY 3. High risk, rule changing IT (remaining %): speculative IT investments; change for tomorrow *radical innovation

Supply chain

- a network of resources and activities that supports the production of goods and services or e services

Supply chain coordination

- a supply chain if fully coordinated when all decisions are aligned to accomplish global system objectives

Stage 1 SCM mgmt practies

- decentralized logistics functions, logistics staff work in all functions =5000 BC- 1960s =fundamental problem: acquisition of materials and demand for goods stretch beyond location where products are made =result: disjointed, uncoordinated, costly logistics =IT installed in internal value chain

Infrastructure artifacts

- hardware, networks, networking apps

Lack of supply chain coordinaion

- occurs when decision makers have incomplete info or incentives that are not compatible with system objectives

Customer relationship Management (CRM)

-A complete system that: 1. provides a means and method to enhance customer's experiences so they remain customers for life 2.provides both tech and functional means of identifying, capturing, and retaining customers 3. provides a unified view of the customer across the enterprise *a strategic tool *core principle: customer insight

Enterprise artifacts

-ERP -enterprise business systems (EBS) -advanced manufacturing technologies (AMT)

Best practices when choosing between IT projects

-IT function needs to have active involvement/ partnership of business area manager -project analysis should involve a rational NPV -project needs tangible and intangible benefits -business unit partner must own the benefits and their execution

Global Trade Mgmt solutions

-IT system for managing global trade events by achieving effective/ efficient: 1. compliance: automating customs compliance 2. Content: accurate trade info 3. connectivity: connect to set of trading partners using EDI, WWW,SaaS 4. Finance: transactional finance

Types of CRM

-PTN: product tracking number -CRT: customer returns tracking -RIF: returns info tracking -HIE: health info exchange

Value, defined

-Value is defined by the customer -value is difficult to quantify -value is multi-dimesnional (functional, economic, and emotional) -value depends on tradeoffs -value is relative to alternatives -value depends on the end-use context -value is a mindset

Enterprise function

-ability to continuously design, assemble and deliver its customer value propostion

Management of Technology

-an academic/ professional field that studies: =how tech affects a firm's mission, stratefgy, and tactics = how to use existing tech effectively =how to manage tech exploitation and exploration in a firm =how to use tech to innovate =how to select new and appropriate techs =how to nurture tech adoption by end users =how to manage tech based firms =how to develop new tech

Core competencies and channel capabilites

-basis of business today rests on two pillars:

Franchising strategy

-best of breed functional approach =bes of breed within each functional area =suits large, diverse companies with non common processes =install independent ERP compnents within each functional area, integrate ERP as necessary across functions

Federated control

-break down hierarchical structure, allow people more freedom to innovate, responsive to market =standarize common info that all units share =some modules have local control

Stage 2 SCM mgmt practices

-centralized logistics functions, application of computers -total cost Management =1960s-1980s =fundamental problem:how to centralize logistics? how to apply total cost to logistics? =result: try to figure out new computer tech and process improvement strategies (JIT,TQM)

Stage 3 SCM mgmt practices

-closer integration of logistics w/ other departments and supply partners, logistics as a strategy -integrated logistics mgmt =1980-1990 =fundamental problem: Foreign companies beating US in auto and other products, how to compete on quality? =result:TQM and Six Sigma, lean processes

Value of a real option

-comes from decision making flexibility -managers can participate in the upside of the option, but limit losses to the cost of acquiring option =project is good, keep going =project not good, terminate to avoid loss -option value= difference between the expected value of the project with the option

Information structure deployment

-deployment roadmap that says how IT toll sets will be configured, maintained and improved over time

Business architecture

-design of how the various parts are integrated and directed to realize goals

End user artifacts

-desktop computers, laptops, PDAs etc -user/ business apps

Present corporate strategy

-dynamIc and demand driven; there is no such thing as sustainable advantage, all advantages are temporary =depends on internal capabilities as well as business partNer network capabilities =IT CAPABILITIES + SCM PRACTICES ENABLE STRATEGY

Process standardization

-enables easy application of Kaizen methods to any process -track measure and demonstrate effects of process changes

social CRM

-engage customers in collab. conversation -provide mutuall beneficial value -trusted and transparent environment customers access firm'smessage, contribute,edit and share it

IRR problems

-execs prefer IRR to NPV -hurdle for IRR sometimes set at overly high return rates =possible to have multiple IRR -only used to evaluate a single project -IRR neglects the size of a project -does not consider time value of money

Slam dunk (quick wins)

-focus on implementing ERP only for a few key processes -plant to implement more ERP in future

Problems with NPV analysis

-ignores risks, opportunities, flexibilities -assumes a fixed path of investments and outcomes ("Big Bang implementation" -does not account for managerial flexibility to make decisions -using high hurdle rates leads to bias toward incremental investments ahead of revolutionary IT =high hurdle rates drive managers to propose small and easier investment

Information Infrastructure systems

-info integration systems, data master file, data warehousing, enterprise content manager (ECM), metadata mgmt

Strategic growth (real option)

-initial baseline investment provides platform for future follow-on investments

Supply Chain Management

-integrated mgmt of the flow of materials and products, services, cash and info from suppliers to end customers and back again

Demand flexible

-means companies move beyond a focus purely on operations optimizations, and restructure SC to sense and proactively respond to signals from demand channel

Information technology

-mechanical, analog, and digital tech for collecting data and processing data into useful info and actionable knowledge - Infrastructure artifacts, End user artifacts, Enterprise artifacts, knowledge and skills

Stage 5 SCM mgmt practices

-multi enterprise supply chain, online markets -Technology enabled SCM =2000- present problem: how to use tech to enable good SC practices result: attempt to sync entire supply network into single virtual enterprise

transactional CRM

-own the customer -optimize up sell, cross sales, profit, repeat business

Enterprise structure

-particular configuration in time of a firm's knowledge, capabilities, productive processes and physical assets

Past corporate strategy

-plan to gain and sustain a competitive advantage; continually solidifying and reinvesting to maintain the advantage in a relatively stable product environment -pick 1 area and dominate

Information definition and governance

-policy and mgmt practices, oversight

e-CRM marketing and enterprise marketing automation (EMA)

-principles of direct marketing, target marketing, and relationship marketing led to attempts to initiate personal, customized, demand driven marketing

Information strategy

-principles that guide the firms IT efforts - end to end vision

Real options

-provides the right but not obligation to buy or sell some real world asset at some future time -represent active mgmt of an IT project -rang of possible outcomes greatly improve when you have a real option

Tactical objectives of CRM

-retain existing customers and win new ones -optimization of profitability =Lifetime customer value (LCV): customer's total sales revenue over lifetime of relationship, minus cost of serving, discounted by inflation - higher the level, the better service the customer gets

Middleware

-sotfware that serves to glue together existing, separate, large scale softwares -EDI, XML

Evolving CEO roles

-strong communication, empathy, collaboration, ability to gain employee and public trust -" to thrive as C-level, must be a good communicator, collaborator, and strategic thinker

Value proposition

-sum total output of core competencies

Technology

-theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery system

Customer service management

-these apps enable companies to activate openn, productive dialogues with customers that are personalized, immediate, and intimiate -tech includes: call center, interactive voice response etc

Sales Force Automation (SFA)

-tools for automating personal sales tasks provided foundation for many modern CRM apps

Customer experience management

-totality of an individual customer's interactions with a company and brand over time - ensures that each dept. and service touchpoint is acting in best interest

Stage 4 SCM mgmt practice

-trading partner network, benchmarking, ERP integration =Supply Chain MGMT =1990-2000 =fundamental problem: China/Russia/ East Europe open up, globalization, WWW.; impact of new internet tech? =result: broader, more integrated view of SC. System focus on channel trading partner level and customer level, synchronize competencies across network of trading partners

Centralized control

-use ERP to centralize systems and info =forces culture to become less autonomous =exert more mgmt control =standardize production processes

Importance of IT

-use tech to Automate knowledge: human knowledge in a machine -use tech to create knowledge (Informate): automated functions create info about performed activities -use tech to Integrate and Network Knowledge: eliminates barriers between functions

Demand driven Supply Network capabilities

1. Ability to "sense" demand. 2. Available agile, flexible supply network components. 3. Ability to leverage innovation drivers. 4. Strive to leverage S&OP and network design across the value network and the supply network. 5. Continuous pursuit of agility

Inter-enterprise business architecture

1. Architecting a shared inter-enterprise vision: vision of how internal functions will fit into wider SC vision 2. I-E business modeling: model of what tech is in the company and how they work together 3. I-E process modeling: develop detailed process model that describes external processes that govern daily SCM functions

Metrics for analyzing options

1. Break even point: ignoring the time value of money 2. IRR: Internal rate of return for an IT project 3. Discounted cash flow (DCF) and Net Present Value (NPV)

Enterprise Business systems (EBS) backbone's 8 core components

1. Customer mgmt: orders 2. Manufacturing: BOM, MRP, WIP 3. Procurement: purchase orders, deliveries, open order tracking 4. Logistics: distribution channel, warehouse, replenishment 5. Product data: database of info on products company makes 6. finance: accounting and real time SC financials 7. Assets: equipment tracking, maintenance 8. Human Resources: time, attendance, compensation, expenses

5 basic functions of info systems

1. Enterprise database: -static data: data that changes very little. -variable data: data that changes over time 2. Transaction mgmt: transaction processing systems (TPS) provide accurate and timely data collection 3. Decision analysis and simulation: planner systems to identify, analyze, and compare alternative tactics 4. Mgmt control: business intelligent systems that allow mangers to track and control costs, quality customer service etc. 5. Strategic planning systems: tools for long term planning about competitive advantage (executive info systems)

NPV cost/benefit analysis

1. Forward approach: -identify all dimensions of decision -calculate parameter estimates for tangible dimensions -make assumptions about intangible parameters -perform c/b analysis and see whether project passes hurdle 2. Reverse approach -identify tangible of problems -calculate parameter estimates for tangibles -perform c/b analysis =if investment satisfies hurdle, OK =if not, ask " will intangibles make up for it?"

3 critical cabailities required for optimization of SC agility

1. Global visibility to actionable data: connectivity between supply chain partners, proactive alerting 2. ability to rapidly assess an array of what if alternatives 3. capability to deploy a comprehensive performance scoring mechanism

Six Managerial Competencies for Building Lean Supply Chains

1. Lean improvement tools 2. process standardization 3. lean scm technologies 4. demand management 5. lean SCM implementation 6. cross enterprise collaboration

NPV decision rules

1. NPV>0: investment may add value, so maybe accepted 2. NPV<0: project may subtract value, may be rejected 3. NPV=0: outcome uncertain, so indifferent

Lean SCM technologies

1. Operations: tech to automate,standardize 2. Networking Sourcing: B2B systems and exchanges automate RFQ, PO mgmt 3. Optimizing sales and marketing: B2C, CRM, and SFA applications automate and integrate customer contact and mgmt processes 4.Connect collaborative demand and supply planning: SC software link channel partners with network events 5. Optimize inventory assets: collaorative tech allows channels partners better visiblity

Triple bottom line of future SCM

1. Profit: customer focus 2. Social objectives: SC design as resource for social change, humanitarian logistics, disaster prevention 3. Environmental objectives: sustainable operations, green tech, energy impacts

Customer lifecycle

1. Target 2. Acquire 3. Retain 4. Expand

Lean improvement tools

1. Toyota Production system (TPS): 7 wastes: overproduction, transportation, unnecessary inventory, bad processing, waiting, excess motion, and defects 2. "5S" system of improvement: sort, set, shine, standardize, sustain 3. SMED/ quick changeover: reduce machine set up times 4. Process flow analysis: value stream mapping to eliminate process flow barriers 5. Total productive maintenance (TPM): proper regular maintenance for firms assets 6. Six Sigma and Statistical methods: SPC to correct processes and reduce errors

System mgmt principles for well run business systems

1. accountability: ensuring quality and integrity of data 2. Transparency: ease of use of systems for end user 3. Accessibility: quick access and easy update of critical info 4.data integrity: accuracy of data and timeliness of database updates 5.valid process simulation: represent the true way the business works 6. flexibility: enables easy upgrade of system 7.Control: reporting and exception messaging to alert manager of out of control processes

IT necessary for merging CRM and CEM

1. business enterprise backbones: -infrastructure built on ERP, CRM, SCM systems 2. Demand sensing: -provide complete view of customer interactions across all channels 3. operations optimization: streamline pipeline supply and demand processes 4. demand sharing: provide customer facing functions with focused order mgmt tools

Critical IT capabilities for social CRM

1. communication repository mgmt -capture and analyze customer interactions 2. advanced networking: stay connected to peers and market buzz 3. innovation -tools to source and make use of customer knowledge, crowdsource 4. promotion: allow satisfied customers to provide brand messages to peers

Older 5 steps in Process redesign

1. develop business vision and process ojectives 2.identify process to be redesigned (identify bottleneck) 3. understand and measure existing processes(set baseline) 4. Identify IT levers (brainstorm) 5. design and build prototype of process [iterate] (implement) (no mention of pitfalls or how to respond)

types of customer value

1. economic value: generate more benefit than initial cost to customer 2. Solution value:functions of product provide desired level of service 3. Psychological value: intangible factors affecting a customer's perception of product value

Newer 5 steps to Process redesign

1. energize organization 2. enterprise vision 3. SC value assessment 4. opportunity identification 5. strategy decision

Architectural steps for implementing CRM

1. establish a customer centric organization 2. determine existing customer positions 3. devise a map of customer segments 4. develop and implement CRM solution 5. monitor, measure and refine CRM apps

System requirements for managing multifaceted enterprise

1. facilitate automation of standardized tasks 2. gnerate info for decision making 3.network knowledge or people within and outside enterprise

5 basic principles of IT consulting

1. focus on relationship: understand personality and expectations of client 2. Clearly define roles: define roles for all parties involved 3. Visualize success for the client: help client see end of the project at the beginning 4.you advise, they decide: client is best person to decide 5. be oriented toward results: ensure solution addresses pitfalls, implementation, transition etc

3 dimensions of task of enterprise system

1. integrate internal data and processes 2. link external parts of the company together 3. link external customers and suppliers to the enterprise supply and demand planning functions

how to convey value to a client

1. laundry list of possible benefits (most common, least effective) 2. identify few important points of differece relevant to customer needs (least common, most effective) 3. identify your favorable points of difference from competitors

3 aims of CRM

1. operational CRM: service operation, ordering, billing, sales, internet driven apps 2. collaborative CRM: focused on channel spanning functions and decision making 3. analytical CRM: capture historical data of customer, storage, analysis, reporting and predictions

Partner relationship mgmt (PRM)

1. partner recruitment and development 2. marketing development 3.sales mgmt 4., services mgmt 5. prm collaboration

Success factors for ERP projects

1. top management must be actively engaged in project 2. Project leaders need to be veterans and team members are decision makers 3. third party consultants are used to fill in knowledge gaps 4. change management goes hand in hand with project mgmt 5. satisficing mindset prevails-80 percent solutions are good enough

Supply chain capabilities needed to create value

1. transparency: full info=lack of risk expsoure 2. Incentive compatibility: individual SC players work compatibly 3. Robustness: flexible system that create value even when bad events occur 4. Pinch point (a system coordinator): someone to coordinate everyone creating value

Enablers for dmeand-pll processes:

1. visible and transparent: can see customer demand events 2. Demand driven: customer demand (not forecasts) drive supply channel procurement 3.instrumented: IT can alert about changes over whole supply channel 4. integrated: demand mgmt process teams align processes to customer value delivery

characteristics of network chatter

1.volume: number of times something is said about a company 2. tone: valence; positive, negative,neutral 3. coverage: # of people in conversation 4. authoritativeness: reputation of message sources

Internal Rate of Return

IRR= annualized effective compounded return rate that may be earned on the invested capital -accept a project if IRR> cost of capital

Enterprise technology

Infrastructure= physical Architecture= design

Net Present Value

NPV: a dollar today is more than a dollar in the future -real dollars= nominal dollars*deflator

Wireless tech

RFID, bluetooth, GPS, short range infrared etc

switch use (real option)

an asset deployed for one use can be redeployed to another

Software as a service (SaaS0

companies provide major business system IT services for a subscription fee -cloud computing

Enterprise IT infrastructure

consists of: 1. database mgmt (relational databases+SQL) 2. Networking toolsets: LAN internet 3. Software: operating system software 4. System configuration: hardware and software

Defer(real option)

defer investment decision until later period, when you've learned more about it

Stage( real option)

divide project into multiple stages

Change scale (real option)

scale up or down on operational system

switch inputs (real option)

switch from one tech to another

Abandon (real option)

terminate project mid stream, save remaining budget(difficult, wasteful)