Bullwhip Simulation: Part 2

There are a couple of ways in which one can go about reducing the Bullwhip effect. First and foremost, the manager has to focus on the demand experienced by factories rather than being getting to myopic about the demands from the customers only. As demand from customers is easy to predict, many managers get complacent doing so, which ignores day-to-day fluctuations in favor of running level. Another method would be to reduce or eliminate the delays along the supply chain. It’s easier to say than to accomplish. And I can definitely say that after completing the Bullwhip simulation where it is such a commonplace to fall for either the demand creep from the customers or the inventory creep because of over producing or wrong prediction.

Bullwhip Simulation : Part 1

I completed the Bullwhip simulation and I felt that it really got into my nerves. It was frustrating for me as I was not able to able to return the systems to equilibrium. Though it sounded very simple as an objective to return the systems to equilibrium, once somebody starts playing it, they will soon realize that it is more intense and complex than it initially seemed. I thought the concept behind the simulation was also very complex but the way they have worded it, seemed like they wanted to camouflage that complex idea with simple words. It sounded so simple. Customers are ordering 10 cases of beer and you have 10 cases of inventory each week. In week 2, your customers will increase their orders from 10 cases of beer a week to 15 cases of beer. That was it. I had to make sure that I can control my supply chain in conformance with the customers’ demand. But, I was wrong. It’s not that simple. I applied two strategies. One was to start off with the customers’ order in mind only. I wanted to make sure that the customers are getting what they are asking for. Pretty soon, I ran into an inventory creep, so I had to cut my supply. In a particular moment of time, I got really scanty. But that didn’t save my day as well. Time isn’t static and it beat me in the long run. Then I applied my second strategy. And that is to start in a skeptical manner. Producing and supplying less, which at one point of time, prompted me to produce by zillions. I was getting messages that my customers are thirsty and I had no means to quench their thirst once the demand started to creep in. And lastly, I would like to say that one has to be really, really judicial in his/her decision while completing this simulation to be successful.

BudNet and SCM

The five factors that are driving SCM success are making the sale to the suppliers, weaning employees off traditional business practices, ensuring the SCM system supports the organizational goals, deploying in incremental phases and measuring and communicating success and last but not the least being future oriented. And now we can draw our attention as to how BudNet had its effect on each of these aforementioned five factors. BudNet has included the distributors as well as the sales representatives in its SCM network, thus touching upon the first factor. As the BudNet had good response from Anheuser-Busch's distributors and sales representatives because of its user-friendliness, it has been successful in addressing the second factor as well. The organiaztional goal of Anheuser-Busch has been to be the best in the industry that they are in. And BudNet has surely been able to successfully achieve that with their SCM system which is said to be even better than Coca-Cola. It has been progressing by having digestable bites of its SCM system, thus touching upon the fourth factor and last but not the least, the tendency to be future oriented has surely been met by Anheuser-Busch merely implementing the SCM systems, giving an important signals to its rivals that they are here to stay and excel, not only for the time being but in the days to come as well.

SCM is experiencing explosive growth

SCM is actually experiencing explosive growth. We can prove that statement by using BudNet as an example. It has helped Anheuser-Busch's share of the $74.4 billion U.S. beer market inch up to 50.1 percent from 48.9 percent. It also helps them to constantly change marketing strategies, to design promotions to suit the ethnic makeup of its markets, and as early warning radar that detects where rivals might have an edge. Thus it has become an integral part of every successful company to have an effective and efficient SCM system. In the recent past, this lone factor has been making all the differences betwenn companies as to who has the better edge over the other. Thus, it is no wonder that SCM is experiencing explosive growth.

Supply Chain Management and Anheuser-Busch

An SCM system can help a distributor immensely such as Anheuser-Busch to make its supply chain more effective and efficient. It helps them to understand as to what products are selling, which campaigns are successful and what needs to be done to help the customer's business. It gives Anheuser-Busch get facts and numbers on how much of the sales they did when they had a display in a certain location. Overall, the SCM systems that Anheuser-Busch adopts has helped them to be more effective and efficient than its rivals.

Autonomous Vehicles

Autonomous vehicles could be used by industries in manufacturing plants to transport raw materials or other heavy equipments, suppose from point A to point B, saving the manufacturing plant labor cost. As it could be able to lift heavy loads, that capability would surely add to the efficiency of the organization. And as more raw materials would be turned to finished products more rapidly, the effectiveness of the organization would increase as well.

Use of DARPA Grand Challenge

With a lucrative prize money and a grand event, DoD was able to draw much more attention than it would have through other means. The DARPA Grand Challenge brought together individuals and organizations from industry, the R&D community, government, the armed services and acamedia. Such amalgamation of minds is more likely to produce a better and sophisticated vehicle than a product produced by a pigeonholed mindset.

DoD and its use of AI

The DoD is using AI to produce autonomous vehicles that can be used by the military to travel long distance and difficult terrains at military relevant rates of speed. Those vehicles will help to improve DoD’s operations immensely. It will also be used to save lives on the battlefield as the vehicles that will be produced using AI would be autonomous and doesn’t need to be operated by an army personnel who can save himself/herself from the deadly Improvised Explosive Device mined by the enemies.

Harrah and its database technology

Harrah's uses database technologies in a very judicious manner to implement its service-oriented strategy. As has been told in the case, customers are the center point around which Harrah's tailor all their strategy and policy. They regard the commitment to their customers as the most important aspect of their business, thus adopting the service-oriented strategy. To make sure that they can serve their customers in the most effective and efficient manner they utilize the information about the customers in a very fruitful manner. That's where their reliance on database comes into play. It contains all the information about various habits of the customers like amount of times they gamble, the games they prefer to play the most, their betting strategies, etc. Based on that information it can go about serving the customers even more loyally. And the database technology acts as the repository from which they can retrieve that vital information.

Effect of poor information on Harrah's business strategy

There would be some serious effects from poor information on Harrah's service-oriented business strategy. As it enjoys its competitive advantage from better utilization of information rather than intuition, poor quality of information will surely affect its superiority in the casino industry. It might encounter less customer visits which will eventually result in gross market revenue, profit and ROI going down because at the end of the day customers are the lifeblood for Harrah's. It has tailored its business strategy to be service-oriented. So, any lacking into the quality of the information that they get about customers or their internal infrastructure will surely cause disruption in their act of providing service to customers which will later on affect their overall business strategy as well.

A Big Revolution in both the IT and business world: Data Warehouse

There is more than one company who has surely reaped the benefit from utilizing data warehousing. Thus it shouldn't be a big endeavor to find out some organizations that has been benefited by using data warehouse. I found out several companies that has achieved great success via Data Warehousing. In the next few paragraphs I am going to elaborate on the success that data warehousing resulted in, at those companies.

The first example can be that of Victoria's Secret. This company analyzes the status of every individual product by customer, by day, for each order that they get through their bricks-and-mortar stores as well as orders that they get through their website victoriassecret.com. The data warehouse that they have then enables Victoria's Secret to improve their prediction on any particular customer. It also enables the company to stay abreast of each order's profit equation. To measure the revenue of each order, Victoria's Secret starts with the merchandise price and subtracts shipping, handling, and related taxes, as well as special service charges, such as shipping upgrades and gift wrapping. This process means that the retailer can measure the profitability of every customer, order, catalog and product.

The next example can be that of Sears, Roebuck and Company, the largest department store chain and the third-largest retailer in the United States. Sears has 18 data centers, one in each 10 geographical regions as well as one each for marketing, finance and other departments. Frequent mismatches between accounting and sales figures and information scattered among numerous databases forced users to query multiple systems, even when they needed an answer to a simple query. Furthermore, there were errors when calculations were based on data from several sources. To solve these problems, Sears constructed a single sales information data warehouse. This replaced the 18 old databases which were packed with redundant, conflicting, and sometimes obsolete data. As has been the result, the data warehouse enabled Sears to monitor sales by item per store to create a sharp local market focus. Eventually, the sales and market share improved. Response times to queries have dropped from days to minutes for typical requests. Overall the strategic impact of the data warehouse implemented by Sears has been the fact that it offered Sears’s employees a tool for making better decisions. And at the end of the day, Sears retailing profits have climbed more than 20 percent annually. Kudos to the successful implementation and utilization of data warehouse.

Companies do get competitive advantage by using BI (business intelligence)

Ben & Jerry’s is using BI to improve quality. Customers know that a pint of Ben & Jerry’s ice cream is of the highest quality.

California Pizza Kitchen and Noodles & Company are using BI to improve financial analysis capabilities. Both companies can now receive more accurate and complete financial views of their businesses.

Reasons why 100 percent accurate and complete information is impossible for Noodles & Company to obtain.

Noodles & Company will never have 100 percent accurate and complete information. Perfect information is pricey. Achieving perfect information is almost impossible. The more complete and accurate an organization wants to get its information, the more it costs. The tradeoff between perfect information lies in accuracy verses completeness. Accurate information means it is correct, while complete information means there are no blanks. Most organizations determine a percentage high enough to make good decisions at a reasonable cost, such as 85% accurate and 65% complete.

Use of BI by California Pizza Kitchen

Financial statements must be as accurate and complete as possible. There have been too many instances in the past where shoddy financial statements have lead to financial crisis such as Enron and WorldCom. It does not matter how good or how many BI tools California Pizza Kitchen uses; if the core data is dirty the results will be inaccurate.

How Ben & Jerry's use business intelligence: a simple concept actually

Ben & Jerry’s tracks the ingredients and life of each pint in a data warehouse. If a consumer calls in with a complaint, the consumer affairs staff matches up the pint with which supplier’s mile, eggs, or cherries, etc. did not meet the organization’s near-obsession with quality.

Why quality of information will matter at Alaska Department of Fish and Game???

If the department receives low quality information from fish counts then either too many fish escape or too many are caught. Allowing too many salmon to swim upstream could deprive fishermen of their livelihoods. Allowing too many to be caught before they swim upstream to spawn could diminish fish populations- yielding devastating effects for years to come.

Use of IT by Alaska Department of Fish and Game

Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks. Analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks. The Alaska Department of Fish and Game is using transactional information to make analytical decisions. The transactional information includes the daily fish tickets from the commercial fishing boats that include the species caught, weight, and quantity. Fish escapement information from remote areas is tracked by field workers positioned in towers who scan rivers to visibly count fish. The analytical decisions that are made from this information include determining whether or not fishermen can fish each day.

Responsibilities of a CTO, CPO and CSO...etc.

Some preventive measures that the executives could follow to avert any personal humiliation or tangible/intangible damages to the company.

The CTO, CPO or CSO should have strong ethical values and should convey that by his/her actions to the rest of the company. He/she should have strong commitment for the company that he/she is working for.

The CTO, CPO or CSO should also have strong personal moral values and should make sure that all his/her activities should be directed for the betterment of the company and shouldn’t include any personal interest.

Again, the CTO, CPO or CSO should act professionally and respect the decision of the board of directors and shouldn’t get involved in any sort of retaliation process to harm against the company that he/she has worked for.

I am in nontechnologial area.....do I have to worry about technology???

In this global environment that we are in right now, where competition is driving everybody and everything, executives can’t help but to make sure that they are knowledgeable about technology irrespective of their specialized fields. They need to make sure that IT is in total alignment with the business functions of that particular company. If there is a harmonious existence of IT and business functions, reciprocating each other, the potential business ramification for any company will sure lead to the way of success and prosperity. Technology is always evolving. Something that a software developer is using today might turn out to be obsolete a after a couple of weeks. Thus the executive has to be always on top of this volatile nature of technology and lead the company by confronting the threats in the proper manner and in the process making opportunities, tapping onto them and bringing in profit for the company.

What are the technical responsibilities of a CEO......???

Understanding technology, especially in the areas of security and ethics is extremely important for a CEO, especially at this point of time era that we are in right now, where employees feel vulnerable to privacy infringement more than ever. The CEO needs to make sure that he/she commits himself/herself to the fullest when it comes to secure the privacy of its employees as well as for the privacy of the company’s intellectual properties and other copyright documents.

CEO’s actions have an immense effect on the culture of the organization. If the CEO provides good examples of ethics and sets a high standard of ethical standard in his/her company, chances are high that the employees of that particular company would be ethical as well, resulting in a healthy productive company. We all saw just how few unethical people can bring in havoc for a company with the example of Enron.

What does website tell about strategic initiatives...........at least to me........a dissection of some organization's website.......

1. VERABRADLEY.COM :-

Vera Bradley remains steadfast in its commitment to excellent quality, dependable service and tasteful, innovative designs. It has earned a reputation as a leader in the gift industry. Creating stylish quilted cotton luggage, handbags and accessories, the company combines smart product designs with distinctive and colorful fabrics and trims. And that does come across through the content of their website.

2. TOYOTA.COM :-

Toyota believes that their value is the same as the consumers. They are hard-working, active in the community and committed to the environment. They enjoys diversity thus creating jobs in the process. They are on a constant drive to make history and to build cleaner and greener cars. And they try to convey those commitments through their website.

3. BESTBUY.COM :-

Best Buy operates a gobal portfolio of brands with a commitment to growth and innovation. They sell consumer electronics, home-office products, entertainment software, appliances and related services through more than 1200 retail stores across the US, throughout Canada and in China. The support the communities in which its employees work and live through volunteerism and grants that benefit children and education. And those commitments surely do come across through their website.

4. IPFW.EDU :-

IPFW has this mission to offer a broad range of high-quality undergraduate, graduate, and continuing education programs that meet regional needs; to support excellence in teaching and learning; to advance and share knowledge through research and crative endeavor; and to work with the community to develop intellectual, cultural, economic and human resources.

Effectiveness IT metrics and its impact on Friendster

We could use effectiveness IT metrics to help place a value on Friendster by focusing on Friendster’s customers, suppliers, employees, partners and more importantly the sponsors to make sure that they are satisfied with the application that Friendster has been functioning on. We could assess whether the particular application is easy to use for the users or not. We could also make sure that the customers are having a good experience on the Web with Friendster and aren’t getting distracted by pop-ups or other form of bugging advertisements. Any kind of unwanted distraction from the users’ point of view would act as an impediment for Friendster to compete with its other competitors like Match.com.

Efficiency IT metrics and its impact on Friendster

We could use efficiency IT metrics to help place a value on Friendster by paying our attention to the existing technology that Friendster is using for the time being. Then, we could use that existing technology to be the benchmark for Friendster for the time being and for future endeavor. After then on, we could monitor and measure against this benchmark to make sure that Friendster’s technology is functioning in the proper manner or not. This metrics would be immensely important as far as operating in the Web environment is concerned, for Friendster.

Saving time at the grocery store

I hate waiting in line at the grocery store. It’s really frustrating to wait in line for such a long time when it should be a smooth process. Right now, what we do is, we get a shopping cart as soon as we enter into a grocery store. We do our groceries. And then we have to stand in a long line to pay for the items that we bought. Unless you are lucky enough, you might have to wait somewhere between 10-15 minutes to pay off. It takes such a long time because the lady at the counter is swiping each and every time that we bought through the scanner. That process can be reengineered. We could have an installed scanner with the shopping cart. And as we take each item and put it into the cart, we swipe it through the scanner installed at the shopping cart. And then as we reach the counter, the lady at the counter only have to take the payment, saving her the time to swipe each and every item that we bought. Thus, it will save lots of time, money and effort, both for the buyers as well as for the sellers.

SAAB..............why not SCM????

A supply chain management would be really beneficial for Saab. It could provide Saab with the ability to obtain key management information to drive business decisions in line with its strategic goals. Almost like the same way that Trek has got benefited from it Saab can act in the same manner. It can give its 220 U.S. dealerships an easier and quicker way to enter their orders and get information. It will surely help Saab to increase its revenue and lower its inventory cost. In that manner, they could at some point of time, will be capable enough to compete with its competitors in terms of advertising and funding.

SAAb without CRM.....a loner

Saab could never have been able to coordinate its sales and marketing effort had it not implemented a CRM system. As it can’t compete with its competitors in other advertising campaigns and funding, it had to differentiate itself from others. Thus it became imperative for Saab to implement the CRM system and take a leading edge over others.

SAAB and CRM.......good synergy

Saab very well understood that it couldn’t compete with its competitors in terms of aggressive marketing campaigns, reduced prices, and inexpensive financing. So it had to implement something that would make itself unique and at the same time gain competitive advantage amongst its competitors. Thus, they opted for a CRM system called Siebel Automotive. It helped Saab’s call center employees with a 360-degree view of each customer, including prior-service related questions and all the marketing communications they have received. In addition to that, Saab’s dealers got equipped with a powerful Web-based solution for coordinating sales and marketing activities. These capabilities helped Saab to measure the sales results leads, recommend more efficient selling techniques, and target its lead more precisely in the future.

Any barrier for VOIP????......thus, any hope......???

The biggest barrier to entry for this VOIP would be to convince customers that it would be safe and secure. Customers might be reluctant to give out their credit card information through cell phones which might get intercepted and thus exploited. So safety will act as a huge barrier for this new technology. And also the fact of uncertainty of getting together the wireless operators, credit card companies and retailers to work seamlessly would be another biggest concern for the advocates of this new technology.

My view about VOIP

I view VOIP technology as a potential threat to traditional telephone companies. As we have seen, the traditional telephone companies has already lost thousands of customers to cell phone companies. If this trend continues (cell phone companies coming up with constant innovations), the traditional telephone companies would face extinction in the years to come. So, I would recommend them to fight fire with fire. That is, the traditional telephone companies should also implement such technology for the user through which they can pay their bills. And also the fact remains that traditional phone companies can always take the advantage of using VOIP with which it can make long distance calls at a cheap price. For example, Vonage is doing exactly that and reaping profits out of it. The other traditional phone companies will also have to come up with new ideas and innovations if they don’t want to become obsolete.

End Result

iPods rivalry, right now can only be with Zune by Microsoft. The rivalry isn’t intense I guess, as many had thought. But then again there is a cold implied rivalry going on between them. The perennial one I guess, like the one between MAC and PC. I think ther aren’t many rivalries amongst the manufacturer of Walkmans as they are concentrating more on portable mp3 players nowadays.

The situation right now..........

Supplier power is high for iPods because buyers have few choices of whom to buy iPods from. In fact, they should have to buy it from Apple authorized iPod retail store/online store. We can ignore auction sites like eBay here for the sake of argument. We can, if we want, buy a Mercedez Car from eBay, but that deosn’t necessarily make eBay the best place to buy Mercedez Car from. Supplier power is low for Walkmans because customers can buy different Walkmans from different manufacturing companies as there is a plethora of them out there.

For iPods, threat of substitute products or services is low whereas it the exactly the converse for Walkmans. iPods doesn’t have any suitable alternative right now, though there are other mp3 players as well, but feature wise it still has the competitive edge over other mp3 players. Threat of substitute products or services is high for Walkman as portable mp3 players itself is a threat which to be honest has made the Walkman in today’s world, obsolete.

Applying Porter’s 5 Forces model to iPod and Walkman

For iPod, buyer power is still really low because it’s still Apple who is bringing iPods into the market. Whereas, buyer power for Walkman is really high because at this time I think there are no companies who can boast that they are the trendsetter when it comes to producing Walkmans. Sony was prominent, but then again that was a long while back. Nowadays, more and more companies are concentrating on compact portable mp3 players rather than Walkman.

For iPod, threat of new entrants is low whereas threat of new entrants is high for Walkmans. There are significant entry barriers for a new company to come up and challenge iPods. The sort of facilities that Apple has pampered its customers with its iPods would be really hard for a new product to mimic and pose a threat against Apple. For Walkman, almost any other company can enter into the market without confronting any barriers and can excel if they want to.

How do I prepare myself to compete in this environment?

This answer is a continuation from my answer to the last question. I think the student should make himself/herself proficient in a certain skill which would make him/her unique and hard for the employer to say no to. The student should have to keep in mind that it’s really easy for a candidate to get lost in the pool of other eligible candidates in this era of flatter world.

How will I get impacted by this?

A student performing a job search doesn’t have to confine himself/herself within the country that he/she is in. If the candidate has the affinity to relocate I guess he/she can easily do that because all the information about jobs is available in the Internet. I can apply for a job in Australia if I would like to, being in the USA. And the other aspect that I need to touch in this regard is the fact of competition. It would increase a lot because a reputable company in my city might be having applications pouring in from a distant country. So I need to make sure that I have the edge over candidates from other countries.

Is the world actually flat?

I do agree with Friedman’s assessment that the world is flat. And it is in the process of getting flatter even more. But before I venture totally into my affirmative answer I need to clarify that it’s relative to a certain extent. Yes, the world is flat and is getting flatter with each passing day, technology and communication wise. I ordered several of my books over ebay from a seller who is in Indonesia, something that would have been impossible even to think about just a couple of decades back. That does convince me that the world is flat. But when it comes to development of different countries, I think that the world isn’t flat, rather it’s round, round as it ever could be. Several countries in Africa are still in a dark age while we surf the Internet in the developed country communicating with somebody in another part of the world.