continuous improvement

Be GREEN, or be SQUARE!

Posted on by suhanip301s12

More and more customers now are looking for companies to be transparent, but it’s kind of hard to be competitive and sustainable at the same time.  Companies are now using value chain processes to get the job done fast.  They are not only focusing on suppliers but also taking into account By-Product-Synergy, which is “taking waste from one part of the production process and using that waste in order to generate a new product.” But how can companies become more sustainable if only “80 percent of management uses just 20% of the available opportunities?!”  The remaining 80 percent is where management needs to focus the rest of their energy.

It’s crucial for management to set goals and assess their risks, thereafter they can easily seek out opportunities for future improvement.  The first step to become a transparent company is to implement a sustainability program, and of course to develop a strategy.  The next step is to identify the companies “main processes and map data throughout the value chain.”  By using life-cycle-assessment software, the companies will have a more clear idea of how to lower their costs.

A similar approach was taken by ThyssenKrupp (FWB: TKA), a German elevator company.  Since ThyssenKrupp uses a considerable amount of steel in the manufacturing process, they thought the operational aspect had the greatest environmental impact. To their surprise,  the “company’s elevators themselves left a greater carbon footprint then their manufacture or any of the company’s other operations.”

As a result, ThyssenKrupp dramatically changed their product line after implementing a sustainability program.  They made the following changes to their products and services:

  • Elevators use LED lights which reduce energy consumption by 80%, and automatic fan and light shutoff which reduces CO2 emissions by 193,000 tons per year.
  • Getting rid of harmful chemicals used to manufacture the elevator.
  • Using petroleum based biodegradable fluid, with a vegetable-based option called “enviromax.”
  • Elevators are equipped with regenerative technology, meaning that the energy generated from the braking system is put back into the building.

In a way the article gives motivation to other companies who are taking their first steps towards becoming a transparent company.  It gives them few ideas and pointers on “unlocking supply-chain opportunities.” It’s important for different industries to decipher various ways to be more environmental friendly.  After all, there is more to being sustainable than just showing off your environmental initiatives.

Do you think ThyssenKrupp can take additional measures to make their company more sustainable?  Or better yet, are there any companies that you want to see become transparent in the near future? How would they need to change there operations?

Links:

http://www.thyssenkruppelevator.com/Sustainability/products-services

http://www.greenbiz.com/blog/2013/04/26/whirlpool-thyssenkrupp-supply-chain-transparency?page=0%2C1

https://opsmgt.edublogs.org/2012/06/28/transforming-waste-into-profit/

 

Want a “bidding war” for your First Class Seat?

Posted on by spr1333jroe

A new trend being seen in airlines overseas resembles that of eBay for first class or business-class seats. As we all know, the price of airline tickets are not cheap and therefore, it is normal for many customers to automatically choose a coach ticket when flying. Airlines realized this was not giving them their most potential profits and looked for a way to fix it. As learned in class, in order to succeed, you have to continually look at the systems you are working with, and learn how to improve and be the best that you can. Airlines overseas, such as Air New Zealand, Virgin Atlantic, Brussels Airlines and CopaAirlines, realized this airline eBay and saw it as a potential to improve their company.

A company in New York has developed a system that essentially gives customers the opportunity to have “bidding wars” with one another in order to upgrade their seats. Once you purchase a coach seat, the airline will then allow you the opportunity to bid on an available upgraded seat. You will be given a minimum amount that you can offer in your bid, and then you decide the amount you would be willing to pay. If customers choose to participate in this auction process and end up with the highest bidding amount, the airline contacts them 48 hours before their flight and notifies them they had the winning amount and will receive the upgrade.

The decision to implement this newly developed system is turning out to be very profitable for the airlines. This eBay style system is not only saving customers hundreds to thousands of dollars due to not having to pay full price for first class seats, but it is also generating a good amount of revenue for the airlines. It has given them an opportunity to receive money for seats that weren’t originally selling at all.

While this system has seen many positive outcomes, there are a few worries airlines are having with it. Airlines are seeing that their loyal and frequent flyers, that are normally offered these available upgraded seats, are complaining they will no longer receive this. Airlines, therefore, have to come up with a solution that balances opportunities for frequent flyers and opportunities for flyers using the bidding process. Airlines do not want to implement a system that benefits half of their customers, but enrages the other half.

Do you think airlines will be able to come up with a balance between frequent flyers and flyers using the bidding process? Do you think this airline eBay will be something that continues to grow? Is it something that only overseas airlines will grab onto, or do you see this system succeeding in the U.S. as well?

Sources:

Video – http://live.wsj.com/video/airline-ebay-for-first-class/56E98E77-CDB9-4742-862A-E7751DDCDAC6.html?mod=WSJ_article_outbrain&obref=obnetwork#!56E98E77-CDB9-4742-862A-E7751DDCDAC6

Picture: Etihad Airways – http://society.ezinemark.com/best-first-class-airline-seats-worldwide-77365a7d46da.html

Wrong CEO, Crazy Damages!

Posted on by f1222sghatila

Wrong CEO, Crazy Damages!

Someone might think that a big company might have all the resources and very intelligent people working because they can afford to do so. In addition, those people will make the right decisions to improve the quality of work and increase the profit in the long run. J.C. Penny is one of the big companies that with one critical decision they lost almost a billion dollar. The hired the wrong person, which lead to critical changes that did not work out in the favor of J.C. Penny and increasing their profits. When Ron Johnson was announced as the new CEO of J.C. Penny the stock prices was $34 and within 2 years, the current stock price is at $14. The reason behind such a dramatic change is the structure of J.C. Penny. The CEO made changes to update the entire store and eliminate the coupons. Johnson did not pivot the idea that start off small and once people accepted the change and wanted that change increase though out the nation. Johnson took a big leap and caused J.C.Penny’s regular customers to look elsewhere for their purchasing needs.

Myron Ullman who was the CEO before Johnson had agreed to go back to and reverse the changes implemented by Johnon. He has agreed to stay until J.C. Penny has the right CEO. The changes made by Johnson eliminated the middle-market customers, which where their target market. Even though someone might think that updating the store and keeping a low price while eliminating coupon will cause more people to come is not necessarily true. Ideally, any idea sounds good but pivoting the idea is to make changes without losing a lot of money. Ulllman’s plan is to change things back and bring back the lost customers what where their target market but getting someone to come back after they have lost the trust is somewhat hard. Ullman has the niche to fix things, which he has done before and J.C. Penny is counting on him to bring back the people and profit into the stores again. His biggest challenge will be to remind the customers that what J.C. Penny was before and nothing has changed.

Quality of management makes a huge difference in the success of any company. Being in this state and losing a lot of money is very critical for J.C. Penny. If they continue to do so they will soon have to declare bankruptcy and that is a whole other situation. Being in economic crises right now and extreme competition from places like Macy’s and Kohl’s’ it will be hard to J.C. Penny to gain the customers because the rivals are trying to take up as much market has they can of lost customers. J.C. Penny is at a critical position right now; the question now remains whether they will be able to reverse the damage.

Do you think the J.C. Penny will gain its customers back and be able to create profit that they use to?

http://www.businessweek.com/articles/2013-04-11/j-dot-c-dot-penney-rehires-myron-ullman-to-clean-up-ron-johnsons-mess#p1

787 Dreamliner Debut…finally a dream come true?

Posted on by f1224srokicki

Inside the Boeing 787 Dreamliner with CEO Jeff Smisek (video)

After years of production delays and costs overruns, November 4 marked the date for the historic use of the Boeing Dreamliner to finally take flight in North America. With suppliers located all over the world in a large-scale collaboration, delays should have been expected. Originally planned for its first flight in August 2007, problems with excess weight and manufacturing and other problems caused for five delays and the first model was delivered in September 2011. The first commercial flight service was on October 26, 2011. Orders for the plane came in before initial production and these delays have caused many unhappy customers and calls for compensation.

It’s amazing that even with all of the delays, many airline companies have still continued to place orders. This extraordinary airplane has promised features that will supposedly astound not only its passengers but its flight crew and potential customers as well. With Boeing finally delivering on this exulted and greatly advertised product, will this plane meet its high expectations?For many of the people on this historic flight, the answer is yes.

United Airlines is the first airline in North America to operate the use of the Dreamliner with a commercial flight from the George Bush International Airport in Houston to O’Hare Airport in Chicago. United Airlines celebrated this historic event with a ceremonial ribbon cutting attended at the departure gate by its senior level management and the 200-plus passengers.

Many passengers commented on the design of the 219-seat interior plane as well as the tranquil atmosphere they experienced. Many noted the reduced noise from the engines, wings, and landing gears along with many of the other special features of the plane. Many new features include 30% larger windows with adjustable tint windows, spacious storage, dynamic LED lighting, a quieter cabin, and a smoother ride. The plane’s composition produces greater fuel economy, less maintenance, lower cabin pressure, and less time out of service. Attached above is a short video of the interior of the Dreamliner.

Even with the delivery of this one Dreamliner, there is the possibility that Boeing can still face problems with its suppliers which in turn causes further delays with providing its customers finished products. So my question is even with all of these fantastic features of the Dreamliner, does it make up for the years of delayed delivery? With multiple airlines carrying this Dreamliner, what does that mean for the competitive advantage of a company? And with all the past production delays, is it possible that there are still faults with the Dreamliner?

http://www.businessreviewusa.com/business_leaders/united-airlines-debuts-first-boeing-dreamliner

https://hub.united.com/en-us/787-Dreamliner/Pages/Infographic.aspx

 

Walgreens Inventory Management System

Posted on by f1234crobinson

 

As early as 1994, Walgreens has been ahead of its competitors regarding inventory systems. Taking on new technology, which is defined as SIMS technology (strategic inventory management systems), which previously had not been applied to the pharmaceutical sales industry. This early technological approach to dealing with issues of inventory, such as over and under stocking, greatly benefitted Walgreens in the long run. This benefit was able to be transmitted to consumers as well as net profits for Walgreens due to their ability to track their inventory in all facets of its movement. The systems implemented by Walgreens allowed it to eliminate a great deal of its excess as well as virtually eradicate under stocking. However ultimately, what was most significant is what this process allowed Walgreens relative to its consumers. Walgreens, as a result, managed to cut its customer wait-time in half.

Walgreens has been able to use this basis of efficient to expand to over 4000 locations in ten years. Moving from a locally recognized Chicago pharmaceutical retail company to a major corporation, which many argue in large part is associated with its focus on inventory management. Because Walgreens monitors its inventory through every step of its process it is more difficult for anything to be lost in addition this data collecting process, which is becoming more and more utilized allows Walgreens to stay ahead of the curve.

Walgreens has been able to become the company it is today as a result of its constant revising and tireless focus on technological internal opportunities in the inventory and customer care sectors. It is this technological focus that has lead Walgreens to become a major market share holder per the NAICS able to hold it’s own against CVS and RiteAid while acquiring smaller scale pharmaceutical retailers.

 

http://www.fundinguniverse.com/company-histories/walgreen-co-history/

http://www.hollandcs.com/retail2.html

 

Groupon: Still underwhelming

Posted on by f1213kpavesich

 

By: Kelsey Pavesich

http://www.chicagotribune.com/business/breaking/chi-groupon-lays-off-80-sales-employees-20121108,0,302142.story

Groupon launched November 1, 2008 by Andrew Mason. This company merged businesses with customers. Groupon used the concept of collective buying in order to bring businesses and customers together in a beneficial way for both sides; sellers get a large number of new customers while buyers get great deals. When Groupon launched the social impact was huge. This ecommerce impacted people’s lives by offering them great deals on anything from dinner to sky diving. Groupon stands at the fastest growing company ever created.

Now look at today. Groupon has proved underwhelming since its fast success. Stock is currently at an all time low. This has forced Andrew Mason to look at the way they do business and make some changes. Groupon laid off 80 workers this week in order to optimize their sale force. They are moving more towards a technological route that will make deals more accessible to customers. Several months ago it was announced that productivity would be increased through automation technology. The company released in a statement that they “will always aim to optimize business operations wherever opportunities are identified.” This automation is an internal tool that is beneficial to the consumer and Groupon’s merchants; it allows personalized deals for customers and can be used to predict different leads in the merchant database. Mason has said that in the last several months’ sales force productivity has improved which increased the number of deals a customer can buy. This is due to the new tools Groupon has released. Mason is quoted: “Those sorts of things are allowing us to increase productivity and continue to scale without adding the same headcount as we have in the past.”

This technology boost in Groupon shows that they are emphasizing agility and focus on the future as their main core values. Agility focuses on faster, more flexible, customized services as well as shorter cycle time for new and improved services. Groupon is trying to obtain a higher level of agility in their company by using automation technology. This allows for a single customer to access their personalized deals faster as well as improve services with merchants. A customer can now view more deals tailored to their preferences at a given time.

Groupon has received some public disappointment with their current state compared to where people thought they would go. This shows how Groupon needs to focus on the future. It has been hard for them to maintain sustainable growth after their initial launch. Their stock is currently at an all time low so they are not leaders in the market. Focus on the future might not have been one of Groupon’s main core values in the past but it needs to be at the moment if they want to compete in ecommerce.

In your opinion is this move towards automation a good idea for Groupon even though they are laying off workers?

What do you think the main core values are of Groupon?

What core values do you think Groupon needs to focus more energy on?

Hungry? Serving up the Supply Chain

Posted on by f1224hpham

 

Last week, my family and I went to Red Lobster for dinner. I was struck at how efficient they were with everyone playing a different role in the restaurant. I noticed that after every order the servers would go to a computer section to input in the orders at the different tables. I have never given it much thought, but I realized then that that was how the restaurant uses to keep track of its inventories (food or drinks). My sister ordered a lobster, which she asked the server if she could pick it. This got me thinking that the restaurant needed to have an excellent inventory management system and supply chain in order to keep up with orders such as my little sister (you cannot have lobster fresh all year round–and live ones too). So what keep Red Lobster going?

Red lobster is one of the chains of the largest casual-dining company, Darden Restaurants Inc. (“Darden”), in the United States. In the article, the management team at Darden is working to continue its competitive advantage by implementing an automation system on the supply chain. I don’t know how extensive this system is, but Darden believes that the benefits will justify the cost for it. And I think they have a reason to be since they have been an innovator in its industry by having a competitive in its supply chain. The article also mentions that Darden has plans to open a lobster farm in Malaysia among its fish farms throughout the world. This would mean that the company would have more control on the quantity as well as the quality of the lobsters coming in to its restaurants. Furthermore, with the inventory management system at its restaurants, the company would be able to measure how much inventory (food like fishes or lobsters) to each location just as demanded.

Questions to consider: Have you ever been to one of Darden’s chain restaurants? How do you feel? Does the supply chain system that Darden has in place surprise you? How do you feel about Darden being the “McDonald’s” in casual dining? Does Darden have a comparative advantage over its competitors? How so?

 

http://nrn.com/article/darden-making-progress-supply-chain-overhaul

iPad Mini, just one of the newest additions to the Apple familyT

Posted on by f1223npatel

 

The iPad Mini just came out this weekend and as always they had a line waiting outside the door. It is sold for around $329 in stores all around. According to CNET.com, it takes only $188 dollars to manufacture. I found this really interesting because it got me thinking of how much money  they can make off every product. There are differneces between how much it takes to make a 16 gb compared to the 32 gb and 64 gb iPads. It costs another $80 dollars for the iPads with more memory in them. They also sell for $429 for the 32gb and $529 for the 64gb.

The iPad Mini looks great, but is it worth buying is what I have been thinking about. Apple has been known for their superior products and are leading their competitors which is the Google Nexus, Amazon Kindle, and the new Microsoft Surface. I think the product will do very well in today’s market because Apple has a reputation of having great products.  Only Apple has come out with a product of their tablet and making a miniature version of it. I think it is a good idea, but the question is, will it sell to their expectations? They are selling their product over $100 dollars more than their competition, and Apple assumes they can do so because you pay more for quality and a credible name. I believe thats why they are charging a significant amount more than other competitors, but they can do so, don’t you think?

It is unbelievable on how much money Apple is making off of their products. The come out with something new throughout the year every year. They have expanded since they started in ’76 and keep on expanding. The net worth of Apple a decade ago was $10 billion and the net worth as of 2012 is close to $500 billions dollars. It is crazy  to think of all that they have done in the last 10 years. I feel as though Apple is just getting bigger, they have not peaked and are still in their prime. They are going to have many new products coming out, and for now, it is the iPad Mini

Would you guys feel about the iPad Mini? Do you think you will consider buying it at any time? How do you feel about Apple and their expansion into one of the greatest companies in history?

 

http://news.cnet.com/8301-13579_3-57544850-37/ipad-mini-costs-at-least-$188-to-build-teardown-reveals/

Shell or Shock? Possible Redesign of Toyota Prius

Posted on by f1223jkundrat

Toyota Motor Company is considering a complete redesign of its iconic economy car, the Prius. After 15 years in production, with only very subtle design changes as seen in the design evolution pictures below. It would be a big risk for Toyota to drastically change the proven design of the Prius, but it could also open it to a large new consumer base. Since its original debut in 1997, the Prius has epitomized the movement towards environmentally friendly hybrid vehicles that run on both gasoline and electricity. The Prius has experienced record sales in 2012, with sales increasing 60 percent over last year.  The main driving factor for the possible shift to a new design is to move away from the awkward shell type platform that has reigned since its initial debut. Although the shell is an incredibly aerodynamic style, it has traditionally been seen as something of a “geek mobile” and was often ostracized by most car enthusiasts.  By shifting to a more generally appreciated design, Toyota would see its target market grow substantially, since most car buyers are always looking for the best mix of fuel economy and design appeal.

It is slightly surprising that Toyota is considering such a drastic redesign, since it is currently in the growth stage of the product life cycle. As stated in class, the growth stage is when a manufacturer needs to focus on competitive product improvements, which are needed to help it stay current with the recent  introduction of new competitors such as Ford, and the continuing rivalry with Honda. However, Toyota Prius has managed to follow one characteristic of  the  product life cycle, and that is to enhance distribution and capacity. It has managed to increase capacity from only a few thousand units in its initial introduction, to nearly 700,000 through only the first 9 months of this year. By designing a new generation of Prius to appeal to more style conscious consumers, Toyota may end up gouging its current market, since many of the current buyers appreciate the iconic shell shape. At this point it is impossible to predict the exact fate of the Prius, since the new design has yet to be finalized. However the question arises of what possible design attributes can Toyota maintain from the current model to retain current customers, and what can they change to help attract new buyers?

 

 

http://www.bloomberg.com/news/2012-11-04/toyota-mulls-whether-to-change-prius-look-to-widen-appeal.html

 

 

First Time for Everything: NYC Marathon Cancelled

Posted on by f1233bnikolova

Due to the horrific damage that Hurricane Sandy has done to New York this past week, ING, the marathon’s leading sponsor since 2003, has been forced by the city of New York to cancel the long-awaited marathon that has held over 40,000 runners and 500 sponsors every year since it began. This will be the first time that the marathon has been canceled in over 70 years and has caused outrage among sponsors and consumers alike.

Although ING was originally planning on continuing to have the marathon even with the unbelievable damage that New York has experienced, public outcry about the unethical issues that ING as well as other sponsors are getting themselves into by ignoring the hurricane’s damage and continuing the marathon has been abundant. Because of this, ING has been forced to cancel the marathon and has put itself in a sticky situation when it comes to the revenue and promotion they and other sponsors will be losing because of it.

As we learned in class, the project triangle consists of time, cost, and performance. The time it took to plan a New York City Marathon is over a full year. The cost to get the over 500 sponsors to sponsor the event is over 1 million dollars, and performance is based on how smoothly the marathon runs. With these three contributing factors as well as many others, I understand why ING was hesitant to cancel the NYC marathon, but understand why the public was outraged as well. The amount of money and planning that went into making the NYC marathon what it is every year means that a lot of people are counting on it, and I believe this is why ING was reluctant to cancel it right away.

Furthermore, in a desperate final effort to save themselves from looking unethical, ING decided to donate $500,000 dollars to aid victims of the hurricane, and donate the generators that were going to be set up around the marathon for the runners, to the millions of people who need help in New York. While this was the right decision, thousands of runners, both from the U.S. and internationally, who have been training for this marathon for over a year, are devestated and feel disrepected that they were told about the cancellation last minute. As customers of the marathon for a number of years, the customer expectation for most of the runners is that they would be running no mater what.

Overall, I believe that this was the right decision to make and while people are still so angry at ING for not canceling it right away, I understand why ING didn’t.

How do you think this will affect ING’s future revenue? Do you think ING made the ethical choice to cancel the marathon? What would you do as president of ING to please both the runners and the people of New york that were affected by the storm?

 

http://www.businessweek.com/articles/2012-11-02/as-sponsor-of-new-york-city-marathon-ing-comes-under-fire#r=hpt-ls