Mobile Age – Take it or leave it.

Mobile Age – Take it or leave it.

One of the things I have noticed recently is how everything is shifting to mobile. The younger generations don’t even know how to use any other device to communicate outside their cell phone or other hand held devices. Base on a post by Stephen Pierzchala on January 15, 2013, titled Mobile Commerce Has Come of Age. Are You Ready? It is obvious that there is a paradigm shift to mobile devices for personal use and commerce. Which made me think if there will be more mobile projects targeting mobile users of all ages. The mobile apps in the US have doubled in the past years. Stephen Pierzhala noted that “Mobile is the fastest-growing segment of the online commerce world”.

 

mobile                              gsma1

Figure 1.                                                                                                            Figure 2

This fact is backed up the Global Association of Mobiles companies (GMSA). See the figure below. Universities lecture are available online. Many students are used to listening to class lectures on their mobile device. There are several factors leading to this growth. There are so many apps for mobile devices. Almost all major banks, insurance companies and supermarkets have a mobile app to buy products and/or services online.

The cultural shift to mobile life style is global in nature but not at the same rate globally. The US is leading the paradigm shift followed by Europe. In the 2013 report by GSMA (link 2 below) shows that mobile wireless data use per connection in the U.S. is significantly higher than in the EU. In 2013, Cisco projects U.S. customers will use nearly twice as much data per connection as customers in the EU. Figure 3 in this blog show how much data US mobile consumers are using compare to European mobile consumer.

gsma2

The mobile space will continue to grow there are endless providers of mobile devices and services. One of the major problems is the quality of service. The mobile space quality of service varies from one provider to another, even within the US which has the highest rating globally. Mobile users in the US still complain about poor quality of service depending on where you are located. While the mobile industry has grown significantly especially with products such as I-Phone, I-pad, etc, there are still room for a lot of improvement. With respect to project management it is interesting to know which of the project management principles or philosophy will not work very well when developing mobile products, applications (apps), or services. I have seen many DePaul students especially the undergrad playing video games on their mobile devices. Which make me to also wonder the type of problems these mobile devices introduces to our society and what educational project will be needed to build awareness against the dangers it poses. I believe don’t text while driving is clearly established as an example. ATT has developed an app to solve this problem see reference 4.

 

Reference

  1. http://www.dmnews.com/mobile-commerce-has-come-of-age-are-you-ready/article/276182/#
  2. http://www.gsmamobilewirelessperformance.com/GSMA_Mobile_Wireless_Performance_May2013.pdf
  3. http://www.mobal.com/international-cell-phones/
  4. http://developer.att.com/developer/forward.jsp?passedItemId=12500023&_requestid=39763&gclid=CNjAvZ2Q1rcCFbFAMgodi2oAGQ

What’s leadership management?

When it comes to management strategies, we are firm on our beliefs and behavior towards the approach we take in managing a staff. We attend classes and read books on the appropriate methods of managing a team, but what if I told you that everything you know about management leadership has been wrong all along.

When you attend a leadership class, you discuss the tools and techniques you can use to alleviate the situations, but the real issue is never address. The major issue is people. When entering the work environment you are forced to work with many different personalities. With all the different personalities, you are bound to clash with someone. In perfect world, we would all agree and get along but unfortunately, this is not the case.  If the issues you have with people are never address, conflicts arise and create big problems. When attending leadership training this issue is often over looked by trainers.

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In leadership classes, it is clearly defined that leaders have a fundamentally different task from the people they are overseeing. With the title of a leader, you are given an extra power that is linked directly back to fear from your staff.  This is the issue in leadership and corporate leadership.  If fear can be removed from the equation, staff will be more willing to communicate issues and ideas they have. Instead of looking at someone as a threat, you can be viewed as someone that was placed in the position you are in because you have put your time into the company and you are very knowledgeable. What if this was the message that employees received instead of the thought that the person who hired you has absolute power over you. It is no secret that real leaders use influence rather than the use of power to achieve goals, yet corporate America continues to run organizations as if this is unheard of. We have all these large corporate leaders attend these leadership training courses but the common worker is never invited. Why is that? Is it that magical secretes are exchanged and only the elite can understand them?

This style of management is not the way to go. We live in a world now that is so diverse that we can benefit from the exposure of different people, cultures, and ideas. Technology and global markets have given us the window of opportunity to take advantage of this and learn from each other. It is clear that the best people will not follow this style of management, they will not submit to the fear of the manager.  We need to start listening to all the issues and address them from the bottom and go from there. We need to consider everyone and see each other as equals and work together as a team with a common goal. We need to eliminate fear.

http://www.businessweek.com/articles/2013-04-12/everything-you-know-about-leadership-is-wrong

http://au.pfinance.yahoo.com/money-manager/career/article/-/15165315/15-ways-to-spot-a-bad-leader/

Got Spirit?: Sales at an All-Time High, Quality at an All-Time Low

As summer approaches, most of us are hoping for a summer getaway. Perhaps one of the most stressful aspects of travel is getting to your destination, and with airfare only increasing, cost is often a key factor in making travel decisions. For a penny-pinching traveler, Spirit Airlines is a frequent air carrier of choice, due to its prices that are considerably lower than its competitors. Spirit’s average base fare is around $79, as opposed to a competitor’s base fare, which would be well over $100.

So how is Spirit able to offer fares at such low prices? An important thing to bear in mind when considering Spirit Airlines is that their business model is drastically different than that of Delta, American Airlines, or Southwest Airlines. While those airlines are quality and customer-satisfaction driven, Spirit is driven strictly only by low prices. They have the ability to offer fares at such low prices since they cut out a lot of expenses that other airlines take on in order to offer their passengers a more comfortable and ritzy experience, such as in-flight movies, free refreshments, and ample amounts of space. On a Spirit flight, they have none of the mentioned extras, as well as a more compactly designed plane that is plastered with ads and leaves its customers cramped and crowded. Spirit flights serve one function, getting you from one place to another as cheaply as possible. Spirit has acknowledged the poor quality of their flight experiences, and after over 16,000 customer reviews their flights are rated the poorest quality in the country. However, this does not phase them in the slightest. Spokeswoman, Misty Pinson stated that to the typical Spirit customer, quality is not that huge of an issue, since price is the biggest priority for them. With that in mind, it is clear that Spirit goes after a very specific type of traveler, one who is incredibly price conscious and is willing to sacrifice comfort in order to travel as cheaply as possible. This business model has been working for Spirit. Over the past few years, sales have been steady, and have even increased by 23% in the past quarter. They have also seen an increase in the number of passengers per flight, averaging about an 85% occupancy in 2013 so far.

Though Spirit has been quite blase about their poor reviews, they still express some interest in breaking down the poor public misconceptions about their airline created through bad press. They make it very explicit that it is unhelpful to be grouped with airlines such as American Airlines or Delta, since their business model is completely different and they have a very different focus in terms of their target market.

Do you think Spirit Airline’s business model of sacrificing quality for price is a sustainable one? As a traveler, would you choose Spirit strictly based on price?

http://www.businessweek.com/articles/2013-05-23/spirit-airlines-doesnt-care-if-you-hate-it

Find a Beauty Expert at Your Local Target!

Generic beauty-products2Target is one of our go-to stores when we are in need of practically anything you can think of-a hair brush, a summer dress, groceries, a plasma tv, makeup, face cleansers and much more. Recently, an article in the Chicago Tribune reported that Target would soon be expanding its “beauty concierge” within the Chicago area. The company’s goal is to expand this program from 28 to 44 stores. The uniqueness of this program is that associates are dressed in black aprons equipped with iPads, as well as mirrors and product samples to provide shoppers with guidance and expertise when they are browsing through the aisles of the beauty section looking for beauty products. According to this article, Chicago was selected as the test market for this program due to its shopping population. Specific locations Target is hoping to expand this program include Cicero, Vernon Hills and West Schaumburg while shutting the program in other locations such as Palatine, Bedford Park, Joliet, Villa Park, Oswego, Plainfield, North Aurora and Romeoville. Further, Target is also expected to expand its program into three additional markets: Los Angeles/Orange County, Minneapolis and Washington, D.C

The implementation of Target’s Beauty Concierge program is part of a trend in the beauty industry in which department stores and specialty retailers are helping and giving customers the opportunity to try their products before buying them. Since the skin care market grew 10 percent in 2012, Target is anticipating this program to boost sales. This new personalized beauty service is allowing Target not only to compete with stores such as Walgreens, who offers most of these products, but also to beauty retailers such as Sephora and Ulta Beauty. Hana Ben-Shabat, a partner at a global management consulting group commented on Target’s strategy by saying that at the end of the day fashion is a product and department stores are competing with beauty retailers and vice versa.

Operation managers at Target are certainly trying to keep up with the industry by coming up with these unique strategies. I think that the implementation of this new service can be a great success in very populated Target stores across the city, for example in downtown Chicago.  As this program matures, I think Target will gain a competitive advantage over other popular department stores such as Wal-Mart, Walgreens and CVS. The success of this program will largely be dependent on the type of associates that are being hired and the level of training they receive. Customers nowadays are always looking for advice when they are shopping for products, especially make up because not everyone is a beauty expert. Having someone to help you choose which specific foundation matches your skin, which mascara would help your lashes stand out, or which lipstick would look nice with an outfit, is certainly a service customers will appreciate. In my perspective, operation managers should place great emphasis on the increase of sales from beauty products to ensure that this project is being managed efficiently and can perhaps be used as a basis to provide a reasonable forecast to other Target stores across the nation.

What is your opinion? Do you think this program would attract more customers?

http://www.chicagotribune.com/business/breaking/chi-target-beauty-concierge-program-20130524,0,7813736.story

Preventive Vs. Corrective

pillsWhile flipping through Pharmaceutical Manufacturing magazine at work, I found an article about what pharmaceutical companies are doing in order to improve quality. The author, Doug Bartholomew, gives reasons why he believes pharmaceutical manufacturing companies are resistant to making changes in the article, “Proactive Compliance: Putting the “P” in CAPA”. CAPA is short for corrective and preventive action, the different processes and systems that are used in the pharmaceutical manufacturing industry in order to ensure quality by providing basic guidelines on identifying, fixing, and preventing the problem in the future..

A lot of the topics that are covered in the article are related to what we have gone over in class. Continuous improvement is difficult for pharma manufacturing companies because of the regulations that are to assure quality. Just like it is time consuming and expensive to be certified, or registered, to meet one of the quality systems we have learned about in class, the same applies to the different quality standards that are set up in the pharmaceutical manufacturing industry. Pharma manufactures shy away from making changed to their processes because every little change that is made has to be re-certified.

Over the past decades, pharma manufacturing companies have started to realize the importance of continuous improvement. Bartholomew quotes K.R. Karu, who is the industry solutions director at the quality management and CAPA system distributer, Sparta Systems; on what the manufacturing companies need to do to ensure high quality levels. One of Karu’s suggestions was to consider Juran’s quality thinking of having quality already built in to the process. Since quality is already built into the process, companies only need to monitor the process. Through inspection manufacturers should be able to find or come up with possible problems, and make changes to prevent them from ever happening.

The definition on CAPA is not completely understood the some throughout the industry. Every company interprets the guidelines differently. Preventative measures would be easier to accomplish if there were more guidelines were more descriptive. In the article it says that the problem is the “preventative” measures have all come about because of a “corrective” actions.  A pure example of a preventative measure that is given is the installation of  “state of the art” production line equipment so the number of errors can be reduced. A corrective action would be to update, and/or repair, older equipment after a problem arises, in order to reduce the number of manufacturing errors.  They are working on coming up with preventative measures that are truly preventative, making sure something that is unforeseen does not go wrong.

 

What are some ideas that you have that could improve the confusion between “corrective” verses “preventing” for CAPA?

http://www.pharmamanufacturing.com/articles/2013/1305_Proactive_Compliance.html#

Sears’ CEO Plan For Turnaround

 

6a00d83451db4269e20120a540599f970b-800wiIn February, Edward Lampert became the Chief Executive of Sears Holdings Corporation. Prior to taking this position, he was their longtime chairman and the founder of the large hedge fund, which is the largest investor in the company itself. Over the recent years, the department store, Sears, is one of the many retail stores who have been experiencing a decrease in profits. When Lampert took the position, he mentioned his plans to increase sales and customer visits. He plans included changing the company by accommodating to “hyper-connected shoppers with tablets and mobile phones.”

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The first change included giving iPads to the employees. The company is in the process of developing an app that would allow their customers to ask the employees questions directly through the text or instant messages. The second service added include allowing third parties to sell their products on their online website, otherwise known as Marketplace, which is similar to Amazon. They also reduced the shipping times for online and ship-to-store orders. Lastly, Sears created their “Shop Your Way,” program where they are able to track how their customers’ shopping patterns.

Even with these added services, Sears, unfortunately, still reported a loss of $279 million dollars in the last quarter. This caused their shares to decrease by 14%. Some of the reasons that may relate to this loss include:

  1. In 2012, Sears’s investments in upgrading the company are far less than other retail stores.
  2. Sears is “behind in terms of their technology.”
  3. Sears is unsure of what they can use their available space for.
  4. Lack of interest from consumers.

The article mentioned Warren Tracy, CEO of Almost There! Inc. and his experience with Sears’ technology. He said that it took him about five months trying to become a third party seller on their website. During this process, he faced many complications and delays. Technology is an important part of Operations Management as it impacts performance directly. More importantly, technology is needed and used in all stages of management. Poor technology will lead to poor management, which will lead to poor performance. Therefore, the company will suffer as a whole.

Overall, it seems like Sears’ plan of creating a shopping experience that accommodates hyper-connected shoppers didn’t work out like planned. Even Mr. Lampert said that the company’s results for the first fiscal quarter were unacceptable. On the brighter side, I look forward to the new app Sears is developing in hopes of making my shopping experience faster and easier.

Do you think that Sears is heading in the right direction to repair their lack of sales? What changes will you implement if you were able to decide? Have you shopped at Sears recently? If so, did you notice these changes? If not, did these changes capture your interest and convince you to shop there more often?

 

Source:

The Wall Street Journal

“At Sears, CEO’s Tech Focus Hasn’t Led to a Turnaround”

Kapner, Suzanne. Wall Street Journal (Online) [New York, N.Y] 28 May 2013

 

 

 

 

Hog-wild for Factory Farming: Hot Dogs Made in China

As the Chinese population and economy continue to grow, safer and more efficient industrialization practices are necessary to keep up with the demands of a hot dog hungry China. This is not an exaggeration as China is “the world’s largest consumer of pork.” A recent takeover of Smithfield Foods by Shuanghui Holdings Ltd., “China’s biggest meat processor,” will provide valuable insight into industry practices that are commonplace in the U.S. Current processing methods in China lack quality control as the majority of meat is produced by small farms that process less than 500 hogs per year.

From Hog to HotdogThese “conditions on smaller farms can be squalid, with a lot of physical contact between farmers and animals, which can transmit disease.” This type of environment can become a breeding ground for contamination leading to outbreaks of diseases like swine flu and foot-and-mouth disease, having major health implications on Chinese consumers. Authorities blame irresponsible farming practices and the disjointed meat processing system that is not easy to “regulate and makes it more difficult to avoid bad practices.”

In contrast, the highly sophisticated and streamlined systems of pork production in the U.S. is often viewed negatively by Americans and referred to as “factory farming.” Smithfield’s facilities have the “capacity to slaughter as many as 110,000 hogs a day,” and most U.S. farms are much larger than their Chinese counterparts, raising over 2,000 hogs annually. Ironically, these modern processing techniques are the envy of Chinese authorities who are looking to utilize the “expertise of Smithfield’s management team to enhance its pork-processing facilities.” Skeptics claim that the Shuanghi-Smithfield partnership “will exacerbate such problems as complex supply chains and food-contamination risks.”

Although the trend in U.S. agriculture is to go “back to the start” as expressed in marketing campaigns by environmentally conscious companies like Chipotle Mexican Grill, this is not the reality in China. As health out-breaks are more widespread in this Asian country and regulation lacking, efforts to “control food safety” and create more modernized processing methods are a welcomed site.

In such an industry, operational expertise will prove essential in restructuring the pork processing system in China. They will likely face challenges like determining adequate process and capacity design for farming facilities and distribution channels; forecasting to meet the demands of a growing population; Slaughter Pigs in Chinaand improving inefficient and broken supply chains. Improved product quality will likely be most prominent and follow a manufacturing-based definition as increased standards will ensure a safer finished product.

On a personal note, I am an advocate for more naturally produced food in smaller farming environments, yet I understand that the demands and current conditions in China are quite different from the U.S. All criticism aside, the majority of the U.S. population relies on the safe meat supply provided by corporations like Smithfield to ensure peace-of-mind at the dinner table. How do you think that the new deal between Shuanghi and Smithfield will impact Chinese and U.S. consumers, respectively. Will the Chinese citizens have a similar sentiment toward industrialized farming practices in future decades?

Article Source

 

 

It’s Amazing What Soup Can Do!

 

CAMPBELLCampbell’s Soup Co. is the leading maker and marketer of soup. But for two straight years, the soup business was struggling, alerting the stakeholders about the possibility of its fate to collapse. However, this past year, Campbell has featured its new skillet sauces line in hopes that it can expand out the dinner segment in 2014.  Denise Morrison, the president and chief executive officer explained that even though it is difficult to create new market segments, she is confident that Campbell’s Skillet Sauces is a “break-through” concept that has a “high potential for reward.” As a result, Campbell Soup Co. has seen the U.S soup business stabilize after the sales dramatically increased by 14%.

Campbell is currently collaborating with its customer base to create an entirely new category of “unique, convenient and versatile” dinner sauces, while experimenting with existing soups to improve taste. This would be an example of product design. Furthermore, Campbell took the process a step further and came up with an innovated product featuring soup in pouches that attract younger and more affluent consumers. Campbell’s competitive advantage over its competitors is its brand name which consumers keep coming back for more. The soup giant has built its brand name upon its Simple Meals platform featuring the popular Go Soup. In addition to the new dinner sauces, Campbell has announced it would be launching the Campbell’s Slow Cooker Sauces.

Despite its recent success, Campbell faced a problem with the product’s location placement and shelving; but the company said it has found the best way to shelve. However, Campbell continues to struggle in two categories which are U.S. beverages and North America Food service.  The self stable juice category sales have been declining due to overwhelming competition against Campbell’s V8 V-Fusion line and decreasing demand from restaurants. Ms. Morrison proposed a solution to this dilemma, by planning to apply the exact business model for its soup business to its beverage business. The plan consists of improving the taste of its existing vegetable juice while adding new products such as V8 energy drinks to attract a more diverse consumer base.

Most importantly, Campbell’s optimistic future is emphasized on management’s attention to the basics and expansion in faster-growing segments. For example, the V8 is considered a strong brand with high benefits such as promoting health, so Campbell’s management team is figuring out ways to improve its product. Campbell has invested in a new manufacturing line to increase the capacity of creating fresh soup to tackle the issue of structural changes in the food service sector. Campbell’s simple business strategy which is to keep costs low while improving its quality has proven to be successful in achieving its short term goals as well as laying a foundation for its long term goals.

If you have ever bought a Campbell product or is an avid consumer of Campbell, what made you choose their products?

Do you think that Campbell’s expansion of new products will maintain or increase its sales and revenue?

Sources:

http://www.foodbusinessnews.net/articles/news_home/Business_News/2013/05/Campbell_to_build_out_dinner_s.aspx?ID={E6E89D05-6287-40A8-9DD9-22D9C80168FF}

http://online.wsj.com/article/SB10001424127887324102604578494890895484784.html

Flying Through Quality

Boeing 787 (Google Images)

Quality is an important factor when producing goods and services. Each organization sets its own quality standards based on customers’ demands and needs. If we look at quality from the customers’ perspective we will want to have products that we can rely on when using them, otherwise if the product is defective we might want to stop using it. On the manufacturers’ perspective if the customers are unsure of quality on their products, it is their job to make the necessary adjustments to make the product attractive to the customer again.  When the situation is created by defect on fabrication it can mean big amount of money losses for the manufacturer, therefore it should work on fixing the defects as soon as these are detected in order to avoid bigger losses and not get their reputation hurt.

 

An example of a company restoring confidence in its product is Boeing and the battery problems that its passenger jet 787s has been facing since January and that it cost them to stop flying them. According to an article in the New York Times by Christopher Drew and Jad Mouawad, the Federal Aviation Administration approved in April the company’s plan to fix the batteries of 50 jets that where delivered at that time. The authors explain that the lithium-ion batteries problems were detected when two of them had overheated in two different jets. As soon as the problem was detected its engineers worked on finding the causes of the defective batteries and the best approach to fix it. Collection of data was necessary to support the changes and come up with a plan.  Luckily, the 800 orders that were already planned for the plane were not affected, the authors explain, since it promised a 20 percent fuel savings. After collecting data and analyzing it, the company decided to send several technicians around the world to fix the batteries and install the new system which includes better insulation and other features to prevent batteries incidents (Drew and Mouawad). The article goes on by explaining that even after this efforts by the company to fix the problem, Japanese airlines have asked for more assurance that the incidents will not be likely to happen again or at least detected by introducing monitoring systems for the batteries that would send information about the batteries conditions and replacement of them every certain time period. All this efforts are done in order to recover the customer’s confidence.

 
We can see in this example how a defect might represents serious consequences in the company’s reputation and generate monetary losses. This illustrates the importance of having systems that monitor the quality and processes on production and if problems are presented look for the causes and fix them as soon as possible.

 
Do you think Boeing’s approach to solve the problem was appropriate? Should the company provide monitoring systems that Japanese airlines demand or do you think is enough just by replacing the batteries and the insulation system implemented?

 

Source: http://www.nytimes.com/2013/04/20/business/faa-endorses-boeing-remedy-for-787-battery.html?_r=0&adxnnl=1&pagewanted=all&adxnnlx=1370203420-Yz8jS+nRMM8ILF6/hvaO2g

Chocolate: The Road to Luxury

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For all of you chocolate lovers out there beware: there may be a flaw in Western chocolate manufacturers’ supply chain management of cocoa. Productivity is not at the levels it needs to be to satisfy manufacturers and consumers. To better put this into perspective, Mars has found that if the levels of productivity remain the same as today, by the year 2020 there would be a shortage of 1.1 million tons of cocoa. If this occurs and current productivity levels of cocoa trended into the future, the cocoa farming business will not be headed in a promising direction.

The disconnect lies within cocoa faming itself. There is little incentive for cocoa farmers to continue in their line of work because of the competitive rubber industry. It is considered a less uncertain industry with a longer crop season by about four months. On top of this, the wage for both types of farming is roughly the same.

The other constraint of the industry is the high risk for disease outbursts. This is partly due to the inadequate access of much needed fertilizers for the cocoa crop.

Cocoa-farmers do not come anywhere near the crop’s capacity since their utilization is only around 60%. Cocoa manufactures have recognized the scarcity as a sincere problem since in many growing areas more than 40% of the cocoa crop is destroyed due to vermin and disease.  One would hope that this type of scarcity could be due to assignable variation that can be improved by subtracting bad causes.

How would you react if chocolate turned into a luxury good instead of an affordable snack due to flaws in the supply chain management?

Chocolate manufacturers are looking to provide solutions for productivity in the cocoa-farming realm. Many companies like Mondelez and Mars have invested millions in education programs in hopes to increase productivity and decrease disease-ridden crop. Mondelez has gone as far as hiring students from universities for these cocoa programs to target efforts toward younger generations. This seems to be an efficient approach, given the fact that peer motivation is a convincing form of motivation.

Another potential solution was Ivory Coast’s decision to set a price minimum for cocoa. This was an astonishing action that stresses how essential cocoa farmers are in the industry.

It is hard to believe that the issue has gone this far. In my opinion, action should have been taken much sooner. The uphill battle is much worse now that efficiency levels have sunk so far below maximum capacity.

Do you think that these efforts put forth by chocolate manufacturers will be enough to save the chocolate industry?

What else can be done to improve the supply chain management and productivity in the industry?

Have you noticed any other flaws in the cocoa/chocolate industry besides the supply chain management?

Which action will have a greater affect on the industry: a price minimum or cocoa farming education programs?

http://online.wsj.com/article/SB10001424127887324412604578513140098292744.html?KEYWORDS=operations+management+supply+chain