RIP to the Modern Gaming Console?

If I were to ask the average American teenager to name their favorite video game system, they would probably respond with one of three answers: Xbox360, Playstation 3, or Wii.  What if I were to tell you that one year from now, “Ouya” would be the the most popular video game console in the U.S.?  I’m sure I would get a lot of puzzled reactions, considering that not too many people have heard of this “console of the future” yet.

Set to be released in March 2013 for $99, the Ouya is an open-source, Android powered gaming console that works more like an iPad than an Xbox, where a user hooks up the system to a TV and downloads games online instead of going out to the nearest Target to purchase the hottest video game releases.  The Ouya is open to any video game developer, and is fully hackable, which gives users the ability to mess around with the system as much as they want, something that is not as easy to do on a current console.

It will be interesting to see how the Ouya will compete against the current giants in the video game market, and how the games will compare in quality to popular console titles such as Call of Duty, Super Mario, etc.  The one thing that will attract consumers is the $99 price tag, considering that most people don’t want to invest hundreds of dollars on a video game console, not mentioning the $60 price tags on many of the popular titles.

By this time next year, the Ouya will most likely be in the growth stage, and we will have a better understanding on what the Ouya really is, and if it really does offer a unique experience for gamers, or if it is just a forgettable console in the same category as the DreamCast or the N-Gage. Only time will tell.

Chinese Car Dealers Face Unexpected Obstacle

On June 30, 2012 at 9pm, the municipal government in Guangzhou, China declared that new vehicle registrations for the month of July would be suspended, effective at midnight. This decision was made in an effort to limit congestion and pollution problems and to keep the number of new registrations capped at half of the total number for 2011. In a panic, dealerships reopened their doors for the three remaining hours of allowable new vehicle sales. Consumers swarmed the dealerships and hundreds of vehicles for sold.

In most cases, this sudden increase in demand would be a dealership’s dream come true. Unfortunately, these registration restrictions will create massive obstacles for the dealerships. There are nearly 10 and a half million residents in Guangzhou, but effective July 1, restrictions allow for only 120,000 new registrations to be issued in the next year.

Guangzhou is not alone either. Many other major cities in China are also using quotas by way of license plate lotteries and auctions to limit road congestion and air pollution. It is expected that smaller cities will also begin following in the footsteps of their larger counterparts.

In the past year, demand for vehicles had already fallen when compared to the prior year. Dealerships in Guangzhou were already facing inventories that almost doubled in May. Now, with these new regulations, it is fair to assume that those inventories with increase even more, potentially crippling the dealerships.

Though many vehicle manufacturers are making efforts to produce environmentally friendlier vehicles, perhaps the larger problem in these cities is the physical congestion on the roads. Overwhelming populations have put record numbers of vehicles on the roads. There are nearly 2 and a half million vehicles in the city that has only 800,000 parking spaces and the average driving speed in Guangzhou is just 12 miles per hour. These staggering facts have tied the hands of municipal leaders and, in turn, had a massive impact on dealerships.

So, what do you think can be done to help lessen the burden on the dealerships? How should these dealerships try to better manage their inventories during times of stagnant sales?

Source: http://www.businessweek.com/articles/2012-07-12/chinese-cities-curb-car-sales

Got Inventory?

In class we talked about how important inventory management was for a business and even one small mistake could harm you. Well I read a article called “Apple’s secret sauce for success is inventory management” by Victor H. In this article he talks about how Apple is the master of inventory management at the time and that is why they are the leading company right now. He mentions that the person who made this possible is not Steve Jobs but Tim Cook (Current CEO). Before Steve Jobs hired Tim Cook at Apple were doing poorly in regards on inventory management. He also says that one of the most important factors in running a successful business is inventory management. In the article it also states that Tim Cook says that each week the inventory is kept it loses 1% to 2% to its value. And the article also mentions that to keep up with the demand for a product if the sales go through the roof Apple goes on a hiring spree.

Above is the Inventory Turnover rate along with how many days it takes apple to run out of all it inventory. Inventory turnover shows how many times inventory of a company could be sold and replaced over a specific period and the higher the number the better. From the chart above we can clearly see how Apple is ahead of its competitors in inventory turnover along with how many days it takes apple to sell out of its inventory. Before reading this I thought it was Steve Jobs who orchestrated everything at Apple and people were just there to back him up if something goes wrong. But I was wrong all the fame and success belong to Tim Cook as well as Steve Jobs because without one another they couldn’t have taken Apple to the heights that its at right now.

So do you think Apple could’ve been where it’s at now without great inventory management?

Seattle: The future planning of a changing city

Having grown up in Seattle and moving to Chicago three years ago, I always find every time I return home the city seems to be undergoing new developmental changes. Whether it be new road construction or building projects, in just the past three years alone I have watched the city not only tear down our beloved viaduct waterfront highway but also construct one of the newest prominent non profit institutions, the Bill and Melinda Gates Foundation, a mere three blogs away from my childhood home. With any of these projects, whether they be large or smaller scale, a huge amount of budgeting and project management goes in to making sure the proposed ideas are a success. So what project is next on Seattle’s agenda? A local Seattle Times article highlights the city’s newest proposal, a huge waterfront project to replace the deconstruction of the Alaskan Way Viaduct. http://seattletimes.nwsource.com/html/localnews/2018675074_waterfront13m.html

 

The new project would include not only new streets and pathways but also parks, a roller rink, and even a salt water swimming pool and is the biggest civic project Seattle has seen since 1962. To reiterate what has been discussed time and again, any management for projects of this time takes an immense amount of planning in everything from the beginning stages, budgeting, and execution. Even deciding between the type of scheduling or budgeting methods you use can have a huge impact on the duration and success of the project. For a project of this size, which will take years to fully execute, the city must prioritize and time each separate activity to ensure their time estimates are as accurate as possible. As demonstrated by the project triangle learned in class, performance, time, and cost must all be taken into heavy consideration because a lack of concentration in just one of these areas can be detrimental to the success of a project.

While still in relatively preliminary planning on the project, the city already has a proposed budget of $420 billion dollars with both public and private contributions as well as a project duration of 7 to 8 years. For funding alone they have already presented various fundraising activities and programs to jumpstart the public donations. Each of these activities, however, will also need to be properly planned, budgeted, and executed to earn the maximum amount of money possible for the project. While much of the planning is still in relatively new stages, the budgeting as received positive feedback from the finance committee, stating it seems attainable as well as reasonable. “We went into this worrying about the scale,” said Gerry Johnson, a Seattle attorney and co-chairman. “We’ve emerged being very confident that this is something we can accomplish.” (Seattle Times) As long as the city can keep cost and proper planning in accordance with their budgets and performance, this could prove to be the largest, most successful civil project the city has seen in a long time, and one I would appreciate coming home to. Do you agree? Does the budgeting and planning seem appropriate or are they neglecting a component that could hurt a project of this size?

Everything is better with Coke

 

 

 

The Global Fund, which is a decade old government and private partnership dedicated to financing healthcare issues in impoverished areas, has recently revamped it’s supply chain and distribution processes to more closely model those of Coca-Cola.  In thinking about what aspect of discussing supply chain management might be most interesting, I came across a video made by The Global Fund.  http://www.theglobalfund.org/en/blog/29348/   The video explains an interesting solution to a common problem, the final leg of the distribution process.  Global Fund workers in Tanzania needed to find a way to distribute malaria medication to locals, but were having a great deal of difficultly.  It was then that they noticed something… There are Coca-Cola bottles everywhere.  Why can’t we distribute medication, but somehow these people have such immediate access to Coke?  It was then that The Global Fund reached out to Coca-Cola and asked for guidance to improve their supply chain and distribution management.

Coca-Cola then proceeded to improve The Global Fund’s supply chain processes through analyzing, identifying issues, maximizing effectiveness of current processes, and implementing new ones.  I think I enjoyed this article to the extent I did because of the sheer simplicity in The Global Fund’s approach to problem solving.  When thinking about a company like Coca-Cola, I think there is much to be learned.  They have not only existed, but been successful for over 100 years!  That kind of longevity is something you just don’t see much of anymore, but especially when the product remains (relatively) unchanged.  Of course Coca-Cola has introduced new products, advertising designs, and marketing campaigns, but with the exception of removing cocaine, the original formula has remain relatively intact since its inception.  I suppose we could expect a company that has been around as long as Coke to continually improve its supply chain, but I think it’s great that they share this time tested process with other entities for the betterment of others, in this case, people living in remote areas of Africa in need of malaria medication.

What are other examples of improving a supply chain management process having a direct and positive impact on you or someone else’s life?

Source:  “Home – The Global Fund to Fight AIDS, Tuberculosis and Malaria.” The Global Fund to Fight AIDS, Tuberculosis and Malaria. N.p., n.d. Web. 14 July 2012. http://www.theglobalfund.org/en/.

The Restaurant that goes above and beyond

With my major in hospitality I wanted to talk about an innovator who I see does well in service development and the one innovator that came into mind when talking about designs of goods and services is Charlie Trotters.  In my hospitality course, we were to read “Lessons in Service from Charlie Trotter” and the book talked about the operation process of the restaurant with the employees as well as the customers.  It really showed emphasis on how concentrating the detail and aspects of both the employees and guests is what gives off the success of service in the long run.

With his employees, he wants his customers to get the service that his servers would want to receive so he encourages his staff to go dine at different restaurants and do research on what was good and what wasn’t.  That way they can implement it on their dining service.  Also there are many different positions in Charlie Trotters and in order for his staff to be the best he gives his employees opportunities (under his expense) by traveling to various states or countries to take a workshop or expo so they can increase their expertise.

This restaurant is the typical restaurant where you may or may not be greeted at the door, you sit, server comes to your table, you order, somebody who isn’t your server delivers your food, you eat, ask for the check, and then leave.  This restaurant isn’t cheap either but it all depends what your definition of expen$ive because even though this course meal may cost your wallet to be empty the service you get out of it could be once in a lifetime and be worth the experience.  Now I can’t list off what every single detail that they do that makes this service an experience but I will share some examples from the book that customers have experienced with Charlie Trotters servers going the extra mile.

What I want to first mention is the customization of the menu.  People go there mainly for the service and if you don’t see anything you like on the menu the Chiefs will make something to your liking, even if they don’t have the ingredients.  They will go to the local shops and do what they can to make you happy.  There is also HONESTY.  With every guest he will go the extra mile but he admits that if he just sees that his service won’t be compatible with his guest he will suggest other restaurants that will suit his guest rather than forcing a service in order to gain profit.

One service example is the blizzard that ran through Chicago on January 2nd, 1999.  The restaurant wasn’t as packed but loyal guests had showed up to their reservations anyway taking cabs and the transit.  After their dinner, the staff contacted numerous of cabs and limos that would take their guests back to their home and they had no luck.  Instead, Charlie didn’t want his guests waiting any longer so he offered himself and as well as the staff to be your personal driver of the night.

A guest wanted to propose to his girlfriend that night at the restaurant and he wanted to use a poem.  He explained to the reservationist over the phone how he didn’t know what to do and he needed help and with the help of the reservationist they both worked out a poem over the phone where he was able to read that night.

Parking is hard to find in the area and a guest had their car towed.  This guest traveled from another state in order to dine at Trotters.  As the guest complained about the car being towed to the receptionist, Sandoval, he offered to take the guest to the towing company.  Sandoval didn’t just drop him off but he stayed with the guest throughout the night waiting at the pound until the guest retrieved his car.

There are other small examples from the staff trying to beat you to the bathroom so they can open the door for you to handing you their tie that they are wearing because you mentioned how much you liked it to Charlie offering to make you lunch even though the restaurant is only open at dinner time.

Were there any restaurants that you been to that you saw as an innovator to a service that they didn’t have to perform but did anyway?  Or had unique strategies on how to treat their operations and employees?

RESOURCE:  LAWLER, EDUMUND. “LESSONS IN SERVICE FROM CHARLIE TROTTER.”

Forecast: Apple up, Android down

Forecasting is a very important process for any business. It is the process of predicting future events for the company. Forecasting is the underlying basis for all business decisions. Information gathered from it will not only help a company decide what is best for production and inventory, but also personnel and facilities. The use of it can significantly help a company in the long run.

 

I read an article recently that discussed the IDC’s forecast prediction for the tablet in 2012. As we all know, the popularity of tablets is quickly expanding. Due to this, there are many versions of the tablet, coming from companies such as Apple, Android and BlackBerry. It will be virtually impossible, however, for every company to succeed in the production of tablets. IDC has the BlackBerry tablet virtually nonexistent in the market. Their share in the tablet market was already significantly small in 2011, and it is only predicted to decline for 2012.

 

The two main competitors in the tablet market are Apple and Android.  While many people may believe that both companies will see growth in the market, IDC does not predict this to happen. IDC expects Apple to maintain growth, moving from 58.2 percent in 2011 to 62.5 in 2012, however they do not see the same for Android. Apple’s growth in the tablet market will come at Android’s expense. They are expected to fall from 38.7 down to 36.5 percent.

 

IDC’s forecast for Apple is no surprise, especially due to their popularity. Apple is known for its innovation, and is a trusted name in the technology field. Android seems to be having some trouble competing. What do you think Android should do in order to gain back share in the tablet market?

Resources:

http://news.cnet.com/8301-1001_3-57453525-92/idc-forecast-ipad-up-android-down-blackberry-irrelevant/

Nike’s Holly Grail

As we have learned in class, there are many aspects that affect the making of a product. Companies are always working on improving their products, while at the same time trying to reduce their production costs. Nike is one out of many companies that is trying to achieve both with their newest invention, a shoe called the “Flyknit”.

For a long time now Nike has been working on achieving the request to “make shoes as comfortable as socks”. While they have been unsuccessful in the past, their new discovery is considered by Nike “the Holy Grail —a 5.6-ounce running shoe called the Flyknit, made from synthetic yarn ingeniously woven together by a knitting machine”.  While the new product could possible be their biggest seller, the executives of Nike are more exited about the manufacturing of the product.  The new computer controlled weaving technology “promises to cut labor costs and production time while also increasing profit margins and opportunities for personalization”.  The new process eliminates the part that is most labor intensive, and knits the upper part of the shoe in one piece. It also provides some customization options that can alter a shoe’s stability and aesthetics.  Due to the new and improved process, the “Flyknit” has fewer pieces to assemble and also fits in with Nike’s sustainability push, because it uses a lot less waste in comparison to the popular Air Pegasus+ 28.  It is so efficient that eventually these shoes could be made all around the world and maybe even bring back some of the work to US. At this point, 96 percent of Nike’s shoes are being made outside the US in countries that have lower labor costs. I think now, since Nike has figured out a new and more efficient way of making shoes, they should work on where to manufacture. While the company is saving money on the production by outsourcing, at the same time they are facing time issues of getting the product out in the market. If they would be able to reduce the amount of time that it takes for a product to get to the store, they would be more successful at filling their demand faster.

http://www.businessweek.com/articles/2012-03-15/is-nikes-flyknit-the-swoosh-of-the-future#p2

 

What do you think about Nike’s new and improved manufacturing process?

What are some other ways that the new technology could be beneficial?

PEPSI: WHERE IS MY SUPPLY?

300_25_-_TP_-_17_-_The_Pepsi_Truck_-_JPEGts2_-_UPLOAD.jpgThis summer I have the privilege for working for Levy Restaurants in Chicago at their Oak Street Beach location right  in the heart of Downtown. During my journey I have had the opportunity to view many of the topics discussed in my operations management class. One of my first experiences was running out of condiments which prompted me to think about forecasting and better ways to stay on top of the types of demand we were experiencing on a weekly basis and how in the future we could be better prepared to accommodate our guest.

At my restaurant we have worked out most of the small kinks being that we are open only for five months during the summer the process is a sort bump your head and don’t let it happen again. But of course those are all things within our control. It wasn’t until last week that I experienced a huge operations management problem that we just simply had no control over.

It was tuesday of last week when I stocked the coolers with all the different beverages that we offer so that we would have backup beverages ready for when our front of house inventory had been depleted as the week went along. after completely stocking the cooler. I went to my manager  and informed him that i had put the last of most of the beverages we had in back stock into the coolers and that we were sure to need some more.

He kind of smirked. I believe  he was happy that I had noticed that we were short but informed me that he was on top of it and that Pepsi was scheduled to make a huge delivery on friday. I had the next few days off and when I returned on saturday there were still no beverages. I was approached by my manager who let me know that we needed to be sparing with the amounts of water we were taking out of the coolers because what was there was all we had and we needed to effectively distribute the product between the three stations that we operate as needed.

Having analyzed the buying patterns of our customers I knew that our bottled water was one of our cash cows  with about every seven out of ten people purchasing at least one bottle. While we quickly came up with solutions on how to accommodate our guest because we’re just that good, I had to know just exactly where our supply was. I asked my manager about the situation and he informed me that he had spoke with Pepsi and they said the supply would be deliverd on Friday. He had called saturday morning and was assured that it would be delivered by the end of the day. Of course once again the truck never showed and I’m just wondering.

PEPSI: WHERE, is my supply?

What do you think should be some penalties for suppliers who do not deliver on time?

What could be some backlash for a company that has not received its product due to a slow supply chain?

What are some things that a company could do to alleviate this type of issue?

 

Supply Chain Management …..the Netflix way

As a loyal customer of Netflix since 2008, or whenever it became available to stream on Xbox, I have been completely satisfied with my subscription…..until…..the whole Qwikster fiasco.

As was probably the case with almost every subscriber at the time of the price and company changes, I was extremely upset.  I was very happen with the product I was getting and I was extremely happy with the price I was paying for it.  One factor i never noticed until taking Operations Management was how it directly influenced Netflix’s business decisions.

Please check out this article by CNET, http://news.cnet.com/8301-1023_3-57468798-93/netflixs-lost-year-the-inside-story-of-the-price-hike-train-wreck/?tag=mncol;morePosts

…I know it is kind of lengthy, but it really gives the inside look into why Netflix’s CEO did what he did.(regardless of if he was wrong or right)

Netflix success was founded on there efficient structure of Supply Chain Management.  They became the best at delivering movies straight to the customer.  Netflix, with the help from the internet, can claim that they killed the retail movie rental business(anyone remember Blockbuster).  But with success comes ego!  The very strength of Netflix was also going to be its demise for the future.  The CEO Reed Hastings recognized this and wanted to make steps to prepare Netflix to change with the future.

The article does a great job of hammering home the fact that Reed Hastings failure was how and when  he chose to implement his plan for the future.  The greatest threat to Netflix’s strength, its Supply Chain Management, is that Netflix has no real Supply.  Netflix’s product is produced by other companies.  These other companies are starting to steal Netflix’s online model and cut Netflix out or raise its prices.  This reason drove the CEO to want to be the first in providing all online streaming content, because if your first then your the best, right?

When you read every decision, or mistake, Netflix made with a focus on Operations Management, you can sympathize with the CEO’s decision to rush Netflix’s changes.  Reed Hastings wanted to eliminate the biggest cost to Netflix’s Supply Chain, the DVDs, and along the way incidentally got rid of most of their own Management talent.

Do you agree or disagree with CEO Reed Hastings vision for Netflix?

and Is it too late for Netflix?…..are they the new Blockbuster?

     =     

References:

http://news.cnet.com/8301-1023_3-57468798-93/netflixs-lost-year-the-inside-story-of-the-price-hike-train-wreck/?tag=mncol;morePosts

http://matthewmolinari.wordpress.com/2012/02/29/netflix-loses-a-star-supplier/