Crowd Funding…imperative to global change.

Crowd Funding is a fairly new way to raise money from a group of people towards a campaign one is working on. Introduced by the organization Kiva via the micro funding platform to aspiring third world country entrepreneurs and causes. Crowd Funding is really changing the way people view getting investment for their venture. An investment option for entrepreneurs wanting to really grow their business organically via sites like indie gogo and kickstarter. A whole eco system has been created around  crowd funding eco system. Peoples dreams actually can come to fruition, the more creative or social you get the better your chance to rile up a crowd to invest in you. The crowd funding is changing and the article I chose, highlights this ever growing phenomena. Coupled with a good  team and strategy this could really accelerate an idea or companies growth. The numbers in 2012 for crowd funding amounted in nearly 2.7 billion dollars. Major banks in 2013 including the World Band look towards crowd funding to stimulant economic development further into needing environments. This type of fund raising will change how the every day person gives back, as it develops and more innovative techniques within the field develop, we will see a radical change in balancing the negatives in areas that need economic stimulus.

It is a really exciting time to be an entrepreneur and 2013 has much in store. I believe if you want a job you can find one or make one. I believe many college students who are unemployed will have no other choice but to follow a passion and build something from it they can monetize and hopefully flourish from. A first hand experience, I encountered was a new client of ours the 1facewatch.com who put together a viral crowd funding campaign basically pre selling their product allowing them to reach a 1 million dollar revenue mark in their first month of the company. Without crowdfunding this social campaign really could not have happened as organically as it did. It is awesome to have them as a client of mine and I hope to learn from them moving forward with my career. Check them out, they are changing peoples lives.

http://venturebeat.com/2013/05/22/5-ways-the-booming-crowdsourcing-ecosystem-is-changing-in-2013/

“Lets Cap Up!” -Ford

Ford has increased their production capacity for the second year in a row in order to meet their production demand for their cars, trucks, and utilities. The Chicago assembly plant, one of the many plants included in the plan, will play a critical factor in the company’s production capacity who seeks to increase total production by 200,000 units. It seems like the company will for now only focus on their more popular automobiles which include the Ford Explorer, Ford Fusion, and the Ford F-Series. Ford plans on increasing the production capacity by only allowing one-week summer shutdowns which in turn will produce 40,000 new units. Currently Ford’s stock is listed at $14.49 per share, while General Motors is trading at $32.87.

General Motors is also planning on increasing their production capacity, however they are focusing on introducing 23 new cars and trucks to their automobile portfolio. Ford states that the company is planning to add 1,300 hourly jobs this year alone and it is planning to offer 12,000 hourly jobs by 2015. Ford’s revenues increased 10.5% to $35.8 billion.

The automobile industry has been considered America’s backbone for many years and we have heard of the struggles it went through especially during the recent recession with needed government aid. I understand that the industry as a whole is looking to increase capacity however Ford has not mentioned any new automobiles to be added as part of the plan. We have all heard of the phrase, “just because everyone’s jumping off a bridge does not mean you have to.” I believe that this is a risky move for Ford with what they plan on doing with their production right now and we all know the costs that run along with production and storage.

The company states that in plans to increase hourly jobs. However, adding these hourly jobs does not completely mean that hourly workers would be able to work full-time hours. The company has yet to declare whether or not these workers will be working full-time and the type of benefits they would receive. I believe Ford is eager to increase their production due to what other companies are doing and because of their recent growth. However, in the automobile industry, bad forecasting can be very costly for many reasons. For example, if revenue drops for the next year or two, then the company is stuck with a large number of vehicles in their storage centers. No company wants to report new hiring and then go downhill with reported job cuts and firings after.

In Ford’s case, is it too soon to increase this production capacity and plan on new hires? Does one good fiscal year call for changes in operational management for next year? And quite frankly, can Ford compete with the innovation that General Motors is adding to their portfolio?

 

Source: http://finance.yahoo.com/news/ford-enhances-production-capacity-141502358.html

How The Light Bulb Got Its Groove Back


incandescent_light_bulb
LED_Bulbcfl_light_bulb

In the 19th century, the only type of bulb available was the incandescent light bulb. This bulb was “the biggest thing since sliced bread” and incredibly effective at its job. Unfortunately for the light bulb, the business world seems to continuously search for improvements or replacements of the once great predecessor. Today, the incandescent light bulb seems like an antique compared to the variety of light bulbs available. Consumers can choose now choose from incandescent, fluorescent, halogen, HID (high-intensity discharge), and LED (light emitting diodes) light bulbs. Each light bulb usually provides a longer life and brighter light than their respective predecessors. Consumers also now have the option to choose from a variety of light types (i.e. warm, cool, natural) and whether they dim or not. At a certain point, a consumer can be quickly flooded with and drown in the massive amount of information and options of light bulbs.

At this point, someone may be thinking to themselves “why should I care about light bulbs?” I’ll admit that when considering a single light bulb the selection of said bulb would not save someone or a company millions of dollars, but an impact will be evident. The average person, especially not a company, does not utilize a single light bulb. Let’s consider an average home to use for as example: three bedrooms, two bathrooms, one kitchen, one dining room, etc. Each room requires at least one lighting fixture, and each fixture uses three light bulbs (if we stay on the conservative side). All these rooms and fixtures amount to a possible minimum of 30 light bulbs.

LED

Compact Florescent

Incandescent

Price per bulb

$ 35.95

$ 3.95

$ 1.25

Life Span

50,000 Hours

8,000 Hours

1,200 Hours

Kilowatts per year

329

767

3,285

Annual Oper. Cost

$ 32.85

$ 76.65

$ 328.59

Now imagine the impact this has over the possible minimum of bulbs established earlier. Although a single light bulb, or even light bulbs in general, might not seem to have a large impact on finances, this myth is quickly proven false. Buildings owners, whether residential or commercial, must take into consideration the price of and the operating costs of light bulbs into their expenses. This affects large buildings even more because of the massive amount of light bulbs in use at any given times. The light bulb is no longer solely symbolic of an idea and can now come to represent money, or $$$.

How could something so small and seemingly insignificant come to have such a large impact on the financial aspect of households and businesses? Should the government require homes and businesses to replace current light bulbs with more efficient ones? Would the requirement even be worth the hassle?

 

http://business.time.com/2013/05/09/long-live-the-lightbulb/

http://www.energystar.gov/index.cfm?c=lighting.pr_lighting_landing

http://www.megavolt.co.il/Tips_and_info/types_of_bulbs.html

Mass Customization: Tailoring To The Individual

NIke, Dell, and Swatch

The system of mass customization benefited manufacturers by offering services and achieving greater customer satisfaction and brand loyalty. In addition, customization brought greater advance information on market trends and reduces inventory. Usually, many companies cannot handle the mass customization system because of the way how their supply chains are designed and optimized for producing predetermined amounts of stock.  Because of this, some manufacturers believe that the profit margins are too low for those who adopt the mass customization system, and thus the system is not economically feasible since it depends on the type of the product.

To increase sales, most manufacturers integrate the most common appealing features into their products to move units.  Conversely, the ideology of mass customization is that every aspect of a product will be tailored to a customer specifically.  For example, Swatch, the world’s largest watchmaker company, produces standardized internal mechanism components en masse, but also offers a wide variety options such as colors, straps, faces, and so on. The idea of a personally tailored product has been adopted by prominent vehicle manufacturers, computer manufacturers, and many more.

Dell, as another example, has demonstrated the idea of mass customization and utilizes it to allow their customers a very personal PC experience. Dell allows customers to assemble their own desktops and laptops online by customizing components such as, hard disk, graphics cards, processor, memory (RAM), and other options before assembly and delivery.  Amazingly, Dell manages to offer a fair amount of variety with their components, but achieves the lowest cost of production in the entire industry, leveraging the benefits of e-commerce and mass customization in selling directly to customers.

Both Swatch and Dell offer personalized experiences, but these two manufactures do not offer an unlimited number of choices.  Instead, companies learn what sort of spectrum that customers would be comfortable purchasing in and adjust the limits accordingly so that customers will end up happy with both their product and service.

Nike, as the most popular sports equipment manufacturer in the world, pioneered many ideas in the industry of mass customization. In spite of this large number of products tailored to golf, basketball, tennis, and soccer enthusiasts, operations managers at Nike have improved product quality while reducing overall costs. Nike allows customers to customize many of their products. For instance, customers can print their own names and numbers on shoes as well as customize their shoe strings to different color. Consequently, these practices boosted sales of Nike products to phenomenal levels, smartly marrying the links between sales, production, design, supply chain, and logistics.

The greatest downfall of mass customization is wait time.  Considering that each product must be tailored to a specific customer, often being done by hand, it will take longer to be in a purchaser’s possession.  That is where uniformly mass produced products are advantageous, as they do not have to meet a specific criteria.  In addition, most custom products cannot be returned to a manufacturer, since the item was created specifically for an individual and the likelihood that that product would meet another person’s needs exactly is slim.

 

Should more businesses adopt the idea of tailoring a product to an individual’s needs?

 

 

 

 Sources:

“Combining Elements of Mass Production with Those of Bespoke Tailoring.” The Economist. The Economist Newspaper, 22 Oct. 2009. Web. 23 May 2013.
http://www.economist.com/node/14299807

Mello, Adrian. “Mass Customization Won’t Come Easy.” ZDNet. N.p., 19 Dec. 2001. Web. 23 May 2013.
http://www.zdnet.com/news/mass-customization-wont-come-easy/296569

“NIKE ID – The First Example of Mass Customization Driving Profit? | Crossroad Innovation.” Crossroad Innovation NIKE ID The First Example of Mass Customization Driving Revenue Comments. N.p., 10 Sept. 2010. Web. 23 May 2013.
http://www.crossroadinnovation.com/nike-id

“NIKEiD.” Mass Customization. N.p., n.d. Web. 23 May 2013.
http://www.mass-customization.com/custom-shoes/nikeid/

 

 

 

 

 

 

 

 

Wal-Mart Just Can’t Keep Products on the Shelves (In a Bad Way)

Wal-Mart Just Can’t Keep Products on the Shelves (In a Bad Way)

Wal-Mart has seemingly had a considerable amount of trouble keeping shelves in its stores adequately stocked since reducing the number of employees on staff at once in stores.  This is odd for a retail location since when products are not on shelves, there is not a large chance of them being purchased.  Especially disconcerting is that Wal-Mart has become the largest retailer in the world on the back of a supposed mastery of its supply chain.

Wal-Mart is now taking measures to ensure that the issue with product stocking is corrected.  The latest effort employed to do so is an external auditing process which entails a detailed process of checking each and every Wal-Mart location to make sure that products (when in stock) are on the shelves for consumption.

Wal-Mart refers to whether or not stores are adequately stocked via a metric known as on-shelf availability or OSA.  Due to the recent issues and the need to involve an external company to help stores ensure that they are stocked properly, shareholders are expected to vote at the next meeting as to whether or not Wal-Mart managers and executives should have their performance reviews and potential compensation tied to OSA.

When visiting a Wal-Mart location, check for neon green stickers next to the price tags on certain products; those are the ones that the auditors are going to be looking for.  Originally, the idea was to have the auditors go into the Wal-Mart stores and check on certain pre-determined items (unknown the store employees) and assign a grade based on how stocked those products were.  However, before the actual auditing process ended up taking place, it was determined that it would be beneficial to the employees at the stores to know the products that were being checked because those would most likely be highly driven items for the time of the year.  This entailed a rather tedious process for store managers as they had to allocate employees to the task of sticking green stickers next to products that needed to be stocked instead of actually just stocking them.

While the idea is good in theory, the actual outcome has been less than stellar since a good portion of the stores now have incredibly well-stocked green dot items with very poorly stocked products immediately next to them.  This should have been expected since the employees could focus purely on the products they would be evaluated on.

This situation is a very direct link to supply chain concept discussed in class.  In this case, the retail stores a sort of bottleneck.  After the products are produced and shipped to retail locations, they are not being put out fast enough to get to the customers.  Managers need to focus on properly allocating their limited employee resources to getting the task completed.

Do you think that this process will work?  How else could Wal-Mart improve its product stocking?

 

Product or Patient? How Lean Manufacturing is Saving Lives

When someone suffers a stroke they must receive anti-clotting medication in several hours to prevent them from dying. At Southwest Medical Center in Oklahoma City, just a few years ago it would take on average 71 minutes for ER patients to receive the drug. Now, their average is 53 minutes, a decrease in 25%. In order to make this change the hospital learned from Toyota’s lean manufacturing.

A team of nurses and doctors looked at the process flow of a patient and identified several key points that wasted time. Just like Toyota’s lean manufacturing, their goal was to get rid of any waste. For example, they leave the patient on an ambulance gurney through the entire process instead of transferring the patient to a bed, which was the traditional process.

Improving this process may not save more lives but it does enhance the treatment of the patients. Treating a stroke patient about 20 minutes earlier “can save an average of 38 million neurons, depending on the type of stroke. That could mean the difference between walking out of the hospital to live a normal life or living the rest of one’s life in a nursing home with constant care.”

Source: http://asq.org/qualitynews/qnt/execute/displaySetup?newsID=16039

Retail to E-tail

There are a lot of pros and cons to doing online shopping as opposed to in-store shopping. Online shopping seems like it only affects consumers by giving them a different medium to make their purchases but we fail to realize that it affects the sellers as well. Through online purchases, businesses gather a lot of data about consumers. Sellers can track which sections of items are the most popular, which products are the most viewed and for how long, and which products are most browsed at but not bought. This gives online sellers a competitive advantage over in-store sellers as they know more about their customers. And everyone knows that the understanding your customer is one of the most important factors in having a successful business. This is empowering in-store sellers to seek e-commerce level data.

The article talks about one company that brings customer tracking data to in-store businesses. This is in hopes of slowly bridging the competitive gap between in-store purchases and online purchases. How can they possibly get consumer data without changing the in-store purchase process? By simply observing the customers! Prism Skylabs specializes in in-store surveillance equipment that tracks customer movement. Prism installs special cameras that captures everything in the store and then is sent to the store’s computers where it is processed by Prism’s special software. The images of the actual shoppers are cut out to respect their privacy.

What is so different about Prism’s techniques than regular surveillance cameras? Prism’s software allows them to “look at which products are hot, which are being moved around and touched, and all kinds of data that allow merchandise teams to understand what is going on across a wide range of stores”. This allows the sellers to get information that the type of information that online sellers use to enhance their systems to get more purchases.

Who is using Prism? Right now, Prism has partnered up with 30 retailers. Retailers that Prism is working with include T-Mobile and Famous Footwear. Does it actually work?  A candy store in Oklahoma City was using Prism in their stores and after close observation they changed their premium display to low-selling seasonal candy rather than their famous candies that buyers usually take the time to look through the store to buy. This allowed the store to quantify the customer’s thoughts and make an effective decision in their operations.

Moreover, Prism is not the only data providing company that is emerging. Other companies are picking up on the importance and building unique strategies and techniques to sell to businesses. For example, Shopkick is an app which personalizes deals for a customer in real time as they walk through the store.

Is it worth it to sellers to invest in these data gathering companies?

How do you feel as a consumer towards this type of innovation? Do you feel that you will be making more beneficial purchases or do you feel manipulated by the sellers to buy their preferred products?

Link:http://www.businessweek.com/articles/2013-04-25/to-catch-up-with-e-tail-tools-to-track-shoppers-in-the-store

Need a New Heart? Let Me Print One for You

It is amazing to live in a generation where technology is advancing because we get to witness life-changing events right before our eyes. Recently, there has been a substantial amount of conversation about three-dimensional printing and how it will change the future because we will be able to print objects instead of psychically manufacturing them. Lately, scientists have been experimenting on printing out anything they could think of, ranging from things such as adjustable wrenches to human organs. Yes that ‘s right, a human organ. You are probably wondering how that is possible. Well you are not alone because when I first heard about 3D printing, I thought to myself, “How in the world is that possible? I can’t even imagine that.”  Then I heard about how 3-D printing had saved a baby’s life and I thought to myself, “Okay, now this is a joke.” Well, it’s not.

3D Printed Wrench

At six weeks old, a baby boy named Kaiba had stopped breathing because of a rare obstruction in his lungs called bronchial malacia; this is a condition where the cartilage in the walls of the bronchial tubes are weakened. After being revived and taken home, Kaiba’s breathing had failed on him day after day causing his parents to constantly perform CPR on him. With the hopes of Kiaba’s survival diminishing, doctors didn’t know what else to do except perform a medical experimental technique equivalent of a “Hail Mary” pass, 3-D Printing.

3d-printed-gears

I can see 3-D printing becoming a process strategy within the mere future because it will be a production process that meets customer requirements and product specifications within a certain cost. In Kaiba’s case, it already has saved his life. Doctor’s had taken an x-ray of his lungs and transferred the picture to a 3-D printer to successfully duplicate a splint measuring “a few centimeters by eight millimeters.” Specifically, this would be considered a process focus strategy because creating one customized, artificial support to be surgically attached into a human requires the ability to be able to produce in low volume. Because of the low volume, doctors can then focus on producing a high variety of customized products for their customers.

 

Having a high degree of product flexibility and a team of experts to meet your specifications and produce your product sounds like an excellent strategy for any ordinary individual; however, one thing some people might not realize are the costs associated with it all. Creating an object that saved Kiaba’s life is a phenomenal occurrence; however, the bill following the surgery is probably not.

 

Do you think 3-D printing will one day become a Repetitive Focus strategy, or maybe even Product Focus Strategy?

Is this a product that meets and exceeds customer requirements, costs and managerial goals?

What do you think are the long term effects 3D printing has on efficiency, production flexibility and quality?

 

http://www.cnn.com/2013/05/22/health/baby-surgery/index.html?npt=NP1

WHOLE Fresh Foods?

 

 

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Entrance of Whole Foods Market

 

 

 

 

There are companies who do it better than others, and those who do it better, eventually gain more customers, and a larger portion of that market. I am talking about priming consumers how to subconsciously shop by precise marketing tactics that show symbolism of freshness and purity.

For instance, Whole Foods Market strategically places fresh flowers at the entrance of their stores to create an illusion of fresh, different and what it means to have high quality not only in their products, but as well as in their environment.  A study indicated that flowers are associated with implications of fresh, therefore, gives the consumer walking in an unconscious suggestion that the store is bursting with freshness. They have dominated this type of consumer priming that positioned them to be leaders in the market, “priding themselves on selling the highest quality, freshest, and most environmentally sound produce.”

Another occurrence is the abundance of ice everywhere and sprinkled drops of water on produce being another symbolic unconscious suggestion of freshness and purity again. There is no actual need for the ice and constant water drops, as it tends to make the produce rot more quickly. However, the point is the perception and illusion of the products being fresh and of high quality and that association is continued subconsciously, with the consumer as they shop. Approaches alike are being implemented as retailers use these mechanisms of luring and encouraging customers to spend more than they need to and more than they intended to.

The point is that by focusing on how to hook and gain customers, is quality compromised at all? Definitely not, as one of the main differences between Whole Foods Market and other retail supermarkets is that they can actually back it up with all the products they offer and high level of customer service they provide.  They have quality standards and are extremely devoted to serving the consumer as the medium in making informed choices when it comes to discovering the best of the best. From seafood, meat and animal welfare to unacceptable ingredients in food they do not carry*. Their core business is to sell the highest quality foods they can possibly find at the most competitive prices. In addition, they evaluate quality in relation to nutrition, freshness, appearance, and taste, and their search for quality is a continual process involving the vigilant decision of buyers throughout the company.

So why do customers keep coming back even if they know they are being primed? They like the experience of going in there, as it is aesthetically pleasing to consumers’ senses and their subconscious. Besides, who doesn’t want better, quality products that aim at always being environmentally sound, and that are good for your mind, body and soul? Everyone’s a winner in this occasion.

3907951643_4313cc6c22_z
Caulk boards gives illusion and implication of being fresh daily

images

Sources:

http://www.fastcompany.com/1779611/how-whole-foods-primes-you-shop

http://www.wholefoodsmarket.com/about-our-products/quality-standards/unacceptable-ingredients-food

 

*disclaimer  from WHOLE FOODS reserving the right to change this list at any time. Please note that creating a product with no unacceptable ingredients does not guarantee that Whole Foods Market will sell it. This list is intended for illustrative purposes only. If you are interested in selling your product to Whole Foods Market, please contact a WFM buyer.

 

Airline Industry Summer Strategy: Have lessons been learned?

“As an airline, if you’re not excited about summer, you’re in the wrong business,” said Mike Van de Ven, Southwest’s chief operating officer. In other words, if you cannot handle the heat get out of the kitchen. This summer, airport crowds are expected to be the largest in the U.S. since 2008. In 2012, all airline flights including regional had an average 76.1% on-time flight arrivals (flight stats analytics WSJ). That will not “fly” this summer.

image_security_linesWhat method of forcasting informed Airlines that airport crowds are expected to be higher than recent years?

United had a terrible summer last year—only 67.9% of flights arrived on-time in summer months. Customer complaints soared. The airline blamed computer system problems related to its merger with Continental Airlines and an attempt to schedule planes and crews more tightly. The plan backfired because it created longer delays and widespread disruption when tighter schedules couldn’t be met. The use of Gantt charts to schedule turnover time is a simple strategy Airlines use. They are constantly coming up with new ways of speeding up this complex process. Southwest does not have to purchase many Airlines because of how fast they can turnover planes. They plan to use spare airplanes this summer to accommodate stuck travelers more quickly. Southwest plans to routinely keep operating late into the night rather than cancel flights on stormy days. This is a contributor to why Southwest is a leader in customer satisfaction.

What is a disadvantage to scheduling each project to tight with each other?

United says they are better prepared for summer because it has more staff and better scheduling. In addition, the airline has rolled out new graphics screens for its computer system to make it easier and faster for airport agents to use. United also is introducing new boarding lanes at gate areas. Five different boarding groups will line up in different areas, similar to how Southwest lines up customers by groups, so that each group will have a designated place to wait. A brilliant new seating system is set to take off. The coach cabin will board window-seat passengers first, then middle seats, and aisle seats last. With the “Wilma” system, as United calls it, seats fill faster because people already seated don’t have to get up as much to let a row mate in.  Now there are more reasons than one to get an window seat.

The industry as a whole have made changes that fliers should be aware of before making travel plans. Budget cuts in Transportation Security Administration overtime will likely lead to longer security-screening lines. Make sure travel plans are set in stone because domestic ticket fees change  to $200 from $150, and international change fees went to $300 from $250. United Airlines, Delta, American, and US Airways collected a total of $2.3 billion in reservation cancellation and change fees last year, according to the Department of Transportation.

Will higher change and cancellation fees persuade fliers to book with other airlines?

What may be the reasons Airlines raise these fees? http://online.wsj.com/article/SB10001424127887324659404578499162528986162.html?mod=WSJ_hpp_LEFTTopStories