Lecture 13: Redesign Supply Chain Processes

Lecture 13: Redesign Supply Chain Processes

Source/Reference:

http://en.wikipedia.org/wiki/Johnson_%26_Johnson

http://www.supplychainshaman.com/supply-chain-2/supply-chain-excellence/it-will-take-more-than-a-band-aid/
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Response:

In this lecture, we learnt about the Supply Chain Challenges, Partner Interface Processes (PIPs) and the steps of redesigning the supply chain processes.

Supply Chain Challenges

There are three supply chain challenges:

1.      Plug-and-play e-process misalignments

The e-Process which two computer applications talk to each other through Internet misaligns between two enterprises. This may cause by different interface for each process. Also, it may become difficult in communication. It is slow to add new products or services.

2.      Information coordination misalignments

It is mainly caused by non-automated and non-standard interfaces, or lack of standardized electronic interfaces.

Information flows are not easily integrated and are not synchronized lead to delay of supply chain process.

3. Knowledge sharing misalignments

Knowledge sharing among enterprises in a supply chain:

l   Sharing of market knowledge and trends

l   Sharing knowledge for joint market programs

l   Sharing expertise around product and service design

To prevent knowledge sharing misalignments, we should prevent the intelligent management of knowledge around supply chain processes.

Partner Interface Process (PIP)

A Partner Interface Process (PIP) defines business processes between trading partners. PIPs fit into seven clusters, or groups of core business processes, that represent the backbone of the trading network. Each cluster is broken down into segments which are cross-enterprise processes involving more than one type of trading partner. Within each segment are individual PIPs. 

Example: RosettaNet

Cluster 1: Partner Product and Service Review 
Allows information collection, maintenance and distribution for the development of trading-partner profiles and product-information subscriptions.
Segment 1A: Partner Review. Provides the ability to share information, such as locations and contacts, and send and receive acknowledgement of receipt
Segment 1B: Product and Service Review. Enables suppliers to manage product information available to partners using a subscription process as well as establish and maintain lists of products that given partners are authorized to sell and lists of partners that sell given products 

Cluster 2: Product Information 
Enables distribution and periodic update of product and detailed design information, including product change notices and product technical specifications.
Segment 2A: Preparation for Distribution. Enables distribution of product resources, including sales catalog and basic technical information, and obtainment of extended product information.
Segment 2B: Product Change Notification. Enables update of product resources.
Segment 2C: Product Design Information. Enables release and update of product engineering design information.

Cluster 3: Order Management 
Supports full order management business area from price and delivery quoting through purchase order initiation, status reporting, and management. Order invoicing, payment and discrepancy notification also managed using this Cluster of processes.
Segment 3A: Quote and Order Entry. Allows partners to exchange price and availability information, quotes, purchase orders and order status, and enables partners to send requested orders, or shopping carts, to other partners.
Segment 3B: Transportation and Distribution. Enables communication of shipping- and delivery-related information with the ability to make changes and handle exceptions and claims.
Segment 3C: Returns and Finance. Provides for issuance of billing, payment and reconciliation of debits, credits and invoices between partners as well as supports product return and its financial impact.

Cluster 4: Inventory Management 
Enables inventory management, including collaboration, replenishment, price protection, reporting and allocation of constrained product.
Segment 4A: Collaborative Forecasting. Enables standardization of collaborative order and sales forecasting between supply-chain partners.
Segment 4B: Inventory Allocation. Lets sellers inform buyers of product allocation determined through the evaluation of preset criteria, such as demand forecast and availability, and allows buyers to respond manually if negotiation is needed.
Segment 4C: Inventory Reporting. Lets buyers provide daily inventory reports to sellers, allows sellers to notify buyers when reports are reflected in their records and enables sending of discrepancy reports.
Segment 4D: Inventory Replenishment. Facilitates inventory replenishment managed by buyer, seller or both -- via a pull signal from the buyer or push notification from the seller that triggers an order, change, ship or return.
Segment 4E: Sales Reporting. Lets buyers provide periodic sales reports to product providers, allows providers to notify buyers when reports are reflected in their records and enables sending of discrepancy reports.

Cluster 5: Marketing Information Management 
Enables communication of marketing information, including campaign plans, lead information and design registration.
Segment 5C: Design Win Management (EC). Enables design registration with suppliers, including requests for design-win registration at different phases of the design cycle and award of win based on predefined criteria.
Segment 5D: Ship from Stock and Debit (EC). Supports creation and use of marketing programs and distribution of pricing incentives to product distributors.

Cluster 6: Service and Support 
Provides post-sales technical support, service warranty and asset management capabilities.
Segment 6A: Provide and Administer Warranties, Service Packages, and Contract Services. Enables registration and product warranty support.
Segment 6C: Technical Support and Service Management. Enables support requesters to submit request for support and provides the ability for an authorized service provider to submit a claim to the warranty provider for a completed request for support.

Cluster 7: Manufacturing 
Enables the exchange of design, configuration, process, quality and other manufacturing floor information to support the "Virtual Manufacturing" environment.
Segment 7B: Manage Manufacturing WO & WIP. Enables the release, management and the exchange of factory production information.
Segment 7C: Distributed Manufacturing Information. Distributed manufacturing information to support product improvements, Quality and warrantee entitlement. 

Case Study:

Johnson & Johnson is an American multinational pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. It consistently ranks at the top of Harris Interactive's National Corporate Reputation Survey and was the first corporation awarded the Benjamin Franklin Award for Public Diplomacy by the U.S.

It was realized that Johnson & Johnson suffered from strained resources, so process should be improved for the coming challenges. A study revealed that the functionally-structured operations environment in which purchasing, manufacturing, demand planning, logistics, design and quality were disconnected.

Then it went through six steps.

Step 1: Reviewing the current supplier quality documentation and procedures. Only a few procedures and audit forms were retained.

Step 2: Design policies, objectives, procedures, tools and techniques to support the strategy to strengthen the relationship with main suppliers.

Step 3: Communicate to 20 suppliers at a 2-day supplier conference day. Suppliers’ feedback was supportive and positive.

Step 4: A cross-functional team handled scoring and supplier categorization. The team gained insight and documented new knowledge regarding process area and opportunity.

Step 5: A system was developed to monitor on-going delivery and quality performance against requirements.

Step 6: Training in lean thinking and continuous quality improvement was set into place.

After redesigning the supply chain process, Johnson & Johnson company achieved great improvements in quality, reporting and data collection and materials. 

Lecture 11: Redesign Principles and Tactics (2)

Lecture 11: Redesign Principles and Tactics (2)

Source/Reference:

Mannings:http://www.mannings.com.hk/chi/

Mannings:http://en.wikipedia.org/wiki/Mannings

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Response:

In this lecture, we continued learning Redesign Principles and Tactics. In lecture 10, we learnt the principles and tactics for changing information flows around processes and for restructuring and configuring around processes. In lecture 11, we mainly learnt the minding part.

The minding process means change the knowledge management around the process.

Principle 8: ANALYZE and SYNTHESIZE

Enhance the interactive analysis & synthesis capabilities around a process to generate value added.

Software and useful information which can generate knowledge can add analysis capabilities to help to redesign a business process. It is the major part of the deliverable to the customer of the process. The tactic is extremely useful to the knowledge-intensive processes which the value proposition of the customers can be increased by providing good advice to the customers.

Common Tactics:

-Provide “what-if” capabilities to analyze decision options

-Provide “slice and dice” data analysis capabilities that detect patterns

-Provide intelligent integration capabilities across multiple information sources

Principle 9: Connect, Collect, and Create

Through those who touch the reusable and intelligent knowledge around the process to acquire the knowledge.

Increasingly acquire the knowledge through people who are involved in the process can help redesign a business process. People involved in the process may be customers or doers.

Common Tactics:

-Create a community of practice around the process

-Create expertise maps and “yellow pages” related to the process

-Build knowledge repositories that can be reused to enhance the performance of the process

-Develop a FAQ database through the doers of the process

-Embed knowledge-sharing spaces for interactive dialogues around the process

Principle 10: Personalize

Make the process intimate with the preferences and habits of participants.

By understanding the preferences and habits of the customers of the process can increase its capabilities which enhance redesigning the business process. Deeply understand the customers can redesign a better process which can satisfy the customers.

Common tactics:

-Learn preferences of customers and doers of the process through profiling

-Insert business rules in process that are triggered based on dynamic personal profile

-Use automatic collaborative filtering techniques

-Keep track of personal process execution habits

Case study:

Mannings

is a chain of personal health and beauty retailer offering comprehensive range of pharmacies, healthcare, personal care, skin care and baby care products.

Mannings applied principle 10: Personalize.

Recently, it introduce a card called "Man card" which customers can apply this card and receives special discounts or offerings in buying things in Mannings. Every time when Man card members buy things in Mannings, they have to show the cards to the cashier. The cashier will then scan the card and the system can automatically collect the data about the things that bought by the customers. Mannings can understand the preference of specific customers. For example, the ladies who aged between 25-30 like buying the skin products in Mannings while those housewives like buying the daily products. Mannings can place different products together so that it is more convenience to the customers. Mannings can know which period of time needs more cashiers and employees. This helps to allocate resources.

Lecture 9 Process Redesign (2)

Sources:Business Process Reengineering – BPRhttp://www.businessprocessreengineering.org/83/Wellcomehttp://en.wikipedia.org/wiki/Wellcome

• IBM Holosofx Workbench

• Used for modeling and analysis. The Holosofx Workbench is composed of the Business Modeler as the core with the UML Transformer (Modeler), Xform Designer, and XML Mapper as extensions.

• IBM Holosofx Monitor

• Used for monitoring processes in real time

• IBM Holosofx Workbench Server

• Used to share process information via the intra/Internet.

The Holosofx Workbench

Subject: Lecture 9 Process Redesign (2)

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Response:

In lecture 9, we learnt about process redesign. The focus of the lecture was the five essential aspects.

Holosofx was a privately company worked in the field of Business Process Management. It provided software product for business process re-engineering.

There are three components of the Holosofx BPM:

In the lecture, we learnt the Holosofx Workbench. It is a software which is for drawing the activity flow diagrams. Also, It exports Flow Definition Language (FDL) files to the IBM WebSphere MQ Workflow run-time environment through an offline import/export interaction process

Building Block #1 - Structural elements of business process flow

There are different elements for building the activities decision flow diagram.

e.g. The activity objects and decision objects

  Activity objects are the main factors of a business process

Decision objects are different choices in the process

Building Block #2 - Organizational resource links to business process flow

An activity requires different resources like facilities, tools and people. This block aims at allocating the resources to the activity.

Building Block #3 - Rules of graphical connection

In the process, there should be input and output. All the tasks are connected by the time line arrows. The objects are connected graphically.

Building Block #4 - Methods of conditional concatenation of process parts

There are different choices. Each choice has different paths.

Building Block #5 - Process performance measurement

Simulation analysis can be done. Time, cost and resources can be calculated for different cases.

The Use case process model

Case Study: Wellcome

Wellcome is the largest supermarket in Hong Kong. It operates many outlets in Hong Kong. There are many different types of products in Wellcome. The products are come from Mainland China and other countries. Recently, it also sells fresh vegetables, fish and meat.

Analysis of the transaction process of Wellcome

Compare the transaction process using the old cash register and that of using the new cash register.

Participants

Customers

Cashiers

Other Staff

The process of using the old cash register

It is very popular that buying some products and then getting another product freely. For example, buying two packs of lemon tea can get a can of coke freely. However, the cashier cannot just scan the barcode of the coke. The old cash register cannot detect the coke is free when the customer buys two packs of lemon tea. Therefore, managers of each branch of Wellcome supermarket have to print out a list of special products. The list included the details of the preferential products and the barcode of the products. Cashiers are required to enter the barcode if the customers buy these preferential products. This slows down the transaction process. Also, cashier may not realize the preferential products and she just scan the barcode of all the products as usual. Then, the amount will be wrong and the cashier will have to do it again. The probability of occurring errors during the transaction process is relatively high.

The process of using the new cash register

The new cash register can automatically deduct the amount of the gifts when it detect the customers has bought the specific products. The central office of Wellcome only needs to update the data to the database. In this case, cashiers can do the work more quickly and the transaction process becomes simpler than before. Besides, managers do not have to print out the list of preferential products for each cashier every day. The probability of occurring errors during the transaction process decreases.

Lecture 6 - Basics of BPR (2)

Souce:

About TQM

http://www.tqm.org.tw/tqm/about.html

Components of Leavitt'sDiamond

http://www.brighthub.com/office/project-management/articles/122495.aspx

HSBC

http://en.wikipedia.org/wiki/HSBC

Response:

In Lecture 6, we mainly learnt about role of IT, Leavitt Diamond and TQM.

Role of IT:

IT plays an important role in business process. IT helps to improve the efficiency and effectiveness of the process. For example, it enables very fast sharing of information.

The Leavitt Diamond:

There are four components in an organization, People, Task, Structure and Technology. There are interactions between these four components. If one of the components changes, other components will be affected.

TQM:

TQM is a management approach which concern about the customers. It focuses on customers and thus improves the quality of products and services in order to satisfy customers.

Case Study:

HSBC

HSBC is a universal bank which provides banking and financial services. It is the largest bank in Hong Kong.

In the past, people were required to go to the bank and queue for a long time in order to do transactions, save money or withdraw money. All these processes were only handled by the staff in the branches of HSBC.

Later, ATM started becoming popular and more people use ATM instead of queuing in the branches of the bank. ATM can be found in many places like MTR stations, shopping malls and beside the streets. Customers do not have to go to the branches of the bank to withdraw money or do some transaction.

Recently, because of the invention of the internet, e-banking system is created so that customers can do transactions or use many banking services on the internet. For example, transferring money to other account or paying bills can simply by clicking a few buttons.

Role of IT in HSBC:

In order to survive in the banking industry, IT plays as a necessity to HSBC. ATM and the e-banking system are the examples of IT in HSBC. These technologies are very important. All other banks are using these technologies and they are indeed convenient to customers. Customers can do transaction within a very short time. Using the e-banking system, customers can even do transaction without geographical limitation. The original process is greatly simplified. In the past, customers have to go to the bank and ask the staff of the counter to help in transferring money. Staff then needs to fill in the form in order to finish the process of transferring money. Such a process would require at least 5 minutes. But now just a few seconds, the process of transferring money or paying bills can be finished.

Components affected by the change in technologies in HSBC

Arising of new technologies reduce the workload of the employees. However, many processes become computerized and less employees are required. Therefore, HSBC fried many employees. The tasks performed by the employees changed. For example, in the past customers could go to the bank and withdraw money directly without paying any handling fee. However, now customers have to pay for the handling fee of withdrawing money in the bank. The tasks have been changed. Since more customers choose to use the e-banking system implies less customers go to the bank, an employees can perform more tasks.  

Problems arise from the new technologies

Although the e-banking system and ATM are very convenient to the customers, there are many security problems. There are fake websites which are similar to the original e-banking website in order to get the username and password of the customers. Besides, some guys installed very little cameras in the ATM and tried to get the passwords of other people. In addition, the bad guys may hack into the e-banking system to steal the information of the customers.

To address the security problems, HSBC should offer a series of measures to protect customers from the internet fraud like double authentication.

Conclusion

HSBC simplified some of the processes such as the processes of transferring money, withdrawing money and saving money. The new technologies ATM and e-banking system change the people, tasks and the structure of HSBC. These technologies help customers to do transactions quickly. The new processes are efficient and effective. However, the security problems are concerned by customers. To improve the service quality, HSBC should maintain a high security e-banking system. 

Lecture 3 Strategic Framework and eBiz

Source/Reference:

Marketing & Competitive Intelligence FAQ SWOT & PEST analysis

http://www.marketing-intelligence.co.uk/help/Q%26A/question24.htm 

ParknShop

http://en.wikipedia.org/wiki/ParknShop

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Response:

In lecture three, we mainly learnt SWOT and PEST analysis. These two analyses can be applied to all business and they are used very frequently. They are very useful for business in planning. They are always used together in business so that companies can know both internal and external environment deeply. Usually, when a company wants to produce a new product or starts a new project, it would use these two analyses.

Explanation of SWOT and PEST analysis:

SWOT:

Strengths: The characteristics of the company or the business that take an advantage over other companies. E.g. The Company can produce a good with same quality using less resource.

Weaknesses:  The disadvantage or limitation of the company or business. E.g. A company cannot produce a good in lower cost than others.

Strengths and weaknesses are about the internal environment of a company.

Opportunities:  Trend or chances faced by the company for profits and growth. E.g. Provide wifi service in the shop to attract more customers.

Threats: External factors which are bad for the company. E.g. Increase in tax.

Opportunities and threats are about the external environment of a company.

PEST:

PEST describes the external macro-environment factors which affect the company.

P-Political: Factors which are about how the government influences the economy, including tax policy, trade law, tariffs and labour law.

E-Economic: Factors which are about the economic cycle, the growth or the decline of the economy. Also, the interest rates, inflation rate and exchange rates which affect the overall economy of society.

S-Social: The cultural factors such as the population growth rate, career attitudes and age distribution.

T-Technological: The technological factors like the new technological invention or technological change.

Case Study:

ParknShop

It is one of the largest supermarkets in Hong Kong. There are more than 260 outlets in Hong Kong.

PEST analysis for ParknShop:

Political:

Recently, government set a minimum wage, it increase the production cost of ParknShop.

Economic:

The overall economy in Hong Kong is fine. People would like to spend more. However, due to the rapid increase in inflation rate, the price of the product increases, and this may lower the demand for the goods and affect the revenue of ParknShop.

Social:

In Hong Kong, housewives are usually responsible to buy the daily accessories. They have no jobs and they can go to different supermarkets or stores to compare the price of the product. The price of the product should keep at the level of others. Besides, nowadays working class like going to supermarket after work, so ParknShop should concern these customers. For example, assign more cashiers at the peak hours to shorter their waiting time. 

Technological:

The new technology, the new system allows ParknShop to collect data from customers so that it can know more about the favor of the customers.

The newly cashdrawer enable the cashiers to do the work more quickly and shorter the time of purchasing of the customers.

SWOT analysis for ParknShop

Strengths:

• ParknShop has very good brand name
• Have high bargaining power with suppliers
• Can get the supplies of goods at low price
• Have a large market size

Weaknesses:

• Too many employees so that it is difficult in management
• Too many product à cannot always sell the product in lowest price compare with other competitors (cannot observe the price of all the product from different competitors)

Opportunities:

• Can cooperate with other company to develop its own product
• There are more product including both low and high price productà attract more customers
• Provide online shopping à more convenient
• Some larger branch can sell fresh fish, pork and beef

Threats:

• There are other huge competitors such as wellcome and China Resource Vanguard.
• Some small stores sell some product at lower prices.

Conclusion:

SWOT and PEST analyses are good tools for companies to understand the internal and external environment. They are used especially before starting a new project or a new business. Usually, PEST analysis is applied first and followed by the SWOT analysis. With the help of these two analyses, companies can have better plans and use different strategies in different situations.

Week 4 - Strategic Alignment Model

Source / Reference:
1)  "Strategic Alignment: Leveraging Information Technology for transforming Organizations
Based on the paper of J.C. Henderson, N. Venkatraman (1993)" by Philipp Maderthaner

http://www.123helpme.com/view.asp?id=87646

2) "Explanation of Strategic Alignment"

http://www.valuebasedmanagement.net/methods_venkatraman_strategic_alignment.html

Subject: 
In Lect 4 - Which alignment strategy in SAM model is the best? and why?
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Response:

In my opinion, there is no Best alignment strategy in SAM. Whether the alignment strategy is the best for an organization is mainly depend on its own situation. Different companies have different background, characteristics and situations, an approach fits this company may not be the best approach for another company. The four approaches in the SAM model have their own advantages. 

The four alignment perspectives:

1. Strategy execution

Business strategy is the driver to the design of both organization and IT. It is the most common perspective.

2. Technology Transformation

Business strategy is supported by both IT strategy and IT infrastructure. 

3. Competitive Potential

Design IT strategy to affect the business scope and develop new forms of relationship

4. Service Level

Focusing on the IT service organization in order to satisfy customers.

For the Strategy execution, it will be more suitable to small shops and small companies. It is not necessary for them to develop very good IT infrastructure since they have only simple structure and they may not have enough money. For these companies, IT is not very important for their business. Therefore, they will focus on business strategy and the IT infrastructure is just only develop to implement the business strategy in a more efficient way.

 On the other hand, if the company is doing a business that requires good technology and information system, Technology Transformation will suit for the case. For example, the American Express. It is a company well known for its credit cards. In order to let its customers to enjoy using the credit cards conveniently and efficiently. It is extremely significant for American Express to have very good IT strategy and IT infrastructure in supporting its business strategy. 

For the company which wants to develop new products or service, Competitive Potential would be effective in this case. For instance, the smartphone companies such as Samsung, LG and Motorola. They must be innovative and develop new products in order to compete with others. The Competitive Potential strategy will be the best approach for them.

Satisfying customer's needs is the main point in success of a business. Companies can apply the service level approach if they are mature enough and want to provide high quality service. Nowadays, all banking companies provide many online services for customers so that customers can do so many things conveniently. They are applying this approach to attract more customers and keep the current customers.

To conclude, there is no best alignment strategy in SAM. All the strategy can provide different benefits for companies. Each company should select its own strategy depends on its business and situation. Although companies may focus on doing one business, the world keeps on changing. Companies should consider the current situation and change to other approach when necessary.