9CustVal.ppt

04/08/23

Measuring Customer Value in the Supply Chain

Jerry Banks

“What gets measured gets managed”

What is value?

• Fair return or equivalent in goods, services, or money for something exchanged

• Monetary worth of something

• Relative worth, utility, or importance

• Degree of excellence

Customer value

• The firm’s contribution to its customer

• Previously– Quality– Customer satisfaction

Some questions

• How is customers value measured?• How is IT used to enhance customer value

in the supply chain?• How does supply chain management

contribute to customer value?• How do the new forms of customer

relationship in the supply chain affect customer value?

Perceived value

• It’s not the product or service received, but the perceived value

• Quality assurance external customer satisfaction customer value

Global logistics spending (1999)

• $3.4 trillion or 11.7% of GDP

• Inefficiencies – Spoilage and breakage– $580 billion or 2% of GDP

• A lot of room for cost reduction• Ref: Delaney & Wilson (2000) 11th Annual State of Logistics Report (c)

(Cass/ProLogis).

Price Waterhouse Coopers Trendsetter Barometer

• Next two slides...

• PWC interviewed CEOs of 410 product and service companies identified in the media as the fastest growing US businesses over the last five years

• The surveyed companies ranged in size from approximately US$1 million to US$50 million in revenue/sales.

Sources very important to own company’s business growth over the next 12 months

Source AllTrendsetter

High TechCompanies

Non-TechCompanies

ProductCompanies

ServiceCompanies

Quality of svc 87% 83% 91% 88% 85%Prod imp 62% 68% 58% 62% 62%IT 59% 63% 45% 52% 67%Advertising 58% 58% 59% 57% 60%New lines 49% 55% 42% 54% 43%Jt ventures 44% 56% 32% 34% 54%Expansion-US 40% 39% 40% 37% 42%Outsourcing 32% 35% 28% 29% 34%Discounting 26% 23% 29% 27% 24%E-Business 26% 29% 21% 17% 34%Acquisitions 25% 29% 22% 22% 29%Expansion-out 23% 29% 17% 27% 19%Franchising 3% 1% 6% 3% 3%Other 3% 3% 3% 3% 2%

Source: Price Waterhouse Coopers Trendsetter Barometer 10/10/01

Trendsetter companies’ sources of most profitable return for each dollar invested

Source Veryimportantto growth

Top 1,2,3rank

Mostprofitable

returnQuality of svc 87% 63% 31%Prod imp 62% 32% 11%IT 59% 22% 3%Advertising 58% 26% 8%New lines 49% 34% 16%Jt ventures 44% 19% 7%Expansion-US 40% 23% 8%Outsourcing 32% 12% 3%Discounting 26% 9% 2%E-Business 26% 7% 1%Acquisitions 25% 15% 6%Expansion-out 23% 10% 2%Franchising 3% 1% 1%Other 3% 2% 1%

Source: Price Waterhouse Coopers Trendsetter Barometer 10/10/01

Quality ratio

• Ask customers and competitor’s customers to list important attributes in their buying decisions

• Ask customers to distribute fractions of 1.00 among the attributes

• Ask customers to rate on a scale of 1-10, your performance vs your average competitors

• Multiply the performance by the weight and add the sum to get an overall score

• Source: Managing Customer Value, Gale

Quality ratio

Attribute Weight Self AverageCompetitor

Ratio WeightedRatio

A 0.10 8.3 7.4 1.12 0.112B 0.20 8.9 7.2 1.24 0.248C 0.20 9.3 6.4 1.45 0.290D 0.20 7.8 7.8 1.00 0.200E 0.10 8.2 8.2 1.00 0.100F 0.25 9.3 9.5 0.98 0.245

QualityRatio

1.00 1.195

Source: Adapted from Managing Customer Value, Gale

Source: Managing Customer Values: Gale "Information: PIMS Database"

Quality effects profits!

0

2

4

6

8

10

12

14

0.76 0.92 1.08 1.24

Quality ratio

Return onsales (%)

“Baldrige Index”

• A fictitious fund comprised of companies receiving the Malcolm Baldrige National Quality Award

• Baldrige Index has outperformed the S&P 500 for 7 straight years

• 2000 results– S&P 500 results 163%– “Baldrige Index” ROI 685%

Longevity

• Who: 600 quality award winning companies• What: Studied results against a control group• When: 5-year period• Results: Significant improvements in stock

value, operating income, ROI, employment and asset growth

• Source: Study by V. Singhal of Georgia Tech and K. Dendricks of the College of Wm. & Mary

Woe unto you!

• “Dissatisfied customers will tell 8 to 10 people about the bad service they received. One in 5 will tell 20 people.”

• Source: Barlow and Moller: A Complaint is a Gift

MSU study

21st Century Logistics: Making SupplyChain Integration a RealityCouncil of Logistics Management1999Donald J. BowersoxDavid J. ClossTheodore P. StankPublished by Michigan State University

MSU study

• Firms demonstrating high levels of supply chain competency report high-perceived performance levels on a number of different outcome measures

Supply chain measurement model

CustomerService

CostManagement

QualityProductivity

AssetManagement

SupplyChain

Performance metricsCustomer

Service

Cost

Management

Quality Productivity Asset

Management

Customer

Satisfaction

Logistics

Cost

Delivery

Dependability

Information

System

Support

Inventory

Turns

Product

Flexibility

Responsiveness

Order Fill

Capacity

Return on

Assets

Delivery

Speed

Order

Flexibility

Advanced

Shipment

Notification

Delivery

Flexibility

What is flexibility?Actually, it is not so much about avoiding commitment to an irreversible decision. It involves development of operational resources that can quickly be redeployed in response to real time -- or at least very recent -- cues from the environment, be it actual demand, a schedule built from a collaborative forecast with a very short time horizon (like a month or less), etc. In production it generally means being able to quickly shift from building one SKU to another. Delivery flexibility requires having different means of transportation based upon the cost/service requirements for the order, sometimes perhaps using package delivery, other times LTL, still other times consolidating with other orders to build a full TL. In ordering, it is associated with the ability to quickly capture demand cues and assign products to orders in various ways based upon where product is available and what the replenishment requirement is. Then, the previously defined operational assets might be used to create different ways to fill orders without having all product coming from stock. The fast moving, smooth demand product might be from stock, but slow-moving items might be pulled from a centralized facility to reduce stock in the system. In extreme situations where product values justify it, slow-movers may be made to order in very short cycle times to fill an actual order.

Ted Stank, MSU, private communication, 28 Jan 02.

Correlation analysis

• Measures the magnitude of the relationship between two variables– Firm´s score on the overall Supply Chain 2000

index– Firm´s perceived performance on the metrics– r indicates the magnitude of the relationship– r2 indicates the fraction of total variation

explained by the variable

Customer service

Performance

Variable

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

Customer

Satisfaction

.394 .155

Product

Customization

.181 .033

Delivery

Speed

.306 .094

Cost management

Performance

Variable

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

Logistics

Cost

.382 .146

Quality

Performance

Variable

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

Delivery

Dependability

.276 .076

Responsiveness .239 .057

Order

Flexibility

.217 .047

Delivery

Flexibility

.321 .103

Productivity

Performance

Variable

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

Information System

Support

.533 .284

Order Fill Capacity .316 .100

Advanced Shipment

Notification

.307 .094

Asset management

Performance

Variable

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

Inventory Turns .285 .081

Return on Assets .235 .055

Overall performance

Correlation

Coefficient [r]

Coefficient of

Determination [r2]

.524 .275

Insights

• Supply chain competency explains 27.5% of the firm´s overall performance level

• Information system support is extremely important

• Customer satisfaction and logistics cost are also very important

Wide range of issues

• Why customers purchase?

• Why do they continue to purchase?

• Why do they defect?

• What are their preferences and needs?

• How can these be satisfied?

Trade-offs

• Low prices versus customer support

• Low prices versus fast delivery

• Specialty store that specializes in one product versus megastore for one-stop shopping

Low prices vs fast delivery

• Issue of supply chain reliability– On time delivery

• Reliability is tied to the mode

• The greater the expense– The greater the reliability

Impact of on-time delivery

• Costs when late

• Costs when early

What are costs of late delivery?

• A.– How is it measured?

• B.– How is it measured?

• C.– How is it measured?

What are costs of early delivery?

• A.– How is it measured?

• B.– How is it measured?

• C.– How is it measured?

Dimensions of customer value

• Customer value is the way the customer perceives the entire firm’s offerings

• Dimensions include:– 1. Conformance to requirements– 2. Product selection– 3. Price and brand– 4. Value-added services– 5. Relationships and experiences

1. Conformance to requirements

• The ability to provide what the customer wants and needs

• When supply exceeds demand, inventory holding cost

• When demand exceeds supply, shortage cost

By product type

• Commodities– Demand is predictable

• Non-commodities– Demand is not predictable– Can result in excess inventory or lost sales– Efficient supply chains can reduce inventory

and transportation costs

Example

• Electronic components are manufactured in SE Asia

• Very competitive industry

• Customers can pick from many suppliers

• Right product at the right time is a must

• Forecasting is difficult as monthly demand is highly variable

Example

• To save money, the supplier ships by sea

• By the time the product arrives, the demand has changed or competitors have developed a newer product

• The manufacturer is considering shipment by air

2. Product selection

• Consider an automobile– 5 styles x 10 exterior colors x 10 interior colors

x 2 types of transmission = 1000 configurations– Retailers need to stock many of these as

customer demand is hard to predict

Strategies

• Specialize in one type of product– Starbucks sells coffee

• Megastores that sell large variety of products– Wal-Mart

• Megastores that specialize in one product area– Home Depot

PC Business

• Mid 80s– Specialized stores such as Egghead

• Early 90s– PCs were sold in department stores such as

Sears

• Late 90s– Direct business model, Gateway opens retail

stores

Ways to control the inventory problem

• Build to order – Dell Computer

• Configuration is determined when the order comes

http://www.dell.com/us/en/gen/default.htm








• Another example – Amazon.com

• When a customer orders a book

• Amazon.com requests it from one of 12 wholesalers and 20,000 publishers

• Amazon only inventories a few-hundred best-selling title


• Use distributors – GM is doing this with their Cadillac unit in

Florida• Major issues

– Who pays inventory holding cost?

– If it’s GM, then auto dealers will reduce their inventory to the minimum

– No differentiation in dealers

– Small and large have access to the same inventory


• Minimize the options– Honda does this on its cars– Large varieties are not always needed

• Grocery store– 150 varieties of dry cereal

– 28 varieties of toothpaste

– 40 varieties of prepared mustard

3. Price and brand

• An essential component of customer value

• When an item is a commodity, there is little flexibility in price– PCs are now commodities

• But, Dell’s direct business model lets the customer configure the computer

• Improves customer value

• Reduces cost

3. Price and brand

• Even in this era of supermarket style shopping, brand is important– Mercedes – Rolex – Coach

• Branding commands higher prices– Even the price can be prestigious!

• Promotes high quality

3. Price and brand

• Example – Federal Express

• A brand name

• When it absolutely must be there ‘overnight’

• Even though there are less expensive carriers

• FedEx = Overnight

www.fedex.com

FedEx is the world's largest express transportation company, with 624 aircraft and service to over 211 countries. There are 46 call centers across the globe handling over 500,000 telephone calls daily. FedEx employs over 145,000 people, including 42,500 couriers who deliver more than 3.1 million packages every working day.

“The best global brands,” (BW, 8/5/02)

Brands usually aren’t listed on corporate balance sheets, but they can go further in determining a company’s success than a new factory or technological breakthrough. That’s because nurturing a strong brand…can allow companies to premium prices… A strong brand also can open the door when growth depends on breaking into new markets. Starbucks Corp., among the fastest-growing brands, recently set up shop in Vienna, one of Europe’s café capitals, and says 400 of its planned 1,200 new store openings this year will be overseas.

“The best global brands,” (BW, 8/5/02)

Rank Brand 2002 BrandValue

(US$Billions)

1 Coca-Cola 69.6

2 Microsoft 64.1

3 IBM 51.2

4 GE 41.3

5 Intel 30.9

6 Nokia 30.0

7 Disney 29.3

8 McDonald’s 26.4

9 Marlboro 24.2

10 Mercedes 21.0

Data:

Interbrand Corp.

J.P. Morgan Chase & Co.

4. Value added service

• Price alone often is too difficult a playing field

• Many companies provide value-added services such as support and maintenance– Particularly for technical products

Why do this?

• Many products are commodities, only the price matters

• There is a need to get closer to the customer

• Increasing IT makes this all possible

Example

• Goodyear delivers mounted tires to Navistar (a truck manufacturer)

• Sequenced for JIT use

• Goodyear has an IT group dedicated to Navistar’s materials management group

Example

• Under a joint venture called AOT, Goodyear and Accuride provide painted wheel assemblies for Mitsubishi and Ford– They will even mount tires from Goodyear’s

competitors

More examples

• For many years, IBM did not charge for service– Now, it’s their biggest source of income

• Otis sells elevators – But, their largest income is from servicing

those elevators for 50 years

5. Relationships and experiences

• A relationship makes it difficult for customers to switch to another provider

• Also, learning relationship– USAA uses databases to offer customers

products that might be of interest• More about USAA later

Peapod

• www.peapod.com

• Six metropolitan markets– Chicago – Peapod– DC area – Giant– 4 areas – Stop&Shop

• Shop by PC

http://www.peapod.com/

Peapod

• At the end of the session– “How did we do on the last order?”– 35% response– Use feedback to make changes

One-to-one enterprise

• Peapod is an example of one-to-one enterprise– Firms learn about each customer through

databases and interactive communications– Peapod uses its database to suggest new

offerings to customers

Other examples

• www.amazon.com– Makes suggestions based on previous purchases

and inquiries

• www.dell.com– Tailors its website to different types of users

http://www.amazon.com/

http://www.dell.com/

Some companies are providing an experience

• Disney theme parks– Lot more profit comes in selling toys, movies,

and accessories

Sizzle or the steak

• Steak companies– Make products and move them to the market

• Sizzle companies– Provide relationships and experiences for the

end user, the customer– Nike provides sizzle

• Just do it!

• What is Intel?

Measuring customer value

• Since customer value is based on customer perceptions, it requires measures that start with the customer

• Typical measures– Service level– Customer satisfaction

Measuring customer value

• Another measure – Supply chain performance

Service level

• The ability to satisfy a delivery date– % of orders received by the promised delivery

date– Many companies invest heavily in systems that

allow them to predict the delivery date with accuracy

– Directly related to the supply chain• Inventory level

Customer satisfaction

• Customer surveys– Measure performance of sales department– Gain feedback on improvements– Not always reliable– Can be manipulated– Doesn’t measure customer retention– More important is customer loyalty

Example

• Lexus doesn’t measure customer satisfaction although they are the leader

• The only important measure is repurchases by customers

Supply chain performance measures

• Supply Chain Operations Reference Model (SCOR)

• Other measures

• Comparisons to (i.e., benchmarking)– Averages– Best-in-class

SCOR

• Metrics and measures are shown for four perspectives of the SCOR Model

Supply chain reliability

• On-time delivery• Order fulfillment lead

time• Fill rate• Perfect order

fulfillment

• %• Days

• %• %

Flexibility and responsiveness

• Supply chain response time

• Upside production flexibility

• Days

• Days

Expenses

• Supply chain management cost

• Warranty cost as % of revenue

• Value added/employee

• %

• %

• $

Assets/utilization

• Total inventory days of supply

• Cash-to-cash cycle time

• net asset turns

• Days

• Days

• Turns

Comments on SCOR Model

• It could become an industry standard

• But, every company needs to understand its own unique environment and determine its own measures based on that insight

• Example– Dell measures inventory velocity– Not inventory turns

Measures of performance

• Keebler and Manrodt (2000) classified some 37 measures as either effectiveness or efficiency

• The % of firms capturing these measures is shown on the following pages

Involve trading partner

Effectiveness Measure % capturingCustomer complaints 76.6On-time delivery 78.6Over/short/damaged 72.3Returns and allowances 69.1Order cycle time 62.3Overall customer satisfaction 60.8Days sales outstanding 58.7Forecast accuracy 54.4Invoice accuracy 52.1Perfect order fulfillment 39.5Inquiry response time 29.6

Inferences

• 21% don’t capture a measure of on-time delivery

• 38% don’t measure order cycle time

• 48% don’t capture invoice accuracy

Internal Focus

Effectiveness Measure % capturingInventory count accuracy 85.8Order fill 80.8Out of stock 70.5Line item fill 68.5Back orders 64.4Inventory obsolescence 62.7Incoming material quality 61.6Processing accuracy 45.0Case fill 39.1Cash/cash cycle time 32.2

Cost

Efficiency Measure % capturingOutbound freight cost 87.3Inbound freight cost 68.9Inventory carrying cost 60.43rd party storage cost 58.6Logistics cost/unit vs budget 52.4Cost to serve 37.4

Productivity

Efficiency Measure % capturingFinished goods inventoryturns

80.2

Orders processed/labor unit 43.3Product units processed/whselabor unit

47.6

Units processed/time unit 37.2Orders processed/time unit 36.1Product unitsprocessed/transportation unit

21.8

Utilization

Efficiency Measure % capturingSpace utilization vs capacity 46.5Equipment downtime 46.0Equipment utilization vscapacity

40.4

Labor utilization vs capacity 35.8

Lots of firms are not capturing important measures

• If firms don’t measure, they probably don’t plan performance

• If they don’t plan, they don’t take corrective action

• They lack control

Benchmarking

• Comparison to best in class– Delivery performance– Production flexibility– Cash-to-cash time cycle– Total SCM costs

Benchmarking

• Industry sectors shown on following slides:– Computers & electronics– Consumer packaged goods– Defense & industry– Pharmaceutical & chemical– Telecommunications

Source: PRTM Performance Measurement Group

Impact of SCM on cash-to-cash cycle time

# of days between paying for raw materials and sales revenue

28.7 24.7 18.533.4

44.4

75.166.6 67.6

91.2100.2

0

20

40

60

80

100

120

Comp/El Con Pkg Def/Ind Ph/Chem Telecom

Best in classMedian


Total supply chain management costs

Cost as % of sales to manage the supply chain

44.9 4.3 3.9 3.3

8.39.2

10.211.2

8.3

0

2

4

6

8

10

12


Best in classMedian


Impact of SCM on delivery performance

% of orders filled on or before customer's requested date

94.3 97.6 97 99 93.9

72.681.2

68.979 77

0

20

40

60

80

100

120


Best in classMedian


Impact of SCM on production flexibility

# of days required to achieve an unplanned 20% increase in production

4.38.3 10

62.6

30

42

30 3025.5

0

10

20

30

40

50


Best in classMedian

“Measuring carrier performance”

Article by Deborah C. Ruriani, Inbound Logistics, April, 2002

10 top metrics

• Pickup performance– Pickups must be on time for the delivery to be

on time

• On-time delivery

• Claims– How quickly are they settled?

10 top metrics

• Invoicing accuracy– Carriers that have an imaging system that

allows them to use information directly off a customer’s bill of lading can ensure accuracy

• Interactive web site– Variety of tracking and tracing capabilities

• Training– How well are the carrier’s workers trained

10 top metrics

• Managing customer accounts– Every customer failure should be followed

• Centralized customer service– Quick and readily available information

resource

10 top metrics

• Good communication– Customers should be involved in a carrier’s

decision making

• Responsiveness– Is the line of communication open and results-

oriented?

Scoring Model

• Determine at least 5 criterion

• Select the weight for each criterion

• Determine measures for each criterion– 1, 2, 3, 4, 5

• Determine raw scores

• Determine weighted scores

• Determine score

Example

• Criteria A, B, C, D, E• With weights .30, .18. 10, .24, .18• For Criterion A

– 1 = Very poor– 2 = Poor– 3 = Middling– 4 = Good– 5 = Excellent

Example, cont.

• Contribution to total score– .30 x 4 = 1.20

Exercise

• In groups of 4, build a realistic scoring model for the SCM function of one of the group members– 30 minutes

• Present this to the entire group– 10 minutes/group

Definition of Measures

• Respondents were asked how four important measures were defined– Jointly defined would be optimal– Customer defined and imposed on the supplier– Lastly, not currently defined

• Manrodt (2000) “The State of Supply Chain Measurement” in Supply Chain Management Practice and Research : Status and Future Directions, April, 2001.

How measures are defined

Measure JointlyDefined (%)

CustomerDefined (%)

Not CurrentlyDefined (%)

On-timedelivery

31 29 40

Order fill 25 33 42Invoice

accuracy28 30 42

Order cycletime

25 25 50

Inferences

• Lack of definition for measures that are critical to a firm’s overall performance

• How can suppliers satisfy customer’s expectations if there is no agreement of the customer’s definition of performance?

• How can processes be improved if they are not being measured?

Information technology and customer value

• Many valuable benefits for customers– Customer benefits– Business benefits– B2B benefits

Customer benefits

• Customer service has changed for many reasons– Opening of corporate, government and

educational databases to the customer• Started with kiosks and voicemail

• Accelerated with access tools of the Internet

• Increased customer value while reducing costs

Examples

• ATMs– Access at any time to accounts and information– Reduction in workload for the bank

• Voicemail– First derided as dehumanizing– Allows unmediated access to accounts at any

time from anywhere• Example is Sprint PCS

Internet

• Users have access to their accounts at any time from any where– Example is Delta Airlines

Internet - less obvious effects

• Increased importance of intangibles– Customers are used to ordering even high-

priced products from unseen sales people– Increases the importance of branding


• Increased ability to connect and disconnect– Makes it easier to connect to new partners

• Lots of information including performance measures are available

– Reduces the need to develop long-term relationships

– Frequent changes of partnerships are possible


• Increased customer expectations– The ease with which transactions can be

performed over the Internet raises expectations that every business will reach that standard

Business benefits

• The supply chain enables businesses to be proactive rather than reactive

• The supply chain makes a pull-type system possible rather than a push-type system

• Requires learning about customers– Sophisticated data mining is used

Example

• USAA– In the 30s it was difficult for military personnel

to obtain reasonably priced insurance– A group of officers formed USAA– USAA provides insurance only by mail and

phone

Example

• USAA, cont.– USAA has used its extensive databases to

expand into financial and shopping services for its members

– When a member calls USAA, everything about that member appears on a screen

– Services can be offered

Example

• USAA, cont.– If a customer buys a boat with USAA

financing, that customer will receive a packet about boat insurance

B2B benefits

• IT makes it possible to outsource parts of a firm’s business, yet maintain control

Technology to the rescue!

• PeopleSoft

• I2

• Siebel

From peoplesoft.com

Supply Chain Management: PeopleSoft 8 Supply Chain Management solutions are designed for the collaborative enterprise. With our fully integrated, end-to-end solutions, you get real-time information. From order capture, collaborative planning and fulfillment, to service and measurement, you can access the information anytime, anywhere through a web browser. At PeopleSoft, we realize that one size doesn't fit all, which is why our solutions are flexible. And we offer comprehensive solutions to suit any organization's supply chain needs, big and small. With PeopleSoft 8, you get the only pure internet supply chain management solution for the global enterprise. Check out our comprehensive solutions for Supplier Relationship Management (SRM), Distribution, and Manufacturing and Planning.

From www.i2.com

Companies have realized enormous benefits from supply chain management (SCM) over the past decade –reduction in inventories of 25–60%, delivery improvements, and improved capacity utilization of 10–20%, to name a few. In fact, as the leader in SCM, i2 has delivered over $29.94 billion in audited value as of October 2001.

This is just the beginning. The next leap forward in productivity will occur when two things happen. First, when SCM is linked to two critical processes – customer relationship management and supplier relationship management. Second, when companies just don’t share information, but when workflows within a company and between companies are linked. When these two things happen, then companies can react with real-time intelligence to changes from product concept all the way to product delivery.

From siebel.com

Siebel Systems provides the industry's most comprehensive family of multichannel eBusiness applications and services. Siebel eBusiness Applications enable organizations to create a single source of customer information which facilitates selling to, marketing to, and servicing customers across multiple channels, including the Web, call centers, field, resellers, retail, and dealer networks. Siebel

Process Redesign

• Technology based on a new paradigm of business process, not automating the old business process

• Back office is now integrated with front office

www.tgw.com

• Golf club configuration – Hand (Right or Left) – Model (275cc, 350cc. 400cc)– Loft (8.0, 9.5, 10.5, or 11.0)– Shaft (EI70, Preforce 65, Nike Graphite,…)– Flex (Regular, Stiff, X-stiff)

• Some choices eliminate other choices• So, you can’t place the wrong order

Old measures

• Some old measures become obsolete due to process changes facilitated by technology– % perfect order fulfillment

Information Gathering

• Once new process is adopted, it enables the fulfillment of the process

• Some old measures no longer needed since new process is proactive– Salesperson downloads inventory status before

sales call– Customer orders from existing inventory– Not ordering then waiting to learn of backorder

Enterprise Performance Mgmt

• Data mining and analysis of information then allows enterprise to fulfill its quality objectives and increase profitability

• Also allows enterprise to measure different consumer patterns

• Better understanding of consumer behavior leads to better product development/ marketing

Dynamic Process Shift

• Changes in technology allow for changes and improvements in business processes

• Better business processes improve efficiencies and enhance value

• This is cyclical and continuous• Enterprises that adhere to this aggressive

adoption of technology/process tend to be leaders in their respective domains.

End

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