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CII Institute of Logistics Virtual Class 1Apr 19, 2023
Session 10
Selling Chain Management
CII Institute of Logistics Virtual Class 2
Selling Chain ManagementWhat is Selling Chain Management?
Selling-chain management is defined as the application of technology to the activities in the whole life cycle of an order – from inquiry to order.
Companies will move away from automating discrete tasks, such as lead management, configuration, and pricing, and move toward an integrated info-structure that view order acquisition holistically, as an end-to-end process involving every department, from marketing to logistics.
Apr 19, 2023
CII Institute of Logistics Virtual Class 3
Selling Chain ManagementWhy Selling Chain Management?Sales forces and strategies under increasing pressure.
The availability of new sales channels, increased choice available to consumers, product and production flexibility, rapid changes in organizational strategies internally and externally and the increasing demands of customers are all increasing the complexity of the selling process.
Creation of a flexible, integrated and responsive sales process is critical to the emerging E-businesses. Stream lining and accelerating the information flow from customer to production and back is a critical skill that modern businesses have to develop.
Apr 19, 2023
CII Institute of Logistics Virtual Class 4
Benefits of Selling Chain Management
Increased ease of customer trading
Increased value to the customer
Ease of ordering and tailoring
Rising sales effectiveness and customer satisfaction
Consistency across all channels
Increased efficiency of Relationship management
Apr 19, 2023
CII Institute of Logistics Virtual Class 5
Selling Chain Management
Apr 19, 2023
Enterprisewith
MultipleSales
Channels
Customers
Distributor
OEM Reseller
Self Service
Sales Force
Selling Chain Structures
Selling Chain Management
- An integrated multi-channel order acquisition strategy, focusing on the buying process
Drivers
- Business ForcesMass customization/personalization, Costs of presale support and order errors, Multi-channels, Product complexity, Deregulation and M&A’s
- Technology ForcesLimited SFA functionality, Limited process functionality, Limited sales effectiveness
CII Institute of Logistics Virtual Class 6
Selling Chain Management - Architecture
Apr 19, 2023
Inquiry/Prospect
Customize Commit
Sales Lead
OrderLife Cycle
CoreProcess &
Technology
Integrated Selling Chain ApplicationsIntegrated Selling Chain ApplicationsIntegratedSolution
Order
Product Catalog
Configurator
ATP
Contract Pricing
Proposal/Quote
Order Entry
CommissionAvailable-To-Promise
CII Institute of Logistics Virtual Class 7Apr 19, 2023
Session 11
Business Process Reengineering
(BPR)
CII Institute of Logistics Virtual Class 8
Business ProcessesWhat are Business Processes?
A set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools
Apr 19, 2023
CII Institute of Logistics Virtual Class 9
Business Process Improvement Why?
Customer Demand and SatisfactionCompetitionCost ReductionProductivity improvement
Basic Steps in Process Improvement
Apr 19, 2023
CII Institute of Logistics Virtual Class 10
Limitations of Continuous Process Improvement Model
Incremental improvementTechnology growth demands vast improvementInternet, Open Trade, Ecommerce
Tough Competition, Require Breakthrough performance
Higher rate of change – slow improvement not affordableBPR – Approach for rapid change
Apr 19, 2023
CII Institute of Logistics Virtual Class 11
What is BPR
"Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical, contemporary measures of performance, such as cost, quality, service and speed"
BPR promises dramatic results
BPR is strong medicine and will result in big gains
Apr 19, 2023
CII Institute of Logistics Virtual Class 12
Process Flow – before and after BPR
Before BPR1. The purchase department places an order on a vendor. A
copy of the purchase order is sent to the accounts department.
2. The vendor supplies the goods directly to the purchase department enclosing a 'goods shipped' voucher and an invoice marked to the accounts department.
3. The purchase department prepares a 'Goods Received Note' and sends the material for inspection.
4. The quality department prepares an inspection note, sends a copy to the accounts department. In the meantime, the materials department takes the goods into store.
5. The accounts office compares the invoice with the purchase order and the inspection note, prepares a cheque for the delivered and accepted goods, and mails it to the vendor
Apr 19, 2023
CII Institute of Logistics Virtual Class 13
Process Flow – before and after BPR
After BPRPurchase orders are placed in a common database.
When a new purchase order is raised, a new record is created in the database that is accessible to the accounts department.
Once the material is received, the person receiving the material opens the purchase order in the database and checks the items received on his computer screen. With a click of a key, he can then clear it for the accounts processing.
The person in the accounts department checks whether the item supplied matches against the invoice received by him directly from the vendor (a task now done automatically by the computer). For all the items received correctly, the computer calculates and prints out a cheque for the amount due against materials received.
Inspection is to be done by vendor himself and any anomaly encountered will be adjusted for in the next consignment.
Apr 19, 2023
CII Institute of Logistics Virtual Class 14
Process Flow – before and after BPR
Benefits of Process Engineering in Purchase
Cycle Time Cut DownA/P Becomes CentralIncreased Supplier SatisfactionCost cutA/P process reengineered
Apr 19, 2023
CII Institute of Logistics Virtual Class 15
Case Study – Hindustan Motors
Problem: The earth moving machinery division of Hindustan Motors manufactured 10 products, each with a different methodology. Management wanted a scheme to prioritize any product depending on customer needs and yet, no delivery schedule was to be upset. Additionally, the flow of materials and machinery on the shop floor had to be streamlined.
The old process: The same assembly line was used for all products. Problem was, it was designed for only one type of machinery. Adjustments of schedules were impossible since the workflow allowed no clear transit from one stage of production to another.
Apr 19, 2023
CII Institute of Logistics Virtual Class 16
Case Study – Hindustan Motors
Solution: Three mini plants were setup - one each for dumper, loader and tract vehicles. Now separate product groups had separate processes. The plant was divided into cells, each staffed with multi-skill workers. Each cell is responsible for the entire product - so, no delays due to hand-offs. Cells are categorized as repeater cells - handling several low priority products - or runner cells - handling high priority products.
Results: Work in progress has reduced by 25 per cent.
Apr 19, 2023
CII Institute of Logistics Virtual Class 17
BPR Vs Industrial Engineering
Industrial Engineering or Organization & Method
Functional BoundariesGoverned by concept of division of labourQuestion : How to speed up Activity/functionNo thought for process reorganization
BPRNo Functional BoundariesCustomer driven Question: How to organize new process flow
Apr 19, 2023
CII Institute of Logistics Virtual Class 18
Steps in BPR1. Develop a vision -Process vision and process
objectives 2. Define process - Defining processes to be
reengineered 3. Measure process - Understanding and measuring
existing processes 4. Identify IT lever -IT as enabler 5. Prototype 6. The Role of IT in BPR
Apr 19, 2023
CII Institute of Logistics Virtual Class 19
Case Study – Bestfit ValvesObjectiveThe CEO of the company realized that there was a high potential in the export market and decided that Fit Valve should target the export market. Thus, the CEO began with a business vision that led to a process vision: if the company had to go in for export orders, it must able to win the orders against competition. That in turn meant that the company must be able to quote against the maximum number of tenders and also be able to deliver high quality products at the shortest time.
Process to addressQuoting against tenders
Speedy delivery of quality products
Apr 19, 2023
CII Institute of Logistics Virtual Class 20
Case Study – Bestfit Valves
Step 1 – Developing process visionCEO set a target of being able to quote within twenty-four hours of receiving an inquiry
Step 2 - Identification of the processesResponding to tenders
Apr 19, 2023
CII Institute of Logistics Virtual Class 21
Case Study – Bestfit ValvesStep 3 - Detailed study of the process 1. Inquiry received by marketing.
2. Marketing passes drawing/sample to drawing section
3. Drawing section makes detailed drawings (2-3 weeks)
4. Production team details manufacturing process
(2 weeks) and sends to costing.
5. Costing does detailed estimates for raw material and each activity and forwards quote to marketing
6. Marketing sends the quotations (1-2 weeks). Whole Process duration 6 – 8 weeks)
Apr 19, 2023
CII Institute of Logistics Virtual Class 22
Case Study – Bestfit ValvesProcess Analysis findings
Very small percentage of inquiries resulted in actual orders
Drawing section ended up spending a lot of time and effort unproductively
Few designs were finally converted to actual production orders
Engineering design was being carried out in a casual manner
Each design needed to be costed. Therefore, costing process became a very mechanized procedure often using obsolete figures.
Apr 19, 2023
CII Institute of Logistics Virtual Class 23
Case Study – Bestfit ValvesSolutions
It was decided that drawing and engineering would not consider all the inquiries. Since most of the valves belonged to standard categories, orders differing from another only in the size (diameter, length and so on) and material could be handled by the marketing section using standard figures for a group of designs.
Marketing would assign an inquiry to a particular standard category and pass it on to costing. It referred only special cases (of which there was very little in number) to drawing and engineering
After receiving the cost figures from the costing section, marketing sent quotes to the potential customer. This reduced the cycle time to about a week
Apr 19, 2023
CII Institute of Logistics Virtual Class 24
Case Study – Bestfit ValvesSolutions with IT leverage
1. Marketing receives inquiry
2. Marketing notes type of valve in terms of dimensions raw materials, finish and special processes.
3. Marketing keys in data into spreadsheet to make cost estimate.
4. Marketing sends quotes.
(Cycle time reduced to 24 Hours)
Apr 19, 2023
CII Institute of Logistics Virtual Class 25
Case Study – Bestfit ValvesAdditional benefits of BPR exercise
1. The export turnover increased by 400 percent.
2. Given that there was no pressure any more on the drawing section to churn out drawings, most of which were actually not required at the end, the morale of the people in this section went up and the quality of drawings for confirmed orders improved sharply.
3. Costing became a more proactive function. Now, costing personnel became responsible for developing standards to be plugged into the spreadsheet. It was no longer a mechanical job. They began updating the standards constantly thus making them more realistic.
4. A very significant change was that marketing, which had hitherto acted only as a post office, became the owner of the process. The change from post man to a driving force not only boosted the morale of the marketing people, it also gave them the initiative to push towards converting most of the inquiries into firm orders by making them customer oriented
Apr 19, 2023
CII Institute of Logistics Virtual Class 26
BPR Framework(Zachman Framework )
Apr 19, 2023
CII Institute of Logistics Virtual Class 27
Process Step AnalysisUltimate objective – Customer pleasure
Each process step analyzed in terms of Real Value (RVA),
Business Value (BVA)
No Value (NVA)
Objective of reengineering is to eliminate all the NVAs', retain only those BVAs that are essential and retain and add the RVAs.
Apr 19, 2023
CII Institute of Logistics Virtual Class 28
BPR Guidelines
Don't Automate, Obliterate Think Process!
Tasks fall in functional boundariesA process is across functional/departmental boundaries
Think SystemsSystem is a collection of men materials, ideas and their interactions organized to achieve a common purpose. Each core process, a sub-systemprovides an easy approach to analyze the existing process and design new processes
Apr 19, 2023
CII Institute of Logistics Virtual Class 29
BPR GuidelinesChange Management
Structural
Job re-definitions
Re-deployment of workforce
Communication is the key
Prior consultation with staff/employees
Proper training
Apr 19, 2023
CII Institute of Logistics Virtual Class 30
Role of IT in BPR
Objective of IT roleIncrease their level of participation in all areas of a BPR initiative;Provide key information regarding automated processes to business analysts;Build a transition strategy that meets short and long-term retooling requirements;Enforce the integrity of redesigned business processes in the target system;Reuse business rules and related components that remain constant in a target application.
Apr 19, 2023
CII Institute of Logistics Virtual Class 31
Role of IT in BPRIT Role required in
Assessing Changing Business Requirements
mapping the existing information architecture to the business model to accurately depict current processesperforms multi-system integration on all relevant systems mapping all business rules extracted from multiple standalone systems to a target design model
Apr 19, 2023
CII Institute of Logistics Virtual Class 32
Role of IT in BPR
Apr 19, 2023
Possible Role of IT in BPRAs a constraint
limited infrastructure = limited possibilities
As a Driver
“technology push/ effective re-design
The neutral role of IT
analysis/ understand/ enable
As catalyst
opportunities planned to take full advantage
As an enabler
utilised to support/ influence and find new ways of working
ProactiveIT
“organic”/ learning company
CII Institute of Logistics Virtual Class 33
Role of IT in BPRIT Enables New Processes Example1: In an early Business Reengineering project the IBM credit corporation
reorganized the crediting function. Just one person (a so called case manager) performs all tasks of a former whole credit department by using a new computer application system (Hammer/Champy, 1993)
Example 2WWW.Amazon.com is the Internet web page address of the currently largest virtual bookstore in the world. More than one million titles are available. None of these is on store, but can be searched for and ordered interactively by remote Internet users located as far away as Herrenberg, Germany. The Amazon company made sure though to locate near Seattle, Washington, to have easy access to the largest physical book warehouses in the U.S. Their web site even offers an alert function, which automatically sends an electronic mail (e-mail), whenever a new book has been published, whose profile (author, title, subject, etc.) the customer is interested in. This Amazon selection and ordering process would not be possible without the Internet technology.
Apr 19, 2023
CII Institute of Logistics Virtual Class 34
Role of IT in BPRIT Tools Help to Facilitate Project Management
Project management tools help to analyze processes, and define new processes. They can also be used to define the introduction of process oriented application software packages
IT Lets People Work Together More Closely Helps to Integrate Businesses
Totally integrated and help to enforce the reengineering process, by concentrating on the software implementation process
Apr 19, 2023
CII Institute of Logistics Virtual Class 35
BPR Implementation Barriers
Hard barriersIT problems
Resource problems
Legal obstacle
Soft BarriersInternal individual resistance
Internal group resistance
Group resistance
Apr 19, 2023
CII Institute of Logistics Virtual Class 36
BPR Implementation Barriers
Causes for barriersProject related causes
People related causes
Organization related
Environment related
Apr 19, 2023
CII Institute of Logistics Virtual Class 37Apr 19, 2023
Session 12 E-Business Strategy
Analysis and Objectives
CII Institute of Logistics Virtual Class 38
What is E-Business Strategy?Strategy
Definition of the future direction and actions of a company defined as approaches to achieve specific objectives
Alternative definitions“Defines how we will meet our objectives”
Sets allocation of resources to meet goals”
“Selects preferred strategic options to compete within a market”
“Provides a long-term plan for the development of the organization”
Apr 19, 2023
CII Institute of Logistics Virtual Class 39
Why E-Business Strategy?Missed opportunities from lack of evaluation of opportunities
Inappropriate direction of e-business strategy
Limited integration of e-business at a technical level
Resource wastage
Apr 19, 2023
CII Institute of Logistics Virtual Class 40
What if no E-Business Strategy?Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side
Fall-behind competitors in delivering online services – may become difficult to catch-up
Poor customer experience from poorly integrated channels.
Apr 19, 2023
CII Institute of Logistics Virtual Class 41
Strategy Models
Apr 19, 2023
Generic Strategy Model Dynamic E-Business Model
CII Institute of Logistics Virtual Class 42
Elements of Strategic Analysis
Apr 19, 2023
CII Institute of Logistics Virtual Class 43
Techniques of Strategic AnalysisResource Analysis
Review of the technological, financial and human resources of an organization and how they are utilized in business processes
Decision on Marketing ServicesLevel 0: No web site or presence on the web
Level 1: Basic web presence
Level 2: Simple static informational web site
Level 3: Simple interactive site
Level 4: Interactive site supporting transaction with users
Level 5: Fully interactive site supporting the whole buying process
Apr 19, 2023
CII Institute of Logistics Virtual Class 44
Techniques of Strategic AnalysisProduct Sourcing Development
(Buy-side E-Commerce) Level I: No use of the web
Level II: Review and selection from competing suppliers using intermediary web
Level III: Orders placed electronically through EDI
Level IV: Orders placed electronically with integration of company’s procurement system
Level V: Orders placed electronically with full integration of company’s procurement, manufacturing requirements planning and stock control system
Apr 19, 2023
CII Institute of Logistics Virtual Class 45
Techniques of Strategic AnalysisApplication Portfolio Analysis
Used to assess current information systems capability and also to inform future strategies
Organizational and IS SWOT Analysis
Help organization analyze their resources in term of strengths and weaknesses and match them against threats and opportunities
Apr 19, 2023
CII Institute of Logistics Virtual Class 46
Techniques of Strategic AnalysisDemand Analysis
Assessment of the demand for e-commerce services amongst existing and potential customer segments
Competitive Threat AnalysisThreat of new e-commerce entrants
Threats of new digital products
Threat of new business models
Sell-side ThreatsCustomer power and knowledge• Use Internet to evaluat3e products and compare prices
Power of Intermediaries• Channel conflicts and result of disintermediation
Apr 19, 2023
CII Institute of Logistics Virtual Class 47
Techniques of Strategic AnalysisBuy-side Threats
Power of Suppliers• Opportunity for buyers
Power of intermediaries• Risk include cost integration
Competitive Threats acting on E-Business
Apr 19, 2023
CII Institute of Logistics Virtual Class 48
Strategic Objectives
Apr 19, 2023
CII Institute of Logistics Virtual Class 49
Defining Vision and MissionCompany vision will be based on the managers’ view of the future relevance of the Internet to their industry
Can the Internet primarily complement the company other channel or whether it will replace other channel?
Customer access to Internet is high
Offer a better value proposition
Product can be delivered over the Internet
Product can be standardized
Apr 19, 2023
CII Institute of Logistics Virtual Class 50
How can E-Business create business value
Adding valueProviding better-quality products and services
Reduce costsMaking business process more efficient
Manage risksCreate different functions and professions
Create new realityCan be used to innovate
Apr 19, 2023
CII Institute of Logistics Virtual Class 51
Evaluate business value from E-Business
An evaluation Tool
Apr 19, 2023
An evaluation tool relating information to business value. An organization’s use of information on each axis can be assessed from 1 (low use of information) to 10 (high use of information)
CII Institute of Logistics Virtual Class 52
E-Business Strategy DefinitionElements of Strategy Definition
Apr 19, 2023
CII Institute of Logistics Virtual Class 53
Decision 1:E-Business Channel priorities
Strategic e-commerce alternatives for companies should be selected according to the percentage of target market who can be persuaded to migrate use the e-channel
Bring benefits to the company by bringing higher sales volume and reduce costs for customer acquisition and retention
Apr 19, 2023
CII Institute of Logistics Virtual Class 54
Right ChannelingRight channelling can be summarized as:
Reaching the right customer– Using the right channel
With the right message or offering– At the right time
Examples:B2B serve SMEs through e-channels and larger clients through personal serviceEncourage consumers to buy and serve through lower cost electronic channelsEncourage offline fulfillment/conversion as appropriateDifferent levels of service/promotion for different customers.
Apr 19, 2023
CII Institute of Logistics Virtual Class 55
Right Channeling
Apr 19, 2023
Strategic options for a company in relation to the importance of the Internet as a channel
CII Institute of Logistics Virtual Class 56
Decision 2:Organizational Restructuring
How the company should restructure in order to achieve the priorities set for e-business
The choices are:In-house division
Joint venture
Strategic partnership
Apr 19, 2023
CII Institute of Logistics Virtual Class 57
Other DecisionsDecision 3: Business, Service and Revenue Models
Review of opportunities from new business and revenue models
Need to review new revenue opportunities and competitor innovations
Decision 4: Market place restructuringConsider options created through disintermediation and reintermediation
Decision 5: Market and product development strategiesDecide on which market to target
Positioning and Differentiation StrategyStrategies should review the extent to which increases in product and service quality can be matched by decreases in price and time
Apr 19, 2023
CII Institute of Logistics Virtual Class 58
Using Internet to support different growth strategies
Apr 19, 2023