Retailing in Electronic Commerce

Retailing in Electronic Commerce: Products and Services
Outline
Internet Marketing and Electronic Retailing E-tailing Business Models Travel and Tourism Services Online Employment Placement and the Job Market Online Real Estate and Insurance Online Banking and Personal Finance Online Online Delivery of Digital Products, Entertainment, and Media Online Purchase-decision Aids Successful Click-and-mortar Strategies Problems with E-tailing and Lessons learned Issues in E-tailing
Roadmap
Internet Marketing and Electronic Retailing E-tailing Business Models Travel and Tourism Services Online Employment Placement and the Job Market Online Real Estate Online Banking and Personal Finance Online Online Delivery of Digital Products, Entertainment, and Media Online Purchase-decision Aids Successful Click-and-mortar Strategies Problems with E-tailing and Lessons learned Issues in E-tailing
Internet Marketing and Electronic Retailing

Overview of Electronic Retailing electronic retailing (e-tailing)
Retailing conducted online, over the Internet
e-tailers
Retailers who sell over the Internet

Size and Growth of the B2C Market
Reported amounts of online sales deviate substantially based on how the numbers are derived
Annual online 2004 sales were estimated to be over $70 billion The average online shopper spent over $350 per quarter Forrester Research estimates that e-tailing will reach $316 billion by 2010
5

What Sells Well on the Internet?
Computer hardware and software Consumer electronics Office supplies Sporting goods Books and music Toys Health and beauty Apparel and clothing Jewelry Cars Services Others
6

Characteristics of Successful E-Tailing
High brand recognition A guarantee provided by highly reliable or wellknown vendors Digitized format Relatively inexpensive items Frequently purchased items Commodities with standard specifications Well-known packaged items that cannot be opened even in a traditional store
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Retailing vs E-Tailing
Roadmap
E-Retailing Business Models
10

Classification by Distribution Channel
1. 2. 3. 4. 5. Mail-order retailers that go online Direct marketing from manufacturers Pure-play e-tailers Click-and-mortar retailers Internet (online) malls
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direct marketing
Broadly, marketing that takes place without intermediaries between manufacturers and buyers; in the context of this book, marketing done online between any seller and buyer
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Direct Marketing: Lands End

Landsend.com Increase sales by going online Website contains product catalogs and features
My Virtual Model Wide range of fabric to choose from Affiliate program: pay 5% commission Real-time chat with customer service reps Less than 2 days delivery 16 distribution outlets and the US and 3 in the UK
88% of their customers are college graduates

13

Direct Sales by Manufacturers
Sellers can understand their markets better because of the direct connection to consumers Consumers gain greater information about the products through their direct connection to the manufacturers
14

virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet without maintaining a physical sales channel
Low overhead costs General purpose or specialized
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web site from which to conduct business
Sells in stores, via phones, over the Internet, via mobile devices
15

Retailing in Online Malls
Referring Directories Malls with Shared Services
Representative B2C Services

Postal Services Services and Products for Adults Wedding Channels Gift Registries
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Roadmap
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Travel and Tourism Services Online

Online travel is probably the most successful e-commerce implementation Services provided include:
General information Reserving and purchasing tickets, accommodations, and entertainment Travel tips Electronic travel magazines Fare comparisons
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Benefits of Online Travel Services
Benefits to consumers
Large amount of free information available 24/7 Substantial discounts can be found Airlines, hotels, and cruise lines are selling otherwise-empty spaces Direct selling saves the providers commission and its processing
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Benefits to providers

Limitations of Online Travel Services
Many people do not use the Internet The amount of time and the difficulty of using virtual travel agencies may be significant Complex trips or those that require stopovers may not be available online because they require specialized knowledge and arrangements
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Corporate Travel
To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips using online optimization tools provided by travel companies Travel authorization software that checks availability of funds and compliance with corporate guidelines is usually provided by travel companies
21

Intelligent Agents in Travel Services
Software agents emulate the work and behavior of human agents in executing organizational processes like travel authorization, planning or decision making Each agent is capable of acting autonomously, cooperatively, or collectively to achieve the stated goal
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Roadmap
23
Employment Placement and the Job Market Online

The Internet Job Market
Job seekers Employers seeking employees Job agencies Government agencies and institutions
The Internet is a global online portal for job seekers
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Intelligent Agents Match Resumes with Available Jobs
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Employment Placement and the Job Market Online

Limitations of the Electronic Job Market
Many people do not use the Internet. This limitation is even more serious with nontechnology-oriented jobs Security and privacy: resumes and other online communications are usually not encrypted, so ones job-seeking activities may not be secure
28
Roadmap
29
Real Estate Online

Real Estate Applications
Advice to consumers on buying or selling a home Commercial real estate listings Listings of residential real estate in multiple databases Maps are available Information on current mortgage rates Mortgage () brokers can pass loan applications over the Internet and receive bids from lenders who want to issue mortgages Online lenders can tentatively approve loans online Automated closing of real estate transactions
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Real Estate Online

Real Estate Applications
Property management companies (residential, commercial, and industrial) are using the Internet for many applications ranging from security to communication with tenants Sites for persons who want to sell their homes privately, without using a real estate agent Rental properties are listed
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Domain.com.au
Whats its revenue model?

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Roadmap
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Banking and Personal Finance Online

electronic banking (e-banking)
Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking
34

E-banking:
Various banking activities conducted from home or the road using an Internet connection; aka cyber-banking, virtual banking, online banking, and home banking
54M Americans use online banking in 2005, 47% increase in only 2 years
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Bankdirect.co.nz
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Bankdirect.co.nz
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Bankdirect.co.nz
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Bankdirect.co.nz
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Implementation Issues in Online Financial Transactions
Securing financial transactions Access to banks intranets by outsiders Using imaging systems
Incoming checks, invoices, letters from banks and customers
Pricing online versus off-line services Risks

Hackers People are afraid of not having sufficient funds resulted in panic withdrawals
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Online Billing and Bill Paying
Automatic transfer of mortgage payments Automatic transfer of funds to pay monthly utility bills Paying bills from online banking accounts Merchant-to-customer direct billing Using an intermediary for bill consolidation
collect commission from payer and payee
Person-to-person direct payment Pay bills at bank kiosks

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Commonwealth Bank
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Roadmap
44
Interactive Entertainment
Web browsing Internet gaming
Online Delivery of Digital Products, Entertainment, and Media
Online arcade, lotteries, casino gaming
Fantasy sport games

Sportline.com, espn.com
Single and multiplayer games Adult entertainment Card games Participatory Web sites:
clubs, user groups, infotainment sites
Reading
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Online Delivery of Digital Products, Entertainment, and Media

Non-interactive Entertainment: entertainment that users are not being entertained
Event ticketing Restaurants Information retrieval Retrieval of audio and video entertainment Live events
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Roadmap
48
Online Purchase-Decision Aids

shopping portals
Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented
shopping robots (shopping agents or shopbots)

Tools that scout the Web on behalf of consumers who specify search criteria
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Business Ratings Sites
Bizrate.com, gomez.com
Trust Verification Sites

TRUSTe (truste.org), Verisign.com
Other Shopper Tools

Escrow services Communities of consumers who offer advice and opinions E-wallet (or e-purse)
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Other Shopper Tools
Amazon.coms A9 Search Engine
Remembers information A user can make notes about any Web page and search them Offers a new way to store and organize bookmarks Recommends new sites and favorite old sites specifically for the user to visit
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Roadmap
52
Successful Click-and-Mortar Strategies

A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to:
Speak with one voice
Communicate the same thing to customers in every channel
Leverage the multi-channels

Purchase online, return at store
Empower the customer

A powerful 24/7 channel for service and information
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Circuitcity.com
A successful click-and-mortar company The second-largest US retailer of consumer electronics Manage 650 stores around the country Features
Educate customers about features and capabilities of products Power search on a product database Extensive amount of product information
Over 50% of purchase processes completed compared to 17% of ones at others Customers have 3 choices: 3-day delivery, overnight delivery, or self-pickup in a store
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Amazon.com & ToysRUs

Alliance between amazon.com and ToysRUs Amazon.com expertises in e-tailing business, but could not get best deal from toy manufacturers ToysRUs is the best in toy industry but failed in e-tailing Seemed to be a promising agreement However, they sued each other after 4 years out of 10-year agreement.
ToyRUs wanted amazon to sell only its products Amazon interpreted the agreement to allow it to sell other companies products
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Roadmap
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Problems with E-tailing and Lessons Learned

Dont ignore profitability
If it doesnt make cents, it doesnt make sense
Manage new risk exposure

Concern about scope of target customers Wallmartsucks.com
Watch the cost of branding Do not start with insufficient funds The Web site must be effective Keep it interesting: dynamic content
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Roadmap
58
Issues in E-Tailing
disintermediation
The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain
reintermediation
The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles
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Disintermediation and Reintermediation in the B2C Supply Chain
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Issues in E-Tailing
channel conflict
Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition
Determining the right price Personalization

Mass customization
Fraud and illegal activities How to make customers happy

Need market research
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Intranets, Extranets, and Supply Chain Management
Intranets
An Intranet is a private network (TCP/IP protocols) designed exclusively to meet the internal information needs of an organization that the general public cannot access Intranets are rapidly emerging as the main information portal of organizations As in B2C, a portal is simply a gateway to information resources available on a network An intranet, or corporate portal, uses Internet protocols (and a browser interface) to provide employees with the ability to share information, communicate, collaborate, and support business processes Intranets fit in the B2E category
Intranet versus Internet

Internet Packets are public IP protocol suite Cost spread out Problematic management Weak policies No enforcement No controlling organization
Intranet Packets are private IP protocol suite Firm bears costs Enterprise management Strong policies Central enforcement Enterprise controls
Conceptual Applications of Intranets

Existing e-mail & voice mail
Communication & collaboration Business Operations & Management Employees Web-based documents Web Publishing
Extranet Internet
Intranet
Existing Databases & Enterprise Apps
Existing Hardware & Networks
Intranet Portal Management

OBrien, 2003
Enterprise Information Portal Example
www.adenin.com
Intranet Benefits
Standardized enterprise-wide interface and access Easy and intuitive browser interface, which minimizes training Low cost and highly scalable Hardware is often available and newer applications are Web-enabled Runs on most platforms Reduces costs of document distribution Larger organizations report $1M+ savings per year Reduces training costs (several million $ for large companies) Serve as the platform for B2B applications with partners (suppliers, customers, etc.)
Extranets
A corporate password-protected network that provides information to people or entities in the environment of the business (partners) An extension of the corporate Intranet to business partners Access rights can be individually customized Extranets can serve as the technical foundation for B2B exchanges and supply chain management The major difference between Intranets, Extranets, and the Internet is the level of access to information by individuals or groups of individuals
Internet, Intranet, and Extranet

Network Type Typical Users Type of Access Unlimited, public; no restrictions Private and restricted Private and outside authorized partners Information Internet Any individual with dial-up or broadband access Authorized employees ONLY Authorized groups from collaborating companies All forms of public information Specific, corporate and proprietary Shared in authorized collaborating group
Intranet
Extranet
Elements of Extranets
Intranet (s) A lot of organizations have multiple interconnected Intranets Web server To give access to the Intranet via the Internet Firewalls Access control (rules to allow or deny access to certain resources) Internet Service Provider (ISP) Provides an Internet connection or private leased line
Connecting IntranetsSCM
Extranet Suppliers Enterprise
VPN VPN
Consumers Internet
Intranet
Clients
VPN
Intranet
VPN
VPN
Remote Employees
Intranet Intranet Distributors

Business Partners
Intranet
Caterpillar
Reduced product development cycle time Customers can use the extranet to retrieve and modify detailed order information while the vehicle remains on the assembly line Enables Caterpillar to improve customer service and charge a premium price for customization and flexibility The collaborative capabilities of extranets are now emerging as some of the most powerful tools to strengthen relationships with key customers and suppliers This is critical in an era when product development costs have increased dramatically and when joint product development has become the norm The reduction in coordination costs and the associated time savings give the organization the ability to better respond to changing customer needs
Supply Chain Management

Supply chain management encompasses a diverse range of activities that covers the entire process of determining demand, obtaining raw materials, manufacturing a product, and delivering that product to consumers The efficient management of the supply chain has become the primary focus of B2B initiatives Can be a source of competitive advantage Many experts believe that future competition will be competition between supply chains The supply chain can affect all shareholder value levers Costs (e.g., inventory, production, distribution, etc.) Customer service (e.g., on-time delivery, stock-outs, etc.) Asset productivity (plant utilization, etc.) Revenue generation (ability to attract new customers, etc.)
Supply Chain Management

Upstream supply chain (external): 1st tier suppliers and their suppliers (2nd and 3rd tiers) Internal supply chain: all internal processes Downstream supply chain (external): final customers Supply chain management (SCM) refers to the planning, organization, and coordination of supply chain activities SCM software and systems can be classified into 2 broad categories SCM planning focuses on the acquisition of customer information (demand planning) and the determination of manufacturing capacity SCM execution deals with the automation of supply chain activities
Supply Chain Management Components

Forecasts & demand planning Strategic sourcing & procurement Customer order fulfillment/service
Distribution network & warehouse operations Production logistics Transportation & shipment management
Drivers of Supply Chain Performance

Facilities Location, size, and operations of production and warehousing facilities Inventory All materials in the supply chain (raw materials, work-inprogress, and finished goods) Tradeoff between availability and costs Transportation Movement of materials in the supply chain Information The ways organizations in the chain request, respond, and inform one another The critical driver in an e-commerce environment Remember the bullwhip effect
Information and Physical Flows

Raw Materials The Supply Chain Finished Goods
Information flow
Information flow
Physical flow
Physical flow
Problems with Traditional Supply Chains

The majority of problems with traditional supply chains are from uncertainties (lack of visibility and transparency) and the need to coordinate a large number of activities (coordination costs) Uncertainties originate from: Demand forecast Delivery times Production delays Coordination of SC activities Coordination costs Delays and inefficiencies throughout
Impacts of Poor SCM

Poor customer service Loss of revenue (due to loss of customers) Increased costs (additional shipping costs) Long lead times High inventory costs Inventories exist because of uncertainties Inventories are unnecessary in a world with perfect information High administrative overhead to deal with complex coordination of activities Inefficiencies can impact all organizations within a supply chain leading to massive amounts of wastage
Traditional Model and Solutions

Build-to-stock Push-based model of production Vertical integration Should reduce coordination and transaction costs since firm owns components of supply chain Reality was very different Inventories Buffers to compensate for uncertainty in supply and demand Very costly solution, especially for products with high rates of depreciation
Push-Based Model (Build-to-Stock)

Supplier
Supply to forecast
Push Versus Pull

Distributor
Inventory based on forecasts
Manufacturer
Production based on forecasts
Retailer
Stock based on forecasts
Customer
Purchase what is on shelves
Pull-Based Model (Build-to-Order)

Supplier
Supply to order
Manufacturer
Production to order
Distributor
Automatically replenish warehouse
Retailer
Automatically replenish stock
Customer
Customer orders
New Model and Solutions

Build-to-order Pull-based model Supply chain integration with the Internet as the communications backbone The Internet provides an inexpensive communications medium and standard protocols to facilitate integration Integration into back-office information systems like ERP (Webenabled) Value-added relationship with suppliers and customers (instead of adversarial price-driven relationship) Remember last weeks discussion of the auto industry
New SolutionSupply Chain Integration

Supplier Manufacturer Retailer Customer
Shared market data & Collaborative fulfillment
Internet
SUPPLIERS Supply-chain management Electronic procurement Stock management Integrated forecasting
The Ultimate Goal: Value Chain Integration

COMPANY CUSTOMERS Electronic commerce Customer service Interactive marketing Demand forecasting Transaction management
Source: The Economist
Manufacturing
Distribution
Employees Purchasing
Quality systems management
Modularity and Indispensability

Modularity allows firms to break out activities from their supply chains into components with standardized interfaces Loosely-coupled components Alternate way to coordinate a complex set of activities The benefits of modularity will depend on the role the organization plays within the supply chain The degree of importance of the firm in supply chain activities is defined as supply chain indispensability Indispensable organizations can modularize their supply chains and improve coordination to better serve customers This makes vertical integration unnecessary since standardized interfaces removes opportunism
Drivers and Benefits

Lower coordination costs (and better coordination) Streamlined information flows Automated execution Lower transaction costs Less human interaction and fewer errors Greater visibility (the most sought after benefit) Ability of all supply chain participants to look at the entire supply chain Facilitates planning and reduces inefficiencies Better demand forecasts More timely information from customers (matching supply and demand) Human factor is important (completely automated can have disastrous consequences)
Drivers and Benefits

Lower inventories At all stages in the supply chain Greater flexibility and responsiveness Ability to react more quickly to changes in the environment Better cooperation among supply chain participants Better alignment in the strategic objectives of participants Leads to better and more efficient product development The end result is greater efficiency and better customer service (win-win)
Barriers and Challenges

Commodity versus strategic suppliers Strategic sourcing versus procurement Need to be treated differently Trust (the basis for flexibility) The most difficult challenge since integration requires trust Trust develops over time (preferred suppliers) and probably requires supplier consolidation Good contracts play a critical role (at least in the early stages)
Barriers and Challenges

Control Integration leads to a loss of control over information and operations It is similar to outsourcing Focus on technology SCM is about relationships, not exclusively about systems Process reengineering and lack of internal integration Lack of internal visibility is a major impediment Global IT infrastructure and security (weak links in the chain)
Current and Future Trends

Increasing complexity of supply chains Supply chains are getting longer (mostly due to 3rd party involvement) Globalized supply chains For both high technology and low technology products Loosely-coupled supply networks The modularity issue Technology is no longer the bottleneck B2B has radically changed the nature of supply chains
Current and Future Trends

Integration of multiple technologies Wireless such as RFID, handheld, 3G, WiFi, WiMax GPS and satellite imagery (GIS) XML and Web services Emerging standards for B2B integration Organizations need to agree on standards for the content of XML messages Industry associations such as Rosetta Net are facilitating that process
LEAN and AGILE

approaches to manufacturing and process improvement
The frog!
Rebbit! Rebbit! Uh oh!
10OoC
5OoC
OoC
Poikilothermic (= dont try this at home)
A Lean and Agile Manufacturing

What are they? What are the benefits? How to do it? Case studies Sources of further information
Lean Thinking roots in Toyota Philosophy

Doing it all for the Customer Levelled production Pull system Continuous-flow production Takt time Multi-skilling TQM TPM Poka Yoke SPC Standardised work Kaizen
Competitiveness Item Runner Repeater Stranger Load Capty Qnty 100 27 5 132 135 Day 1 20 7 27 27 Day 2 20 7 27 27 Day 5 20 5 25 27
kanbans K K replacement
store withdraw & process
work centre
work centre
batches
Upper action limit
average
Upper warning limit time
action?
Uncompetitive
Competitive Time
What is Lean Manufacturing?

Builds on roots but with specific focus on: Lead time reduction
Regular production New products
Flexibility improvement Variability reduction Cost reduction
Lean Characteristics & Benefits

Characteristics
Customer Driven Profit Driven Team Based Customer Satisfaction Profitability
Benefits (higher )
Fewer Players
Devolved responsibility
Greater Control
Improving business performance

Increase turnover
Sell more Charge more
Reduce cost
Reduce direct material cost Improve production efficiency/effectiveness Increase the rate of adding value
Time based competitiveness some rules

0.05 to 5 Value actually added between 0.05% - 5% of total time 3/3 Why no value being added:
Waiting for completion of batches Waiting for physical / intellectual rework Waiting for management decision
1/4 - 2 - 20
For every quartering of total time, productivity doubles, costs reduce by 20%
3x2
Lean competitors enjoy x3 avg growth rate, x2 profit margin
What is World Class Manufacturing?

Being the best
Delighting the customer?
Being the lowest cost producer Schonbergers agenda?
What is World Class Manufacturing?

Flexibility & control to satisfy customer on time, every time Managing through people, teams and aligning all to goals Reduction of waste in the manufacturing system
Product quality right first time, every time
How to go lean
Objective 1
Understand customers and what value they want Define the internal value stream Eliminate waste, make info & products flow, pulled by customer needs Extend the definition of value outside your company Continually aim for perfection
Method
Setting the direction, targets and checking results An internal framework for delivering value Appropriate method to make necessary change Externalise the value focus to the whole value stream Strive for perfection in the product and in all processes and systems
Cornerstone of Lean Manufacturing

Value stream mapping Construct process map of the value stream Avoid using existing maps, may be out of date or have misconceptions Many mapping tools (process activity, Analyse the process map supply chain response, quality filter, etc.) Focus on customer Identify value-added and non-value-added activities Calculate the value-add ratio Reduce and eliminate wasteful steps
Conduct all improvements in context of value-add ratio

(several value streams exist in a value chain, e.g. key product line to key customer)
Example of process map

Note value-add time -vs- lead time
Demand amplification mapping

Many tools exist including demand amplification mapping Concerned with batching and response time Spreadsheet example from IOM publication shows effect
Capability of processes and the dangers

If your production planning function was likely to produce infeasible plans occasionally would you trust them?!
Need to establish capability in all processes Need capable machines Need capable suppliers etc. Danger is that you can base lean on poor foundations Focus on assembly area when machine shop is not capable Focus on production processes when supplier is not capable Need to be careful with available literature, can assume You have sales and operations planning See roots of lean You have capable machines thinking slide etc.
Capability / variance
Lower specification limit Upper specification limit Defects 1350 parts per million Defects 0.001 ppm
Nominal
3s 6s
Variation of output of a process can give rise to defects internally and/or passed onto customer Aim to reduce process variation to increase reliability of a process This is the foundations of Six Sigma methodology
Six Sigma the business or A complete methodology for improving

simply a process reliability concept? Key to Motorola, GE and other businesses at all levels
Executive vision Assess & kickoff
Select champions Train and set up structure Map, id critical input/output variables Determine variance Design of experiments Use control charts
Deploy strategy
Measurement Analysis
Improvement Control
Agile a step on from lean?

Roots of agile in America defence industry developing the ability to react and reorganise to successful equipment bids Lean and agile have common components See Lean Thinking Roots slide (quality, reliability, improvement, etc) But lean is process focused, agile is boundary focused Ability to thrive in constant, unpredictable change Key attributes of agile Customer value focus (solutions not products) Flexibility to adapt to fundamental market changes Not simply changes in product mix Competing from multiple fronts, possibly virtually Organisational knowledge, including ability to adapt IT systems to support new processes
Different views on lean -vs- agile

The journey Traditional Lean Agile
A spectrum of companies Lean

Make to stock Low variety Mass, repetitive Cost minimiser
Agile
Make/Engineer to order, High variety, Service culture Product Innovator? Customer intimate?
Complementary
Make to forecast
Material suppliers
Lean
Stock (to decouple)
Make to order
Agile
customer
Upstream variation
Downstream variation
Establishing Foundations for Lean, Agile

Need the classic pre-requisites for any programme
Culture Strategy change Commitment Objectives Use of champion Communication Empowerment Establish framework Activity plan, cost, time and execution Measurement and evaluation system
Key to Lean Manufacture is measurement

Need clear, objective focus on value Example: OEE (Overall Equipment Effectiveness) A composite measure of the ability of a process to carry out value adding activity OEE = % availability x % output achieved x % perfect output If change to a process increases OEE it is worthwhile
Actual Available Production Time Theoretical time minus planned downtime and shutdowns This is the realistic best available production time (100%) Planned Downtime PM, Shutdowns, Holidays
Machine Running Time Actual production hours minus downtimes This is possible production if 100% performance
Unplanned Losses Breakdowns, HR, Set-up time
Availability
Net Operating Time Machine speed against theoretical speed This is the possible output if 100% quality
Speed losses Idling, minor stopages performance
Performance
OEE
Useful Production Time Material in minus product out This is the real output
Quality Losses, adjustments, Set-up waste
Quality
OEE Example Calculation

Loading Time A. Working Time B . Line Off Time C. Loading Time (A-B) Availability D. Downtime E. Operating Time (C-D) F. Availability (E divided by C x 100) = 525 mins = 30 mins = 495 mins = 190 mins = 305 mins = 62%
Line Off Time Lunch break 30 mins Asset Care 0 mins Downtime Start up 30 mins Shut down 20 mins Breakdown 40 mins Changeovers 90 mins Materials Supply 10 mins
Performance G. Total dozens produced = 3869 dozen H. Balanced Speed (180 BPM=0.067) = 0.067 I. Performance (HxG / Ex100) = 85% Quality J. Rejects during operating time = 20 dozen K. Rate of quality products (G-J / Gx100) = 99%
Overall Equipment Effectiveness OEE (F x I x K / 10000)
= 52%
Cost benefit analysis

Costs
Investigation Implementation Project specific
Benefits (higher )
Customer Satisfaction Profitability Greater Control
Summary
Strategy that encompasses business [profit] objectives and customer order winning [and maintaining] criteria Achieve short-term, KPI-driven improvements consistent with strategy Plan and act for sustainable change
Example: Rolled metal manufacture (batch)

Major initiative to remove waste Significant formal education and training Targeted specific product stream From supplier to customer Mapped out processes and established measures Result Major quality improvements, 60% drop customer complaints Other significant financial benefits Short / long term EVA moved negative to neutral (EVA=Economic Value Add -> sustainable investment) Openness of data systems!
Example: Bottled water (process)

Phase 1 Education and training of teams Use of DTI funding via TCS Programme (tcd.co.uk) Full integration of sales, purchasing, manufacturing Improved management information system (Soft) greater teamwork, responsiveness From 80% to 100% peak season stock cover DEPALLETISER TOPSTAR/DUBUITT Sales up 30%, same headcount RINSER Phase 2 (underway) FILLER Production processes focus CAPPER Introducing OEE LABELLER Focus on waste OCME (S/wrapper) CI, include quick changeovers HANDLE APPLICATOR Ambitious, achievable targets PALLETISER Self-managed work teams
STRETCHWRAPPER
FILLING HALL
CASE ERECTOR CASE SEALER CASE PACKER
BOTTLING HALL
Example: Whisky bottling (process)

Use of OEE Overall
equipment effectiveness
(OEE) as key measure

Specific focus on bottling lines Low OEE Start / stop Breakdowns Introduced asset care 5S Sort, Straighten, Sweep, Standardise, Self discipline Quick changeovers Reliability centred maintenance Asset care programme brought 0.5m savings in 6 months

Retailing in Electronic Commerce

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Retailing in Electronic Commerce

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Retailing in Electronic Commerce: Products and Services

Internet Marketing and Electronic Retailing

Internet Marketing and Electronic Retailing

Internet Marketing and Electronic Retailing

Internet Marketing and Electronic Retailing

E-Retailing Business Models

E-Retailing Business Models

E-Retailing Business Models

Direct Marketing: Lands End

88% of their customers are college graduates

E-Retailing Business Models

E-Retailing Business Models

E-Retailing Business Models

Representative B2C Services

Travel and Tourism Services Online

Travel and Tourism Services Online

Travel and Tourism Services Online

Travel and Tourism Services Online

Travel and Tourism Services Online

Employment Placement and the Job Market Online

The Internet is a global online portal for job seekers

Intelligent Agents Match Resumes with Available Jobs

Employment Placement and the Job Market Online

Real Estate Online

Real Estate Online

Whats its revenue model?

Banking and Personal Finance Online

Banking and Personal Finance Online

Banking and Personal Finance Online

Pricing online versus off-line services Risks

Banking and Personal Finance Online

Person-to-person direct payment Pay bills at bank kiosks

Online Delivery of Digital Products, Entertainment, and Media

Online arcade, lotteries, casino gaming

Fantasy sport games

Online Delivery of Digital Products, Entertainment, and Media

Online Purchase-Decision Aids

shopping robots (shopping agents or shopbots)

Online Purchase-Decision Aids

Trust Verification Sites

Other Shopper Tools

Online Purchase-Decision Aids

Successful Click-and-Mortar Strategies

Leverage the multi-channels

Empower the customer

Amazon.com & ToysRUs

Problems with E-tailing and Lessons Learned

Manage new risk exposure

Disintermediation and Reintermediation in the B2C Supply Chain

Determining the right price Personalization

Fraud and illegal activities How to make customers happy

Intranets, Extranets, and Supply Chain Management

Intranet versus Internet

Conceptual Applications of Intranets

Existing Databases & Enterprise Apps

Existing Hardware & Networks

Intranet Portal Management

Enterprise Information Portal Example

Internet, Intranet, and Extranet

Intranet Intranet Distributors

Supply Chain Management

Supply Chain Management

Supply Chain Management Components