WAL- MART GRAPPLES WITH RFID

INTERACTIVE SESSION: ORGANIZATIONS

WAL-MART GRAPPLES WITH RFID

Wal-Mart has required its top suppliers to use passive RFID tags on cases and pallets shipped to its stores to help it track and record information flow.  Suppliers have been proceeding slowly because of difficulties in RFID implementation.

CASE STUDY QUESTIONS

   1.How is RFID technology related to Wal-Mart’s business model? How does it benefit suppliers?

Wal-Mart is the largest retailer on Earth. Their business model is centered on using a low-cost leadership strategy in order to achieve the lowest operational costs and services at a lower price than competitors while enhancing quality and level of service. Wal-Mart have been able to follow their strategy of keeping prices low and shelves well stocked by using a legendary inventory replenishment system (Real Link). Through Real Link, Wal-Mart’s has a continuous replenishment system that sends orders for new merchandise directly to suppliers as soon as customers pay for their purchases at the cash register. At Wal-Mart’s headquarters, the central computer collects the orders from all Wal-Mart stores and transmits them to suppliers. The objective was to reduce out-of-stock items by tracking item location more precisely as they moved from the receiving dock to store shelves.

Suppliers can also access Wal-Mart’s sales and inventory data using Web technology. Wal-Mart wanted suppliers to use of RFID technology in order to assist the suppliers in shipping products more accurately and faster. RFID technology offers other benefits to suppliers. RFID technology is tied directly to Wal-Mart’s Real Link system. As soon as a customer purchases an item at a Wal-Mart store, the supplier monitoring the item knows to ship a replacement to the shelf. Suppliers are able to obtain real-time access to customer demand, track shipments, and improve inventory control. Using these technologies, suppliers are better informed of product demand, and given this information they can use it to predict their own manufacturing, production, and shipping logistics.

2.What management, organization, and technology factors explain why Wal-Mart suppliers had trouble implementing RFID systems?

Wal-Mart exemplifies the power of information systems coupled with brilliant business practices and supportive management to achieve world-class operational efficiency. The Retail Link system digitally links its suppliers to every one of Wal-Mart’s stores worldwide. However, the implementation of RFID systems appeared to be a top-down mandate by Wal-Mart without the support of the suppliers.

Management:

·                    Design an RFID implementation strategy

·                    Educate and work closely with suppliers

Organization:

·        Redesign RFID requirements for different product

·        Overcome supplier resistance to RFID

Technology:

·        Deploy RFID technology required in implementation.

·        Implementation of RFID into suppliers IT infrastructures and information systems (many are legacy systems and costs would be high).

    3. What conditions would make adopting RFID more favorable for suppliers?

Not all suppliers could comply with Wal-Mart’s demand for attaching RFID tags to all of their products. Only a limited number of suppliers could afford to make the major technology and business process changes required to integrate RFID into their IT infrastructure and information systems. RFID technology is still viewed as being in its infancy and the benefits are not fully understood or even measurable. On top of that, this technology is still very expensive and pricing of the tags themselves make it impossible for the majority of suppliers to do it.

Wal-Mart must assist suppliers in making the required changes to their systems so that the can actually use the data generated by RFID to track their product movement and inventory. Through education, the suppliers would be better equipped to understand how they can benefit from RFID.

  4. Should Wal-Mart require all its suppliers to use RFID? Why or why not? Explain your answer.

In February, 2005 Wal-Mart ordered its top suppliers to place RFID tags on all products shipped to specific distribution centers. The objective was to reduce out-of-stock items by tracking item location more precisely as they moved from the receiving dock to store shelves. The information captured through the use of RFID tags would held Wal-Mart reduce out-of-stock items, increase sales, and further reduce its costs. However, suppliers are not totally convinced of the benefits that they would reap from such an expensive undertaking.

Wal-Mart has the power to exercise muscle in the supply chain. However, Wal-Mart must streamline their demands in requiring suppliers to attach RFID tags to all items. From the supplier side, this top-down mandate from Wal-Mart was simply not economically feasible. The technology itself is still very expensive and suppliers simply could not state a good business case to support such expenditures.

Major retailing and manufacturing companies will no doubt switch to RFID technology as its costs fall, and its applications increase. Whether or not all major retailing and manufacturing companies should switch to RFID is a matter of choice. They will no doubt go this way in the near future. By doing so, they will increase operational efficiencies, increase profits margins, and gain a competitive advantage by lowering overall costs to consumers.

THE ALLURE OF MYSPACE

THE ALLURE OF MYSPACE

1. How do businesses benefit from Myspace? How do Myspace members benefit?

Businesses benefit from Myspace because they can advertise and also retrieve information from these users so that they can target and better serve their market. The businesses can advertise to a particular set of individuals who fit their target market. They can also retrieve their potential user’s age, location, marital status, language, gender, etc. to analyze what types of individuals may be interested in their products.

     

Myspace members benefit from Myspace because they can network with millions of people who also utilize the service. They can do job searches, blog, play games and e-mail.

2. Does Myspace create an ethical dilemma? Why or why not?

Myspace does not create an ethical dilemma because all of its users subscribe by choice and therefore consent to the sites agreement.

3. Do parent and schools’ objections to Myspace have any merit? Should a site like Myspace be allowed to operate? Why or why not?

I do believe parents and school objections should be valued. They object Myspace because they are trying to protect children from being hurt by individuals who misuse this site. Although some people object this site. I believe that Myspace should be allowed to operate. There are a lot more positive aspects to this networking site than negative ones. Myspace is listening to the concerns and doing the best they can to protect individuals who could be a target to sexual predators. It is also the parent’s responsibility and not Myspace responsibility to protect and watch their children.

 

NTERACTIVE SESSION : TECHNOLOGY

RENAULT SPEEDS UP DELIVERY WITH A NEW DSS

1. How did this DSS improve decision making at Renault? Describe some of the decisions that were improved by using this system.

The new DSS software solution designed for overall operations of Renault Company has made a huge progress for entire value chain of the company. This software has managed to link the company directly with the customers through the dealers. Similarly, it has made the whole process of car manufacturing, customization and the sales of car highly efficient. To every successful project, it involves a lot of decision making process. Some of the improved decision making by this new DSS software can be discussed below:

A. Customer order handling : Since the DSS software was able to receive the order directly from the customers, through car dealers, they were able to optimize the mix of models, critical options like engine, gearbox, and secondary options like colour, in-car electronics etc. Similarly, they were able to analyse a large number of customer orders with a powerful computer processor capable of processing 140 millions  evaluations in 10 minutes. In contrast, previously the numbers of car orders were taken as per the order the dealers. If a car was left in a showroom for a long time, the dealer would ultimately need to reduce the price of a car making it unprofitable to sell a Renault car.

B. Efficient Assembly plant : With the new DSS software, there was significant improvement in order sequencing. Based on the customer orders, the numbers of cars to  be  manufactured  were sequenced  as  per their  critical  and  secondary requirement. Also, the company managed to reduce a lot of production cost by systematization of the whole process. The car sequence ensured the workload to be sequentially distributed and managed to reduce variable costs like painting which required painting tubes to be washed. With proper sequencing, it ensures lesser wastage in paintings.

C. Smooth cooperation among the various departments : The software also managed to give a clear picture of whole assembly line, which in return helped to define   clear   job   roles   of   each department. For example, they were able to allocate sales targets and work into manufacturing issues like planning problems, constraints, decision variable. The sales department was able to focus on ability to produce profitable mix of the car.

D. Future planning and software modification : The introduction of new DSS software   solution was simply a start to much more sophisticated planning process. The initial software had some drawbacks and needed to be modified accordingly for its international production houses in various countries. It led to healthy competition among research teams from Europe, Canada and Brazil for innovation solutions like car sequencing and increment in evaluations. Similarly, the company is now looking into speeding the delivery process through optimized routing of delivery vehicles from plants to dealers via intermediate dispatching centres, which requires extensive calculations of worldwide  transportation network of Renault.

Hence the company was able to make efficient decisions for over all supply chain and thus gaining a competitive advantage in the value chain management process.

2. How much of an impact did this DSS have on business performance? Explain your answer.

The newly introduced DSS software solution has had an outstanding impact on the overall business performance of the Renault company. It has helped the company to communicate with the customers effectively by taking orders quickly and processing the order in the assembly line and the delivering back to the customer. It has several business implications to the company.

Initially the whole supply chain was time consuming and highly inefficient due to the legacy mainframe systems, which could not handle the ever expanding product line of the company and options available for the customers. Ever since the replacement of such system with DSS system, the company has reaped the benefit of technology advancement in terms of product development, production and sales. The impact of DSS can be further discussed in following points:

A. Sales :  with the advance order handling software, the company was able to provide customized cars to its customer with reduced lead time. Similarly, they were   able   to   order   more   varieties of cars to the customers through quicker product development and market penetration. Similarly, with quicker order handling, the company was able to increase the customer satisfaction and reliability.

B. Production cost control : One of the essential parts of manufacturing based industry is to reduce if not control its production costs. With the new DSS, the company was able to improve its product sequencing at manufacturing plant and reduce production cost of car painting process and other variable costs like electricity, chemicals etc. When the cost price of a car is reduced, it increases the profit in sales of the car. Hence it leads to increase business performance.

C. Planning   and   implementation : With centralized information system and database, each department  was  able  to  extract  required  information  from the central   server.   For example, the sales department focused on the ability to produce the right mix of models, engines, equipment levels, colours, and options every month while industrial planners focused on weekly production volumes for each plant. Similarly, this kind of planning provided a feasible sales targets and implementation of plans in each departments across the production houses of Renault Company across the globe.

D. Competitive Advantage : The smooth operation of the entire supply chain is able   to   give Renault   Company   a   competitive   advantage   compared   to   its competitors. Even if the decision to implement DSS was on the wake of intense competition,  it  will   ensure that   the  company  has a competitive   advantage  on product delivery and thus increase in customer satisfaction.

Hence the new DSS system has huge implications on business performance of the company. It will ensure that the company will able to sustain in long run by creating a competitive advantage in supply chain management.

3. What   management,   organization,   and   technology   factors   had   to   be addressed in order to make this system successful?

To be able to implement the new DSS software system, the company had to go through various hurdles in the initial stages. Similarly, due to various manufacturing sites of the company worldwide, it required extensive planning and controlled execution of the plans. Some of the various factors that were addressed during the DSS system are as follows:

a. Management:  The Renault Company has an extensive network of dealers, manufacturers   and customers  across the  globe. To   be   able   to   manage   such extensive   network,   it   requires   a huge   management   prowess   and   regional cooperation.   To   manage   a   centralized command, this   company   needed   this software to report various information such as sales report, manufacturing plant report etc. The system was designed such that customer orders flow directly from dealers to assembly plants, bypassing corporate headquarters. This ensured that the   regional management   team   as   well   as   the   management   team   at   the headquarter was aware of the company’s day to day operations.

b. Organization:  Since the Renault Company has a diverse organizational environment through out its regional corporate offices/manufacturing houses, it was important to incorporate such practice to make this system successful. Similarly depending upon the customer order and manufacturing limitations in each area, the plant operators requested for the modification of software as it was unable to handling the car sequencing at assembly line. To solve this issue, Renault research teams from Europe, Canada, and Brazil competed to provide a solution. The software now performs more than 140 million evaluations in ten minutes.

c. Technology:  It is certainly the most important issue to be addressed in this renovation   process. In fact, the DSS software solution  itself  is a technology. However, the implication of this software is not limited to few computers only. It has touched every aspects of the supply chain which are computerized.  For example, the sequencing of assembly line. Depending upon the order of the customers, the software analyses the efficiency of production line. For example, if there are 14 red cars, 23 blue cars and 2 black cars, depending upon the delivery date and painting efficiency, the software will recommend the exact sequencing on which the cars can be painted. Similarly, this system has revamped information system of every department. Now each department can collect the required information from central server making their information need much more easier.

Hence proper planning and addressing of the above factors contributed to effective implementation of DSS system.

UPS'S PACKAGE TRACKING

UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY

1. WHAT ARE THE INPUTS, PROCESSING AND OUTPUTS OF UPS'S  PACKAGE TRACKING SYSTEM? 

Inputs: The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while en route), and billing and customer clearance documentation. 

Processing: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria.

Outputs: The outputs include pickup and delivery times, locationwhile en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports formanagement. 

2. WHAT TECHNOLOGY ARE USED BY UPS? HOW ARE THESE TECHNOLOGIES RELATED TO UPS's BUSINESS STRATEGY?

Technologies include handheld computers (DIADs), bar code scanning systems, wired and wireless communications networks, desktop computers, UPS’s central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts, and managing logistics, as well as software to access the World Wide Web. 

UPS has used the same strategy for more than 90 years. Its strategy is to provide the “best service and lowest rates.” One of the most visible aspects of technology is the customer’s ability to track his/her package via the UPS Web site. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.

3. WHAT PROBLEMS DO UPS's INFORMATION SYSTEMS SOLVE?

• Operational excellence: UPS has maintained leadership in small-package       delivery services despite stiff competition from FedEx and the U.S. Postal System by investing heavily in advanced information technology.

• New products, services, and business models: In June 2009 UPS launched a new Web-based Post Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfillment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.  

• Customer and supplier intimacy: Customers can download and print their own labels using special software provided by UPS or by accessing the UPS Web site. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations.

• Improved decision making: Special software creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology. To further increase cost savings and safety, drivers are trained to use “340 Methods” developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck.

• Improved decision making: Special software creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology. To further increase cost savings and safety, drivers are trained to use “340 Methods” developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck.
• Competitive advantage: UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. Its Supply Chain Solutions division provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their won systems and infrastructure. 

4. WHAT PROBLEMS DO UPS'S INFORMATION SYSTEMS SOLVE?WHAT WOULD HAPPEN IF THESE SYSTEMS WERE NOT AVAILABLE?

Arguably, UPS might not be able to compete effectively without technology. If the technology were not available, then UPS would, as it has through most of its history, attempt to provide that information to its customers, but at higher prices. From the customers’ perspective, these technologies provide value because they help customers complete their tasks more efficiently. Customers view UPS’s technology as value-added services as opposed to increasing the cost of sending packages.

DNA DATABASE : CRIME FIGHTING WEAPON OR THREAT TO PRIVACY

Q.1 What are the benefits of DNA database?

A.1 By using DNA database, we can identify the criminal by observing his/her genes. By using advanced technology, we can discover the identity of criminal by matching DNA from blood, hair, saliva or other bodily fluid which we got from the crime scene. Used in crime fighting by searching in the DNA database - the identity of a criminal through the DNA of evidence found at the scene.

Q.2 What problems do DNA database pose?

A.2 Sometimes DNA database poses mistakes & it might be affect innocent person. There may be reason to found innocent person's DNA at a crime scene. But with the disregarded by police that person might be caught up for criminal investigation

Q.3 Who should be included in the national DNA database? Should it be limited to convicted felons? Explain it.

A.3 DNA database to include juveniles or people who have been accused of crime but not convicted. advocated expanding the FBI national DNA databases to include juveniles. People who are guilty or cleared of a crime and also who has not committed any crime that all are included in DNA database. Yes, it should be limited to convicted felons because only they are included in the criminal activity.DNA samples taken when people are arrested must be destroyed if the individual is not charged or convicted.

Q.4 Who should be able to use DNA database?

A.4 There may be valid reasons for an innocent person's DNA to be at a crime since that police might choose to disregard. There may be valid reasons for an innocent person's DNA to be at a crime since that police might choose to disregard. Innocent people may be caught up in a criminal investigation when their DNA from a single hair or spot of saliva on a drink glass appears in a public or private place where they had every right to

Information Systems help KIA solve Its Quality Problems