Case Studies – ICAN OTA & District Society

Ericsson’s Proactive Supply Chain Risk Management

ota_admin — Thu, 11 Jan 2018 09:52:16 +0000

Project Infomation

When faced with a supply chain disruption, proactive and reactive supply chain risk management can in fact make or break a company’s existence. One of the most famous (or rather infamous) cases is the fire at the Philips microchip plant in Albuquerque, New Mexico, in 2000, which simultaneously affected both Nokia and Ericsson. However, both companies took a very different approach toward the incident, and in hindsight, clearly displayed how to and how not to handle supply chain disruptions.

In the late 1990s, Swedish-owned Ericsson was one of the big international players in the mobile phone industry, together with the Finnish company Nokia. My first mobile phone in 1996 was in fact a Nokia, but I switched to Ericsson in 1999, because they made much better phones, so I thought. While the phones may have been better, risk management for sure wasn’t.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

Ericsson learned its lesson and now has a completely different supply chain risk management system in place. It starts with mapping all the components and products many tiers upstream the supply chain and identifies critical suppliers and sites that have to be prioritized and assessed further. After a rough assessment on how shortage will affect the supply chain, a more thorough investigation into probability and impact of different accidents at different suppliers is conducted to assess the impact on the supply chain as a whole, particularly the impact on business recovery time.

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I haven’t been able to find much research literature on Nokia’s supply chain risk management, maybe because it went so well for Nokia. Ericsson, on the other hand, is another story. The incident turned disaster cost the Swedish company $400 million in lost sales, and it had to quit the mobile-phone business, leaving Nokia to cement its position as the European market leader. What went wrong?

Determine the right inventory level

On March 17, 2000, a small fire hit a microchip plant owned by Philips, the Dutch company. The plant supplied chips to both Ericsson and Nokia, and the smoke and water damage from the small and easily contained fire contaminated millions of chips — almost the plant’s entire stock.

Optimize the supply chain for perfect order planning

This article was written in 2004, when Nokia was still a major player in the mobile market. While Nokia may have learned a lesson in supply chain resilience, Nokia did not learn what it would have taken to stay a major player.

Our Process

Finally, risk management actions (protection) are evaluated against risk costs (impact and consequences), to avoid over-action or over-insurance against incidents. Not only Ericsson, but many other companies have also learned from this incident. Supply chain risk management (SCRM) is a necessary component of any supply chain. SCRM may lead to increased costs in the form of prevention measures, and SCRM may lead to increased lead time, in order to have buffers, should something happen. In essence, though, risk exposure always has a price, and as a company, one should think through what price (or rather cost, as in disruption cost) that is.

Improve sales & operations & production planning

Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

In his 2006 article Robust strategies for mitigating supply chain disruptions, Christopher Tang uses Nokia’s approach as one of three prime examples of how to counter supply chain disruptions. Most recently Jon Hansen of Procurement Insights decided to reopen the case and ask industry experts to weigh in with their opinion as to what happened at Ericsson and why, and what they believe should take place to address the obvious shortfalls on a go forward basis.
(Credit: husdal.com )

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Yesware’s Matthew Bellows on His Ironic Challenge

ota_admin — Thu, 11 Jan 2018 09:51:47 +0000

Project Infomation

Converting free users into paying customers. By early 2013, even with a newly hired 10-person sales team, Yesware’s sales were abysmal and the company had yet to turn a profit, casting a pall over pending efforts to raise venture capital. Because he was struggling to sell a product built to make sales easier, Matthew Bellows, a co-founder, felt like the shoemaker whose own children pad about barefoot.

YESWARE is a four-year-old company that designs and sells software intended to make it easier for sales teams to record and analyze essential data. Released in late 2012, Yesware’s basic version, which can be downloaded free, quickly attracted more than 100,000 users.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

But this kind of oversight requires salespeople to type updates into customer relations systems, rather like police detectives pecking away on case reports back at their desks. Sales agents hate doing it, and sales managers hate hectoring them.

Clean house. Fire seven of the 10 salespeople.

Step in himself as vice president of sales and devote the necessary time to training and supervision. To ensure he would have that time, he would hire a chief executive to serve in his stead.

Hire a vice president of sales.

Have this person do the firing, hiring and supervision while Mr. Bellows remained chief executive. Such a search might take as long as six months, and with the need to raise venture capital looming, Mr. Bellows wondered if he could wait that long.

Promote the best sales person among the three

He deemed worthy of keeping to manage the team. The person he had in mind had six years of sales experience. He had never led a sales team but had demonstrated an aptitude for mentoring and leadership.

Our Process

In his previous company, with no investors and no need to raise money, business had been simpler. He could serve as chief executive and the lone sales rep. Any doubt that he was wearing too many hats at Yesware evaporated the day he discovered his entire sales team in a conference room at 2 p.m. on a Wednesday in June — “hanging out, listening to loud music and drinking beer, like it was a frat house.”

Improve sales & operations & production planning

Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

Mr. Bellows closed the conference room door without a word. That weekend he went to a meditation center in Vermont to ponder how he might fix his sales team. (Credit: nytimes.com)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Maclaren’s Stroller Recall: What Would You Do?

ota_admin — Thu, 11 Jan 2018 09:51:21 +0000

Project Infomation

Safe to say the management team at Maclaren is having a terrible week. On Monday its US subsidiary issued a press release announcing a recall of every baby stroller it has sold in the United States in the past decade — which means about one million units. The purpose is to install a cover for the stroller’s hinge mechanism, which is sharp enough to cut through a baby’s fingers should they happen to be in the wrong spot as the stroller is opened.* In fact, this has happened on at least twelve occasions.

If you didn’t get a sick feeling in the pit of your stomach as you read that paragraph, you are not a consumer goods executive — or a parent. Think about all the levels on which it’s your worst nightmare, beyond your obvious concern for the children’s injuries:

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

Maclaren surely knows it has much to lose from the publicity, but it did the right thing in the US. It contacted the Consumer Product Safety Commission’s Office of Compliance and asked for its help in conducting a recall under the Fast Track Product Recall Program. That saved the CPSC from conducting a detailed evaluation of the product, and allowed the company to get out in front of the story as it hit the press.

Engage a reputable, independent, outside investigator

Once the study is complete, make it available to the baby stroller industry at large so that all companies involved in the manufacture of strollers might benefit from it. – John R. Hall, retired chairman, Ashland Incorporated

Hire a crisis management expert

charged with setting up and training a permanent, internal crisis-management team comprising people from the operations, marketing, IT, security, and legal departments. – Ian Mitroff, University of Southern California Marshall School of Business

Announce the recall in paid advertisements

as well as issuing the joint press release with the CPSC. While the CPSC does not allow ads announcing a recall to be marketing tools, the agency would allow language expressing the company’s commitment to its customers. – Alan H. Schoem, former Director of the Office of Compliance at the U.S. Consumer Product Safety Commission

Our Process

As for all the other fronts of the crisis noted above, we don’t know what Maclaren’s management will do. But thanks to Harvard Business Review’s archives, we know what they should do. In 2001, HBR published a case study called “When No News is Good News,” and asked four experts to advise on the issues it raised. It’s the fictional story of, you guessed it, a baby stroller manufacturer deciding what to do after a highly publicized accident involving one of its products. A few nuggets from those experts:

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Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

Crisis management, by definition, is not something a company thinks about often. But when a crisis hits, a company has to do a whole lot of things right. Let’s hope Maclaren is doing them.
(Credit: hbr.org)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Tylenol Scandal and Crisis Management

ota_admin — Thu, 11 Jan 2018 09:50:54 +0000

Project Infomation

In October of 1982, Tylenol, the leading pain-killer medicine in the United States at the time, faced a tremendous crisis when seven people in Chicago were reported dead after taking extra-strength Tylenol capsules. It was reported that an unknown suspect/s put 65 milligrams of deadly cyanide into Tylenol capsules, 10,000 more than what is necessary to kill a human. The tampering occurred once the product reached the shelves.

In 1982, Tylenol controlled 37 percent of its market with revenue of about $1.2 million. Immediately after the cyanide poisonings, its market share was reduced to seven percent (Mitchell 1989). They were removed from the shelves, infected with cyanide and returned to the shelves (Mitchell, 1989).

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

Once the connection was made between the Tylenol capsules and the reported deaths, public announcements were made warning people about the consumption of the product. Johnson & Johnson was faced with the dilemma of the best way to deal with the problem without destroying the reputation of the company and its most profitable product.

Offer favorable coupons

In order to motivate consumers to buy the product, they offered a $2.50 off coupon on the purchase of their product. They were available in the newspapers as well as by calling a toll-free number. (Mitchell 1989)

Recover from stock crisis

To recover loss stock from the crisis, Johnson & Johnson made a new pricing program that gave consumers up to 25% off the purchase of the product. (Mitchell 1989)

Restore the confidence on the product

Over 2250 sales people made presentations for the medical community to restore confidence on the product. (Mitchell 1989)

Our Process

Following one of our guidelines of protecting people first and property second, McNeil Consumer Products, a subsidiary of Johnson & Johnson, conducted an immediate product recall from the entire country which amounted to about 31 million bottles and a loss of more than $100 million dollars. (Lazare, Chicago Sun-Times 2002) Additionally, they halted all advertisement for the product.

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Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

Although Johnson & Johnson knew they were not responsible for the tampering of the product, they assumed responsibility by ensuring public safety first and recalled all of their capsules from the market. In fact, in February of 1986, when a woman was reported dead from cyanide poisoning in Tylenol capsules, Johnson & Johnson permanently removed all of the capsules from the market. (Credit: http://iml.jou.ufl.edu)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Carbon Emission Management Assistant

ota_admin — Thu, 11 Jan 2018 09:50:14 +0000

Project Infomation

The University of Cambridge’s Environment and Energy section works to improve the environmental sustainability of the University’s operational estate. With an estate portfolio valued at over £1.7bn, a planned capital building programme worth £412m, and energy costs of £15m a year, the University has a high environmental impact and large carbon footprint. We are committed to an absolute reduction of our carbon footprint by 2020.

My graduate placement, as Carbon Management Assistant was created to help support the Carbon Reduction Manager in a number of areas of carbon management.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

I supported the Carbon Reduction Manager in a number of areas including data management, analysis and reporting; project design and implementation; and communications and engagement. I also helped to implement the Energy and Carbon Reduction Project (ECRP).

Improve carbon savings

I helped to organise the launch of the University’s Equipment Replacement Programme, which should see large carbon savings with funding to replace inefficient pieces of energy intensive equipment, such as -80 freezers, in the near future.

Carbon emission review

I also helped on a practical level with the current review of the University’s Carbon Management Plan. I carried out, reviewed and improved the University’s methods for reporting Scope 3 (indirect) carbon emissions helping to report against targets in the future.

Results Analyses & Conclusions

My placement was organised through Change Agents, who supported the University in terms of helping with the recruitment process and provided me with personal and professional development as a graduate.

Our Process

Opportunity Benefits: I was given the opportunity to attend many events as well to develop skills and knowledge outside of the scope of the role. I was given the independence to focus and work on different areas, and to make contacts which will be extremely useful for my future career and studies.

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Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

During my opportunity, I launched and started the beginnings of the University’s Green Labs Programme – a programme which seeks to reduce the environmental impact of scientific research where possible. (Credit: environment.admin.cam.ac.uk)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

An Effective but Risky Strategy for Late-Paying Clients

ota_admin — Thu, 11 Jan 2018 09:49:41 +0000

Project Infomation

I still did not receive my payment for month-old work. I’m kind of hesitant to speed up work on your project because I have several projects in progress and my priorities are shifted towards the paid ones. So a web developer emailed me the other day. By the way, we (my business partner and I in a web development venture) like her a lot: She is fast, professional, has reasonable rates, and does high-quality work.

Her email was in response to my asking her to give us a sense of when we can expect more project deliverables, as well as to ask if she could devote more time to our project.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

Her reply was a bit of a shock to us. We had paid her up front when we began work, and since put two checks in the mail. Apparently she had not received these two checks, which did not make sense. Also, while we knew she was awaiting payment, she never told us that she was on the brink of slowing down work on the project.

Grab the audience's attention

It got our attention. We scrambled to get her on the phone and resolve the problem. It used her leverage over us — our need to get work done.

Use the right strategy to call for action

We needed the project done, and so had some conversations about how to phase her out quickly (after all, we thought the check was in the mail). Her move could have cost her a lot of work.

Solve the issue in an appropriate way

She should have sent a warning first, so that we could have resolved the situation without taking it to the brink. After all, honest mistakes on both of our parts led to this problem.

Our Process

The above strategy got our attention, because we really wanted to accelerate progress on our project and, so far, she was our main resource (and design/usability is the bottleneck on this project). At the same time, it got us frustrated, too, because it came as a surprise given that we thought the “checks were in the mail.

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Determine the right inventory level

Optimize the supply chain for perfect order planning

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Result Driven

So, we called her immediately to find out how we could resolve the situation. When we did, we learned that she had moved her office without our knowledge, and so her checks were most likely being forwarded. After our talk, she did accelerate her work, and in fact exceeded our expectations (Credit: sitepoint.com)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

How Social Media Drives New Business: Six Case Studies

ota_admin — Thu, 11 Jan 2018 09:49:11 +0000

Project Infomation

Businesses both big and small are flocking to social media platforms such as Twitter, Facebook, YouTube and Foursquare. The fact is that a presence on these platforms not only allows companies to engage in conversations with consumers, but also serves as an outlet to drive sales through deals and coupons.

And while major brands like Starbucks, Virgin, and Levi’s have been participating in the social web for some time now, the rate of adoption among small businesses is increasing too. According to a recent University of Maryland study, social media adoption by small businesses has doubled from 12% to 24% in the last year.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

But as these businesses look to Facebook and Twitter to connect with customers, many are finding that some strategies work and some do not produce results. We’ll be exploring these questions at a panel on Social Media and Businesses at our Social Currency CrunchUp on July 30. We’ve found some local and national businesses using social media effectively, ranging from Levi’s to a creme brulee cart, whose case studies are below. Some of these businesses will be sharing their experiences at the CrunchUp.

Marketing strategy

The company’s marketing VP Ann Nadeau tells me that because of the economy the hotel industry’s marketing budgets have shrunk, and social media efforts have proved to be a great way to both drive sales and build loyalty.

Social Media Utilization

The company’s social media efforts are not solely deal based. This summer, Joie De Vivre encouraged consumers to enter its Road Trippin’ California contest, which asked people to submit videos on YouTube that share why they love California.

Customer Service Support

In terms of using social media for customer service, Nadeau says that each property hotel manager is responsible for monitoring conversations and reviews on Twitter, Facebook, and Yelp.

Our Process

Food from street carts have become a foodie favorite for San Franciscans. Food carts travel from neighborhood to neighborhood, offering their delicacies to a range of local foodies. But without a set location, how do these carts let consumers know where they will be? Well, through Twitter of course.

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Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

Curtis Kimball, the man behind the enormously popular Creme Brulee Cart in San Francisco, has quickly amassed over 12,000 followers in a little over a year. (Credit: techcrunch.com)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Putting People Before Profits: Classic PR Case Study

ota_admin — Thu, 11 Jan 2018 09:48:25 +0000

Project Infomation

In late 1995, a fire at Malden Mills put 3,000 union jobs at risk. The timing couldn’t have been worse. The 90-year-old manufacturer in Lawrence, Mass., has seen its revenues triple and employment double since emerging from bankruptcy in 1982. It’s popular Polartec and Polarfleece fabrics were one reason. A loyal and productive workforce was the other.

In a time when offshore manufacturing became standard procedure in American business, Malden Mills’ CEO Aaron Feuerstein opted to stay put and to rebuild his factory on the very site where his family had made textiles for 90 years.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

The fire came just two weeks before Christmas, affecting employees both financially and emotionally. So just 2 days after the blaze, Feuerstein announced plans to pay his employees their full wages for 30 days. He would eventually extend that offer to 90 days for the paychecks, 180 days for benefits. Total cost to Malden Mills: $25 million.

A business fairy tale?

It would seem so. Unfortunately, the case doesn’t end here. Feuerstein found himself back in bankruptcy court, saddled with $140 million in debt, much of it tied to the rebuild. The company hired a new president in 2004 as part of the Chapter 11 reorganization. It wasn’t enough.

Did Aaron Fueurstein do the right thing in 1995?

After his decision, Feuerstein became a legend in both business and PR circles — a textbook case in excellence theory. But in the end, he leveraged the business into bankruptcy. No one will question Feuerstein’s good intentions, but there’s no line on the balance sheet for “loyalty” or “ethics.”

The business of business is messy.

Always has been. But we don’t often talk about the ugly side of it in our PR casebooks. Instead, we select cases that exemplify symmetrical communication, ethics and trust. And we celebrate them.

Our Process

When students leave my classroom, few will work for principled managers like Aaron Feuerstein, the man they called the “Mensch of Malden Mills.” If there’s a silver lining to this story, it’s that Polartec remains a great product with a loyal customer base, including me. None of that may have occurred had Feuerstein not saved the day on Dec. 13, 1995.

Improve sales & operations & production planning

Determine the right inventory level

Optimize the supply chain for perfect order planning

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Result Driven

Sadly, Malden Mills didn’t turn out as such a classic case in employee relations. To me, it’s a depressing reality of business world that makes “maximizing shareholder value” its top priority. (Credit: toughsledding.wordpress.com)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

Background Checks for Job Candidates

ota_admin — Thu, 11 Jan 2018 09:47:41 +0000

Project Infomation

OfficeDrop scans paper documents into digital files. Its clients include hospitals that want to archive patient records and a minister with too many hand-written sermons. Prasad Thammineni started the company in 2007 and opened his doors to clients a year later.

Checking the backgrounds of job candidates to ensure that only trustworthy employees handle client documents (without violating candidate privacy or breaking the bank).

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

The need to do background checks came up in the start-up phase, when participants in a focus group said they were nervous about entrusting strangers with private documents.

Candidate identity information

The first piece of the package is the Social Security number and address check, which confirms the candidate’s name and date of birth and also shows where he or she has lived.

Criminal record check

The criminal checks can get complicated because authorities keep records in a wide range of courts. Kroll suggested that Mr. Thammineni pull data from three sources.

Court record information

Kroll also recommended digging into federal court records that contain information about crimes committed across state lines and tried by federal courts for other reasons.

Our Process

Driving records came last. This check is crucial because employers can be liable for accidents that happen on company time. In addition, Ms. DeLoach said, the data can offer insights, flagging those who flout the law or abuse drugs or alcohol.

Improve sales & operations & production planning

Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

OfficeDrop now pays $100 to $175 for every candidate, depending on how many states he or she has lived in. When Mr. Thammineni wants to hire a new employee, he enters the person’s name and Social Security number in OfficeDrop’s online Kroll account; in less than a week, he receives a seven- or eight-page report. (Credit: nytimes.com)

Reduced lead time by 43%

Decreased variability by 50%

Lowered the risk of back-order by 95%

Increased stock for finished goods by 10%

A Local Dry Cleaner Tries to Compete Against P.&G.

ota_admin — Thu, 11 Jan 2018 09:46:58 +0000

Project Infomation

FOUNDED in 2004, Hangers Cleaners of Kansas City, Mo., was started as an environmentally safe dry cleaner. It uses colorless, odorless liquid carbon dioxide instead of the aggressive chemicals applied at traditional dry cleaners. It has 35 employees and 2009 revenue of $1.6 million.

To survive the arrival of a huge new competitor, Procter & Gamble, which began testing a Tide dry-cleaning service in Kansas City in 2008.

Client : Insight Studio
Date : 20 Feb, 2018
Skills : Project Planning

Challenge & Solution

When Joe Runyan started Hangers, he was hoping to bring a fresh approach to what he considered a stagnant industry. A first-time entrepreneur who had left a marketing career at Sprint, he had been dissatisfied with the local dry cleaners, finding dirty facilities and rude workers to be the norm.

Cultivate its offbeat image

Hangers continued to cultivate its offbeat image. “We have a personality in a business devoid of it,” Mr. Runyan said. “We can’t out-price or out-spend our big competitor, but we can be genuine, funny and edgy.”

Culture of service and accountability

He worked to create a tight-knit culture of service and accountability. If a garment was damaged, a store representative would call the customer immediately and offer to replace it.

Quantify the gained patrons

He initiated partnerships with corporations, nonprofit organizations and community groups, and he can quantify the patrons gained from each. He also contacted schools and donates 10 percent of the proceeds from parents’ dry cleaning back to each school.

Our Process

Then, while researching the business, he discovered that the chemicals used by most cleaners were prohibiting new entrants. Building owners refused to lease space to cleaners using perchloroethylene, or “perc,” which is now heavily regulated. “By no means was I a tree hugger,” Mr. Runyan said. “But from a business perspective, it was clear this industry had to change.”

Improve sales & operations & production planning

Determine the right inventory level

Optimize the supply chain for perfect order planning

Improve sales & operations & production planning

Result Driven

While other local dry cleaners have told him that their year-over-year revenue is flat or down as much as 25 percent, Mr. Runyan said his revenue grew 2 to 3 percent in 2009 and his profits quadrupled, largely as a result of closing the unprofitable location. (Cedit: nytimes.com)