1. Selling Chain Management
Session 10
Selling Chain Management
22-Apr-17

2. Selling Chain Management
What 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.
22-Apr-17

3. Selling Chain Management
Why 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.
22-Apr-17

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
22-Apr-17

5. Selling Chain Management
Enterprise
with
Multiple
Sales
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 Forces
Mass customization/personalization, Costs of presale support and order errors, Multi-channels, Product complexity, Deregulation and M&A’s
- Technology Forces
Limited SFA functionality, Limited process functionality, Limited sales effectiveness
22-Apr-17

6. Selling Chain Management - Architecture
Inquiry/
Prospect
Customize
Commit
Sales Lead
Order
Life Cycle
Core
Process &
Technology
Integrated Selling Chain Applications
Integrated
Solution
Product Catalog
Configurator
ATP
Contract Pricing
Proposal/Quote
Order Entry
Commission
Available-To-Promise
22-Apr-17

7. Business Process Reengineering (BPR)
Session 11
Business Process Reengineering (BPR)
22-Apr-17

8. Business Processes What 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
22-Apr-17

9. Business Process Improvement
Why?
Customer Demand and Satisfaction
Competition
Cost Reduction
Productivity improvement
Basic Steps in Process Improvement
22-Apr-17

10. Limitations of Continuous Process Improvement Model
Incremental improvement
Technology growth demands vast improvement
Internet, Open Trade, Ecommerce
Tough Competition,
Require Breakthrough performance
Higher rate of change – slow improvement not affordable
BPR – Approach for rapid change
22-Apr-17

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
22-Apr-17

12. Process Flow – before and after BPR
Before BPR
1. 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
22-Apr-17

13. Process Flow – before and after BPR
Purchase 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.
22-Apr-17

14. Process Flow – before and after BPR
Benefits of Process Engineering in Purchase
Cycle Time Cut Down
A/P Becomes Central
Increased Supplier Satisfaction
Cost cut
A/P process reengineered
22-Apr-17

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.
22-Apr-17

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.
22-Apr-17

17. BPR Vs Industrial Engineering
Industrial Engineering or Organization & Method
Functional Boundaries
Governed by concept of division of labour
Question : How to speed up Activity/function
No thought for process reorganization
BPR
No Functional Boundaries
Customer driven
Question: How to organize new process flow
22-Apr-17

18. Steps in BPR
1. 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
22-Apr-17

19. Case Study – Bestfit Valves
Objective
The 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 address
Quoting against tenders
Speedy delivery of quality products
22-Apr-17

20. Case Study – Bestfit Valves
Step 1 – Developing process vision
CEO set a target of being able to quote within twenty-four hours of receiving an inquiry
Step 2 - Identification of the processes
Responding to tenders
22-Apr-17

21. Case Study – Bestfit Valves
Step 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)
22-Apr-17

22. Case Study – Bestfit Valves
Process 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.
22-Apr-17

23. Case Study – Bestfit Valves
Solutions
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
22-Apr-17

24. Case Study – Bestfit Valves
Solutions 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)
22-Apr-17

25. Case Study – Bestfit Valves
Additional 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
22-Apr-17

26. BPR Framework (Zachman Framework )
22-Apr-17

27. Process Step Analysis Ultimate 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.
22-Apr-17

28. BPR Guidelines Don't Automate, Obliterate Think Process! Think Systems
Tasks fall in functional boundaries
A process is across functional/departmental boundaries
Think Systems
System is a collection of men materials, ideas and their interactions organized to achieve a common purpose.
Each core process, a sub-system
provides an easy approach to analyze the existing process and design new processes
22-Apr-17

29. BPR Guidelines Change Management Structural Job re-definitions
Re-deployment of workforce
Communication is the key
Prior consultation with staff/employees
Proper training
22-Apr-17

30. Role of IT in BPR Objective of IT role
Increase 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.
22-Apr-17

31. Role of IT in BPR IT Role required in
Assessing Changing Business Requirements
mapping the existing information architecture to the business model to accurately depict current processes
performs multi-system integration on all relevant systems
mapping all business rules extracted from multiple standalone systems to a target design model
22-Apr-17

32. Role of IT in BPR Possible Role of IT in BPR 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
As a constraint
limited infrastructure = limited possibilities
As a Driver
“technology push/ effective re-design
The neutral role of IT
analysis/ understand/ enable
22-Apr-17

33. Role of IT in BPR IT 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 2
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 ( ), 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.
22-Apr-17

34. Role of IT in BPR Helps to Integrate Businesses
IT 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
22-Apr-17

35. BPR Implementation Barriers
Hard barriers
IT problems
Resource problems
Legal obstacle
Soft Barriers
Internal individual resistance
Internal group resistance
Group resistance
22-Apr-17

36. BPR Implementation Barriers
Causes for barriers
Project related causes
People related causes
Organization related
Environment related
22-Apr-17

37. E-Business Strategy Analysis and Objectives
Session 12
E-Business Strategy Analysis and Objectives
22-Apr-17

38. What is E-Business 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”
22-Apr-17

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
22-Apr-17

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.
22-Apr-17

41. Strategy Models Generic Strategy Model Dynamic E-Business Model
22-Apr-17

42. Elements of Strategic Analysis
22-Apr-17

43. Techniques of Strategic Analysis
Resource Analysis
Review of the technological, financial and human resources of an organization and how they are utilized in business processes
Decision on Marketing Services
Level 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
22-Apr-17

44. Techniques of Strategic Analysis
Product 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
22-Apr-17

45. Techniques of Strategic Analysis
Application 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
22-Apr-17

46. Techniques of Strategic Analysis
Demand Analysis
Assessment of the demand for e-commerce services amongst existing and potential customer segments
Competitive Threat Analysis
Threat of new e-commerce entrants
Threats of new digital products
Threat of new business models
Sell-side Threats
Customer power and knowledge
Use Internet to evaluat3e products and compare prices
Power of Intermediaries
Channel conflicts and result of disintermediation
22-Apr-17

47. Techniques of Strategic Analysis
Buy-side Threats
Power of Suppliers
Opportunity for buyers
Power of intermediaries
Risk include cost integration
Competitive Threats acting on E-Business
22-Apr-17

48. Strategic Objectives
22-Apr-17

49. Defining Vision and Mission
Company 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
22-Apr-17

50. How can E-Business create business value
Adding value
Providing better-quality products and services
Reduce costs
Making business process more efficient
Manage risks
Create different functions and professions
Create new reality
Can be used to innovate
22-Apr-17

51. Evaluate business value from E-Business
An evaluation Tool
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)
22-Apr-17

52. E-Business Strategy Definition
Elements of Strategy Definition
22-Apr-17

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
22-Apr-17

54. Right Channeling Right 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 service
Encourage consumers to buy and serve through lower cost electronic channels
Encourage offline fulfillment/conversion as appropriate
Different levels of service/promotion for different customers.
22-Apr-17

55. Right Channeling 22-Apr-17
Strategic options for a company in relation to the importance of the Internet as a channel
22-Apr-17

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
22-Apr-17

57. Other Decisions Positioning and Differentiation Strategy
Decision 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 restructuring
Consider options created through disintermediation and reintermediation
Decision 5: Market and product development strategies
Decide on which market to target
Positioning and Differentiation Strategy
Strategies should review the extent to which increases in product and service quality can be matched by decreases in price and time
22-Apr-17

58. Using Internet to support different growth strategies
22-Apr-17