Case Study-Nestle Tries for an All-for-One Global Strategy

Questions:

2.) What type of global business and systems strategy did Nestle adopt?

Nestle adopted a transnational strategy which involved managing nearly all of its value-adding activities from a global perspective without reference to national borders, optimization of sources of supply and demand wherever they appear, and taking advantage of any local competitive advanatages. The globe not the home country is the management frame of reference. Nestle wanted to be the first global enterprise to conduct business as if it were operating in a single country. This meant that it had to choose one system and make all countries conform to that system no matter what local differences there might be and know matter what differences there were in the way they conducted day to day business.


3.) What management, organization, and technology challenges did Nestle have to deal with to standardize its business processes and systems?

Management challenges included convincing all of the market heads around the world to adopt one single set of business processes and systems for procurement, distribution , and sales management. All of the managers felt that their way of doing business was the right way and it was a challenge to get them all on board to give the new system a chance. As a whole organization it was challenging because up to that point each local organization had been allowed to run the business as it saw fit which took into account local conditions and cultures. Standardization of all of the company's systems completely changed the culture of the company. No longer was each global site its own autonomous unit, now everyone was expected to use the same system and do things the same way no matter what part of the world they resided in. The technological challenges that the company faced wsa that Nestle facilities in 14 countries all ran their ERP software differently and used different schemes for formating data and management forms. Also many of the company's core processes were not documented and were passed down by word of mouth. All of these processes needed to be documented so that the best way to run the business could be determined and all sites could use these core processes.

Article Summary

GET A GRIP
Mary Hayes Weier
InformationWeek; Nov 5, 2007; 1161; ABI/INFORM Global
pg. 41

This article discusses offshore outsourcing and how that it is creating new risks and requiring new strategies to deal with those risks. The article opens with a description on how the CIO from Genworth Financial, a company that provides mortgage and life insurance has had to change his whole routine because of IT outsourcing. He now has to come into work extra early (between 6:00-6:30 A.M.) so that he can spend the first couple of hours of the day dealing with IT teams in India and Europe before the U.S. workday starts. In 10 years Gensworth went from outsourcing just a few IT projects to almost having half of all IT work done outside the U.S. This firm and other firms like it in the U.S. prefer to use the term "globalization" instead.

The article goes on to explain how the techniques for dealing with offshore IT employees and projects is now changing to deal with some of the challenges that come with the territory. For instance, firms that employee outsourcing of their IT functions are trying to have a closer relationship with the vendors that they are employing. This includes doing things like helping improve with employee retention and attempting to treat those problems more like their own inhouse problems. Companies are also trying to hold the providers more accountable for costs and outcomes and also are giving them more critical work. It appears that since more companies are relying on outsourcing as a way to cut costs there is also more of a need to make sure that the investment is really paying off and that means having more involvement in what is going on.

The article also mentions that even though cost cutting is still the main reason for outsourcing, some companies are also depending more on foreign markets for revenue growth. To become successful in those markets these companies are starting to put employees in those markets including IT. Companies are also looking for the latest skills and technology platforms which many see as coming out of India. The hardest lession that has been learned with all the outsourcing in the last decade was the hidden costs associated with it. To avoid these hidden cost companies are now creating outsourcing contracts based less on input andm ore on output (that is generating revenue from new products, meeting systems uptime requirements, ect).
The article ends by discussing the ongoing problem of retaining skilled outsourced employees. Many employees would get burned out at having to work night shifts just to please U.S. customers. Outsourcing companies are trying to change this and make the work environment better to help retain these employees.

This article relates back to what was discussed in the chapter on the challenges of implementing global information systems. It is important to make sure that the benefits outweigh the costs and that companies monitor these types of systems to make sure everything runs smoothly. It can be much harder to fix a problem that is occuring on the other side of the world once it has already happed but close monitoring and adjustments can keep a new global system running smoothly and make it remain profitable. I also have experience with outsourcing at my own company. Recently we began to outsource the production of some of the recombinant proteins that we make to India. This has helped to cut costs for the company but early on there were some challenges. For awhile production levels were much lower than normal as the new team got used to the proccesses. I think one important thing that helped improve the process was that some of the scientists from the India group came to our site for training and to meet everyone. It helped both the India site and our site transition faster to the new arrangement and since then production has been high with few problems.

Chapter 13 Case Study

Can the U.S. Army Reserve Pay Soldiers Correctly?

2.) Diagram the Forward Compatible Payroll business process for paying Army reservists. How should this process be improved?

It was supposed to proved a temporary solution until a more complete systems solution could be implemented. It provided more automation for the change in pay that occurred when Army reservists were called to active duty. The pay administrator could use a web browser to review the orders in the system and then access and update the files in the personnel database without any duplicate entries occurring. The system still required a unit commander to approve and sign a hard copy of a mobilization order before the data was transferred to the payroll system so that soldiers could get payed. The problem was still do to human error that caused a lag in information to be updated and the update also was very slow because pay was constantly changing for these soldiers which added more complexity to the system. To improve the system more it will be important to make it even more automatic by getting rid of the need for manual approvals and limit the data entry so it only needs to happen once. Also add a way to check to make sure the data is entered correctly the first time to prevent errors.

3.) Describe the role of end users and technical specialists in analyzing the problem and developing a solution.

The end users are the pay administrators who enter the data and the commanders who approve the pay decisions as well as the soldiers who rely on these systems to get paid correctly. End users can analyze the process to see what parts are redundant or could be eliminated or streamlined to make it more efficient to reduce error and save on time. The technical specialists are the programmers and consultants that will be able to recommend, design and implement the right kind of information system that will solve the problems identified by the end users of the current system.

Article Summary

Signed, Sealed and Indelible

Nicoe Vaughan-Spickers. Health Management Technology. Altlanta: Mar 2007. Vol. 28, Iss. 3; pg. 22, 3pgs

This article talks about a pharmaceutical company called Ferring Pharmaceuticals which identifies and develops products in the fields of urology, gynecology, fertility, gastroenterology, and endocrinology. It discusses how this company decided in 2004 to change from paper lab notebooks to an Electronic Lab Notebook (ELN). Lab notebooks are essential for creating what is called a " trail of evidence" that protects valuable intellectual property when new products are being developed by R&D groups in the life-science industry as well as other science-based industries. The information contained can contain the record on when a new invention was conceived as reduced to practice. This information is essential for patent protection and patent infringement cases.

The article begins by talking about how important it is in the healthcare, biotechnology, and pharmaceutical industries to bring new products to market more quickly. It greatly increases the opportunity for revenue and company growth. In order to do this these types of companies must constantly look for ways to streamline processes to allow research scientists to spend more time actually producing work and less time documenting their work. In doing this it is important to make sure that these processes continue to adhere to strict quality standards as many products made in these industries are regulated by governmental agencies like the FDA.

The article goes onto discuss how most companies in health care and pharmaceutical industries still rely on paper lab notebooks to protect intellectual property even though there are electronic software versions available. There are problems with paper lab notebooks which include illegible, incomplete or error filled notebooks that can make it impossible to repeat a key experiment. Also, often it can be extremely time consuming to find the right lab notebook since there can be dozens in a single lab. The reason companies have been hesitant to adopt an electronic version despite these issues is a perception that Intellectual Property protection can not be managed by electronic systems, in order to have this protection you need a signature and witness that can only be obtained by using a paper lab notebook.

Ferring Pharmaceuticals took the risk and switched to an ELN with very positive results. They believed by doing this that they would provide a way speed up information retrieval, make it easier to collaborate and share knowledge among its 100 scientists and different sites, and also to speed up documentation and data entry process. The company chose to use a digital time-stamp technology embedded in its Electronic Lab Notebooks so that the notebooks would be able to still be used for Intellectual Property protection. The software was called Surety's AbsoluteProof technology and it allowed for a unique timestamp token or seal to be generated for every electronic document produced in Ferring's ELN's. The timestamp or token was stored off site in a data center that was fully accessible, searchable and verifiable.

The system was easily implemented with a half-day specialized training for scientists. Scientists also had two week time frame to experiment with and test the ELN system before it was implemented. The user acceptance was high and the system has increased the efficiency of scientists by saving countless hours by getting rid of the manual process of documenting experiments in lab notebooks and having them signed and witnessed.

This article relates back to chapter 13 because it illustrates how a successful information system was designed and implemented. It also illustrates how important getting the end user involved is through training and input so that they will accept the new system once it is implemented. Also, it shows how a whole organization can change with the design and implementation of a new system. Ferring got rid of a completely outdated system and successfully implemented a new system that is still not widely accepted by the rest of the industry.

Chapter 11 Case- Can Knowledge Systems Help Boeing Trounce Airbus?

Questions:

2.) What is the relationship of knowledge management to Boeing's business strategy? How is Boeing using knowledge management systems to execute its business model and business strategy?

Boeing's business strategy is based on the assumption that travelers prefer to fly non-stop from their home city to their destination. As such they are focusing on developing and selling smaller airliners that can fly quickly and cheaply. In order to design a plane that will allow the company to implement this strategy it has had to take advantage of knowledge management in order to build on the technology of its existing planes rather than starting from scratch. To do so it shifted from a "paper-intensive" production process to a computer one that allowed the 777 aircraft to be completely designed and produced by computer. By using software and computers Boeing was able to communicate effectively with all departments at the company cut down on design errors, and save time. Part of Boeing's strategy also involves using a new production process which outsources design and construction to cut down on costs. Boeing must use knowledge management systems to coordinate and collaborate with all of these different suppliars and design teams in order to efficiently implement this cost saving strategy. Boeing uses supply chain knowledge management software to allow Boeing's suppliars and contractors to have a larger role in the design and development of new planes. It also cuts costs by half.

4.) What role has knowledge management played in Airbus's business strategy and business performance?

Airbus's strategy is the opposite of Boeing's, it believes that as air travel expands there will be a growing need for jumbo jets to carry a larger amount of passangers without increasing airline costs. It appears that a lack of knowledge management may have been the cause of some of the drop in performance that has been seen recently. It has had to delay the delivery of its A380 jet to customers multiple times because of "electrical problems". The case mentions that the electrical systems are "highly integrated" which results in one problem creating problems in other areas of the plane. It seems like Airbus's inability to correct these type of problems may be due to a lack of good knowledge management systems. If it were able to implement software like Boeing did which helped reduce many of the design errors that it was seeing perhaps problems like this could be avoided or fixed at an early stage of product development so that it doesn't cause a delay in customer orders.

Article Summary

Reality, only better. The Economist. London: Dec. 8, 2007. Vol. 385, Iss. 8558; pg. 14

The article I chose for this week relates back to the Chapter 11 discussion on managing knowledge. The article talks about a fairly new technique called "augmented reality" or AR for short. Using this technology, the real world is "augmented" with text or graphics. The user puts on a pair of goggles similar to the virtual reality goggles discussed in the textbook and is able to see computer graphics or information (virtual images) in the real world. For instance in the picture at the left a mechanic is able to see colors and arrows overlaid over the top of the car's engine so that he knows what parts of the car to fix. This technology fits into the category of knowledge work systems discussed in chapter 11 of the text. Instead of just offering a virtual world, however, this technology allows the user to learn by doing or to make changes to a real world process as it is being done as new information is viewed. For instance, surgeans could use it so that they would not constantly have to look up and down from patient to equipment displays. Information would just be overlaid into a single field of vision. For use in battle it could relay tactical information to soldiers who are in the war zone or it could be used during military training. Soldiars could be told with virtual images like arrows where to patrol or retreat and symbols could mark locations of supplies or friendly forces like in a video game. AR could create virual targets for sodiars in combat training to shoot at that would be in a real world setting. AR is also being used by car companies like Volkswagon to speed up prototype construction by overlaying the instructions directly onto tools and prototype components in front of workers. AR is still in the early stages of development when compared to virtual reality. A lot of AR technology is expensive and fragile but it clearly has a lot of possible applications that will keep researchers furthering its development.

Chapter 9 Case- Limited Brands Consolidates its Supply Chain Management

Questions:

2.) Describe the supply chain management problems encountered by Limited Brands in this case. What was their business impact?

The main problem had to do with all of the different companies that Limited Brands acquired over a short period of time. All of these different companies had a different information technology infrastructure which included sixty different systems with hundreds of different applications on a variety of platforms. Due to all these different systems it was very difficult to have supply chain information flow to different applications so that the entire supply chain could be coordinated. The business impact was a major traffic jam of 400 merchandise trailers at a distribution center that could only hold 150 trailers. The incident occurred because of poor communication between segments of the firm and poor planning. The result was a public relations nightmare and a loss of sales for the firm.

4.) How did Limited Brands solve these problems?

The company upgraded its supply chain and eliminated all the different systems being used by the various segments of the company. It used Tibco Software which is a leading vendor of enterprise application integration software. Tibco Software allowed there to be real-time communication between Limited Brands and its suppliers. It also provided a secure environment for document transfer, enhanced shipment tracking and order visibility, and put the company in a position to support future IT initiatives that could save on time and costs. Limited Brands now has all of its IT operations under one business segment instead of having separate IT infrastructures for each business.