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60 Cards in this Set

  • Front
  • Back
Process Reengineering
BPR – the radical redesign of existing business processes to increase measures of quality, speed, service, and cost.
Pull system
system of demand where the customer is at the beginning of the chain and initiates products. That is, it is built on demand/to order. Requires a large amount of information symmetry and has minimal inventory.
Push system
system of demand built to stock where affirm forecasts the demand and produces according to the schedule/ The customer is at the end of the chain and if demand is not as high as forecasted, then the firm resorts to discounts and promotions.
Vendor Management Inventory
vendors (suppliers or manufacturers) monitor usage, inventory, and restocking of inventory at customer’s premise. The vendor takes ownership of the inventory and maintaining adequate supply. The vendor bears the risks of inventory. In return, the vendor gains higher demand visibility and some level of customer lock-in
Relationship among inventory, capacity and information
lack of accurate and timely information can lead to higher inventory and higher capacity requirements. This is because without good information about demand, the firm is likely to overproduce or have a backorder (this will be even amplified because of the bullwhip effect). This overproduction will lead to higher inventory. Capacity is based on peak demand. If demand can be smoothed out, then the excess capacity will be removed. As information content increases (both accuracy and timeliness), we can expect lower inventory and capacity to follow.
Rationalization and consolidation
rationalization is the reorganization of products, services, parts, or an entire company to minimize complexity of operations and enhance efficiencies. Redundancies are minimized. Rationalization lowers inventory levels, improves scheduling, and increases buying power through economies of scale, also increase profits. Rationalization often entails consolidation of procurement, manufacturing, and support services. Consolidation may remove idle capacity, increase buying power, and improve efficiency of operations.
Information substitutes inventory
This happens in the pull-based system of demand. Instead of a company requesting a batch of inventory upfront, they communicate information with their suppliers so during the transaction and request the item form the suppliers after demand is met. Thus, instead of simply requesting inventory, the firm uses information to communicate their needs directly to the supplier. This spreads out the risk and shares it with the supplier.
Uncertainty
the variability in the supply chain. With more uncertainty, the bullwhip effect is even higher. More information sharing across supply chain lowers uncertainty
RFID (and related terminology from METRO case like readers, portals, RFID printers)
radio frequency identification. This helps companies like Walmart and P&G implement the hybrid system of demand (instead of just push or pull). It gives the supplier good information about demand and also lets the customer (in this case Walmart) increase efficiency and reduce theft.
Role of uncertainty & IT
IT can increase coordination across supply chain. Thus, it can decrease uncertainty and increase efficiency/profit.
Virtual community/social networking
unique to Web 2.0. It allows digital self expression and social affiliation over long distances. Has the potential for marketing.
Data Mining
the extracting of useful information from large data sets.
Customer relationship management
set of business practices and applications that help manage customer information, activities, and interactions.
Lift ratio
an indicator of the strength of an association rule. (confidence/benchmark confidence)
Benchmark confidence
(# transactions with consequent item set)/(# transactions in database)
Confidence level
the ratio of number of transactions with both antecedent and consequent item sets and number of transactions with antecedent item set.(# transactions with both antecedent and consequent item set)/(# transactions with antecedent item set)
Cross sell
attracting attention where a firm attempts to sell other products/services to a customer who has purchased some product/service from that firm. This way a firm can increase revenue, increase customer reliance, and benefit from economies of scope.
Up-sell
a firm attempting to sell more expensive products, upgrades, or accessories to existing customer to increase revenue
Customer retention
keeping the customer form leaving to a competitor by better understanding what customer wants/needs are
Association rules
generally used to identify products/services that go together. This applied to market basket analysis. Association rules are typically in the form of “IF <certain events> THEN <certain events>. *<certain events> can be plural
Clustering
type of analysis where similar records/characteristics are grouped together so that it will be useful for many business and scientific studies
Classification
data analysis used to classify data using classification trees based on data to refine as more data becomes available.
Predictive models
using the insights from data mining analysis, we can build models using statistical approaches
Market basket analysis
understand what products or services are commonly purchased together
Interactive marketing
predict what each individual accessing a website is most interested in seeing
Trend analysis
reveal the difference in the purchasing behavior among customers this time month (or any other tie period) relative to other time period.
Market segmentation
identify the common characteristics of customers who buy the same products from your company
Customer churn
predict which customers are likely to leave your company and go to a competitor
Fraud detection
identify which transactions are most likely to be fraudulent
Direct marketing
identify which prospects should be included in a mailing list to obtain the highest response rate
Software-as-a-Service
provides a complete, turnkey application (including complex applications like CRM applications and Enterprise resource management) via the internet
Cloud computing
you can store data and run processes and applications on a remote internet server. As a result, you can access this data and applications on multiple platforms and devices.
Web 2.0
newer form of internet with higher interactivity potential, more collaboration, more co-creation ability, and high amounts of information propagations (viral effect). It has a bottom-up influence and is more dynamic and refined than web 1.0.
Long tail
when a very small amount of companies (for example social media companies) dominates in popularity while the rest of the companies in the same industry have incredibly low popularity, When graphed with the products on the x-axis and popularity on the y-axis.
Monetizing networks
when network has
1. the capability to act as a marketplace,
2. the goods and services exchanged through it have defined values,
3. the network can capture a percent of transaction value (toll booth)
4. stickiness-users who have a stake in the network effect that goes beyond normal means
Degree centrality
the number of direct connections a node has. That is, the number of connections to other entities
Betweenness centrality
the degree to which the node plays an important role in the network by connecting two or more different sets of network cliques (how many triangles it is a part of)
Closeness centrality
the ability of the nodes to reach other parts of the networks in the shortest manner
Network centralization
measure of a node’s centrality by using the degree, betweenness and closeness centrality as measures
Network analysis
evaluating how highly connected and central a node is in a network and that node’s overall importance. Also, looking at how information flows within a network.
Sourcing choices
there are four main choices for sourcing: Offshore insourcing, offshore outsourcing, domestic insourcing, and domestic outsourcing
Business process outsourcing
when a company transfers some of its business processes to another company for it to complete
Insourcing
when a company completes a process either in-house or in a subsidiary of the firm
Outsourcing
when a company has a process done by a vendor separate from the company
Offshoring
when a company has its business process done in another country
Offshore outsourcing
when a company has a vendor outside the country complete a business process for the firm
Offshore insourcing
when a firm has a business process done at a subsidiary of the firm that is physically outside the country
Domestic insourcing
when business processes are done in-house in the home country
Domestic outsourcing
when processes are sourced from separate domestic vendor in the home country
Process maturity
as a process becomes more mature (older), exceptions go down and production and coordination costs come down. This makes the process easier to outsource as process maturity increases because over time and through experience a company learns about how the process interfaces with other processes and reduces uncertainties
Process modularity
the extent to which a process has well-defined interfaces, is easily detachable, and is self-contained
Process criticality
the extent to which a process is valuable, rare, difficult-to-imitate and difficult-to substitute. When a process is critical, it is often embedded deep in the firm’s organizational and social fabric
Human capital specificity
the extent to which human skills, knowledge, and understanding associated with business processes are specific to the firm. these have implications to both production and transaction costs
Intellectual capital specificity
the extent to which codified knowledge embedded in the business process including operating procedures, routines, data, and information are specific to the firm. These have implications to transaction costs.
Transaction costs
expense incurred whenever a business process is carried out (when a process is more mature and has lower uncertainty, it has a smaller transaction cost)
New media metrics
• co-creation - the involvement of consumers in the customization of the brand and the promotion of the brand through content, testimonials, and storytelling.
• self-expression – this is the use of avatars and digital representations of themselves online and virtually trying products
• sharing – often through message boards or virtual communities, consumers share their experiences or develop peer- to-peer relationships that will enable them to quickly disseminate word of mouth influences
• social affiliation – the amount that consumers feel connected to a particular media brand, letting themselves form a community/social network
Traditional media metrics
• Reach – the extent to which people are affected by the media
• Frequency – how often people are exposed to the media
• Target – who the media is made to appeal to
• click-through ratio – how often people click on an online ad compared to how often they are exposed to it (clicks/# of impressions)
• conversion ratio – number of visitors to a website/or other media that go beyond the typical casual content view / the # of users who see the site/media
Bullwhip effect (causes and effects)
• definition: information is distorted from one end of a supply chain to the other end. This distortion created inefficiencies where the system has excess inventory or backordered. The variability increases as you move up the supply chain.
• Causes: demand forecast updating, order batching, price fluctuations, and ration and shortage gaming
• Effects: excessive inventory, insufficient or excessive capacity, lost sales, poor customer service, long backlogs, frequent changes to production schedule, high costs for corrections
Supply chain management
the coordination and integration of all activities and flows (materials, information, and financial) in the value system that includes suppliers and customers to maximize firm benefits. SRM, CRM, and ERP are included
Supply Chain: Main Objectives
o improving financial performance and shareholder value by accelerating CCC and return on invested capital
o expand market through better service, fulfillment and quality
o lock-in customers and suppliers for sustainable advantage
o increase entry barriers
o increase power as buyer and or seller
o increase agility for demand and product portfolio changes (lower time to market)
o instill a culture of continuous operational excellence
o improve margin buy lowering costs, better information sharing, and improved operations