A restaurant firm is actively conducting experiments in pricing and…

Question Answered step-by-step A restaurant firm is actively conducting experiments in pricing and… A restaurant firm is actively conducting experiments in pricing and promotion across a set of franchised booths in sporting and entertainment pavilions. Using digital signage, the company can experiment with bundling and pricing to increase sales. Sellers can change their menus according to whether a baseball game, football game, or concert is happening nearby. Now the company is experimenting with dynamically adjusting prices to shift demand as a result of weather, time of day, and inventory levels. The company shares what it learns in each location so that others can benefit. But the company retests each idea in each new venue to ensure that ideas from Milwaukee will really sell in Miami, and vice versa. Even more powerful is the experience of Seven-Eleven Japan (SEJ), whose strong, central process controls increase efficiency while also enabling innovation. The company has built an information and process platform that connects every store to headquarters and distribution centers in real time. Store managers have the status of every order they have placed, whether it is for hot foods, delivered twice daily; cold food, delivered daily; or hard goods, delivered less frequently. A dashboard in each store shows real-time performance relative to similar periods in the past. Managers know what is selling and what is not, and they can vary their orders accordingly. The managers can even adjust orders on a daily basis, such as ordering more hot foods on days that are expected to be cold and rainy. SEJ’s strong process controls also enable innovation. The company routinely launches new products and tests them in a sample of stores, getting rapid feedback on product performance. Good products stay, and poor products drop. SEJ also experiments with services such as banking and bill paying that can use the firm’s many retail locations to provide customer convenience. The company has begun to foster new innovation opportunities at the local level. Store managers are encouraged to make hypotheses about what will sell, and order accordingly. They might see children wearing a certain color, and order accessories in that color. Or they might suggest a new product in light of what customers have been requesting lately. Successful experiments turn into innovations that the company can share across all of its stores. In a company where more than 50 percent of products are new each year, the opportunities afforded by local innovation capability are very valuable.  How does SEJ manage to break one or more management paradoxes? Discuss the benefits that the company has gained from breaking these paradoxes? Name only one issue you liked in the above case    Improving Efficiency Through Standardization at UPS The success of global package delivery company UPS is based largely on standardization and operational efficiency. The company operates in 220 countries, with nearly four hundred thousand employees. In 2012, it served 8.8 million customers and delivered some 4.1 billion items. UPS controls a complex logistical web with millions of possible permutations in service options and delivery routes. Jack Levis, UPS director of process management, explained: “We not only aim to deliver every package on time, but we provide customers with multiple service options to meet their needs. We even allow adjusting of delivery choices while the shipment is in route. Executing this mission means constantly orchestrating orders, adjusting route schedules and following up on package deliveries with a massive fleet of ground and air vehicles.” For decades, UPS has been a leader at optimizing its processes. By standardizing its processes, even to the extent of telling drivers how to step off the truck, UPS continually improves efficiency, safety, and quality. New data analytics capability is enabling even further optimization. According to Levis, UPS generates “huge amounts of data feeds, from devices, vehicles, tracking materials and sensors. Our goal is to turn that complex universe of data into business intelligence.” Route optimization is a key opportunity and a complex challenge, as Levis explained: “We have 106,000 package car drivers globally and we deliver more than 16 million packages daily. When you consider the fact that every driver at UPS has trillions of ways to run their delivery routes, the number of possibilities increases exponentially. The question becomes: how do you mine the sea of data from our sensors and vehicles to arrive at the most effective route for our drivers?” Cracking the puzzle can have huge payoffs, as a reduction of one mile per driver per day translates into savings of up to $50 million per year. Levis and his team used advanced algorithms to shave millions of miles from delivery routes. The project crunches business rules, map data, customer information, and employee work rules, among other factors, to optimize package delivery routes within six to eight seconds. An optimized route might look very similar to the driver’s normal route—a quarter mile saved here, a half mile there— but the real benefit lies in the accumulated distance saved across thousands of deliveries. The project is a huge endeavor for UPS, employing some five hundred people. But it generates significant operational advantage. So far, analytics has helped UPS to reduce eighty-five million miles driven per year. The reduction equates to over eight million fewer gallons of fuel used. The systems reduced engine idle time by ten million minutes, thanks in part to onboard sensors that help determine when in the delivery process to turn the truck on and off. This technology alone saved more than 650,000 gallons of fuel and reduced carbon emissions by more than 6,500 metric tons. Levis said, “We don’t look at initiatives as ‘analytics projects,’ we look at them as business projects. Our goal is to make business processes, methods, procedures and analytics all one and the same. For the front line user, the use of analytics results becomes just part of the job.  How does UPS manage to break one or more management paradoxes? Discuss the benefits that the company has gained from breaking these paradoxes? Name only one issue you liked in the above case Business Management Human Resource Management ADMN 3216 Share QuestionEmailCopy link Comments (0)