ISMS EXAM ANSWER SHEETS
PROVIDED. MBA EMBA BMS DMS ANSWERS
PROVIDED. DR. PRASANTH MBA PH.D. DME MOBILE
/ WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Master Program in
Business Administration (MBA)
Note :- Solve any 4
case study
All case carries equal marks
Case I
PANDIT TO AFAUZI
The case is based on an actual incident which took place in an Army unit
operationally deployed in a field area just a few months before the 1971
showdown with Pakistan. The opposing forces of India and Pakistan were taking
their respective positions in a pre-war scenario. The clouds of showdown were
looming large over the horizons of both the countries. The rumbling of own
tanks and guns, the reconnaissance, leaders of different arms and services
establishing liaison with one another in the
process of formulating plans for both defence and attack, digging of main and
contingency positions was in progress, complete war machinery was being mobilized, camouflaged, and concealed. Ammunition and
other explosives were being unloaded and dug down. Junior leaders were
being briefed and rebriefed, communications were being checked, and troops were
being motivated and looked after as most of them were green because of their
sudden induction in the Army in post war days of 1965.
Such was the scene which convinced all and sundry that war was imminent. Most of the troops looked forward to a showdown mainly
because they wanted to get rid of the heavy ammunition as also for the mere
thrill of it. Those who had not seen a battle, seemed excited over the
prospects of a war and those who had seen the war, took everything in their stride, displaying a perfect cool, calm and confident
countenance.
One Ram Bali Mishra (RBM) was a raw and green jawan of about 20 years of
age and two years' service and naturally had not seen a war. He was relatively
tall, well built with fair complexion. He had pleasant manners, turned himself
out well and spoke well. He was a complete teetotaler, non-smoker, and a
vegetarian. He was well educated and well versed in religious affairs, particularly, of the religion to which most of the unit belonged. In the absence of the religious teacher of the unit, he held
religious institute (dharamsthal) and gave religious discourses at the
dharamsthal to all officers, junior commissioned officers JCOs),
non-commissioned officers (NCOs) and jawans. During the pre-war days, he was
performing the duties of a Sahayak (assistant, formerly known as
orderly) to Gun Position Officer (GPO), a young officer, of the rank of a
Second Lieutenant with one year of service.
RBM's charter of
duties included:
(a) attending all the training activities of his trade (telephone operator)
which were being organized in the sub-unit;
(b) making
arrangements to get the food from the officers' mess and water from the tube- well
for the office; and
(c) attending the
telephone and noting down all the messages for the office.
By virtue of the nature and timings of these duties, RBM was excused
physical training in the morning and games in the evening which all other
jawans of the sub-unit attended. He was generally happy with these duties and
working with the officer: After a short span of a week or so, the
officer noticed some changes in the behavior of RBM. He also looked pale and
worried. He was less talkative, less lively and his interaction with other jawans decreased. He started keeping aloof except where his
duties warranted interaction with others. The officer tried to find the
reasons from RBM but nothing emerged except a shy and coy smile and “aisi to koi baat Nai, Sahib". The officer tried to probe
further to find out if some guilt conscience was bothering him because of some bad habit which young man of his age is likely to fall prey to, in the absence, of even visual contact
of civil life and members of the opposite sex.
This was denied vehemently. After another week or so, it was noticed that RBM had developed
constipation, ate very little, felt
tired after walking even a few hundred yards and had become weak. He was interviewed by the officer but nothing emerged once again. He was sent to
the Regimental Medical Officer (RMO). The RMO inspected him and gave some medicines. On being contacted by the officer, the RMO
mentioned that there was nothing wrong medically with RBM except that he was
scared of the prospects of war. He even disclosed that after having been
medically examined, RBM even started giving a discourse to the RMO on the bad
effects of a war on environment, economy, costs, etc. He stated that people
would be loaded with sufferings; killed, injured, maimed, and would become
homeless. The children would become orphans, women widowed, and the humanity
would suffer. He vehemently advised the RMO to make all attempts to stop
the war and if he could, at least oppose it. After a brief conversation, the
RMO was convinced that all the symptoms pointed to a fear psychosis of war. He
gave some medicines to RBM and sent him to the sub-unit.
The RMO told the GPO
that because of the worry about the war, RBM had developed problems of
digestion and hence, ate less, became inactive and felt tired quickly. He had
earlier been feeling shy of expressing his apprehensions about the war to
others, lest they consider him a coward. The GPO gave a thought to the whole
problem and interviewed RBM, advising him to attend· all physical activities, including physical training, weapon training,
games, etc. thence on. The officer also planned to keep RBM among
the persons of his trade, specially in the command post which controlled the
firing of the guns, where from the officer himself was expected to control the' fire in case of breakout of war.
A small cadre (class)
was organized for all ranks of the sub-unit to apprise them of the organization
of all arms and services in the army, starting from the level of a sub-unit.
They were explained the tactics in the battlefields, the deployment patterns of
different arms, the pattern and modes of support
by the Air Force, the capabilities of weapons held by them, the comparative
sizes of the countries, India versus Pakistan, and the level of forces held by
them. They were also explained the cause for which they were there. They were
there to make their contribution towards the liberation of Bangladesh (then
East Pakistan), wherefrom about a
crore refugees had entered India because of the repression by Pakistan forces.
These refugees had become a burden on the Indian economy and social structure
which India could not afford. Thus, India, the foremost leader of peace loving
nations, had to prepare for war to ensure return of these refugees to liberated
Bangladesh. At times, to maintain peace, it becomes necessary to resort to war.
The participants were
also told about the strength of their Army and deployment in that area, of
course, within the constraints of security requirements. They were also told
that none of them would remain alone even during the war and that their
sub-unit and the unit would always fight together. They would always have their
weapons and ammunitions with them, which they were very good at firing. The
process of medical care, the claim of evacuation in case of serious injuries and the enhanced benefits and compensation to families in case of death of a soldier, then
announced by the government, were also communicated to them. The reliability of India's friends on the international scene was also intimated. The tactics, capabilities of aircrafts and weapons, and reliability of Pakistan's friends were also brought out. The
disadvantages and difficulties of supply to the then East Pakistan were
explained to the participants. The geographical location of East Pakistan in
relation to our country was also described. Everybody was
convinced of the great advantages and superiority we had vis-a-vis Pakistan.
Thence on, RBM was a
totally changed man. He was noticed to be more active, intermingling with
others at the slightest pretext and opportunity, giving discourses about
loyalty to the country and martyrdom. He took keen interest in all the training
activities, including the digging of a number of contingency gun
positions. He volunteered to go with night patrols too, which operated to shoot bursts of rounds with light
machine guns in trees and groves close-by, whenever the guns were deployed at a
new place. He volunteered to venture out with the line party
which was earmarked to lay telephone lines over long distances through
sugarcane fields. He started watching the slaughtering of goats
in the unit. Above all, he started eating eggs, though he did not touch meat.
This transformation in
RBM was a welcome sight and appreciated by all. Everyone heaved a sigh of
relief on seeing RBM becoming a brave "Fauzi" from a timid
"Pandit". The RMO was informed of this transformation.
He too felt happy. His contribution had been no less in
diagnosing the cause of sickness correctly. The cadre was conducted for the
whole sub-unit with a view to eradicate any apprehensions from the minds of
others too, in case there were any, and to educate all.
The cadre proved to be a great success. It motivated the
whole lot, made them more confident and ready to face the
challenge bravely. This was subsequently apparent when the hostilities started.
QUESTIONS:
1.
What was the
cause of fear in RBM?
2.
What were
the symptoms of fear displayed by RBM?
3.
How did
the RMO come to know of the war phobia of RBM?
4.
What
actions should be taken to avoid building up of fear among the troops?
Which of these steps were taken by the officer?
Case II
HE WHO RIDES A TIGER
In the Year of the Youth, the author took up a research project on young
industrial workers. It involved comparing young and old workers.
Two industries producing the same machines at similar technological level were
selected. One belonged to the private sector and the other to the public
sector. While the latter was started a decade later than the former, it had
achieved greater expansion. Both were located in the same state.
After we obtained necessary permission to conduct our
study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a
matter of principle, we wanted to meet the General Secretary of
the workers' union. The Personnel Department was not willing for this. On our
insistence they called the union official. We talked to him for about half an
hour but Personnel Department people were all the time
hovering around.
So we fixed a time in the evening to meet him in the union office in the
town. We visited the union office in the evening. The
union was having problem regarding wage deduction of some
workers who did not show up for overtime. The overtime notice was short and they had not consented either, even then the management was threatening wage
deduction for one week.
The union could hardly do a thing' as they in the past had burnt their hands when they had to unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide. They were scared to the extent
that they had productivity linked bonus agreement for even 12% bonus. Moreover,
a new minuscue union was recently started in the company.
We visited the new union's office next evening and held a long discussion.
They asked for' our suggestions. The union believed in legal
battles more than agitations. After a visit to the industry the author visited
the state headquarters of the new union. There every office bearer was
surprisingly a lawyer. In the HQ we learnt that after we left, their union took
out a procession and held a meeting in the temple. Perhaps this was the result
of our discussion. While the older union was a prisoner of its past, the new
union was free to write its own history. Workers' interests were being served
perhaps by both.
QUESTIONS FOR DISCUSSION
1.
Discuss
merits/demerits of the role of strike, agitation and legal approach in unionmanagement relations.
2.
What role
does mutual trust play in building union-management relations?
CASE III
COMPETITION AHEAD: VSNL AT CROSS ROADS
The telecom
sector had been functioning as a typical government department right from its
inception. With the Department of Telephones (DoT) being under the exclusive
control of the Ministry of Communications, Government of India (GO!), the
system functioned more as a monopoly., With the advent of the LPG process (liberalization, privatization
and globalization) in the early nineties, the telecom department went through a
phase of modernization. A number of new and sophisticated electronic exchanges
were installed which enhanced the capacity and lead to the disappearance of
waiting list for telephone connections. In a landmark decision in 1995-96, the Government of India threw
open its gates for private players in the area of cellular services. LCG and
ACG were the two major players to enter this area in Karnataka region, while
DoT decided to remain as an observer and continued as a provider of basic
services only. Subsequently the Internet, ISD and other services were also opened to private participation.
The year 1998 saw the entry of Vikas
Telenet (VTNL) as a basic service provider in the state of Karnataka. It launched its basic services
in Bangalore district, the commercial capital of the state, in January 1998.
The impact of this entry was felt by DoT as it resulted in a mass customer
churning, challenging the market leadership of DoT in basic services. This
growing challenge from VTNL made General Manager DoT Indore, R.L. Rawat
realized the need for a comprehensive review of the competitive scenario. The
situation faced by the Bangalore district was one of its kind. It was the only
city where four companies were providing telephone services. LCG and ACG were providing
cellular services while VTNL and DoT were providing basic services. To attract the customers all
the providers had attractive tariff plans. DoT's market share was not affected
by the entry of LCG and ACG as - they operated only as cellular service providers and their
services carried a premium price. But the entry of VTNL as a basic service provider with attractive
tariff plans showed a marked shift in customer base from DoT to VTNL specially
in case of heavy users make it necessary for DoT to come up with similar
competitive tariff plans.
General
Manager Operations DoT Bangalore, S.N. Dutt, felt that improved services, customer care and proper pricing would
help in winning back the heavy users who accounted for almost 60 to 65% of the
total revenue. Keeping this in mind, a review of VTNL's tariff plans was done
(Annexure I). The review revealed that the customers were getting a distinct price advantage in the rentals and free calls
given by VTNL.
Along with
this, a discount
ranging from 2.5 to 16% was also announced by VTNL. S.N. Dutt formulated a comprehensive
plan to guard DoT's market share. Officers were appointed as account holders and were responsible
for rendering personalized customer care to commercially important customers hoping to retain them
with better services. He also formulated a proposal of discounts which was forwarded to
the Circle Head Office (Annexure-II) and a presentation was made by DGM -
Marketing K.K. Sen, highlighting the rate at which customer churning was taking
place and the need for implementation of new tariff plan. He pleaded with the
senior officers that DoT needed to be at least reactive if not proactive, to
sustain itself in the market. The proposal was well received and forwarded to the Ministry of
Communications for approval. Responding to the need of the hour, the Ministry
decided to offer a comprehensive discount of 2.5 to 16% for its heavy users. The scheme was introduced in
Bangalore, which was extended first to the state of Karnataka and later on to
the entire nation.
VTNL, which
had so far been concentrating only on the heavy users, decided to now expand its network to get a wider customer base.
With this view in mind, a number of promotional schemes were introduced e.g., web phone, a facility for
internet usage where access to the net was provided at a cost of 60 paise per
call only. It also announced free Internet facility for a year on every new connection. Besides this, VTNL went in for heavy promotion of its
schemes. The careful wording of the schemes and enhancement of the number of
free calls made the customers feel that they were gainers as far as rentals were
concerned. These schemes when launched created very difficult times for VTNL
during May -August
2001. By then, DoT had been Corporatised (October 1, 2000) and came to be known
as VSNL. The Bangalore office was extremely hopeful that the corporatisation would facilitate. the implementation of new innovative schemes. For drafting a
proposal of innovative schemes, VSNL first conducted a market research where in -the database of surrendered
connections was used as sample and effort were made to identify the cause of
disconnections. The survey revealed that of the total number of disconnections
30% were due to economic recession while 40% were due to customer turning in
favor of VTNL while the remaining were due to a multitude of factors
interplaying with one another.
To redeem the
situation, VSNL, Bangalore prepared an innovative plan known as Business
Special Plan - Plan 600-800, which offered 800 free calls on a monthly rental
of Rs.600 only. The plan was put forward to Chief General Manager at Bangalore
for approval. The persistent efforts of K.K. Sen bore fruits and the proposal
was approved at the Circle level.
However, at
the time of launch K. K. Sen realized that they needed TRAI's (Telecom
Regulatory Authority of India) approval for going ahead. To ensure the
unhindered approval of TRAI, modified tariff plans called 500-700 and an
economy plan were suggested and sent for approval. While formulating these
plans, an attempt was made to segment the market with an intention to target
each segment with a customized/specific
set of services. Plan 500-700 was targeted at high end users. Here, 700 calls
were offered free on a monthly rental of Rs. 500 only. The economy plan carried
a rental of just Rs.160 per month with a rate of Rs.l.20 per call. This plan
was specially targeted at customers who had more of incoming calls and needed a
facility for meeting their specific requirements. The rolling out of these
schemes had an immediate impact with nearly 8,000 customers coming over to VSNL
Bangalore. Along with these new tariff proposals a number of innovative
strategies were introduced by VSNL, Bangalore.
·
The initial registration amount
was reduced and new subscribers were offered the facility of paying the amount
in installments.
·
Call centre functioning since
February 2001 to deal with customer grievances was made proactive to ensure
better customer care.
·
Training was given to the
front-end-people for updating their skills and changing the mindsets.
·
Tele-shopping service was
started which provided a one stop shopping facility, giving the customers the option to
choose their telephone numbers, instrument and service.. Installation was assured within
48 hours.
·
Phone-on-Phone facility was
started wherein customers could obtain a connection installed by simply ringing
up for it.
·
A bill collecting facility was
also introduced to further assist the customers.
·
VCC Le., prepaid cards were
introduced and even delivered at the doorsteps of the customers.
·
Bill collection in the rural
areas by mobile vans was introduced.
·
Linemen were given pagers to
facilitate prompt servicing of faulty telephone lines.
·
Regular meetings between call
centre members and maintenance staff were held to exchange information and
solve grievances.
·
For motivating and facilitating
their employees, free telephone service was provided to all the employees.
·
An advertising budget of
Rs.30,00,000 (0.2% of the total sales revenue) was outlined for launching a
comprehensive promotion programme using both indoor and outdoor media ensuring
a good coverage of the market.
VSNL – Tariff Structure
|
Scheme
|
Rental (Rs.)
|
Free Colis
|
Facilities
|
|
Business Plan - 500-700*
|
500 (Monthly)
|
700
|
Without STD
|
|
Economy Plan **
|
160 (Monthly)
|
Nil
|
With STD
|
|
Standard Plan*
|
500 (Bimonthly)
|
150
|
With STD
|
|
* 0.80 Per Call
|
** Rs.1 .20 Per Call
|
|
|
VTNL – Tariff Structure
|
Scheme
|
Rental (Rs.)
|
Free Calls
|
|
Silver 300
|
349 (Monthly)
|
300
|
|
Golden – 500
|
499 (Monthly)
|
500
|
Questions:
1.
What were the strengths and weaknesses of
VSNL?
2.
Do you think that VSNL should have changed
its thrust from basic telephony to cellular services?
3.
If you were the Deputy General Manager,
what strategies would you have undertaken to deal with the competition?
Case IV
DISNEY’S
DESIGN
The
Walt Disney Company is heralded as the world’s largest entertainment
company. It has earned this astounding
reputation through tight control over the entire operation : control over the
open – ended brainstorming that takes place 24 hours a day ; control over the
engineers who construct the fabulous theme – park rides; control over the
animators who create and design beloved characters and adventurous scenarios ;
and control over the talent that brings the many concepts and characters to
life. Although control pervades the
company, it is not too strong a grip.
Employees in each department are well aware of their objectives and the
parameters established to meet those objectives. But in conjunction with the pre-determined
responsibilities, managers at Disney encourage independent and innovative thinking.
People at the company have adopted
the phrase “Dream as a Team” as a reminder that whimsical thoughts, adventurous
ideas, and all – out dreaming are at the core of the company philosophy. The over all control over each department is
tempered by this concept. Disney
managers strive to empower their employees by leaving room for their creative
juices to flow. In fact, managers at
Disney do more than encourage innovation.
They demand it. Projects assigned
to the staff “ imaginers” seem impossible at first glance. At Disney, doing the seemingly impossible
is part of what innovation means. Teams of imaginers gather together in a brainstorming
session known as the “Blue Sky” phase.
Under the “Blue Sky”, an uninhibited exchange of wild, ludicrous,
outrageous ideas, both “ good” and “ bad”, continues until solutions are found
and the impossible is done. By demanding
so much of their employees, Disney managers effectively drive their employees
to be creative.
Current Disney leader Michael Eisner
has established the “Dream as a Team” concept.
Eisner realized that managers at Disney needed to let their employees
brainstorm and create with support. As
Disney president Frank Weds says, “If a good idea is there, you know it, you
feel it, you do it, no matter where it comes from.”
Questions
:
1. What environmental factors influenced
management style at Disney?
2. What
kind(s) of organizational structure seem to be consistent with “Dream as a Team” ?
3. How and where might the informal
organization be a real asset at Disney ?
Case V
“THAT’S NOT MY JOB” – LEARNING DELEGATION AT
CIN-MADE
When
Robert Frey purchased Cin – Made in 1984, the company was near ruin. The Cincinnati, Ohi-based manufacturer of
paper packaging had not altered its product line in 20 years. Labor costs had hit the ceiling, while
profits were falling through the floor.
A solid quarter of the company’s shipments were late and absenteeism was
high. Management and workers were at
each other’s throats.
Ten years later, Cin – Made is
producing a new assortment of highly differentiated composite cans, and pre-tax
profits have increased more than five times.
The Cin – Made workforce is both flexible and deeply committed to the
success of the company. On-time delivery
of products has reached 98 percent, and absenteeism has virtually
disappeared. There are even plans to
form two spin – off companies to be owned and operated by Cin-Made
employees. In fact, at the one day
“Future of the American Workforce” conference held in July 1993, Cin-Made was
recognized by President Clinton as one of the best – run companies in the
United States.
“ How did we achieve this startling
turnaround ?” mused Frey. “Employee empowerment is one part of the
answer. Profit sharing is another.”
In the late spring of 1986,
relations between management and labor had reached rock bottom. Having recently suffered a pay cut, employees
at Cin- Made came to work each day, performed the duties required of their particular
positions, and returned home-nothing more.
Frey could see that his company was suffering. “To survive we needed to stop being worthy
adversaries and start being worthy partners,” he realized. Toward this end, Frey decided to call a
meeting with the union. He offered to
restore worker pay to its previous level by the end of the year. On top of that, he offered something no one expected:
a 15 percent share of Cin-Made’s pre-tax profits. “I do not choose to own a
company that has an adversarial relationship with its employees.” Frey proclaimed
at the meeting. He therefore proposed a
new arrangement that would encourage a collaborative employee-management relationship
“Employee participation will play an essential role in management.”
Managers within the company were
among the first people to oppose Frey’s new idea of employee involvement. “My three managers felt they were paid to be
worthy adversaries of the unions.” Frey
recalled. It’s what they’d been trained
for. It’s what made them good
managers. Moreover, they were not used
to participation in any form, certainly not in decision making.” The workers also resisted the idea of
extending themselves beyond the written requirements of their jobs. “ (Employees) wanted generous wages and
benefits, of course, but they did not want to take responsibility for anything
more than doing their own jobs the way they had always done them,” Frey
noted. Employees were therefore
skeptical of Frey’s overtures toward “employee participation.” “We thought he was trying to rip us off and
shaft us,” explained Ocelia Williams, one of many Cin-Made employees who
distrusted Frey’s plans.
Frey, however, did not give up, and
he eventually convinced the union to agree to his terms. “ I wouldn’t take no for an answer,” he
asserted. “Once I had made my two grand
pronouncements, I was determined to press ahead and make them come true.” But still ahead lay the considerable
challenge of convincing employees to take charge :
I made people meet with me, then
instead
Of telling them what to do, I asked
them.
They resisted.
“ How can we cut the waste on his
run ?” I’d
say, or “How are we going to
allocate the
overtime on this order ?”
“That’s not my job,” they’d say.
“But I need your input,” I’d
say. “How in the
World can we have participative
management
If you won’t participate?
“I don’t know,” they’d say. “Because that’s
not my job either. That’s your job. ?”
Gradually, Frey made progress. Managers began sharing more information with
employees. Frey was able slowly to
expand the responsibilities workers would carry. Managers who were unable to work with
employees left, and union relations began to improve. Empowerment began to happen. By 1993, Cin Made employees were taking
responsibility for numerous tasks.
Williams, for example, used to operate a tin-slitting machine on the
company’s factory floor. She still runs
that same machine, but now is also responsible for ordering almost $ 100,000 in
supplies.
Williams is just one example of how
job roles and duties have been redefined throughout Cin-Made. Joyce Bell, president of the local union,
still runs the punch press she always has, but now also serves as Cin- Made’s
corporate safety director. The company’s
scheduling team, composed of one manager and five lead workers from various
plant areas, is charged with setting hours, designating layoffs, and deciding
when temporary help is needed. The
hiring review team, staffed by three hourly employees and two managers, is
responsible for interviewing applicants and deciding whom to hire. An employee committee performs both short –
and long – term planning of labor, materials, equipment, production runs,
packing, and delivery. Employees even
meet daily in order to set their own production schedules. “We empower employees to make decisions, not
just have input,” Frey remarked. “I just coach.”
Under Frey’s new management regime,
company secrets have virtually disappeared.
All Cin-Made employees, from entry-level employees all the way to the
top, take part in running the company. In fact, Frey has delegated so much of the
company’s operations to its workers that he now feels little in the dark. “I
now know very little about what’s going on, on a day-to-day basis,” he
confessed.
At Cin-Made, empowerment and
delegation are more than mere buzzwords; they are the way of doing business –
good business. “We, as workers, have a lot of opportunities,” said Williams.
“If we want to take leadership, it’s offered to us.”
Questions:
1. How
were principles of delegation and decentralization incorporated into Cine –
Made operations?
2. What are the sources and uses of power
at Cin – Made?
3. What
were some of the barriers to delegation and empowerment at Cin –Made?
4. What
lessons about management in a rapidly changing marketplace can be learned from
the experience of Cin – Made?
Case VI
HIGH-TECH
ANSWERS TO DISTRIBUTION PROBLEMS AT ROLLERBLADE
When
a manger finds that demand exceeds inventory, the answer lies in making more
goods. When a manager finds that inventory exceeds demand, the answer lies in
making fewer goods. But what if a
company management finds that they just do not know which situation applies?
This is the situation that
recently confronted management at Rollerblade, the popular skate manufacturer
based in Minnetonka, Minnesota. Rollerblade has been one of the leading firms
in the fast growing high performance roller skate marketplace, it matters a
great deal for Rollerblade managers whether demand and inventory are in
balance, or not.
Rollerblade was in a bind. The product literally could not be shipped
out the door. The managers found that
workers were not able to ship products because, as a result of poor storage
structures, they could not find the products.
Once they were found, overcrowded aisles, in addition to other space
constraints, still prevented efficient shipping because the workers could
barely manage to get the products out the door.
“We were out of control because we didn’t know how to use space and
didn’t have enough of it,” said Ian Ellis, director for facilities and
safety. “Basically, there was no more
useable space left in the warehouse, a severe backlog of customer orders, and
picking errors were clearly in the unacceptable range,” added Ram Krishnan,
Principal of NRM Systems, based in St. Paul, Minnesota.
The answer for Rollerblade was found
in technology. High-tech companies have
introduced a collection of computer simulations, ranging in cost roughly from
$10,000 to $30,000, that assist managers in generating effective facility
designs. With the help of layout Master
IV simulation software, developed by NRM, Rollerblade Management was able to
implement a new distribution design. As
a result of the distribution improvement, Rollerblade was able to increase the
number of customer orders processed daily from140 to 410 and eliminate order
backlog. “Now we have a different
business,” says Ellis. “The new layout has taken us from being in a crunch, to
being able to plan.
Questions:
1. With
retailers as their primary customers, what customer competitive imperatives
could be affected by Rollerblade’s inventory problems?
2. How
appropriate might a just – in – time inventory system be for a product such as
roller skates?”
3. What
opportunities are therefore Rollerblade managers to see FOR themselves as
selling services, instead of simply roller skates?
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