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CHAPTER EIGHT
CLOSING MATERIAL
OPENING CASE QUESTIONS
1. Knowledge: Dene 3D printing and its impact on business.
3D printers work by rst creating a digital computer aided design (CAD)
le, produced with a 3D modeling program or scanned into a 3D modeling
2. Comprehension: Explain CRM and how 3D printing could a,ect
customer relations.
Operational CRM supports traditional transactional processing for
day-to-day front-o'ce operations or systems that deal directly with the
customers. Analytical CRM supports back-o'ce operations and strategic
analysis and includes all systems that do not deal directly with the
3. Application: Provide an example of how 3D printing might
a,ect the global economy.
Organizations are anticipating that e-business will increase protability,
create competitive di(erentiation, and support innovative business
practices. To achieve these goals, companies must evolve through distinct
stages, from integrated processes to truly synchronized inter-enterprise
The disruption occurring in the 3D printing world can of course be
attributed to Moore’s law as the technology has increased in capacity and
processing power while decreasing in size and costs. Now you can
materials, including plastics, metal, glass, and even chocolate. That’s
right—you can custom print your own valentine chocolates! The only
barrier to 3D printing is that the software used to control the printer is still
rather di'cult for the average person to use, but you can expect that to
change because software makers, such as Autodesk, are quickly releasing
4. Analysis: Analyze how 3D printing is a,ecting supply chains.
Supply chains will be greatly impacted by 3D printing. Companies will no
longer have to source parts for other vendors as they can just print any
5. Synthesis: Propose a plan for how a company can use 3D
printing to increase sales and customer satisfaction.
Have you ever lost a beloved pet? No worries, just draw a picture of your
pet and print a plastic replica from your 3D desktop printer so your cat or
No worries, just download the specications and print one. Did you forgot
your girlfriend’s birthday? No worries, just download and customize a
silver bracelet with her initials and in less than 30 minutes, you’ll have the
beautiful custom piece of jewelry on her wrist without ever leaving your
apartment. Welcome to the wonderful world of 3D printing. For almost 30
years, 3D printing has been used by large manufacturing companies to
create everything from custom parts to working prototypes. The medical
6. Evaluate: Argue for or against the following statement: “3D
printing will be more disruptive to business than the Internet.”
Student answers to this question will vary. This works as an excellent
REVIEW QUESTIONS
1. How do integrations connect a corporation?
Integrations allow separate systems to communicate directly with each
other, eliminating the need for manual entry into multiple systems.
Building integrations allows the sharing of information across
2. What is the di,erence between forward and backward
integrations?
Forward integration takes information entered into a given system and
sends it automatically to all downstream systems and processes. A
3. What are the ve primary activities in a supply chain?
Plan, source, make, deliver, and return are the primary activities in a
supply chain.
4. What is the bullwhip e,ect and how can it impact a supply
chain and a rm’s protability?
The bullwhip e(ect distorted product-demand information ripples from
one partner to the next throughout the supply chain. The
5. Why are customer relationships important to an organization?
Do you agree that every business needs to focus on customers
to survive in the information age?
Without customers you will not have an organization. CRM is critical to
6. What is the di,erence between operational and analytical
CRM?
Operational CRM focuses on business operations such as sales and
7. How can a sales department use CRM to improve operations?
Sales departments can use customer service and support, sales force
8. How can a marketing department use CRM to improve
operations?
Marketing departments can use list generators, campaign
9. What is the di,erence between customer relationship
management, supplier relationship management, and
employee relationship management?
Supplier relationship management (SRM) focuses on keeping suppliers
satised by evaluating and categorizing suppliers for di(erent projects.
Partner relationship management (PRM) discovers optimal sales
channels by selecting the right partners and identifying mutual
10. What is an enterprise resource planning system?
Enterprise resource planning (ERP) integrates all departments and
functions throughout an organization into a single IT system (or
11. What are the components in a core ERP system?
Core ERP components are the traditional components included in most
ERP systems and primarily focus on internal operations. The three
12. What are the components in an extended ERP system?
The four most common extended ERP components business
intelligence, customer relationship management, supply chain
13. What does a company need to integrate to become
connected?
Without integrations a company systems will be siloed and unable to
CLOSING CASE ONE QUESTIONS
1. Dene SCM and how it can benet Zappos.
An SCM system can help make a distributor more e(ective by tracking,
monitoring, and analyzing inventory throughout the entire supply chain.
An SCM system can trigger the production of a product for a
manufacturer, determine where to transport the nished product through
a specic distribution company to a particular supplier, and can even
2. Explain CRM and why Zappos would benet from the
implementation of a CRM system.
Operational CRM supports traditional transactional processing for
day-to-day front-o'ce operations or systems that deal directly with the
customers. Analytical CRM supports back-o'ce operations and strategic
3. Demonstrate why Zappos would need to implement SCM, CRM,
and ERP for a connected corporation.
Organizations are anticipating that e-business will increase protability,
create competitive di(erentiation, and support innovative business
communities. Getting e-business applications based on di(erent
technologies and with di(ering business models and data models to work
together are key issues for 21st century organizations.
Most organizations piecemeal their applications together since no one
vendor can respond to every organization’s needs; hence, customers
4. Analyze the merger between Zappos and Amazon and assess
potential issues for Zappos customers.
Student answer to this question will vary. Zappos could risk losing its
5. Propose a plan for how Zappos can use Amazon’s supply chain
to increase sales and customer satisfaction.
A supply chain consists of all parties involved, directly or indirectly, in the
procurement of a product or raw material. Supply chain management
(SCM) involves the management of information Cows between and among
an organization to generate e'ciencies within these steps by automating
and improving the information Cows throughout and among the di(erent
supply chain components.
An SCM system can trigger the production of a product for a
manufacturer, determine where to transport the nished product through
a specic distribution company to a particular supplier, and can even
recommend the optimal location for the product at the supplier’s store. A
good SCM system will know exactly when a customer purchases a product
6. Argue for or against the following statement: “In the electronic
age customer relationships are more important than ever and
Zappos provides the new benchmark that all corporations should
follow.”
Student answers to this question will vary. This works as an excellent
CLOSING CASE TWO
Got Milk? It’s Good for You – Unless It’s Contaminated!
1. List 10 products that could possibly be a,ected by a problem
in the U.S. milk supply chain. What would be the damages to an
ice cream business that used contaminated milk in its
manufacturing process? Who do you think should be held liable
for such an issue?
Supply chain management involves the management of information Cows
enable an organization to generate e'ciencies within these steps by
automating and improving the information Cows throughout and among
the di(erent supply chain components. If one member of the supply
consumer to the dairy farmers were impacted by one participants reckless
decision. By continuously monitoring the processes involved in
production a company can quickly identify any potential issues, such as
low-quality supplies or contaminated milk. The list could include:
Chocolate products
Food made with milk in restaurants
Baked goods
Ice cream
Outsourcing o(ers many benets such as lower cost, niche expertise, and
increased supplier options. There are also numerous risks associated with
2. Do you think a CRM system could have helped communicate
issues in the milk production supply chain? How could a company
use a CRM system to perform damage control after nding out
about contaminated milk in the supply chain?
A CRM system could identify customers who might have purchased the
products and then you could contact the customers directly, similar to
3. Do you agree with the Chinese court in sentencing of the
middlemen to death and a dairy boss to life in prison for their
roles in the milk contamination scandal? Do you think the United
States should implement similar laws for unethical corporate
behavior?
This is a very interesting question to discuss in class. These punishments
are harsh compared to U.S. punishments, but with the recent number of
4. Many companies in the United States use Chinese suppliers in
the sourcing of raw materials and manufacturing of products.
Research the Internet and nd three examples of recent issues
for U.S. companies because of Chinese products. What will
happen in the long run as companies use Chinese suppliers?
Answers will vary depending on the businesses the student identify.
CRITICAL BUSINESS THINKING
Instructor Note:There are few right or wrong answers in the business world.
There are really only e'cient and ine'cient, and e(ective and ine(ective
business decisions. If there were always right answers businesses would
never fail. These questions were created to challenge your students to apply
the materials they have learned to real business situations. For this reason,
the authors cannot provide you with one version of a correct answer. When
grading your students’ answers, be sure to focus on their justication or
support for their specic answers. A good way to grade these questions is to
compare your student’s answers against each other.
1. POLITICAL SUPPLY CHAINS
Project Purpose: Analyzing global supply chains.
Potential Solution:The average company spends nearly half of every
dollar that it earns on production needs—goods and services it needs from
external suppliers to keep producing. A supply chain consists of all parties
involved, directly or indirectly, in the procurement of a product or raw
In the past, companies focused primarily on manufacturing and quality
improvements within their four walls; now their e(orts extend beyond
those walls to inCuence the entire supply chain including customers,
customers’ customers, suppliers, and suppliers’ suppliers. Today’s supply
2. ANALYZING DELL’S SUPPLY CHAIN MANAGEMENT SYSTEM
Project Purpose: Analyzing one of business’s most successful SCM
implementations.
Potential Solution: There are numerous websites and articles on the
Internet discussing Dell’s famous SCM system. The U.S. government even
visited Dell to learn how to implement a superior SCM system for moving
army supplies. Student answers to this question will vary. The most
important part of this question is that your students gain a detailed
3. TOTAL RECALL
Project Purpose: Analyzing issues in the supply chain.
Potential Solution:In mid-2000, the Firestone Tire Company issued a
recall of some of its tires – those mounted on certain sport-utility vehicles
(SUV) of the Ford Motor Company. This was done in response to reports
that tire treads on some SUVs separated in use, causing accidents, some
of which involved fatal injuries as vehicles rolled over.
At rst, Firestone denied there was a problem with its tires, but it issued
the recall under pressure from consumer groups and various government
agencies. All of the tires in question were produced at the same tire
plant, and there were calls to shut down that facility. Firestone suggested
that Ford incorrectly matched the wrong tires with its SUVs. There were
also the suggestions that the shock absorbers of the SUVs were rubbing
against the tires, causing or aggravating the problem.
Both Ford and Firestone denied that this had been an ongoing problem.
However, there was a public outcry when it was learned that Firestone
had previously issued recalls of these tires in South America, but
companies had settled at least one lawsuit involving an accident caused
by tread separation several years earlier.
This case raises a number of issues, some related to possible causes, as
well as ethical issues. Discuss each of these factors and their actual or
potential relevance to what happened:
1. Product: Firestone and Ford both produce products. When a
company produces products and services they must constantly monitor
the ve competitive priorities. All of these factors could contribute to
strategy. There are ve key competitive priorities that translate
directly into characteristics that are used to describe various processes
by which a company can add value to its OM decisions including:
Cost
2. Qualitycontrol: Assuring quality: Quality is indispensable in an airline
where safety is the highest priority. Today’s travelers expect
high-quality customer service during ticketing, check-in, curb service,
market that it is aimed to serve. For example, a generic bike is of
signicantly di(erent quality than the bike of a world-class cyclist.
Higher quality products command higher prices in the marketplace.
Organizations must establish the “proper level” of product quality by
customers to products that cost a little more but are perceived by the
customers as o(ering greater value.
Process quality is critical in every market segment. Regardless of
whether the product is a generic bike or a bike for an international
and higher revenues. Many organizations have turned to the use of
modern quality control standards including:
Six sigma quality: Detects potential problems to prevent their
occurrence and allows just 3.4 defects per million opportunities.
Malcolm Baldrige National Quality Awards: In 1987 in the
United States, a standard was set for overall company quality with
the introduction of the Malcolm Baldrige National Quality Awards,
named in hone of the late U.S. secretary of commerce. Companies
can apply for these awards in each of the following areas:
ISO900: The common name given to quality management and
assurance standards. The International Organization for
Standardization (ISO) is a nongovernmental organization
established in 1947 to promote the development of world standards
to facilitate the international exchange of goods and services. ISO
ISO 14000: A collection of the best practices for managing an
organization’s impact on the environment. ISo 14000 does not
prescribe specic performance levels, but establishes environmental
management systems. The requirements for certication include
CMMI: CMMI stands for Capability Maturity Model Integration.
CMMI is a framework of best practices. The current version,
CMMI-DEV, describes best practices in managing, measuring and
monitoring software development processes. The CMMI model does
3. Ethics: Ethics is everywhere is this dilemma. Should a company take
responsibility for product problems? The obvious answer is yes, but
4. FINDING SHELF SPACE AT WAL-MART
Project Purpose: Analyzing Wal-Marts Supply Chain
Potential Solution: Companies that excel in supply chain operations
perform better in almost every nancial measure of success, according to
a report from Boston-based AMR Research Inc. When supply chain
“The basis of competition for winning companies in today’s economy is
supply chain superiority,” says Kevin O’Marah, vice president of research
at AMR Research. “These companies understand that value chain
There is an excellent article on the Wal-Mart site that steps potential
partners through how to become a Wal-Mart or Sam’s Club partner.
Interested in doing business with Wal-Mart or Sam’s Club?
http://www.walmartstores.com/Files/Supplier_GettingStarted.pdf
Then this guide is the right place to start. Here you’ll nd essential
information on preparing yourself for the Wal-Mart and Sam’s Club
marketplace, as well as useful resources to help guide you through the
5. CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES
Project Purpose: To analyze the value of a CRM strategy.
Potential Solution: CRM is a business philosophy based on the premise
that those organizations that understand the needs of individual
customers are best positioned to achieve sustainable competitive
advantages in the future. Operational CRM supports traditional
transactional processing for day-to-day front-o'ce operations or systems
that deal directly with the customers. Analytical CRM supports back-o'ce
6. SEARCHING FOR EMPLOYEE LOYALTY
Project Purpose: To gain additional insight into employee relationship
management (ERM).
Potential Solution:Employee relationship management (ERM) provides
employees with a subset of CRM applications available through a Web
browser. Many ERM applications assist the employee in dealing with
customers by providing detailed information on company products,
7. DRIVING UP PROFITS WITH LOYALTY (or Driving Down?)
Project Purpose: To apply CRM technology.
Potential Solution:Customer relationship management involves
managing all aspects of a customer’s relationship with an organization to
increase customer loyalty and retention and an organization’s protability.
The ButterCy Cafe has a big decision to make. It can sell the information
8. SUPPORTING CUSTOMERS
Project Purpose: To revamp a customer service center.
Potential Solution: A contact center (or call center) is where customer
service representatives (CSRs) answer customer inquiries and respond to
problems through a number of di(erent customer touchpoints. A contact
center is one of the best assets a customer-driven organization can have
customer service center can use to help it operate e(ectively include:
Automatic call distribution - a phone switch routes inbound calls to
available agents.
Interactive voice response (IVR) - directs customers to use touch-tone
phones or keywords to navigate or provide information.
