MASTER IN MANAGEMENT PROGRAM PPM - School of Management DEC 05 2009 - Week I 0CT 11 2008 Lecturer : JONATHAN SOFIAN LUSA Reading materials : Applegate.

MASTER IN MANAGEMENT PROGRAMPPM - School of Management

DEC 05 2009 - Week I

0CT 11 2008

Lecturer : JONATHAN SOFIAN LUSA

Reading materials : Applegate chapter 2

IT IMPACT ON BUSINESS MODELSession 02

Chapter Outline

The Search for Opportunity

Analyzing IT Impact

3333 GPA Case Study

2222

1111

ANALYZING IT IMPACTCASE STUDY : BORDERLESS MANUFACTURING AT LI & FUNG

AssemblyCHINA

ShellKOREA

LiningTAIWAN

FillerCHINA

ZipperJAPAN

Label, elastic,studs, toggle

and stringHONG KONG

Made in Hong Kong

by

LI & FUNG’S BUSINESS PARADIGM

Supply Chain ManagementSupply Chain Management

LocalForwarding

Consolidation

LocalForwarding

Consolidation

ConsumerConsumer

RetailerRetailer

WholesaleImporter

WholesaleImporter

ConsumerNeeds

ConsumerNeeds

ProductDesign

ProductDesign

FactorySourcingFactory

SourcingMfg

ControlMfg

ControlExport Docu-

mentationExport Docu-

mentationForwarder

ConsolidationForwarder

ConsolidationCustomsClearanceCustomsClearance

Raw MaterialSourcing

Raw MaterialSourcing

Supply Chain Financing

Raw MaterialMill

Raw MaterialMill

Supply Chain

FactoriesFactories

FinancingFinancing

ShippingAirlines

ShippingAirlines

FinancingFinancing FinancingFinancing FinancingFinancing

ProductDevelopm’t

ProductDevelopm’t

THE CHANGING ROLE OF THE TRADING COMPANY

Lev e

l of

Va l

ue A

dded

BuyingAgencyBuyingAgency

SourcingSourcing

BorderlessManufacturing

BorderlessManufacturing

VirtualManufacturing

VirtualManufacturing

Supply ChainManagementSupply ChainManagement

ANALYZING IT IMPACT

1. IT impact on strategy

• Determining product, market, business network, and boundary positioning

2. IT impact on capabilities.

• Building processes, infrastructure, people, partner, organization & culture, leadership, governance

ANALYZING IT IMPACTIBM Path to Business transformation

ANALYZING IT IMPACTIBM Path to Business transformation

• Goal: Use IT to improve local operating performance

• Business Sponsor: Local Manager, team, individuals.

• Business Value: Reduce cost & Improve local operating performance.

• Risk & Uncertainty: Low to moderate• Investment: Local Budgeting

• Goal: Use IT to improve end to end operating processes• Business Sponsor: Business Unit & Shared service Leaders

( suppliers, customer, partner)• Business Value: Reduce cost, decrease cycle time, improve

org or extended enterprise operating performance, improve total cost of IT Ownership.

• Risk & Uncertainty: moderate to high, business & tech complexity and volatility, org change, required integration.

• Investment: Corporate Budgeting, steering committee.

• Goal: Pursue opportunities that enable launch of new products / business, entry into new market

• Business Sponsor: Executive Committee, business unit leadership.

• Business Value: Grow Revenue, launch new product, enter high growth industries and market

• Risk & Uncertainty: High, new business model needed• Investment: Staged commitments and investments base on

milestones, base on business plan, new venture risk management

• Goal: Transform organization n industry, differentiate strategy, develop proprietary asset.

• Business Sponsor: BOD, strong project leadership.• Business Value: Enable sustained capital efficient profitable

growth, improve market share, deliver sustainable competitive advantage.

• Risk & Uncertainty: High, new business model needed, new tech needed, organizational change, integration of new business.

• Investment: Integrated with corporate strategy, Review by committee, change control process n system

BASIC QUESTIONS

Five key questions can be used to guide executives as they search for value creating opportunities to use IT to support and drive the business strategy

1. Can IT change the basis of competition?2. Can IT change the nature of relationship and the

balance of power among buyers and suppliers3. Can IT build or reduce barriers to entry?4. Can IT increase or decrease switching costs? 5. Can IT add value to existing products and services or

create new ones?

GROUP PURCHASING ALLIANCE

New concept for health care industry

CASE STUDY

Radiology Film

0

500000

1000000

1500000

2000000

18x24 1086100 228800 325000 528000 240000

24x30 904800 371360 569900 880000 400000

30x40 1534500 590920 895500 1467400 655000

35x35 1603300 641980 951250 1548800 705000

A B C D E

FACT

Disp Syringe

0

1000

2000

3000

4000

1 ml 1746 3146 905 1270 2100

2ml 1202 2227 951 660 1200

5ml 1730 2794 1121 836 1550

10ml 2003 3591 1550 1452 2100

A B C D E

FACT

350%

18 X 24 474%24 X 30 243%30 X 40 259%35 X 35 249%

D5W 138%D10W 164%SALINE 140%RINGERS 164%

1ml 347%2ml 337%5ml 334%10ml 247%

GLOVE

FILM

I.V.SOLNS

DISP SYRINGES

% COST DIFFERENCES% COST DIFFERENCES

SOLUTIONS ?

CONSEPT Infomediaries

GPA GPA ComponentsComponents

Hospitals: Power Force of GPA

Bank: Financial support

GML: Representer of Hospital

Distributor/Manufacturer: Product supplier

GPA GPA ComponentsComponents

Transaction Scheme

GMLGML

BENEFIT

HOSPITAL BANK GMLDISTRIBUTOR

OUR LEARNING POINTS FOR TODAY …

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THANK YOU