Thursday, June 11, 2009

Coke Meets ‘The Jetsons’ with new Robodispenser

Coca-Cola recently announced a revolutionary new soda dispenser they will soon pilot in selected areas. See a great comprehensive article in the June 8, 2009 issue of Information Week magazine. It is a significant announcement for many reasons.

  • The Freestyle “Fountain” dispenses over 100 different beverages (sodas, juices, teas, and flavored waters) using thirty highly concentrated flavor cartridges.
  • The system uses RFID tags on the flavor cartridges to track inventory
  • The dispenser communicates with a central Corporate point-of-sale system and data warehouse via a dedicated wireless network recording quantity, types, time, and location of drinks sold

Customer Value

  • More choices
  • Special offers

Retailer Value

  • Inventory optimization
  • 100 choices in the same footprint as an eight to 12 drink dispenser
  • Information about sales patterns that can be used to provide special offers to the customers
  • Easier ordering process with recommendations based on ten day moving average of sales, cartridge inventory, and dispenser inventory.
  • Access to a portal with visibility to the consumption data and statistics that can be sliced and diced by cartridge, drink, dispenser, hour, day, week, etc.

Value to Coca-Cola

  • Faster, lower cost new product Research & Development, Market Research, product piloting and production rollout
  • Remotely adjust beverage formulas
  • Better understanding of regional customer preferences
  • First to market; four years in development
  • Better data to align supply with demand for Sales and Operations planning
  • Competitive advantage with offer of high retailer and customer value

When Information Technology is applied effectively in close cooperation with Business Operations, improvement initiatives offer opportunities for significant gains for all parties involved from the supply chain to the customer.

Wednesday, June 3, 2009

Debit Card Activation Improvement

credit card photo A colleague recently expressed his enthusiasm for another  Wells Fargo customer experience improvement. Your shiny new debit/credit card arrives in the mail, but before you can use it, you need to peel off the sticker and call the number navigating an automated menu to activate it. Who doesn’t put that off until the last minute? Wells Fargo has a new option – you simply insert your new card into the nearest ATM and enter your PIN. Voila! Activated. You still have the option to call or activate online, but if you use the ATM anyway, it is a compelling new “effortless” option.

It is hard to believe with the technology available, the concept wasn’t more widespread before now, but it shows signs that the banking industry is starting to put their technology to use to improve customer experience.

According to the 2008 Forrester’s Customer Experience Index (CxPi), in the Banking Industry Wells Fargo ranked third for “ease of use” out of the banks surveyed. The competition between a smaller number of increasingly larger banks brings welcome improvement.

Monday, June 1, 2009

One Strategy to Describe GM History in more than 11 Chapters

chevys photo credit: just4you Leading up to a likely bankruptcy, GM Executives have had to make numerous big decisions recently about restructuring to maintain its future viability. Closing a large number of dealerships was one of the chosen strategies. In order to make smart decisions about which dealerships to close, the leaders would need two things: selection criteria aligned with the scope of the goal and a lot of data that links key performance indicators to dealership locations.

Despite the media reports of “successful” dealerships tagged for closure, the selection process is not likely as simple as just picking the bottom 40% of dealerships from a list of annual sales. Some accounts have described the targeted dealerships as “under-performing”. Under-performing is relative condition, especially in a huge organizational network implementing other significant changes that will impact dealership performance in the future, such as eliminating entire Makes (Pontiac) with multiple product lines.

Strategies like this one require careful consideration of a number of complex scenarios to minimize risk while maximizing the predictability and effectiveness. With over 6000 dealerships, it is unlikely that a comprehensive comparative review of each individual dealership can be conducted. More likely a review will be made of multiple combinations of aggregated key performance metrics like:

  • sales history by make, model, and region
  • forecast by make, model, region
  • volume vs. mix
  • up-sell/cross-sell statistics
  • profitability by new/used car sales
  • service labor vs. parts sales
  • warrantee reimbursement
  • dealership proximity concentration
  • years in business - short term vs. long term performance
  • customer loyalty
  • average vehicle inventory
  • regional demographics affecting future sales forecasts
  • seasonal sales variation

*I’m not connected to the details of the actual selection process; I am supposing.

The aggregated data will be sliced and diced, repeatedly applying a great deal of analysis, criteria refinement, and simulations before lines are drawn and lists of targeted dealerships are made. The actual data specific to the selected locations are likely plugged back into the equation to solidify the estimate.

Executing a strategy like this without the right process would be a monumental task carrying high risk of missing expectations. It is necessary to have:

  • strategy - clear understanding of the assumptions/expectations behind the selected strategy
  • process - a process to identify the combination of complex criteria that will yield the optimum result in the face of many significant, changing, and sometimes unpredictable factors
  • technology - a fast and flexible process to filter, sort, and aggregate massive amounts of demographic and performance data in any number of complex combinations and extrapolate that into specific dealership locations