Category: Business

This business case outlines how the e-Saman project will address current business concerns, the benefits of the project, and alternative of the project. The business case also discusses detailed project goals, project’s MOV and alternative options.

1 Problem or Opportunity

Currently, when students are summoned by the auxiliary police, they need to come to auxiliary police headquarters to check the status and pay their summons. If students do not know that they are being summoned, the summons would deferred and students must pay before graduate in order to get the certificate.

In order to effectively manage summons in auxiliary police headquarters and reduce time consuming, auxiliary police headquarters must move to a web-based application as outlined in this business case for the e-Saman project. By doing so, it will easier to students to check and pay their summons and auxiliary police can manage all summons payment efficiently.

2 Organization’s Goal and Strategy

Auxiliary police UiTM ‘s goals are:

1. Security policy makers in all UiTM campus.

2. Implementing security controls in a systematic and continuous. 3. Enforce laws and regulations on the safety of the university community in a prudent and proactive. 4. Providing security services affairs in an efficient and effectively 5. Manage the auxiliary police headquarters to be the professional security, integrity and accountability

1.3. Project’s Measurable Organizational Value

1. To inform the student about the summons that they got.

2. Student can pay online without have to go to the auxiliary police station.

3. To increase the efficiency in managing payment of the summons.

4. To inform the student about the latest news or announcement for example discount rate offer.

1.4. Option or Alternative Analyzed

To develop an online system where:

i. Students can check whether they got a summon or not. ii. Students can pay the summon through online using this system. iii. Students can get the information about the UiTM rules. iv. Students can get the latest news from UiTM. v. The e-Saman system is also provides an announcement. vi. The e-Saman system contains the rules and guidelines for students. vii. Students can know who the officer on due.

1.5. Alternative Explanation

Recommended alternative is to develop an online system where student can check and pay bill online because:

i. The only place that student can check the summons is at the police station. ii. Technology evolvement. In the new technology era, people nowadays cannot leave without using the internet. Therefore it is practical to use online system especially to student. iii. Time consuming for student to go pay manually.

2. Introduction

2.1. Background

Organization

The history of Security Department was initially started in 1974 when MARA University of Technology was fully established. Before that, the security control for the MARA University of Technology was entirely handled by the SafeGuard Security Company at the Jalan Othman, Petaling Jaya. The main purpose of the development of this department is to obtain some responsibility that concerning of the security, peaceful threatening and matters that relating to the Institute and the name of institute. The duties of this department are to enforce rules and regulations for UiTM is one of the “Executive Function” and status are given for ensuring UiTM image as a whole and the efficiency and effectiveness of towards campus society do not affecting at all. Generally, function of this unit are been divided into several group according form of tasks such as logistic and administration division, operation, special tasks and discipline. These forms of tasks are including:-

• Security Control • Traffic Control • Controlling the staffs and students discipline • To avoid fire fighting • Investigation • Logistic and Administration • Training

Security Department was upgraded to UiTM Auxiliary Police on 18 April 2011. In the early years of the establishment of UiTM Auxiliary Police, it’s have been known as UiTM Help Security Unit later upgraded to the Security Department. Administrative structure varies according to the current development of universities either placed under the supervision of the Office of the Director, Office of the Registrar and the Office of the Chancellery.

Beginning August 1, 2011, the Administration of Auxiliary Police is put under the Vice-Chancellor and known by the name of UiTM Auxiliary Police Headquarters. For state campuses, they were placed under the administration of the Campus Rector and known as the Office of Auxiliary Police. Function and role of Auxiliary Police still the same but the scope of duties and jurisdiction has been expanded to have police powers.

System

e-Saman is a system of integrated programs designed to make it easier for a user to discover information in a convenient way and become a vital to our life rather than Manual System. For these proposed, the development of e-Saman for Security Department of UiTM is being build up to determine the staff acceptance level of the e-Saman system and also to develop a solution replacing the existing conventional system with a web-based computerized system. Mainly, this project proposed to make information management more organized and effectives. The e-Saman is the new concept of system management where the entire organized summons will be supervised by on-line system. This new concept of system management will helped the Security Department of UiTM to control the students summon so that it will be more effective and efficient. Employees of Security Department of UiTM can easily updating and checking students summons. Besides that, they can storing and retrieve the summons’s records. For the students, they can pay online without have to go to the auxiliary police station.

2.2. Current Situation

The current situation that happens in UiTM Auxiliary Police is the organization is still using the manual system in handling the student’s summons. The students have to go to the Office of UiTM Auxiliary Police to pay for the summons. Besides that, their staffs also need to find the summons’s records by manually that spend a lot of time.

2.3. Description of Problem or Opportunity

UiTM Auxiliary Police is currently using the manual system in handling the student’s summons. Thus, the usage of the current system is less effectives where the employee in the department has to recheck the students summons manually. According to Security Officer of UiTM Auxiliary Police, their staffs have to spend a lot of time to recheck thousands of students’ summonses. This situation, involves high costs in paying staffs’ overtime-working hours. Besides that, it creates difficulties to the staff during the university’s convocation season. Almost thousands of summonses need to be rechecking and after that, they have to send notices to student directly to their permanent address. Because of that reason, this project is proposed to ensure all the problems relating to students summon can be solved and indirectly can help the UiTM by gearing its processes to the computerized system.

2.4. Project’s Measurable Organizational Value (zie buat ni salah, tapi hok betol tu jat try tengok dalam buku, dia bagi instruction untuk buat yang ni)

The development of this system gives a lot of benefits both for the Security Department UiTM itself and the students. They are:

• The Security Department itself can increase the effectiveness of storing and retrieve data. • All students in the Faculty of Information Technology and Quantitative Science can easily to check their summons without having to come to Security Centre. • Reduce time to get the student summons status. • Students are easy to access through the Internet. Students are able to interactively search for information and checking their summons. • Employees of Security Department can easily updating and checking students summons. • The entire students’ summonses are stored at the vulnerable place. Its more secure if compare to conventional system.

2.5. Project’s Measurable Organizational Value Supporting Details (ini pon samo)

Reach for a higher measure of success, an information technology project can be on time and within budget, but that doesn’t mean it will be successful. The real measure of success is the value that the project delivers to the organization. A project MOV must be agreed upon. All project stakeholders should agree upon the MOV of a project before the project starts. This requirement includes making business stakeholders as well as technology stakeholders, such as analysts and developers; agree to the MOV before a project begins as a later measurement of project success.

This is a difficult task as it is in one group of stakeholders’ interest to make the MOV high while it is in the interest of the technology stakeholders to make it low. This is especially difficult as it benefits the business side to trick or take advantage of the lack of business acumen from the technology side and requires the technologist to allow them to be judges of something that they neither understand nor ultimately control.

Verifiability of the MOV is the key. Since the project’s MOV is measurable by definition it must then be verifiable. After the project has been completed the MOV is to be verified to determine if the project was successful or if it was not.

2.6. Objectives of Business Case

• Why a project should be undertaken? • Identifying a problem to be solved or an opportunity to be pursued • Providing recommend solutions and plans of action and the benefits of performing them. • Adequately and competently request resources and explain why they are needed in order to succeed, as well as describe the likely benefits, primarily in increased revenue or reduced losses.

London Business School Essay Topic Analysis 2012-2013With the exception of a few minor wording changes, four of London Business School’s essay topics for the 2012-2013 admissions season have remained essentially the same as last year’s prompts. Meanwhile, the school has reintroduced a career goals essay that was last seen on the 2009-2010 application, in addition to completely revamping their sixth essay question. Overall, LBS has maintained its trend of placing a marked emphasis on learning about the specific details of an applicant’s future involvement on campus and contribution to the school community.

From this, one can extrapolate that LBS may be interested in candidates who have spoken to students and learned a good deal about the program to better understand how and where they might fit. Question 1: In what role or sector do you see yourself working immediately after graduation? Why? How will your past and present experiences help you achieve this?

How will the London Business School MBA Programme contribute to this goal? (500 words) Question 2: Where do you see your career progressing five years after graduation and what is your longer term career vision? (200 words) As in previous years, LBS has divided the typical career goals essay into two discrete questions.

Though the first question more closely resembles Question 1 from the 2009-2010 application than to that of last year’s, the school’s two-part approach to learning about applicants’ career goals still underlines the importance of having both a short- and long-term career plan in the MBA admissions process. While the compartmentalization of the short- and long-term discussions might make it a bit more difficult to adapt content written for applications to other schools, it does signal the extent to which the adcom wants to hear about each of the topics raised.

Developing one’s long-term goal discussion over 200 words, with a starting point at the five-year mark, could be a great opportunity for applicants who often cover this topic in a single sentence to meet the word limit in their essays for other schools. Although the first question no longer specifically asks applicants why now is the best time for them to attend business school, a brief discussion of the timing of your application could still be useful in proving to the adcom that you are making a well-informed decision. Question 3: Give a specific example of when you have had to test your leadership and / or team working skills either professionally, or outside of work. What role will you play in your first year study group? (300 words) For another year in a row, LBS is asking applicants to discuss an experience in which they faced challenges to their leadership and teamwork skills. Given that the adcom has stated that this topic does not have to come from one’s professional experience, applicants should feel free to use this essay as an opportunity to showcase their involvement in an outside activity.

After clearly outlining the situation, it’s crucial that applicants explain how they persevered through the challenge, as doing so shows one’s maturity and ability to overcome obstacles. It would therefore make sense to end this essay by explaining the strategies you’ve subsequently developed to navigate difficult situations, and discussing how you can apply these processes to future work at LBS. Note that the question about LBS study groups offers applicants a great chance to showcase their familiarity with the program and prove that they’ve done their homework, as well as demonstrate that they’ve thought through the contribution they would make and the strengths they could bring to the program. With only 300 words allotted for this essay, applicants will need to be highly efficient with their writing to ensure that they can respond to each component of the prompt.

Question 4: Student involvement is an extremely important part of the London MBA experience and this is reflected in the character of students on campus. What type of student club or campus community events will you be involved with and why? How will you contribute? (300 words) This question, which has appeared in similar forms on the LBS application for several years, asks candidates to broadly discuss the clubs and events in which they would like to participate.

This framing gives candidates a wide berth to discuss how their interests and experiences to date would translate to contributions on several fronts. As with any essay of this sort, it would be ideal to link the clubs and events you cite to established interests or elements of your career goals, as these will help the admissions committee readily see how you are poised to make a contribution. Taking the time to learn about the school’s special programs and extracurricular activities—whether through a visit to campus, conversation with alumni, or reading the Clear Admit Guide to London Business School—will pay dividends here.

Question 5: London Business School offers a truly global and diverse experience. Describe any significant experiences outside of your home country or culture. What did you gain and how will your experience contribute to the School? (150 words) Another carryover from last year’s application, this question allows applicants the opportunity to showcase their international experience, both professionally and personally, and is designed to gauge the applicant’s ability to navigate unfamiliar terrain and resolve cross-cultural issues. In order to answer both components of this question, we suggest that applicants quickly outline important experience abroad, and then focus on providing detail about the lessons and skills gained from these situations, as well as how the experiences would help the applicant benefit from and contribute to LBS.

Based on the first sentence of this prompt, it will be important for applicants to show that not only can they contribute to the diversity at LBS, but also that they will thrive as a member of the diverse student body. Considering that the adcom has shortened this essay to just 150 words, applicants will need to be direct and concise to ensure that they can cover each aspect of the essay question. Question 6: Give an example of a person who, in your opinion, has made a profound impact on the way the world does business. How will this person influence your contribution to your MBA Programme at London Business School? (300 words)

This question is a new addition to the LBS application, and gives applicants a chance to showcase their understanding of the business world and the types of people who create change. When selecting someone to write about, applicants should think about a variety of options—while popular figures might jump most readily to mind, you might consider slightly less well known individuals to help distinguish your application. Regardless of the person you choose, the key to this essay is to keep the focus on you and your candidacy by explaining how you think the person has influenced the business world and the lessons you have drawn from the person’s actions.

You may also be interested in the following: essay about business career

A business unit, sometimes called a strategic business unit or SBU, is a segmented group or department within a company that focuses on reaching a specific market or client. It may also focus on achieving a specific goal for the organization. While some businesses find success with this strategy, there are concerns and potential problems to consider before trying it at your company.

Finances

In business, money is usually a problem. It can be good to make money, but when you are just getting started with a business, it can be easy to lose money quickly.

Before you start your business, develop a comprehensive list of the things you will need to finance and how much money you will need to make it happen. Discuss your business with others who have experience to try to cover as many costs as you can. When you have developed your startup budget, add 20 percent to it to cover the costs that you have not yet accounted for.

When it comes to financing a startup, it is better to plan for more than you will need than to find yourself deep in debt right away.

Employees

Your employees can be your greatest asset and your greatest expense. It costs money to hire, train and retain employees. Your company needs to provide some sort of benefits package that includes health insurance, paid vacation days and paid sick days to attract and retain employees, and even then, you will have competition from other companies that may be able to offer better. As you delegate responsibilities to your employees, you begin to rely on them for your company’s success. A key employee leaving your company can have an effect similar to losing a major account.

Space

It is common for a new business owner to try to keep his office and warehousing costs down. When your company first starts out, a small and affordable space may be adequate. As your company grows, you will need more space, and you may realize that the facility you signed the one-year lease for is no longer sufficient. Have a backup plan available for warehousing just in case you outgrow your current warehouse. Offer sales employees the option of telecommuting to reduce the amount of office space you need. Become creative with your space, or you may find yourself spending money to remedy a space problem to which you are contractually bound for years.

Problems Meshing Ideas

When you segment your company in this way, you may find it becomes more difficult to get units to combine and work together. Though the separate units have different purposes, there may come a time when they need to convene in order to accomplish a goal for the organization. If your employees become too familiar with working in segmented groups, they may have problems working on joint projects with other units.

Expensive

Establishing business units can also be expensive. For one, you may have to create separate physical departments within the company. You may also need to create separate websites, mailing addresses and, in some cases, entirely new sub-organizations to properly establish these units. Finding a balance between efficiency and cost when maintaining these units can be challenging.

Time-Consuming

Setting up and running business units is also time-consuming. When you establish one, you must create a separate mission statement, budget, marketing plan and general business proposal. You must also set up technology and tools to support the department. You must then evaluate the functionality of the department before repeating the process with another business unit. If you decide to start all of your units at the same time and then determine that the formula isn’t working, you’ll also spend a significant amount of time dismantling or updating all of them.

Social Responsibility

Small businesses can encounter several problems related to Corporate social responsibility due to characteristics inherent in their construction. Owners of small businesses often participate heavily in the day-to-day operations of their companies. This results in a lack of time for the owner to coordinate socially responsible efforts.[9] Additionally, a small business owner’s expertise often falls outside the realm of socially responsible practices contributing to a lack of participation. Small businesses also face a form of peer pressure from larger forces in their respective industries making it difficult to oppose and work against industry expectations.[9] Furthermore, small businesses undergo stress from shareholder expectations. Because small businesses have more personal relationships with their patrons and local shareholders they must also be prepared to withstand closer scrutiny if they want to share in the benefits of committing to socially responsible practices or not.[9]

Job Quality

While small businesses employ over half the workforce [10] and have been established as a main driving force behind job creation [11] the quality of the jobs these businesses create has been called into question. Small businesses generally employ individuals from the Secondary labor market. As a result, in the U.S. wages are 49% higher for employees of large firms.[11] Additionally, many small businesses struggle or are unable to provide employees with benefits they would be given at larger firms. Research from the U.S. Small Business Administration indicates that employees of large firms are 17% more likely to receive benefits including salary, paid leave, paid holidays, bonuses, insurance, and retirement plans.[12] Both lower wages and fewer benefits combine to create a job turnover rate among U.S. small businesses that is 3 times higher than large firms.[11] Employees of small businesses also must adapt to the higher failure rate of small firms. In the U.S. 69% last at least 2 years, but this percentage drops to 51% for firms reaching 5 years in operation.[10] he U.S. Small Business Administration counts companies with as much as $35.5 million in sales and 1,500 employees, depending on the industry. Outside government, companies with less than $7 million in sales and fewer than 500 employees are widely considered small businesses.

What makes someone a successful entrepreneur?

It certainly helps to have strong technology skills or expertise in a key area, but these are not defining characteristics of entrepreneurship. Instead, the key qualities are traits such as creativity, the ability to keep going in the face of hardship, and the social skills needed to build great teams. If you want to start a business, it’s essential to learn the specific skills that underpin these qualities. It’s also important to develop entrepreneurial skills if you’re in a job role where you’re expected to develop a business, or “take things forward” more generally.

It’s very easy to get lost trying to rate ourselves against our peers or even rate ourselves around society when it comes to success. Its actually depressing at times and inconclusive as you often get side tracked comparing apples to oranges. In our quest for success, we often look for some sort of ranking system to gauge how well we are doing and unfortunately decide to use others as the measure.

It is often an inaccurate scale as so many factors come into play, so many that it makes it unfair to compare yourself to others on any level. There are so many circumstances that dictate success it makes it impossible to find multiple people with identical circumstances to compare us to. Since we cannot compare ourselves to others, we must become our own competition and strive for perfection daily in order to move forward. We ultimately set the velocity at which we move. The results however are none that can be compared to others as every situation is as unique as the next.

The real point here is why do we worry about what others are doing if we ultimately shouldn’t compare ourselves to them. The answer is jealousy and should end immediately. If you are someone that often finds yourself worrying about what others are doing, how they are doing it and where their wealth comes from, then start minding your own business and instead focus your energy on yourself and your work which is what will get you there, not finding out if your neighbor is in the Mafia or indeed a real estate guru. The best way to check if you are yourself is to ask yourself if you often form conclusions when faced with an individual who has attained a higher level of monetary success. Do you often find yourself guessing that perhaps this person was given wealth from past generations or that they are involved in negative activities that have led to financial success?

One should rather focus our energy and efforts on our own growth and not criticize others whose level of success is above ours. If you find yourself in such a negative position where a friend or relative seems to feel that way, then identify them as one whose lack of effort and lack of motivation is ultimately going to be the reason they fail, and separate yourself from that energy instantly.

Defining Entrepreneurship

Some experts think of entrepreneurs as people who are willing to take risks that other people are not. Others define them as people who start and build successful businesses. Thinking about the first of these definitions, entrepreneurship doesn’t necessarily involve starting your own business. Many people who don’t work for themselves are recognized as entrepreneurs within their organizations.

Regardless of how you define an “entrepreneur,” one thing is certain: becoming a successful entrepreneur isn’t easy. So, how does one person successfully take advantage of an opportunity, while another, equally knowledgeable person does not? Do entrepreneurs have a different genetic makeup? Or do they operate from a different vantage point, that somehow directs their decisions for them?

Though many researchers have studied the subject, there are no definitive answers. What we do know is that successful entrepreneurs seem to have certain traits in common. Check for yourself if you have these traits:

•Interpersonal skills.

•Critical and creative thinking skills.

•Practical skills.

Optimism: Are you an optimistic thinker? Optimism is truly an asset, and it will help get you through the tough times that many entrepreneurs experience as they find a business model that works for them.

Vision: Can you easily see where things can be improved? Can you quickly grasp the “big picture,” and explain this to others? And can you create a compelling vision of the future, and then inspire other people to engage with that vision?

Initiative: Do you have initiative, and instinctively start problem-solving or business improvement projects? Desire for Control: Do you enjoy being in charge and making decisions? Are you motivated to lead others? Drive and Persistence: Are you self-motivated and energetic? And are you prepared to work hard, for a very long time, to realize your goals? Risk Tolerance: Are you able to take risks, and make decisions when facts are uncertain? Resilience: Are you resilient, so that you can pick yourself up when things don’t go as planned? And do you learn and grow from your mistakes and failures?

Interpersonal Skills

As a successful entrepreneur, you’ll have to work closely with people – this is where it is critical to be able to build great relationships with your team, customers, suppliers, shareholders, investors, and more.

Some people are more gifted in this area than others, but, fortunately, you can learn and improve these skills. The types of interpersonal skills you’ll need include: Leadership and Motivation: Can you lead and motivate others to follow you and deliver your vision? And are you able to delegate work to others? As a successful entrepreneur, you’ll have to depend on others to get beyond a very early stage in your business – there’s just too much to do all on your own!

Communication Skills: Are you competent with all types of communication? You need to be able to communicate well to sell your vision of the future to investors, potential clients, team members, and more.

Listening: Do you hear what others are telling you? Your ability to listen can make or break you as an entrepreneur. Make sure that you’re skilled at active listening and empathetic listening. Personal Relations: Are you emotionally intelligent? The higher your EI, the easier it will be for you to work with others. The good news is that you can improve your emotional intelligence! Negotiation: Are you a good negotiator? Not only do you need to negotiate keen prices, you also need to be able to resolve differences between people in a positive, mutually beneficial way. Ethics: Do you deal with people based on respect, integrity, fairness, and truthfulness? Can you lead ethically? You’ll find it hard to build a happy, committed team if you deal with people – staff, customers or suppliers – in a shabby way.

Critical and Creative Thinking Skills

As an entrepreneur, you also need to come up with fresh ideas, and make good decisions about opportunities and potential projects. Many people think that you’re either born creative or you’re not. However, creativity is a skill that you can develop if you invest the time and effort.

Creative Thinking: Are you able to see situations from a variety of perspectives and come up with original ideas? (There are many creativity tools that will help you do this.) Problem Solving: How good are you at coming up with sound solutions to the problems you’re facing? Tools such as Cause & Effect Analysis, the 5 Whys Technique, and CATWOE are just some of the problem-solving tools that you’ll need to be familiar with.

Recognizing Opportunities: Do you recognize opportunities when they present themselves? Can you spot a trend? And are you able to create a plan to take advantage of the opportunities you identify?

Practical Skills

You also need the practical skills and knowledge needed to produce goods or services effectively, and run a company. Goal Setting: Do you regularly set goals, create a plan to achieve them, and then carry out that plan? Planning and Organizing: Do you have the talents, skills, and abilities necessary to achieve your goals? Can you coordinate people to achieve these efficiently and effectively. And do you know how to develop a coherent, well thought-through business plan, including developing and learning from appropriate financial forecasts?

Decision Making: How good are you at making decisions? Do you make them based on relevant information and by weighing the potential consequences? And are you confident in the decisions that you make? Core decision-making tools include Decision Tree Analysis, Grid Analysis, and Six Thinking Hats.

You need knowledge in several areas when starting or running a business. For instance: Business knowledge: Do you have a good general knowledge of the main functional areas of a business (sales, marketing, finance, and operations), and are you able to operate or manage others in these areas with a reasonable degree of competence?

Entrepreneurial knowledge: Do you understand how entrepreneurs raise capital? And do you understand the sheer amount of experimentation and hard work that may be needed to find a business model that works for you?

Opportunity-specific knowledge: Do you understand the market you’re attempting to enter, and do you know what you need to do to bring your product or service to market? Venture-specific knowledge: Do you know what you need to do to make this type of business successful? And do you understand the specifics of the business that you want to start?

Conclusion:

As a dreamer, you need to understand its significance and mind your own business. Never lose track of your vision for your life. Do not ever get so busy making a living that you forget to live your life.

Business Cycle (or Trade Cycle) is divided into the following four phases :- Prosperity Phase : Expansion or Boom or Upswing of economy. Recession Phase : from prosperity to recession (upper turning point). Depression Phase : Contraction or Downswing of economy.

Recovery Phase : from depression to prosperity (lower turning Point).

Diagram of Four Phases of Business Cycle

The four phases of business cycles are shown in the following diagram :-

The business cycle starts from a trough (lower point) and passes through a recovery phase followed by a period of expansion (upper turning point) and prosperity.

After the peak point is reached there is a declining phase of recession followed by a depression. Again the business cycle continues similarly with ups and downs.

Explanation of Four Phases of Business Cycle

The four phases of a business cycle are briefly explained as follows :-

1. Prosperity Phase

When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living.

This period is termed as Prosperity phase. The features of prosperity are :-

High level of output and trade.
High level of effective demand.
High level of income and employment.
Rising interest rates.
Inflation.
Large expansion of bank credit.
Overall business optimism.

A high level of MEC (Marginal efficiency of capital) and investment. Due to full employment of resources, the level of production is Maximum and there is a rise in GNP (Gross National Product). Due to a high level ofeconomic activity, it causes a rise in prices and profits. There is an upswing in the economic activity and economy reaches its Peak. This is also called as a Boom Period.

2. Recession Phase

The turning point from prosperity to depression is termed as Recession Phase. During a recession period, the economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits. The businessmen lose confidence and become pessimistic (Negative). It reduces investment. The banks and the people try to get greater liquidity, so credit also contracts. Expansion of business stops, stock market falls. Orders are cancelled and people start losing their jobs. The increase in unemployment causes a sharp decline in income and aggregate demand. Generally, recession lasts for a short period.

3. Depression Phase

When there is a continuous decrease of output, income, employment, prices and profits, there is a fall in the standard of living and depression sets in. The features of depression are :-
Fall in volume of output and trade.
Fall in income and rise in unemployment.
Decline in consumption and demand.
Fall in interest rate.
Deflation.
Contraction of bank credit.
Overall business pessimism.
Fall in MEC (Marginal efficiency of capital) and investment. In depression, there is under-utilization of resources and fall in GNP (Gross National
Product). The aggregate economic activity is at the lowest, causing a decline in prices and profits until the economy reaches its Trough (low point).

4. Recovery Phase

The turning point from depression to expansion is termed as Recovery orRevival Phase. During the period of revival or recovery, there are expansions and rise in economic activities. When demand starts rising, production increases and this causes an increase in investment. There is a steady rise in output, income, employment, prices and profits. The businessmen gain confidence and become optimistic (Positive). This increases investments.

The stimulation of investment brings about the revival or recovery of the economy. The banks expand credit, business expansion takes place and stock markets are activated. There is an increase in employment, production, income and aggregate demand, prices and profits start rising, and business expands. Revival slowly emerges into prosperity, and the business cycle is repeated. Thus we see that, during the expansionary or prosperity phase, there is inflation and during the contraction or depression phase, there is a deflation.

1. How have businesses in India developed differently from their western counter parts?

India, from 1947 to 1991 followed the socialist system of industrial development, wherein the major industries were controlled by the state. The western countries have followed a policy of free market and capitalism during the same time period. The Indian economy was restricted by the License – Permit – Quota Raj, due to which the opportunities of developing new businesses were minimal. This policy insulated the Indian economy from the outside world , and led to monopolies in the public sector which were inefficient, similar to the U.

S.S.R. Post liberalisation, with removal of these restrictions, the businesses in India, free from the shackles of the permit system have grown as a fast pace with improving efficiencies. However several businesses, which could not cope with the competition, fell by the wayside.

The western economies have in the capitalistic environment, graduated from family run businesses to control by institutional investors to control by private equity firms in many cases, whereas, their Indian counterparts still have a large proportion run by family run businesses and institutional investors controlled by the government.

Many of the PSU’s in India which have survived the post – liberalisation opening up of the economy are monopolies in their respective markets and today are quite competitive on the global stage. The family run businesses compete fiercely with each other and look for opportunities in newer areas, including global markets. In the western world, there is a growing trend of consolidation with oligopolies emerging in almost all industries, which are being controlled by PE firms. Overall, India’s form of ownership has barely changed over the past decade. The division of profits made by family firms between those in their first, second and third or older generations has stayed pretty constant.

2. Why has Indian business developed in this way?

Indian businesses have developed this way mainly because of two reasons: 1. India followed the socialist policy post independence, which converted the British legacy to public run institutions, and followed a policy of nationalization whereby control of industrial output was controlled by the government. The license – quota – permit raj severely restricted the Indian entrepreneurs from developing new businesses. The family run businesses with deep pockets and good political connections expanded their sphere of influence from their core businesses into unrelated areas where they saw an opportunity to grow. With reforms taking place post 1991 in a gradual manner, many new and existing businesses managed very well to adapt to the changing environment, taking advantage of the technology advances which had already taken place in the western world.

2. With a largely agricultural based economy, the Indian government had focussed on related infrastructure, leading to a weak over all infrastructure for industry. This has led to difficulties in starting new businesses. Similarly, regulations involved in starting new businesses are severely restrictive and cumbersome which is discouraging to entrepreneurs

3. Will it continue to?

Major reforms in several areas are sorely required if Indian businesses and the Indian economy are to maintain the growth trajectory. If these happen, Indian businesses will transform into real global players in a few years. If reforms are soft-pedalled there is a very good chance the Indian business growth story will come to an early end.

4. Can the aspirations it has raised be met?

Yes, the aspirations it has raised can be met. There is every reason to believe that the decision makers in Indian governance recognize what needs to be done and will act accordingly, although not at the pace required. The overall momentum generated by India Inc. should carry it through the current set of problems it is facing. The pool of skilled professionals combined with a large population with a growing purchasing power will project India to the big league. The relatively slower growth rates in the developed economies will give Indian firms the opportunity to scale up to global level at a fairly rapid pace.

5. And is this new form of capitalism good for India—and the world?

The new form of capitalism called capindialism is good for India, at least for the coming generation. As India transforms into one of the largest economies of the world, the moderate growth rates as compared with China, and somewhat controlled, India will be able to protect itself and therefore the world from unexpected shocks. If the country maintains its current rate of growth it is expected to become the world’s third-largest economy sometime after 2030, and hundreds of millions of people will lift them out of poverty. The Indian businesses which survive the growth will be transformed into world class and be controlled indirectly by the Indian public.

We are in the age of information. Today there are more than 23 million managers and 113 million workers in the labor force depend on information system to accomplish their business in the United States of America. Information systems are essential to achieve strategic business objectives. Today’s global economy, transformation of industrial economies, transformation of the business enterprise, and the emergence of digital firm require information systems essentially in business. Information system is the pillar for excessing business today. In many businesses, survival and the ability to achieve strategic business goals is difficult without extensive use of information technology.

There are six reasons or objectives why businesses use information system:

Operational Excellence:

In any business improves its efficiency and accuracy of their operations in order to achieve higher profitability. Information systems are also important managers for achieving higher levels of efficiency and productivity in business operations. As an example I can include that Wal-Mart uses a Retail Link system, which digitally links its suppliers to every one of Wal-Mart’s stores.

as soon as a customer purchase an item , the supplier is monitoring the item , knows to ship a replacement to the stores.

New products, services, and business models:

Information system is one of the main elements for organization to create new products and services, and also a completely new business idea. Example, Apple inc transformed an old business model based on its iPod technology platform that included iPod, the iTunes music service, and the iPhone. Customer and supplier intimacy:

If a firm service its customers well, the customers normally respond by coming again and purchasing more products or services and firm can increased revenue and profits by that. The more a business engages its suppliers, the better the suppliers can provide vital inputs. These lower costs. Example: The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technology to achieve customer intimacy. They use computers to keep track of guests’ preferences, such as their preferred room temperature, check-in time, and television programs. There is another example; UPS got a tremendous result right after they introduced online tracking system. This made UPS the first choice of most of the target customers.

Improved decision making:

Many managers operate in an information bank, never having the right information at the right time to make an informed decision. These poor outcomes raise costs and lose customers. Information system made it possible for the managers to use real time data from the marketplace when making decision. Example: Verizon Corporation uses a Web-based digital dashboard to provide managers with precise real -time information on customer complains network performance. Using this information managers can immediately allocate repair resources to affected areas, inform customers of repair efforts and restore service fast.

Competitive advantage:

Only proper information system can make is possible to have important information about the competitors and ensure to have advantages from that. If a firm does not have the necessary information about its competitors, the firm could lose business. It is very important to have proper information about how the competitors how they are pricing and other things about the same products.

Survival:

Business firms invest in information system and technology because they are necessities of doing business. These necessities are driven by industry level changes. Example: Citibank introduced the first automatic teller machine to attract customers through higher service levels, and its competitors rushed to provide ATM’s to their customers to keep up with Citibank. providing ATMs services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Firm turn to information system and technology to provide the capability to respond to these. I would like to conclude with my personal experience in my work place.

Olympic Industries Ltd which is one of the largest manufacturing company in Bangladesh. This company has a number of factories and office alone with a head office. The company used to has a customized program developed by its IT department but the managers were not happy with the performances of the program. Recently the industry successfully installed SAP (Systems Applications and Products in Data Processing) and the manager found the program really helpful. They got a keen controlled over the every part of the industry from the corporate departments to the production unites. It is like the company in controlled in just one switch. Which means for better business Information System is must.

Citations

Text Book
http://wiki.answers.com/Q/Why_are_information_systems_so_important_in_business_today http://www.ups.com/search/navigate?type=quick&results=25&view=both&match=ALL&query=dele%20very%20system&loc=en_US

1. Introduction

Yell Group consists of two businesses that are operating across countries. Yellow Page is a classified directory business in the UK, while Yellow Book is an independent directory business in the USA. These businesses are currently owned by British Telecom which is under pressure to reduce its heavy debt load and had been wavering for months about the future of these two Yellow Pages divisions. Apax Partner and Hick Muse are two private equity firms that are interested in the acquisition of the Yell Group by using debt for a majority of the purchase price and equity for the remainder.

The deal is crucially important to both Apax and Hicks Muse because of its high visibility — simply by virtue of its size and complexity, it will leave its mark on the reputations of both PE firms. But the team faces a challenge when valuing a cross border business involved in the LBO. Not only are those business located in different markets, but they also are characterized by different growth rates and cash flow characteristics.

Furthermore, each business unit faces an immediate uncertainty.

2. Overview of LBO The Equity Sponsor borrows the debt portion of the purchase price, typically through public or private bonds and bank loans issued by the company and contribute the equity portion typically through a private fund. Debt is serviced and repaid with the company’s operating cash flows. The buyer later sells all or a portion of the company and realizes a return on its initial equity investment — Sale of Sponsor equity typically through an initial public offering or a sale to a strategic buyer or another LBO firm.

The LBO transaction focuses on cash flows generated by operations and the use of the cash to pay down debt, thereby increasing equity value. Additionally, improvements in operating performance can increase value. Assuming the enterprise value remains unchanged, as debt is repaid, value reverts to the equity holders, thereby generating equity returns. Through this cross-border LBO, our team wants to achieve three fundamental goals: a) Determining the enterprise value of Yell Group by measuring its ability to generate sufficient cash flows to meet required equity returns while complying with leverage parameters. b) Calculating financial ratios and other measurements to determine the balance sheet and credit impact of the LBO c) To justify whether they can get reasonable returns given financial projections and leverage assumption in the model. Our team is aim to use as much leverage as possible to minimize initial equity check and create an aggressive financing structure that can be effectively syndicated to the market.

3. Yell Operations

When valuing Yell, we find that Yell currently has two well-established business lines in two different markets. While the environment is different in each market, Yell’s business lines achieve somewhat steady cash flows that are on pace with market growth, even the OFT is expected to recommend the imposition of a limit on the annual increase in rates for advertising in the U.K. market. The projected EBITDA for both BT Yellow Pages in the U.K. and Yellow Pages USA combined are more than enough to cover the considerable interest expense. Furthermore, with the ambitious growth plan, Yellow Book hopes to capture much of the predicted market share gains. A good LBO candidate should have some characteristics on its business specific and industry specifics. That means, the underlying Yell fundamentals and competitive advantage should be much more scrutinized by the team. Indeed, BT Yellow Pages as a market-leader in the classified directory business and Yellow Pages USA as a market leader in the independent publisher of business directories.

Finally, shortly before Apax and Hicks Muse had initiated talks with BT executives about the future of Yell, the telecom giant had announced plans to pay down its debt, so this deal should be a fire-sale transaction, the sale of Yell is good for BT and its shareholders. However, BT Yellow Pages and Yellow Book USA represent two very different businesses. The U.K. business is subject to heavy regulation which will restrict the price. Thus the only way to expand profits is through the advertisement volume.

Unfortunately, the growth in the classified directories advertising market has been declining over the last few decades and will probably continue in this tendency even though the total advertising market has seen increasing growth. The potential good opportunities for this business could be the additional divisions that BT Yellow Pages owned. Prospective investment indicated these businesses are in the early stages. The U.S. market is an important source of new business for SMEs throughout the country and the independents are projected to increase their market share from 11% to 30% over the 2000 — 2005 period.

For Yellow Book, this growth is to be fueled by expansion efforts as launching new directories into contiguous markets and launching wide area books into cities without an independent presence. In terms of the industry life cycle, BT Yellow Pages is most likely in the late maturity / early decline stage while Yellow Pages USA was still in the growth phase. These factors combined with the buyers’ investment horizon will influence their exit strategy. Yell Group Ltd. provided Apax and Hicks Muse team with projections for both BT Yellow Pages and Yellow Book USA based on what a potential growth in the upcoming years.

Since Yell is trying to sell their business, we have to be careful about the assumptions used to come up with these projections. As a financial buyer, we tend to leave the day-to-day operations with management and thus would hope that they can meet their projections. These numbers should be viewed conservatively, as Yell would want to make the company look as attractive as possible to potential buyers. For BT Yellow Pages, their growth is dependent on the number of advertisements sold in a given year and the advertisements’ prices. Thus, as a potential buyer, these areas need to be scrutinized to come up with a reasonable projection. The growth rate (nominal) of advertisement volume from 2001 to 2007 may be as high as the rate of past years at 6.6%, and for SMEs, BT Yellow Pages were considered a “must buy”, since the yellow pages are their principal means of reaching customers in UK.

Yellow pages advertising expenditures tends to be more stable than other forms of media advertising and do not fluctuate widely with economic cycles. For advertisement prices, the trend is slightly increasing from 2001 to 2003 and flat thereafter. Yell’s management seems to be too optimistic here as the OFT is expected to announce its new recommendation for the following years soon. Since the cap is 6% below the inflation rate and the projections for inflation is 2.4% in 2002, 2.3% in 2003, and 2.0% thereafter, the advertising prices should be expected to show a decreasing trend. For example, the Weighted Average Advertisement Fee in 2002 should be 621.78 = 645 x (1 + 2.4% – 6%).

The year-over-year revenue growth for Yellow Book USA ranges from 10.0% to 15.0% with an average of 12.5% and a compound average growth rate of 12.4%. Organic growth in the US market is 4-5% and so the additional growth for Yellow Book USA must be coming from new market launches as well as increasing market share as an independent publisher. The growth rates seem quite aggressive and so additional new market launches may be required in years 2005 and 2006, currently not projected, to ensure that there is a buffer to hit revenue projections. It may make sense to also decrease the revenue growth rate to be more realistic and use yell’s projection as an upper limit case. We think it important to segregate organic revenues from new launch revenues and only apply an EBITDA margin to organic sales while separately adding in the impact of new launches in order to roll the two very different types of markets together.

This approach also affords an opportunity to give a more sophisticated treatment to operating income from new launches. We believe that a 17% EBITDA margin on organic sales is a more realistic target for 2002, improving at a 2% increase per year as business goes up until the 25% target rate is hit in 2005 and maintained thereafter. Capital Expenditure and depreciation also need to be reviewed as they are somewhat positively related, which means an increase in Capital Expenditure usually results an increase in depreciation and vice versa. Overall, the numbers for both markets should be viewed with skepticism as these are Yell’s projections and may not reflect the buyer’s expectations in terms of the growth in the market.

4. Transaction Assumption The following transaction assumptions must be considered at the beginning of LBO analysis:

a) BT Yellow Pages has its price adjusted for inflation as stated by the OFT. b) The U.K. discount rate is calculated using the comps Telefonica Publicidad e Informacion and Enriro. c) The U.S. discount rate is calculated using McLeod USA and World Pages. d) The model assumes the debt is held in the U.K. and the U.S. business line will have its cash flows converted to U.K. denominated pounds at the spot rate- For the base case, the terminal value growth rate of BT Yellow Pages is 3.47% which is a forecast of the compound average growth rate of FCF from 2002 to 2007 based on our projection. Sensitivity analysis should be applied to see how the growth rate of terminal value would affect the overall valuation. e) For the base case, the terminal value growth rate of Yellow Book USA is 4.3% which is the historical growth of the RBOCs. Sensitivity analysis should be applied to see how the growth rate of terminal value would affect the overall valuation. f) New launches in the U.S. are forecasted to return 5% EBITDA to Sales in the first year. This is a conservative estimate and sensitivity analysis should be applied to see how the EBITDA margin of new launches would affect the overall valuation. g) Once launched, the new markets are assumed to reach organic EBITDA margins in the following year. h) The risk premium of both markets is set as 6.5% and sensitivity analysis should be applied to see how the risk premium would affect the overall valuation.

5. Valuation Method

It is accepted that CCF valuation is widely used for LBO. WACC is not applicable here because the calculation of WACC assumes constant D/E ratio. Based on the debt repayment schedule, it is unlikely that the firm will be able to maintain a constant ratio. CCF is ideal for this transaction because the debt repayment schedule is known in advance. CCF separates the calculation into two parts: unlevered cash flow using unlevered cost of equity and tax shield using the unlevered cost of equity. For our calculation, CCF is more suitable due to the known debt repayment schedule and the more conservative valuation. Coming up with an accurate valuation becomes more complex when dealing with different currency of cash flows from cross border assets.

Yell’s two business line, BT Yellow Pages and Yellow Book USA, operates and generates revenue from their respective countries; therefore, we must look each asset as a separate part. We could do a separate valuation on each asset based on the home country’s currency and financial projections. To determine a representative discount rate, we used betas and Debt/EV ratios of comparable listed companies in Exhibit 10 from each region. For example, for Yellow Book USA, we only used betas and Debt/EV of comparable American firms and not European firms and we assume the risk premium is 6.5%. We also had to take into account difference in risk-free rates by looking at country-specific yield on 30 years Treasury Bills when calculating the cost of equity for each asset.

Depending on the capital structure, each asset may have tax benefit from tax-deductible interest payments. The interest tax shield must be calculated using the local country’s corporate tax rate; therefore, each business line may have different cost of debt. At Yell, we used the U.K. tax rate of 30% because the acquired company is incorporated in the U.K. thus everything is consolidated in pound. When building a valuation model, we also consider the growth potential of each asset separately as well.

We take into account the firm’s local business strategy, competitors, and overall market potential to develop a representative perpetuity growth rate. Once we get the enterprise values for both assets, we can then use the spot rate to convert the enterprise values into pound for comparison. All these factors play a vital role when forecasting revenue growth / free cash flows, determining the discount rate and eventually calculating a fair enterprise value for the firm. Using our pro forma assumptions and CCF valuation, the total acquisition fee is £2.09 billion (shown in excel). The U.S. business is valued and converted to the pound to reach a total valuation. These values include the 5% in transaction fees.

6. Sensitivity Analysis

Sensitivity is done on five major variables. The first variable is the terminal growth rate of the U.K. business since BT Yellow Pages represents a huge part of the total valuation (see excel file for the sensitivity of growth rate on BT Yellow Pages valuation). If the terminal growth rate is 5%, the total acquisition price with fees is £2.28 billion, compared to the £2.09 billion with the base case of 3.47% growth rate. The second variable is the terminal growth rate of Yellow Book USA. This scenario analysis doesn’t affect the overall valuation much as the Yellow Book USA only accounts for a small fraction of the overall valuation.

For the third variable, the analysis performed is the change in regulatory imposition when keeping the terminal growth rate of UK business at 3.47%. Currently the base case is that revenue decreases by the inflation subtracting 6% annually. The results are shown in Sheet ‘Sensitivity Tables’. When there is no regulatory imposition applied and the price grows with inflation, the acquisition price with fees is 3.01 billion. If they can negotiate with the UK government to reduce the rate to 5%, instead of 6%, the acquisition price with fees is 2.30 billion. It is highly sensitive to the change in regulatory imposition.

This implies there is significant upside if the regulatory imposition is lower than 6%. For the fourth variable, we change the projections of Yellow Book USA’s EBITDA margin of new launches in order to create a range where revenue projections are uncertainty. But there is not much of a difference among those valuations. The last scenario analysis performed is the risk premium for both markets, at the very beginning we assumed a 6.5% risk premium, but we also want to get a range of the valuation as the numbers changes. The results are from 2.4 billion to 1.85 billion. Overall, we are confident that the bid would be somewhere between £1.85 billion to £2.3 billion.

7. Conclusion For this financial acquisition, we are more opportunistic and thereby looking for value creation based on the assets itself in order not to overvalue the target firm and thus overbidding for the company. In addition, we are looking to expand its presence on the European LBO market. We viewed Yell as a compelling investment opportunity, particularly in light of the company’s growth potential, low valuation and leverage capacity. This deal will leave its mark on the reputations of both PE firms.

Logistics management is that of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods service, and related information from the point-of origin to the point of consumption in order to meet customers’ requirements.

Logistics’ role in economy Logistics play a key role in the economy in two significant ways. First, logistics is one of the major expenditures for business, thereby affecting and being affected by other economic activities. If logistics expenditures are high, this would translate into higher prices for consumers, lower profits for businesses, or both.

The result could be a lower overall standard of living and/or a smaller tax base. Thus, by improving the efficiency of logistics operations, logistics makes an important contribution to the economy as a whole.

Second, logistics supports the movement and flow of many economic transactions: it is an important activity in facilitating the sale of virtually all goods and services. To understand this role form systems perspective, consider that if goods do not arrive on time, customers cannot buy them.

If goods do not arrive in the proper place, or in the proper condition, no sale can be made. thus, all economic activity throughout the supply chain will suffer. One of the fundamental ways that logistics adds value is by creating utility. From an economic standpoint, utility represents the value or usefulness that an item or service has in fulfilling want or need.

The role of Logistics in the organization In recent years, effective logistics management has been recognized as a key element in improving both profitability and the competitive performance of firms. The marketing concept, as mentioned above, is a “marketing management philosophy which holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.” Logistics plays a key role in each of the elements of the three critical elements of the marketing concept (customer satisfaction, integrated effort/systems approach, and adequate corporate profit) in several ways.

Key logistics activities Below are the key activities required to facilitate the flow of a product from point of origin to point of consumption. All of these activities may be considered part of the overall logistics process: customer service, demand forecasting, inventory management, logistics communications, material handling, order processing, packaging, parts and service support, plant and warehouse site selection, procurement, return goods handling, reverse logistics, traffic and transportation, warehousing and storage.

Customer service Customer service can be defined as: A process which take place between the buyer, seller, and third party. The process result in a value added to the product or service exchanged. This value added in the exchange process might be short term as in a single transaction or longer term as in a contractual relationship. The value added is also shared, in that each of the parties to the transaction or contract are better off at the completion of the transaction than ot was before the transaction tool place. Thus, in a process view: customer service is a process for providing significant value-added benefits to the supply chain in a cost-effective way.

In time of tough competition when many organizations offer similar products in terms of price,features, and quality, customer service differentiation can provide an organization with a distinct advantage over the competition. Customer service represents the output of the logistics system as well as the “place” component of the organizationg’s marketing mix.customer service performance is a measure of how well the logistics system functions in creating time and place utility, woth a focus on external cunsomers. The level of service provided to functions, such as marketing and production, affects the organization’s ability to serve the needs of customers and will determine how well these functions communicate and interact with logistics on a day-to-day basis.

The level of customer service provided to customers determines whether the organization will retrain existing customers and how many new customers it will attract. In virtually every industry today, from computer to clothing to cars, customers have a wide variety of choices. A company cannot afford to offend its customers. The customer service level that an organization provides has a direct impact on its customers. The customer service level that a organization provides has a direct impact on its market share, its total logistics costs and, ultimately, its overall profitability. To illustrate, a key to corporate profitability is to successfully attract and retain customers.

For these reasons, it is of the utmost importance that customer service be an integral part of the design and operation of all logistics systems. Customer service is the output of the logistics system. It involves getting the right product to the right customer at the right place, in the right condition and at the right time, at the lowest total cost possible. Good customer service supports customer satisfaction, which is the output of the entire marketing process.

Inventory management

Inventories represent the largest single investment in assets for many manufacturers, wholesalers, and retailers. Inventory investment can represent over 20 percent of the total assets of manufacturers, and more than 50 percent of the total assets of wholesalers and retailers. Competitive markets of the past 20 years have led to a proliferation of products as companies have attempted to satisfy the needs of diverse market segments. Customers have come to expect high levels of product availability. For many firms, the result has been higher inventory levels. With the growing popularity of just-in-time [J IT) manufacturing. the reduction of product life cycles, and an increased emphasis on time-based competition, firms who hold large amounts of inventory have been much criticized. However, inventory does serve some very important purposes.

But carrying excessive levels of inventory is costly. Organizations frequently do not identify or capture all of the many costs associated with holding inventory. Since capital invested in inventories must compete with other investment opportunities available to the firm, and because of the out-of-pocket costs associated with holding inventory, the activity of inventory management is extremely important. Management must have a thorough knowledge of inventory carrying costs to make informed decisions about logistics system design, customer service levels. the number and location of distribution centers, inventory levels, where to hold inventory and in what form, transportation modes. production schedules. and minimum production runs.

For example, ordering in smaller quantities on a more frequent basis will reduce inventory investment. but may result in higher ordering costs and increased transportation costs. It is necessary to compare the savings in inventory carrying costs to the increased costs of ordering and transportation to determine how the decision to order in smaller quantities will affect profitability. A determination of inventory carrying costs also is necessary for new product evaluation, the evaluation of price deals/discounts. Make-or-buy decisions and profitability reports. It is thus imperative to accurately measure a firm’s inventory carrying costs.

Logistics information system

Computer and information technology has been utilized to support logistics for manyyears. It grew rapidly with the introduction of microcomputers in the early 1980s. Information technology is seen as the key factor that will affect the growth and development of logistics. The order processing system is the nerve center of the logistics system. A customer order serves as the communications message that sets the logistics process in motion. The speed and quality of the information flows have a direct impact on the cost and efficiency of the entire operation. Slow and erratic communications can lead to lost customers or excessive transportation. inventory, and warehousing costs, as well as possible manufacturing inefficiencies caused by frequent production line changes.

The order processing and information system forms the foundation for the logistics and corporate management information systems. It is an area that offers considerable potential for improving logistics performance. Organizations of all types are utilizing computers to support logistics activities. This is especially true for companies thought to be on the “leading edge.” that is, leaders in their industry. Such firms are heavy users of computers in order entry, order processing, finished goods inventory control, performance measurement, freight audit payment, and warehousing. A recent study of world-class logistics practices cited logistics information systems as a key to competitiveness. Going beyond “transaction processing and tracking,” decision support systems (DSSs) are computer-based and support the executive decision-making process.

The DSS is an integrative system of subsystems that has the purpose of providing information to aid a decision maker in matting better choices than would otherwise be possible. To support time-based competition, organizations are increasingly using information technologies as source of competitive advantage. Systems such as quick response (QR), just-in-time [JIT], and efficient consumer response (ECR) are integrating a number of information-based technologies in an effort to reduce order cycle times, speed responsiveness, and lower supply chain inventory. In addition, more sophisticated applications of information technology such as decision support systems, artificial intelligence, and expert systems are being used directly to support decision making in logistics.

Communication is key to the efficient functioning of any system, whether if be the distribution system of an organization or the wider supply chain. Excellent communications within system can be a key source of competitive advantage.

Materials handling

Materials handling is a broad area that encompasses virtually all aspects of all movements of raw materials, work in process, or finished goods within a plant or warehouse. Because an organization incurs costs without adding value each time an item moves or is handled, a primary objective of materials management. is to eliminate handling wherever possible. That includes minimizing travel distance., bottlenecks, inventory levels, and loss due to waste, mishandling, pilferage, and damage. Thus, by carefully analyzing material flows, materials management can save the organization significant amounts of money.

ln addition to supporting production through the movement of materials, work in process, and finished goods. logistics also is responsible for providing after-sale service support. This may include delivery of repair parts to dealers, stocking adequate spares, picking up defective or malfunctioning products from customers, and responding quickly to demands for repairs. Downtime can be extremely costly to industrial customers who may have to stop or delay production while awaiting repairs.

Packaging packaging is valuable both as a form of advertising, marketing, and for protection and storage from a logistical perspective. Packaging can convey important information to inform the consumer. Aesthetically pleasing packaging also can attract the consumer’s attention. Logistically. packaging provides protection during storage and transport. This is especially important for long distances over multiple transportation modes such as international shipping. Packaging can case movement and storage by being properly designed for the warehouse configuration and materials handling equipment.

Plant and warehouse site selection

Determining the location of the company’s plants and warehouses is at strategic decision that affects not only the costs of transporting raw materials inbound and finished goods outbound, but also customer service levels and speed of response. Issues to consider include the location of customers. suppliers, transportation services, availability and wage rates of qualified employees, governmental cooperation. and so on.

Warehousing is an integral part of every logistics system. There are an estimated 750,000 warehouse facilities worldwide. including slate-of-the-art, professionally managed warehouses. as well as company stockrooms, garages. self-store facilities, and even garden sheds. Warehousing plays a vital role in providing a desired level of customer service at the lowest possible total cost. Warehousing activity is an important link between the producer and the customer. Over the years, warehousing has developed from a relatively minor facet of a firm‘s logistics system to one of its most important functions.

Procurement

With the increase in outsourcing of goods and services, the procurement function plays a more important role in the organization. Procurement is the purchase of materials and services from outside organizations to support the firm’s operations from production to marketing. sales, and logistics. Procurement. also referred to as purchasing, supply management, and by a number of other names. includes activities such as supplier selection, negotiation of price, terms and quantities, and supplier quality assessment. As organizations form longer-term relationships with fewer key suppliers, procurement continues to grow in importance and contribution to the organization.

Return goods handling

Returns may take place because of a problem with the performance of the item or simply because the customer changed his or her mind. Return goods handling is complex because it involves moving small quantities of goods back from the customer rather than to the customer as the firm is accustomed. Many logistics systems have a difficult time handling this type of movement. Costs tend to be very high. The cost of moving a product backward through the channel from the consumer to the producer may be as much as nine times as high as moving the same product forward from the producer to the customer. Thus, this significant cost and service area is beginning to receive more attention.

Reverse logistics

Logistics is also involved in removal and disposal of waste materials left over from the production. distribution. or packaging processes. There could be temporary storage followed by transportation to the disposal, reuse. reprocessing, or recycling location. As the concern for recycling and reusable packaging grows. This issue will increase in importance. This is of particular concern in Europe. Which has very strict regulations regarding removal of packaging materials and even obsolete product due in part to limited landfill space.

The Go-Giver – A Little Story about a Powerful Business Idea Many people go after success in the wrong way. They are motivated by the desire to achieve fame and fortune. They believe the world owes them something. They see success as clout and leverage–something that emanates from the outside rather than from within. Such was the case with Joe, a sales consultant, before he learned the secret of he Five Laws of Stratospheric Success. Fearing that he will fail to meet his third quarter quota, Joe seeks out an influential gentleman named Pindar the Chairman.

Joe views Pindar as the person with enough pull to save him. Pindar has many eye openers for Joe. He points out that while you may not get what you want, you get what you expect. We control our own destiny. Truly, life is 10% what happens to you, and 90% how you react to it. Go-givers are not self-seekers. They know if you put others first, if you empower them and appreciate them, their successes will become your own.

Many people are surprised that seemingly important people can be approachable and willing to share their secrets.

It is this openness that has gotten these people where they are. Their motivation is infectious. They are so full of zest and magnetism that you can’t help but want to be a part of whatever they are offering. This applies to your personal life as well as your professional life. Go-givers do not take credit for successes but instead lay these achievements on others. As a leader, the go-giver may have the ability to manage people and to light a fire underneath them, but his drive and desire lead him to instead light a fire within. Go-givers want others to be successful.

They encourage them and believe in them. They push them out of their comfort zones and give them the opportunity to experience new things. Pindar’s trade secret was labeled as such to make it more intriguing. He was willing to share his insight with Joe with the condition that Joe applies this new knowledge in his own life the same day it is revealed to him. Pindar stressed to Joe that he first had to give in order to receive. Trying to both give and receive at the same time is impossible. Pindar instilled value and self-worth in people.

If you make people believe in themselves, they will strive to be the best that they can be. Other people cannot bring us down unless we allow them to. That in itself is a powerful concept and often one that is hard to grasp. The first law of stratospheric success that Joe was introduced to is the Law of Value. This law states “your true worth is determined by how much more you give in value than you take in payment. ” Restaurateur Ernesto Iafrate is proof of this concept. As a hot dog vendor, his business earned the title of best outdoor dining “experience” in the city.

Although Ernesto is well off and does not need to work, he continues to cook at one of his restaurants. While his food is delicious, it is more the experience of dining with Ernesto that has made his customers loyal. We all want to feel like we are the most important person in the world. If we do not treat our customers right, our competition will. One way to show people they are valued is through appreciation. Pindar shows this by thanking Joe for coming to see him even though he is the one that seems to be doing Joe a favor. Giving without expecting anything in return is essential in achieving the Law of Value.

Joe shows he understands this principle by referring a large account known as the Big Kahuna to his competitor, Ed Barnes, and by giving a referral to a client, Jim Galloway, who turned him down. The Law of Compensation is the second law of stratospheric success Joe is introduced to. This law states “your income is determined by how many people you serve and how well you serve them. ” Joe was introduced to CEO and founder, Nicole Martin, who runs one of the most successful educational software companies in the country, Learning Systems for Children, Inc. Previously Nicole was a grade school teacher.

She was very involved with her students and used her creativity to develop a series of games to help them learn and grow. After becoming frustrated with the monotonous school system and having to survive on her low teacher’s salary, Nicole pulled away from the teaching field and created a software company. One day while in a parent conference with a software engineer, Nicole mentioned one of the games she had created and asked the engineer to see if it could be programmed to run on computers. He agreed to do so. Soon after, she held another meeting with him and another student’s mom who ran a small marketing and advertising business.

A few days later, the three of them formed Learning Systems for Children, Inc. Within a few short years, this educational software company turned into a multimillion dollar firm. Nicole began doing consulting work for several organizations, school systems, and educational researchers all over the world and touching the lives of numerous children. Nicole explained the two parts of this law to Joe. You determine your level of compensation and there are no limitations on what you can earn. Your level of compensation is completely up to you. If you desire to be more profitable then you must serve more people.

There are no limitations to your success because there is always somebody that you can serve. When Joe returns to his office, he applies this law by serving all the workers on his floor a cup of freshly brewed coffee. Some of them he knew well and some he didn’t know at all. Doing this got him no further in life or any extra income but he got the satisfaction of doing something for the benefit of others. The Law of Influence is the third law of stratospheric success. It states “your influence is determined by how abundantly you place other people’s interests first. With this lesson Joe met Sam, Pindar’s financial advisor. Networking was a major point in the lesson. Sam said to consider the people that you are in network with as your army of personal walking ambassadors. They are the people who will help you succeed. The key to networking is to watch out for the other person’s interests. Once you place the other person’s interests first, your interests will always be taken care of. That’s how Sam’s career turned right side up for him. He started changing his focus from seeing what he could get to what he could give.

Pindar told Joe to “watch out for what other people need, with the faith that when you do, you’ll get what you need. ” This means instead of trying to just solely better yourself you should place the needs of other’s first. With your army of ambassadors you never know when you may get recommendations and it’s all from the people that you know and have helped in the past. Pindar told Joe that givers attract. With this, Joe realized that is why the Law of Influence works. It magnetizes you. Once you start looking out for others, the same will be done unto you.

Joe was unaware that he had used this law within his own marriage. After arriving home from work each day, Joe and his wife took time to talk. They were each allowed thirty minutes of complaint time. That night Joe’s wife Susan had a lot on her mind. After her thirty minutes had passed, she stopped to allow Joe his turn to talk, but instead he asked her to go on because he could tell she had a lot troubling her. While Susan told her story, Joe comforted her and she ended up falling right to sleep. Without even realizing it, Joe had done his homework for the night. He had put his wife’s needs and interests before his own.

By taking the time to listen to his wife, Joe had made his marriage even better than it had been before. The fourth law of stratospheric success is the Law of Authenticity. This law states “the most valuable gift you have to offer is yourself. ” In this lesson, Pindar took Joe to hear keynote speaker Debra Davenport at an annual sales symposium. Debra spoke about her previously floundering real estate career. One year, Debra accompanied a friend to a sales symposium and while there the keynote speaker delivered a striking message. He talked about the importance of adding value to what you sell.

Debra asked herself what value she could add to her real estate business but drew a blank so she decided it was time to quit. On her last day of work, Debra met with a client and found herself really not caring about any of the rules she had learned about closing deals. She went in unprepared and just chose to be herself. Lo and behold, Debra sold the house. She realized the value that needed to be added was herself. Once she realized that, she became very successful meeting many new people and landing many major deals. Back at the office later that day, Joe had the chance to speak with his colleague Gus one- on-one.

He talked to Gus about the rumors he had heard about him and asked him if he already knew about the five laws that he was learning from Pindar. Indeed, Gus had learned the same lessons as Joe and explained to Joe how he had become successful by using those laws. By opening up and talking to Gus, Joe had completed his homework for that day. He had applied the Law of Authenticity by being himself and speaking with Gus about everything he had learned. Joe anxiously waited for Friday at 12:00 p. m. because he knew he would finally be meeting the surprise mystery guest that he and Gus discussed during their conversation.

As Joe waited for Pindar, he had the opportunity to get to know the marvelous coffee maker, Rachel. Rachel recounted how she met Pindar and how she had used his laws to become a coffee mogul. To Joe’s surprise, Rachel was not the Friday mystery guest he assumed she was. Once Pindar emerged, he and Joe sat and reminisced about the first four laws Joe had learned. Although Joe had followed all the rules, he was having trouble seeing where this new way of thinking would lead him. Pindar realized Joe was struggling with the rules he learned growing up, such as, “It is better to give than to receive. Pindar points out that it is insane to try to give and not receive and then he presented the final law to Joe. The Law of Receptivity states “the key to effective giving is to stay open to receiving. ” As they finished lunch, Joe was finally able to see that the Friday “mystery” guest was actually Pindar himself. As Joe went back to work to try to meet his quota, he found Gus still at the office. He discussed the last law with Gus because he was having a hard time understanding the value of the law if it did not actually get him anywhere.

Joe was open to receiving and completing the last bit of homework, but he could only receive if someone offered something to him. He decided to stay late and send Gus home. This showed Joe had changed in the past week from a go-getter to a go-giver. He was willing to stay late and to let his partner leave. Typically Joe would not be at work at 6:15 on a Friday night, but since he was a go-giver, he found himself there when his phone rang. The laws Joe put into place throughout the week had come back to help him complete the last law of receiving.

On the other end of the line was a man by the name of Neil Hansen. Neil needed a firm to spearhead a rebranding effort on hotels. The main objective was to find someone with connections to high quality, high volume, premium coffee in just a few short weeks. Joe was confused. He had never heard of Neil Hansen. When he voiced his puzzlement to Neil, it was then that he explained to Joe that he had gotten his name from Ed Barnes. Joe made numerous connections throughout the week, and looking back he realized the connections he made and the laws he applied all led to this one shining moment.

He called upon Rachel and her coffee connections to give her the opportunity to branch out with her own business. This opportunity was two-fold as it also allowed Joe to open himself up to receive rewards in return. Joe, Rachel, Neil and others were able to evolve Rachel’s Famous Coffee into a mega business that spanned international waters. Joe had himself become the Big Kahuna. Joe did not let success change him. He continued to apply the laws he learned from Pindar and maintained his go-giver attitude.

A young free-lancer named Claire approached Joe and wanted to be part of a deal with Rachel’s Famous Coffee. Joe did not give her the position she originally wanted, but he did make her an offer for an even bigger opportunity with a new outreach platform the company was working on worldwide. Claire was flattered but confused and asked Joe how he was able to offer her these opportunities. Instead of answering Claire’s question, Joe simply asks, “Have you ever been to Iafrate’s? It’s our favorite. There is someone there I would like you to meet. ” It is at this moment that we see this lesson has come full circle.