The DNA of a New Business ModelLearning from the Multinationals: Take the Best and Leave the Rest We realized we need to study all possibilities. We looked at how the “Big Boys”, as well as other, cooperative business models operate. Just in Time A method of management involving a “pull” system that is driven by the actual demand of a product. The goal is to produce or provide one part just-in-time for the next operation. This reduces stock inventories, and creates more efficient use of resources and time. Sales and Operations Planning Forecasting methods are used to estimate the promotional lift, and econometric models are used to support decision making in promotional sales. An econometric model is an economic model formulated so that its parameters can be estimated if one makes the assumption that the model is correct. Forecasting systems are used for pre-launches of new products. Such forecasts are generated internally by pre-launch volume forecasters and externally via forecasting agencies and pre-market consumer insight research. Primary consumer research can be combined with forecasting techniques to estimate the sales potential of new product initiatives prior to market entry. Sales Data and Promotion Promotion plays an important role in competitive retail markets. Many companies do not distinguish regular/baseline sales from promotional sales in their forecasting efforts; instead, they use gross forecasting. However, even in strong promotion-driven markets, the sales data can provide valuable information that can be used in supply chain planning and marketing. It can:
Strategic Lead Time Management The concept of logistics lead time is simple: how long does it take to convert an order into cash? Strategic Lead Time Management is a computer modelling, product testing and prototype approach designed to identify and maximize the value added to cost added ratio in supply chain design. It is based on simulating the relationship between organisational process and procedure and the flow of inventory through the supply chain. In simpler terms it means simulation, testing and prototyping is less costly and errors can be detected before they are made. An Example The system for the above functions is known as an Enterprise Resource Planning (ERP) and Cusomter Relations Management (CRM) system (our system is affectionately referred to as "Big Mama") and an example of how it will work can be seen in how it will look with one of our first products, organic flowers.  Alternative Models In addition to learning from the advanced systems used by the large multinationals, there is also much we can learn from other business models that stress cooperation as opposed to competition. |
