Many firms have enjoyed remarkable success using revenue sharing contracts to improve supply chain performance. Video rental industry and its pioneering deal with movie studios is one such example. At the same time, other firms have struggled to make it work. What accounts for this difference? When can revenue sharing create significant value and what are implementation costs? By comparing and contrasting several case examples-including our own experience working with a major semi-conductor manufacturer-we develop a general framework that helps answer these questions, which is based on the fundamental sources of added value and added costs.

The case examines Ritz's processes, leadership, technology, systems, and people as they align to achieve long term goals. In 1992, the Ritz-Carlton Hotel chain won the top US industry prize for excellence in quality and service. However, customer demand for value, as well as growing competition within the hotel industry, was making it harder for the company to continue this legacy. Students learn about Ritz-Carlton's history and corporate philosophy, and analyze the challenges of being a quality service provider. Issues addressed include how the company should remedy defects in its customer service, achieve its customer retention goals, and maintain a culture of service while experiencing rapid growth.

Supply chains consume vast amounts of capital and are responsible for most of a firm's cost of goods and operating expenses. Supply chains also create significant value and can be the deciding factor in whether a firm will keep its customers. Through concrete examples, this case introduces students to an inventory model that shows how to quantify the often-subtle impact of both operational and structural changes in a supply chain.

Production processes typically consist of a complex mix of people, technology, and practices. If poorly conceived or mismanaged, these processes can burden a firm with inefficiencies and performance difficulties that can be difficult to overcome. In this case, students learn why it is important to view production as an integrated whole, consisting of inputs, outputs, resources, and activities.

The case examines Ritz's processes, leadership, technology, systems, and people as they align to achieve long term goals. In 1992, the Ritz-Carlton Hotel chain won the top US industry prize for excellence in quality and service. However, customer demand for value, as well as growing competition within the hotel industry, was making it harder for the company to continue this legacy. Students learn about Ritz-Carlton's history and corporate philosophy, and analyze the challenges of being a quality service provider. Issues addressed include how the company should remedy defects in its customer service, achieve its customer retention goals, and maintain a culture of service while experiencing rapid growth.