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Supplements the (A) case.

The Toyota demand chain is efficient, flexible, customer oriented, and product specific. Studies how Toyota uses its advanced distribution channels, inventory management, planning methodologies, and production capabilities to create and manage its demand chain, with a particular focus on the Japanese and the North American markets. Uses the Toyota Prius and the Scion product lines to illustrate how Toyota adjusts its demand chain to fit a particular product and its target customers, utilizing as much as possible from its existing manufacturing and distribution infrastructure.

The American system of distribution is dysfunctional, favoring the interests of huge retail chains at the expense of manufacturers. Accustomed to working in this imbalanced system, American managers think they have no choice but to cede control of distribution by placing it into the hands of megadistributors and, for the most part, they are correct. However, in high-growth emerging markets, distribution channels are still malleable, providing manufacturers with the opportunity to shape and mold the way distribution takes place. Argues that firms should lay aside their dysfunctional patterns of dealing with distributors when they leave America and regain control over their products and operations in international markets.

During the past 20 years, the real price of most consumer goods has fallen worldwide, the variety of goods and the range of sales channels offering them have continued to grow, and product quality has steadily improved. So why is consumption often so frustrating? It doesn't have to be--and shouldn't be--the authors say. They argue that it's time to apply lean thinking to the processes of consumption--to give consumers the full value they want from goods and services with the greatest efficiency and the least pain. Companies may think they save time and money by off-loading work to the consumer but, in fact, the opposite is true. By streamlining their systems for providing goods and services, and by making it easier for customers to buy and use those products and services, a growing number of companies are actually lowering costs while saving everyone time. In the process, these businesses are learning more about their customers, strengthening consumer loyalty, and attracting new customers who are defecting from less user-friendly competitors. The challenge lies with the retailers, service providers, manufacturers, and suppliers that are not used to looking at total cost from the standpoint of the consumer and even less accustomed to working with customers to optimize the consumption process. Lean consumption requires a fundamental shift in the way companies think about the relationship between provision and consumption and the role their customers play in these processes. It also requires consumers to change the nature of their relationships with the companies they patronize. Lean production has clearly triumphed over similar obstacles in recent years to become the dominant global manufacturing model. Lean consumption, its logical companion, can't be far behind.

In the 1990s, Hewlett-Packard's PC business was struggling to turn a dollar, despite the company's success in winning market share. By 1997, margins on its PCs were thin, and some product lines had not turned a profit since 1993. The problem had to do with the PC industry's notoriously short product cycles and brutal product and component price deflation. A common rule of thumb was that the value of a fully assembled PC decreased 1% a week. In such an environment, inventory costs become critical. But the standard "holding cost of inventory" accounted for only about 10% of HP's inventory costs. The greater risks, it turned out, resided in four other, essentially hidden costs, which all stemmed from mismatches between demand and supply leading to excess inventory: component devaluation costs for components still held in production; price protection costs incurred when product prices drop on goods distributors still have on their shelves; product return costs that have to be absorbed when distributors return and receive refunds on overstock items; and obsolescence costs for products still unsold when new models are introduced. By developing metrics to track those costs in a consistent way throughout the PC division, HP has found it can manage its supply chains with much more sophistication. Now, each product group chooses the supply chain configuration that best suits its needs.

On March 4, 2003, AirTran Airways announced new non-stop service from Atlanta to Los Angeles. The routes were a major commitment for AirTran, and came at a time when the airline industry was in turmoil. The major airlines had lost a record $12 billion the previous year, and two were in bankruptcy. AirTran and two other low-cost carriers were the only sizeable airlines that were profitable, and all three were expanding rapidly. The stakes for the West Coast service increased when Jet Blue, one of the other low-cost carriers, announced it would start new service from Atlanta to Los Angeles and Delta, the incumbent on the route, announced that it would increase its non-stops from 5 to 13 per day. HKS Case Number 1789.0

Hong Kong logistics companies are facing increased competition from the Chinese mainland operators, particularly in cross-border logistics business in the Pearl River Delta region. Examines the cost structure of Transland's (a Hong Kong-based third-party logistics operator) cross-border trucking operation, the inefficiencies captured in the logistics pipeline, and the cargo and sea trade challenges facing Hong Kong.

This case consists of a letter to Herb Kelleher, chairman of Southwest Airlines requesting his comments on a pair of first-hand experiences on Southwest Airlines and JetBlue Airways flights.

Supplements the (A) case.

InfoVision illustrates university technology transfer through the choices of a graduating doctoral student. Also explores the challenges of working across the scientific, business, and legal disciplines in the Georgia Tech transfer program.

This case is a good fit for courses in operations management and business communications. It examines the procurement strategy of a global energy company by describing the overall change program led by the new chief procurement officer as well as specific information regarding the commodity for electric meters. See also the B case (UV3548).

The case describes a large and complex IT integration project, after the acquisition of one metals mining company by another. As part of the integration, 40,000 PCs, applications, and the network had to be consolidated into one system. The project lasted two years and involved 1,000 people across the organization.

The case describes a large and complex IT integration project, after the acquisition of one metals mining company by another. As part of the integration, 40,000 PCs, applications, and the network had to be consolidated into one system. The project lasted two years and involved 1,000 people across the organization.

Students in a technology transfer class identify a promising application for a dormant university technology. In the process, they alienate the inventor, who threatens legal action. What exactly are the problems, and how should the professor teaching the class proceed?

The president and chief executive officer of Progistix-Solutions Inc. has asked an analyst to prepare an annual review of the Xerox Critical Parts Network for presentation to management in two weeks. The president expected the analyst to review the performance of the network and establish an improvement plan for the coming year, supported by specific goals and objectives. Although Xerox and Progistix had been satisfied with their relationship, after five years, both parties were interested in exploring ways to improve the network, particularly as competitors adopted similar approaches. In preparation for the meeting, the analyst wanted to explore opportunities in three specific areas. First, identify opportunities to improve depot operations. Second, he believed that opportunities existed to make additional improvements in the area of inventory management and he wondered how and where Progistix could work together with Xerox on such an initiative. Third, was to improve system-wide inventory turn performance by re-examining the cut-off point for filling the technicians' trunks with inventory. This case provides an opportunity for students to analyse a rapid-response supply chain and make recommendations for improvements. Class discussion can include issues related to supply chain partnerships, outsourcing, inventory management and demand forecasting. Data provided in the case allow students to develop implementation plans and set specific performance targets.

A junior process engineer at Pharma Laboratories in Cambridge, Ontario, prepares a report to recommend increasing the output of the manufacturing line that produces the drug Allegex. The increase would allow manufacture of the product to be transferred from a plant in the United States to the Cambridge facility. In addition to evaluating the financial viability of her proposal, the engineer must consider related qualitative issues.

By the mid-1980s, it was clear that not all transplant centers in the growing organ transplantation market were able to achieve and sustain the same levels of quality and high rates of transplant procedure success. Similarly, significant variation had emerged in the cost of these complex and expensive procedures. Within this dynamic environment, United Resource Networks (URN) was founded in 1989. The express purpose of this new organization was to manage variation in the transplantation process to enable the delivery of higher quality, lower cost, more predictable results to patients, employers, and health insurers. The company would accomplish this by establishing a virtual network of transplant centers that were made available to its customers through preferred contracting arrangements. By 2004, URN had built the largest transplantation network in the United States, growing at an average annual rate of 40% over the last 10 years. With 4,000 customers and 44,000,000 covered lives, the network managed approximately 10% of the nation's organ transplants each year. Explores the URN business model as an example of the innovative strategies being used by health plans to carefully manage complex medical conditions and control the risks associated with expensive procedures, such as organ transplants.

Should you set up your own sales force or should you outsource it? The standard analysis is cost based and assumes that the direct sales force is a fixed cost and that the outsourced sales force's cost varies with sales. The standard analysis then calculates the sales volume at which the direct sales force's costs equal the outsourced sales force's costs and suggests that for sales volume above that quantity, firms should use a direct sales force. This analysis has two problems. First, several other cost factors are not considered in the standard analysis. Second, the standard analysis considers only cost, ignoring coverage efficiency and selling effectiveness differences between the two sales forces. Details and develops both problems.

The president of Mcavan Advertising, a full advertising, marketing and design agency, was trying to decide what to do about a long-term client's request. The client, Floos Inc., had referred the president of Ryl Enterprises to Mcavan Advertising and Mcavan began work on the new account. Later, Floos Inc. claimed that Ryl Enterprises was a competitor of Floos and asked Mcavan not to work further with Ryl. Students have to identify and evaluate Mcavan's various options.

This case describes how IDEO adapt its famed innovation process (developed to design new products) to the particularities of services and their design. The case series describes four service design projects to show how IDEO has developed and codified a series of design methods, which constitute a toolbox from which teams can pick and choose depending on the innovation project.