Step 1: Read the following case studies.

Quality is more than just the product. Here, two customers describe their experience of how they were treated when the product they bought failed. Example 1: Obodex Computers Limited I bought an Obodex laptop computer and was very pleased with its performance. After a few weeks, however, the screen failed. I rang the company and was put straight through to their service manager, who apologized profusely for the failure and, after a few questions, identified what he thought was the fault. He asked if it was convenient for me to drop the machine into their service center and said that he would ensure that it was dealt with while I waited. Given the possibility of having my computer up and running again so quickly, I agreed. When I arrived at the center, I was shown to a waiting area and supplied with a cup of coffee while the laptop was taken away. As I handed it over, the technician asked, ‘Would you like me to make a small upgrade on it while I am working on it, at no charge?’ This sounded too good an offer to pass up, and so I agreed. Thirty minutes later, I was walking out of the center with my repaired and upgraded machine. You would not believe the number of people who I knew who then bought Obodex when they heard of the service that I had received. Example 2: Car dealers We bought a brand new car for our family business. It was needed to go and visit customers and so reliability was vital to us. If we could not keep appointments with customers, this reflected on our business and customers would buy elsewhere. We had had it for 10 days when the power steering failed. This made the car undriveable. It happened at the weekend and so I rang the dealer where we had bought the car first thing on the Monday morning, asking them to come and get the car at the earliest opportunity, as we needed it for several important trips that week. The response was pathetic. They said that they were far too busy and initially offered to look at the car, if we could get it to them, the following Thursday – 11 days later. I complained, but was told that ‘You are not our only customer!’. This made me very angry, and so I called the manufacturer direct. Their customer service people were far more helpful, and eventually agreed to arrange for the car to be collected later that day. It was collected by the same garage that I had called first. I wasted nearly 3 hours on the telephone trying to sort this problem. I will never do business with that dealer again, which probably means we will never buy another car from that company. This is a shame, as it wasn’t a bad car.

Step 2: Respond to the following items: Compare the two cases in terms of how each firm looked after their customers. What is the influence of apostles (customers who tell others how good your service is) and terrorists (customers who tell others how bad your service is) on a business? How might customer complaints actually be an opportunity for gaining greater loyalty to an organization? Why has quality emerged in terms of strategic importance in recent times? What were (at minimum 3) relevant parts, products, or processes involved in this case study? What recommendations do you have regarding overcoming potential challenges and helping future growth? What is the final solution? What does the future look like in terms of globalization and this case study?

Support your statements with evidence from the Required Studies and your research. Cite and reference your sources in APA style.

The changing fortunes at Apple The most striking change has been in operations. When Jobs took over, Apple ended each quarter with some 70 days’ worth of finished products sloshing around its factories and warehouses, a $500 million-plus drag on profits that was the worst in the industry. Jobs quickly streamlined. He outsourced manufacturing of half of Apple’s products to contractors who could do it far more efficiently, say analysts. That got inventory down to about a month by early 1998. Jobs still wasn’t satisfied. He hired former Compaq (CPQ) procurement executive Timothy D. Cook to meet a higher goal: to get more efficient than Dell, the industry’s best. It was a daunting challenge. Cook recalls drawing a flowchart of Apple’s operations, with all the linkages from suppliers to manufacturing to distributors, that ‘looked like a printed circuit board’ And not a very fast one. Because many of the transactions between suppliers weren’t processed in real time, it could take days for a parts order to be delivered to a factory. And Cook knew he would be facing an inventory management nightmare when Jobs unveiled five different colors of iMacs. Cook wasted no time. In his first month on the job, he outsourced production of the printed circuit cards inside Macs, easing the complexity of the manufacturing job. He closed more than 10 warehouses for finished products, making do with nine regional sites. With fewer places for stuff to sit, the less stuff there would be, he reasoned. ‘If you have closets, you’ll fill them up’, says Cook. Simplicity was the key. Cook trimmed Apple’s list of key suppliers from more than 100 to just 24. That further eased the job of keeping track of all the parts used in Apple’s products. And since it meant more business for each supplier, Apple wielded more influence with each – and better prices. Finally, his team scrapped an off-the-shelf software program for managing manufacturing and inventories that had been limping along. Instead, Apple devised its own build-to-order system for handling online purchases. It has worked beautifully. Pundits snickered when Jobs predicted Dell-like online efficiency at a 1997 event. ‘We’re coming after you, buddy’, Jobs said, referring to founder Michael Dell. Today, Apple’s online store is shipping 75% of orders on the day they’re placed, up from 5% for the Apple of old. ‘That’s as good as or better than Dell or Gateway’, says Salomon Smith Barney analyst Gardner. But Cook’s biggest claim to fame is getting the inventory of parts down to less than a day – obliterating the record in an industry where weeks or even months is the norm. One reason: Apple has persuaded key suppliers to set up shop close to Apple facilities, for just-in-time delivery. Another benefit of the new system: The entire production process has dropped from almost four months to just two, so Apple can more quickly move to the latest, fastest parts. Research what happened in this particular situation to bring this situation to the present.

Step 2: Respond to the following questions: From the above case, describe how inventory management has been used for strategic advantage. What were (at minimum 3) relevant parts, products, or processes involved in this case study? What recommendations do you have regarding overcoming potential challenges and helping future growth? What is the final solution? What does the future look like in terms of globalization and this case study? What were (at minimum 3) relevant parts, products, or processes involved in this case study? What recommendations do you have regarding overcoming potential challenges and helping future growth? What is the final solution? What does the future look like in terms of globalization and this case study?