Mini-minicase: Coca-Cola Amatil, Ltd.

The business strategy of Coca-Cola Amitil, Ltd. when they made the decision to install this new technology, and what would have been the major components of the cost/benefit analysis that justified this project:

The business strategy might have been to lower the cost of maintenance and/or to increase the sales made through each machine. Components of the cost/benefit analysis might have included things like the cost per machine to send someone out to fill it up, the estimated sales lost from stock-outs, the maintenance cost for a machine, the cost of a maintenance person going to a machine only to find out that they don't have the parts needed to repair it.

How the process of managing sales of sodas through vending machines changes with the introduction of this system:

Since the system sends information daily to company headquarters, we would expect an entirely new way to manage sales information (I assume the old way was that sales info was only available after someone when out to restock the machine. And then, they may not have had information by machine, but only by truck restocking the machine. First, we might see corporate people, rather than local people, doing the sales management processes (analyzing the numbers, predicting sales, managing profit numbers, setting prices etc). Perhaps they would have instituted "machine controllers" at the headquarters site. So the place where the work is done, and the person who does the work, might be different. Second, with daily information, rather than less frequent information, we might expect to see processes that respond to that information, such as new ordering/delivery processes. And third, since the information would be by machine, we might expect forecasting processes to change. The machine "controllers" would be able to identify high traffic machines and order new machines installed there, for example.

How this system might change the process of maintenance and repair of the machines:

With knowledge of faulty machines coming back to the maintenance organization, a repairperson can go fix it with the required parts in hand. Otherwise, the repairperson might have to make two trips, one to diagnose the problem and another to fix it. Usage data gives the maintenance group information for forecasting needed maintenance. For example, they can analyze statistics of usage/failures and anticipate when a problem will occur. That might change the maintenance processes significantly, since they may not have had specific maintenance processes in the past. They might build a set of processes based on usage statistics that the maintenance person can do to keep the machine from failing in the first place.

* Source: Pearlson & Saunders (2006)