Construct an evaluation sheet using variables from the case, which you could use for scoring multiple solutions. You will need to determine:

• What are the most important things you would want to score? For example, the cost of the system would be very important. You can consider quantitative elements (like cost) and qualitative elements (such as ease of use of the software.
• How would you score each variable?
• Does it make sense to group certain variables together under categories?

You should develop 8-10 new variables (i.e. you can include cost, ease of use in addition to 6-8 variables) and put them in a scoring format:

Variable Name	Short Description	Proposed measurement (value, scale, Y/N, etc).
Cost	Individual licence costs	Dollar value per license
...

Attached is the case for your reference

1of6 uusrness Analysis Scenario Introduction IT Storage Inc is a medium-sized technology company that specializes in providing a variety of storage solutions around the world. They are known for a combination of value features and competitive pricing. To achieve this balance of value and price, all products are made in mainland china. Many ofthe supplier relationships have esisted since the 19905 when the company was formed. The company sells 550 different products (these are referred to as 'Stoci: Keeping Units' or SKUsI. Last year, the company achieved revenues of over $150m. Approximately 60 products out of the total of 550 contributed 40% of the revenue. The company operates three warehouses worldwide one in Canada, one in the US and a third in Germany. To provide a greater presence in these markets as well as the UK, France, Spain, Mexico, Australia and Poland the company has extensive agreements with IT distribution partners who will stock and sell their products directly to customers. One of IT Storage inc's competitive advantages is its ability to assist its distribution partners by providing information on which products they should stock and how many unib they should hold. This allows IT Storage Inc to have control over their supply chain in a way that their competitors do not. Inventory is monitored and adjusted weekly. Therefore [1' Storage Inc is trying to manage products and inventory across 9 markets with 550 products, and this requires a lot ofcomputing power (9 x 550 = . 4,95!) decisions per weekl. This also means a very high investment in inventory for the distribution partners, so poor decisions about the level of inventory required can create serious problems. As IT Storage Inc's revenues grow, both the internal processes around inventory management, as well as the distributors' view of risk in relying on IT Storage Inc to manage their inventory levels, are becoming high profile risks. The Current Situation Over the past 3 years. IT Storage Inc has been growing at approximately 25% per year. This has created a lot of stress within the company as the various departments try to adapt. Many of the processes are at their breaking point, either due to the age of the computing infrastructure or the need to automate manual processes. IT Storage Inc has tried to offset this by hiring more staff howeverthis Is not sustainable over the long term [it is an expensive solution] and there are declining returns from each additional staff member. For example, the warehouse systems are very manual, but only so many workers can be added before other inefficiencies creep in (for example there is a limit to the number of order pickers that can effectively operate in a single warehouse aisle]. The diaribution partners can scale much more easily than IT Storage Inc, which has helped to alleviate the growing pains. However, in addition to the current partners, FT Storage Inc wants to expand to several new countries which will out further stress on their internal systems. To convince their distribution partners to allow the same level of inventory control, the CFO of IT Storage Inc has decided to begin entering into agreements that state ITStorage Inc will only be paid by the distributor forthe product when the distributor sellsthe product to a customer. This alleviates cash ow problems and potential risk for the distributor, but that burden shifts to IT Storage Inc. However, he believes that the cost of financing the inventory is more than offset by the ability to optimize their product and inventory availability throughout the markets in which they operate. The First Meeting You first meet with the President of the company, who gives you background on her version of the problem. The following is a summary of the conversation: We have been growing very quickly, both in terms of the number of units we are shipping but also the numberof products that we sell. This is creating stress on our internal systems as we try and cope with this growth, but also our distribution partners who are starting to notice that their inventory investment in our products is also growing, The CFO has suggested that we should start to offer a cons'gnment model so that they only pay for the inventory once they have sold it. Therefore we will own all of that inventory in distribution. I agree that this will help us remain competitive, but I'm worried about the additional risk we will be taking on. It seems that we will need to invest heavily in a new supply chain management system that will enable this capability, but also address some other issues that we have. The mainthing thatWat I don't have a strong background in supp y c arn t ry or practice. ere re W: e re ying on many other people ._._.._, ...... ...... .. __.....__ _.._. .._.._... _.._.,_._ .. -----r----- .. --rr---- . ..._ _._-........ .._ Pm... .. .. CRM software {customer relationship management) Implementation that promised a lot of benefits, but he doesn't feel that it was successful given the investment. He is wary that the company may be headlne .1 :u r the same road with the supply chain software implementation. You ask the CFO ifthe SCM protect is a critical one given other priorities at the company. He agreesthat it must be addressed he feels thatthe current software and processes have about a 2-year lifespan before it completely breaks down, which would be a catastrophic risk to the company. You leave the interview wondering how to manage the criticatity of the risk of delay, with the apparent cautious nature of this important stakeholder. chief Operating Officer (COO) It takes three weeks but you nally manage to flnd a small window to meet with the (:00. He begins by stating that he will be the sponsor of the project and to make sure that anything important is run by him rst. Before you can begin asking questions, he launches into a detailed summary of his past work experience, whlch was primarily In the automotive manufacturing business. He has only been with the current company for three months. He certainly agrees that this is a high-priority project, and wants it completed as quickly as possible. He has already made many promises to the Fresident and other members of the executive team about what will be accomplished with the project He talks to you about reducing overall inventory as a Itey goal. 'for: ask about how this might impact other departments (tor example, sales), but he does not have an answer. It is not entirely clearthat he has had many discussions with other functional areas about the project - he is very focused on the benefits that will accrue to his area. He asks why you would need to worry about other areas this is a supply chain project after all. Since he is the overall lead of the supply chain department, which is driving this initiative, you ask if he will support you in setting up interviews with the Supply Chain Manager and the Warehouse Manager. He seems hesitant and asks that he be copied in on any emails and be notied about any meetings that have been set up, Including summaries ofany information collected. As you begin to asli about some of the details surrounding the problem, he becomes flustered and states that he doesn't have enough time. He states that all he knows is that people keen complaining about the current system and that it needs to be xed now that the President is involved. Your final question is to ask how long he thinks the current system wlll last he mumbles a response about being impossible to tell, then stands up as a way to encourage you to leave his office, Grief Sales Ofcer [csol The SD greets you with a smile, and she asks if you have had a chance to speak to the C00 yet. You answer 'yes' but don't give any more infom'iaon. The :50 appears to be amused by your response. You start by asking her opinion of the problem, the vision. and the scope of the project. She states that the President is always setting very aggressive sales targets, so there is always a lot of pressure to meet these targets. She states that the main issue with not meeting the aggressive targets is a lack of inventory. She emphatically states that when the growth is so high, why are 'theyr worried about inventory levels? After all, you can't see what you can't have! She estimates that the company growth rate would have been 2-596 higher over the past year i'lthey did not have any stockouis. You ask for an example, and she tells you that over the last yearthere was a major initiative to increase sales of new products. You mention that the CFO stated that there is normally too much lnventoryin new products, but the C50 counters this by stating that yes, overall there is enough Inventory, but they can't seem to put it in the right places in the right quantities. This is because distribution partners do not want to take a risk in purchasing new products, since many new products do not work out. You mention the objective of being able to offer consigned inventory, and the C50 feels that this is critical to support the company's future growth targets. Another example she provides is that 'iust last week there was a large deal for 1,500 units of a product, but they were unable to ciose the deal clue to not having enough inventory. This represented lost revenue of approximately $125,000. You nish the interview by asking if there is anything you might have missed. She states that her salespeople are always 'behind the eight-hair when it comes to understanding what is happing with their accounts. You ask her to clarify that stamment and she responds by pointing to her computer screen - she states that the reporting Is always out of date and they currently only get the sales numbers for their accounts once per month. Also, the inventory data is often Inaccurate, which has led to problems where salespeople have promlsed inventory that was not actually in the warehouse. Now you have a sense as to where the upper-level management team is at with the protect. You decide to schedule some observations and interviews with managers and process workers. The summary of the notes from your elicitation efforts is presented below. ale Managgr - North America I Seems comfortable with the overall levels of inventory for day-to-day sates. - Needs a lot of inventory available for large deals which often 'make or break' the revenue targets. I The time between quoting a large deal and needing the inventory is, on average, about 60 days. To convince their distribution partners to allow the same level of inventory control, the CFO of IT Storage Inc has decided to begin entering into agreements that state IT Storage Inc will only be paid by the distributor for the product when the distributor sells the product to a customer. This alleviates cash flow problems and potential risk for the distributor, but that burden shifts to IT Storage Inc. However, he believes that the cost of financing the inventory is more than offset by the ability to optimize their product and inventory availability throughout the markets in which they operate. The First Meeting You first meet with the President of the company, who gives you background on her version of the problem. The following is a summary of the conversation: We have been growing very quickly, both in terms of the number of units we are shipping but also the number of products that we sell. This is creating stress on our internal systems as we try and cope with this growth, but also our distribution partners who are starting to notice that their inventory investment in our products is also growing. The CFO has suggested that we should start to offer a consignment model so that they only pay for the inventory once they have sold it. Therefore we will own all of that inventory in distribution. I agree that this will help us remain competitive, but I'm worried about the additional risk we will be taking on. It seems that we will need to invest heavily in a new supply chain management system that will enable this capability, but also address some other issues that we have. The main thing that makes me uncomfortable about this project is that I don't have a strong background in supply chain theory or practice. Therefore I will be relying on many other people in the company to help make the right decision about how to solve this problem. And I'm relying on you to help organize this effort. And we don't have a lot of time to do it. Chief Financial Officer (CFO) You ask the CFO what his main focus is for the company. He replies that his goal is to manage profitability and cash flow. You ask about the importance of revenue growth, and he replies that 'revenue is vanity, profit is sanity, and cash flow is reality'. You think about what that means and how it might impact how the CFO will view the project and its goals. It seems clear that the CFO supports the corporate growth objectives, but only if other objectives around profitability and cash flow are met at the same time. He views cash flow as being of primary importance since the company is primarily engaged in purchasing from suppliers and reselling them to customers. The more efficient the company can be in converting products to cash, the more successful the company can be in delivering bottom-line results. The CFO states that there have been issues with effective planning as the forecasts being developed are not very accurate, especially at the product level. This has led to various over-stock positions (over-stock means that the company is holding far more inventory on certain products than necessary - a waste of capital investment). Also, it has led to situations where the company cannot fulfill demand due to stock- outs, resulting in lost revenue and profits. Finally, he points to new product inventory as being an especially problematic forecasting issue. The turnover (the number of times the inventory 'turns over' in a year) is very low for new products, indicating that the company is investing too much capital in new product inventory. Could the company do something to increase the sales of new products immediately after launch? Finally, you start to talk about the project solution. The CFO is very concerned about the budget required, and that a detailed cost-benefit analysis be completed to support the decision. He points to a CRM software (customer relationship management) implementation that promised a lot of benefits, but he doesn't feel that it was successful given the investment. He is wary that the company may be heading down the same road with the supply chain software implementation. You ask the CFO if the SCM project is a critical one given other priorities at the company. He agrees that it must be addressed - he feels that the current software and processes have about a 2-year lifespan before it completely breaks down, which would be a catastrophic risk to the company. You leave the interview wondering how to manage the criticality of the risk of delay, with the apparent cautious nature of this important stakeholder. Chief Operating Officer (COO) It takes three weeks but you finally manage to find a small window to meet with the COO. He begins by stating that he will be the sponsor of the project and to make sure that anything important is run by him first. Before you can begin asking questions, he launches into a detailed summary of his past work experience, which was primarily in the automotive manufacturing business. He has only been with the current company for three months. He certainly agrees that this as quickly as possible. Heo The buffer time from receipt to put-away is approximately 6 days. I The warehouses in the US and Canada are too small and are running inefciently - approximately 2096 of the work in the warehouse is moving inventory around. I The warehouse in Germany runs using different systems/processes and it is difcult to get the systems to 'talk to each other'. Product Marketing Manager I The main pressure is to focus on new product revenue. I The lead time between when a purchase order is placed and the product gets to the US warehouse is approximately 75 days. Then the product must be transferred to the Canada warehouse (7-14 days] or the Germany warehouse [28 days). I She feels that the company is very conservative in risk-taking - takes a long time to approve new products, but once approved they want to start selling them immediately. I You ask about the aggressive revenue growth targets, and she feels that new products are the primary growth driver, not the large deals. Finance Accounts Payable and Receivable I Needs functionality to support new payment terms (consignment). I Uses basic reporting. ieeelehainManaeec I The supply chain manager is very keen to hear about what the COD has said about the project. I He thinks that the sales forecast and supply chain [inventory required to purchase) forecast should be identical but right now they are different. Stated that the salespeople are always complaining about not having enough inventory, and the CFO is always complaining about too much inventory. The current system is antiquated and is currently at a breaking point. They are having to fix errors every week. Most planning and reporting is done in Microsoft Excel approximately 259i: of the time is spent updating Excel sheets, reviewing for errors, and creating reports for Sales and Finance. He thinks that the current system can last at most one year. MW Purchasing decisions are based entirely on sales history with no input from other departments because 'the C00 does not allow it'. Having a projected plan (projected forecast and inventory levels) would be much better than the current method of planning for the next month. Constantly struggles with the long manufacturing lead times. Each buyer does his or her own forecast using Excel. Each buyer uses their own method to do this. in in In II' n I She only recently found out about this initiative and is only interested in her piece of the proiect. She lets you know that her department is going to be choosing a BI reporting system within 6 months' So whatever software the Supply Chain Department uses will need to be compatible or they wiii have to gure out their own reporting. _..._-,,-..,,.- ...- .......,- .._....... ...- -.... ...... ...._.. .. -.....__ .. _...._..._.._...o m.-. .- .._,.,..... ...... their accounts. You ask her to clarify that statement and she responds by pointing to her computer Screen - she states that the reporting is always out of date and they currently only get the sales : Jl Pu ers for their accounts once per month. Also, the inventory data is often inaccurate, wt't I has lec' to problems where salespeople have promised inventory that was not actually in the warehouse. Now vou have a sense as to where the upper-level management team is at with the proied. You decide :me observations and interviews with managers and process workers. The summary of the 5 of 6 :ur elicitation efforts is presented below. Sales Manager - North America - Seems comfortable with the overall levels of inventory for day-to-day sales. 0 Needs a lot of inventory available for large deals which often 'malte or break' the revenue targets. I The time between quoting a large deal and needing the inventory is, on average, about 50 days. I She estimates that the product margin forthe day-today business is about 45%. whereas the larger deals have much lower margins 7 10-2596. Sales Manager - Euroig - He complains that Europe is always the last warehouse to get inventory whatever is 'ieft over' from the North America warehouse. Believes that they are missing out on a lot of business due to a lack of inventory for both the day-today sales and larger deals. New products launch 3 months later in Europe. Smaller revenue but larger growth 96 (contribution to growth) He estimates that the product margins for day-today business and deals are approximately 35% and 25% respectively. MW! Not enough notice with inbound inventory there are signicant delays in receiving the product and putting the inventory away (ready for sale]. The buffer time from receipt to put-away is approximately 6 days. The warehouses in the US and Canada are too small and are running inefciently approximately 20% of the work in the warehouse is moving inventory around. The warehouse in Germany runs using different systemsfprocesses and it is difcult to get the systems to 'talk to each other. Product Marketing Manager The main pressure is to focus on new product revenue. The lead time between when a purchase order is placed and the product gets to the US warehouse is approximately 75 days. Then the product must be transferred to the Canada warehouse (7-14 days] orthe Germany warehouse [28 days). She feels that the company is very conservative in risk-taking - takes a long time to approve new products, but once approved they want to start selling them immediately. You ask about the aggressive revenue growth targets, and she feels that new products are the primary growth driver, not the large deals. Finance , Accounts Payable and Receivabie I Needs functionality to support new payment terms {consignment} - Uses basic reporting. Wattage: I The supply chain manager is very keen to hear about what the C00 has said about the project. - He thinks that the sales forecast and supply chain [inventory required to purchase) forecast should be identical but right now they are different. - Stated that the salespeople are always complaining about not having enough inventory, and the CFO is aiways complaining about too much inventory. I The current system is antiquated and is currently at a breaking point. They are having to fix errors every week. - Most planning and reportirg is done in Microsoft Excel approximately 25% of the time is spent updating Excel sheets, reviewing for errors, and creating reports for Sales and Finance. I He thinks that the current system can last at most one year. Slimm