Question
How do I respond to this post? Im going to continue with a solution at GE Healthcare called Service Shop for the first option in
How do I respond to this post?
Im going to continue with a solution at GE Healthcare called Service Shop for the first option in the discussion this week. This is an e-Commerce solution, our first actually, and I am happy to see it launched to ease the purchase of parts for our customers in the healthcare industry. In order to run the Service Shop, we have network costs. This is where the product resides. We have a team of developers and support representatives and they use computers, fax machines, and other equipment to manage the system. There are also office supplies needed but well stop there and keep things very basic for this weeks discussion. As we learned this week, a standard cost is a measure of how much one unit of product or service should cost to produce or deliver and that is exactly how we use the information each year (Rapier, 1). This is our fourth year in production so these costs can be used in the creation and the forecast (Johnson, 2). Obviously, we had a baseline in the first year and could only estimate based on external norms and hypotheses when we started. Once the baseline was set, we used the data of our costs to forecast future revenue projections to determine our profits versus the huge initial investments to establish this system. At the time, I recall that it seemed everyone in the business knew this was something we should do and I had actually managed a similar type of system in the Appliances division, but convincing leadership to place the bet on an obvious need seemed so challenging. It paid off and we beat expectations every year for revenues, profits, and costs. This made it very easy to get approvals for additional tools and training investments to add to the online system. Our revenue projections and profit margins have been higher than our targets each year, so much that the actual number was not displayed last year and was simply shown as an F, which is favorable (2). At GE Healthcare, we use quarterly metrics for our revenue, margin, and cost projections. It would be nice if goals could be set on a monthly basis, however, the final month is when we typically see a hockey stick in spending by our customers. They too, work on quarterly and sometimes annual budgets, therefore, our biggest revenue-generating months are March, June, September, and December. While it is last on the list for performance reviews, it is probably the most exciting part of our product and solutions financial reviews. On two occasions, we have tried to make up for other parts of the organization by providing discounts on bulk and early buys, however, this does not always get executed in time to fill the gap. This part of the portfolio is fast becoming a go-to deliverer of cash for the business and makes me wonder why we waited so long to implement it.
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