Thomas Janovic
Info. Tech.
Week 2 task 3
Value Chain
3. You have decided to open an internet site to buy and sell used music CDs to other students. Describe the value chain for your new business.
Upstream Management
Raw Materials
- There will be no need for raw materials in this case because my company’s products are used CDs, not new ones. The CDs will be acquired from various sources such as music stores that are going out of business or we can buy up collections of used CDs from different vendors in the area. We will devise a technique to encourage people to mail in their old or unwanted CDs and maybe offer something to them such as a discount for the website or even a cash prize. Going from dorm room to dorm room might be time consuming but may be an effective technique nonetheless.
Inbound Logistics and Tracking Systems
- The CDs that are being collected and shipped to us will have tracking devices on them so we know when they were shipped, from where they were shipped, and the arrival time of the product to our warehouse. Every single bit of information is crucial, especially time, in managing the arrival of products. It would help us to know when the product will arrive to ensure our customers receive the CDs in a timely manner.
Warehouse and Storage
- Since the company is internet-based, a warehouse of some sort will either have to be rented/leased or purchased to store the used CDs. Locating a warehouse or storage facility with a reasonable price and enough storage space will be essential. The used CDs will be shipped to the warehouse facility location where they will be sorted and stored for future purchasing. The products will also be shipped out to consumers from this location. All this will be accomplished with a computer-based IS.
Production
- Since nothing here is manufactured by our company, there will be no need for a manufacturing plant or facility. However, our company will need to process and enhance the CDs to make them suitable for sale. Our company will build a separate compartment in the warehouse specifically designed for the purpose of cleaning and repairing old or worn out CDs. Once the compact discs are cleaned and working properly, they will be re-packaged and labeled for sale via an automated computer printing apparatus.
Downstream Management
Finished Product and Storage
- Once the newly furnished CDs are packaged and ready for shipping, they will be placed in a clean, temperature controlled room to protect them from water damage or any other danger. There will be an automated system in which products will be stored and retrieved with the use of a highly advanced IS. The time to single-handedly look through hundreds of thousands of CDs is a daunting task to say the least. Retrieving and storing CDs will be done in a flash with our new IS. The CDs will be stored alphabetically to prevent any confusion.
Outbound Logistics
- CDs shipped from our warehouse location will reach customers as fast as possible with today’s most effective shipping methods. USPS and UPS will be used depending on size of orders and shipping costs. There will be tracking devices on the boxes similar to those of CDs coming into the warehouse. Customers will be able to access our website and browse information about their order that is being shipped to them. They will be able to know how much more time it will take to be delivered as well as the exact time and date it left the warehouse. If something goes wrong with the shipment, at least the customer knows the company is not at fault.
Marketing and Sales
- Though our website, we will team up with other colleges to effectively market our product. Colleges we decide to get on board will provide a convenient link on their homepage for their students to access. Flyers, as well as paper mail will be used to get our company name into the public. For new users, we will have a one time discount to intrigue people to use the site at least once or twice. Loyal customers will receive free CD cleaning for music CDs, video games, and information CDs that have been scratched, worn out, or unreadable. We guarantee all our products or they get their money back.
Customer Service
- As said before, customers will be able to view their order on the website and be able to know when the package arrives. Our website will contain a customer service compartment where customers can provide valuable feedback from our products and services. There will be an educated staff available via telephone most hours of the week. Surveys will be mailed out to all customers who have bought CDs which will include a section where customer service, arrival time, and website accessibility will be rated.
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