Tuesday, February 7, 2012

LG Supply Chain

            In today’s business world, many companies focus on profit.  Companies can obtain profit through the increase of their sales or by the decrease of their costs.  In an article in Bloomburg Businessweek, LG focuses on decreasing their costs by innovating its supply chain.

            Even with the increase in sales of their new products, such as the LG Cookie, LG truly cut costs in their supply chain.  In LG’s former supply chain, divisions within the company made their own deals with suppliers.  This means that information was not being shared between managers within the same company.  In the new supply chain, LG created a 50-page procurement list of suppliers to create more centralized purchases.  Moon Ihlwan writes, “By centralizing purchases, LG has cut more than $2 billion from it annual $30 billion shopping bill” (Moon).

            This scenario shows a classic case of a company moving from a silo structure to more of a matrix structure.  In a silo structure, each division controls its own function.  No collaboration runs across the different units.  This creates difficulties in obtaining price advantage, as one does not know the price that other divisions are obtaining.  A matrix structure allows for collaboration throughout all of the divisions.  For example, in a matrix structure, different divisions are able to know the price that each paid to their suppliers.  This gives the company the ability to lock in premium prices due to cooperation along the divisions.

            Other articles support LG’s move of focusing on the supply chain by innovating horizontally.  Greater profits do not always have to come from the innovation of a new product.  Sure, a new iPhone or laptop would increase sales and profits, but it is not the only solution.  Success can come from the integration of existing capabilities within the company.  Breaking down silos and thinking horizontally provides collaborative innovation within the company.  The CIA, Central Intelligence Agency, found success in integrating horizontally.  Saul Kaplan writes about CIA turning to more of a matrix structure:
With no security risk, disruption of agency activities, or incremental cost, the CIA has opened up a treasure trove of valuable data to scientists from academia, government, and industry for environmental research.  To replicate the capture of this information would be silly and cost-prohibitive, and I was encouraged that the data were being shared to make progress on an important social issue.  (Kaplan)   
This shows how success does not always have to be measured in profit.  The CIA used information technology principles of integrating horizontally to protect the United States.  The free sharing of information allows the different divisions of the CIA to be on the same page.  This gives the CIA an advantage in protection as they are not barred from any information within the CIA.

            These two cases prove how information technology exists throughout many fields for many different purposes.  LG did not use information technology to innovate in product design, but they also used it in the supply chain.  The CIA used IT principles to help protect the United States through horizontal information sharing.  With its many uses, information technology is important in today’s world.

Word Count: 519


Ihlwan, Moon.  “Innovation Close-up: LG Electronics.”  Bloomberg Businessweek.  Bloomberg, 15 Apr. 2010. Web. 6 Feb. 2012. <http://www.businessweek.com/magazine/content/10_17/b4175037784791.htm>.
Kaplan, Saul.  “Innovators, Break Down Those Silos.”  Bloomberg Businessweek.  Bloomberg, 8 Feb. 2010.  Web. 6 Feb. 2012. <http://www.businessweek.com/innovate/content/feb2010/id2010028_390003.htm>.
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Monday, February 6, 2012

Data-mining in Politics

President Obama’s re-election campaign is implementing a data-mining tool, “Project Dreamcatcher.” It uses text analytics to analyze voter’s opinions, so that promoters will know how to influence the electorate.  Rayid Ghani is the “chief scientist” of the operation. He’s determined to help the President recognize patterns in voter’s behavior like he has with consumer behavior in other corporations.  Because of Ghandi’s success in the business world with CRM I believe that “Project Dreamcatcher” will positively affect Obama’s campaign. 
In a retail environment Ghandi was able to use “historical transactional data” to form a personal relationship with individual customers.  According to his paper, Predicting Customer Shopping Lists from Point of Sale Purchase Data, they ran the experiment in a grocery store because they have consistent steadfast customers.  This aspect of the research reflects politics because habitually voters support one political party.  Ghandi’s research is able to predict what products a customer is most like to buy and what promotional strategies will affect individuals.  Analysts can also determine how to influence purchases of different products. “The result is a practical system that increases revenues by up to 11%, and enhances customer experience and loyalty by giving retailers the tools to individually interact with customers and anticipate their needs.” If data mining is able to increase sales in a business environment I think it will increase votes for Obama. 
Through websites such as, “Share your Story” text analytics will be able to analyze individual’s complaints and personalize the way targeters’ campaign to that person. I think that this will increase that voter’s loyalty and influence a deeper connection with their president.   The article on SlateMagazine.com says that “Ghandi could isolate keywords and context, then use statistical patterns gleaned from the examples of millions of voters to discern meaning” of what people are saying on facebook, twitter, and other forms of social media in order to form a campaign platform that the constituency will relate to.  By analyzing a voter’s thought on Obama or controversial issues the campaign can target the individual in a way that could potentially change their ideals.   Obama’s campaign can personalize the data that each person is getting on their individual social media page.
With the execution of “Project Dreamcatcher” campaigning and politics will be significantly changed.  Although, making a personal connection with each voter will take time and money if a voter that is on the fence can be targeted and influenced to vote in favor of Obama every vote will count.  According to the article on SlateMagazine.com Obama’s campaign won’t reveal exactly how they plan on analyzing the data they collect. They do not want other candidates to implement their technology.  If every candidate had access to this knowledge then voters would be bombarded with personalized information.  I believe this would increase the amount of voters that participate in the election because the population would become more informed.  This would also make campaigning more expensive because having the data-mining technology would be crucial to competing against other candidates.

Link to main Article:
Friday, Sasha Issenberg|Posted. "Project Dreamcatcher: How Cutting-edge Text Analytics Can Help the Obama Campaign Determine Voters’ Hopes and Fears. - Slate Magazine." Slate Magazine - Politics, Business, Technology, and the Arts - Slate Magazine. Web. 06 Feb. 2012. <http://www.slate.com/articles/news_and_politics/victory_lab/2012/01/project_dreamcatcher_how_cutting_edge_text_analytics_can_help_the_obama_campaign_determine_voters_hopes_and_fears_.html>.

Works Cited:
Cumby, Chad, Andrew Fano,Rayid Ghani, and Marko Krema. Predicting Customer Shopping Lists from PointofSale Purchase Data. Accenture Technology Labs. Web. <http://www.accenture.com/SiteCollectionDocuments/PDF/shopping.pdf>.
"Pennsylvania: Share Your Story." Barack Obama. Web. 06 Feb. 2012. <https://my.barackobama.com/page/s/pennsylvania-share-your-story?source=state-blog-pa]>.