Operations and new technology implementation

Question

Hi,

How would you approach the following case please:

Our client is a large grocery distribution company. The CEO is thinking about automating parts of his company processes. What are the implications of this ?

I was thinking about exploring: the company in terms of costs and revenues change, customer, competition and products. How would you approach the case differently in a MECE way please?

Answer 1

Is this "To Automate of Not" from the Darden casebook? :)

It's a great entry-level case!

FYI, they have a framework in the casebook itself.

Ultimately, it comes down to:

Benefits of tech - $ amount (NPV)
1. Cost savings (labor, space, etc)
2. Revenue gains (premium product from faster deliveries (price), more throughput (quantity))
Cost of tech - $ amount
1. Upfront cost (implementation, installation, contract signing, purchase, etc)
2. Recurring cost (maintenance, training, subscription fees, etc) - $ amount NPV
Logistics/Implementation
1. Benefits must be greater than costs
2. They must be greater than the costs, moreso than other investments would make (i.e. best ROI our capital can get)
3. We must have confidence in 1) True cost and 2) True benefits
4. We must have confidence in timelines...i.e. will it take longer to install, get operational, etc. than we're being told?

Here's the case solution (but, of course, casebook solutions are rarely as thorough as a coach's explanation)

Answer 2

Hello!

Agree with Ian!

Furthermore, on top of the business case (is it worth it or not to make the change, etc.), I would include risks consideration, for post-changes integration.

Hope it helps!

Cheers,

Clara

Answer 3

Hey, I recently got an offer at Mckinsey. I'll be happy to give you my two cents and do some prep to help you out. Sh... (read entire answer)

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