1Virginia’s Finest Meat Distributors Victor Constantine is owner of one of the few remaining privately owned meat distributors in the Washington DC Metropolitan region. Independent butcher shops have decreased in number over the last decade, since meat sales have fallen overall and restaurants have increasingly moved to large wholesale distributors. However, this has created an opportunity for specialty butcher shops in markets that provide only basic options through these larger retailers. Victor's market niche is providing customized meat cuts for each client – clients are individual restaurants, chains, caterers and specialty places such as country clubs. Virginia’s Finest Meat Distributors (VFMD) operates a 40,000 square foot processing plant in Winchester, Virginia. The company is doing very well with revenues steadily increasing over the last several years and reaching $19 million in gross revenue last year, netting a modest but satisfactory net profit. As would be expected, the largest expense is the cost of the meat itself, followed by labor costs currently hovering around $2.5 million per year. Current debt includes approximately $4 million on its current building. Retail butchers have been replaced with grocery chains and big box stores. In addition, people are eating more meals away from home. With an increasing percentage of food dollars spent in restaurants, there is a growing need for sales of specialty meats to the niche market that can afford and desire them. Caterers, especially those serving high-end corporate and private events, and upscale restaurants seek high-quality specialty meats atmarket prices. VFMD sells to catering businesses and restaurants, meeting their special timing needs and highly variable special demands, which puts VFMD in high demand and provides them with an above average margin of profit. VFMD treats its employees well and the labor costs include matching funds on employees 401K plans, a very good medical plan, and bonuses for all employees. At this time, there are approximately 50 employees. The business began with Victor's father who originally sold meat to local families and restaurants from a wagon and ran the business out of his home. Today’s business is quite different. In addition to Victor, who has long-term relationships with the best suppliers of meat as well as an understanding of the craft of butchering, the leadership team includes Victor’s son and daughter. His son, who performed every job including receiving, shipping and cutting the beef, is currently the Vice President and is expected to take the reins when his father retires; his formal education includes food service management, state food hygiene laws, business to business sales, and finance. Victor's daughter handles marketing and social media. A typical day starts very early in the morning when employees receive carcasses, cut and grind the meat, weigh, package and label it (if needed), and load the 8 refrigerated trucks owned by VFMD. These trucks deliver on average 65,000 pounds of meat and poultry to roughly 375 customers in the Washington area each week. Deliveries consist of standing orders of specific cuts of meat, special orders to be delivered on specific days, and expedited deliveries to meet unexpected demand. At theoperational level, orders are taken by the office clerk over the phone or Internet. The clerk works with Victor and the customers to ensure their individual needs are met. For example, when a restaurant client couldn’t get its nine-pound racks of lamb to cook equally from end to end, Victor reduced the size of the cut he sold them to precisely 7.5 pounds; the problem was solved and a valuable customer was pleased.Orders for immediate delivery of specific cuts are written down and carried from the clerk to the butchers on duty who will prepare the cuts. They will be packaged, priced, and prepared for delivery.While products can be replenished within a few days, there is the possibility of certain items running out because of unexpected high demand, and VFMD may run out of stock on certain products until new shipments arrive. In such cases, the sales staff will offer suggestions of substitutions or special offers in order to make sure all customers are satisfied. The majority (about 85%) of VFMD’s product is boxed beef from the Midwest whicharrives every other day. Additionally, pork, beef, lamb, and poultry are sourced from local farms. Victor insists on purchasing from well-managed and supervised farms where no drugs or medicated feed are used. The majority of beef is wet-aged – a common process where the meat is aged by sealing it in a bag with its own juices. However, the real profit is in dry-aged beef that high-end restaurants require, and then sell, at a substantial premium. Costs are considerably higher as a large percentage of weight (close to 50%) is lost in the dry-aging process and the time to age is considerably longer. This process results in a more tender and flavorful meat.The profit margin is higher than wet-aged beef as high-end restaurants are willing to pay for this – which in turn their customers expect. VFMD operates a very busy dry-aging facility where the dry-aging process takes from 15-28 days and the stock rotates continuously. Vincent refers to his dry-aging facility as the “Money Room.” While VFMD is doing well in today’s market, Victor is aware of the increased trends in healthy eating and vegan lifestyles. In addition, he’s seen the number of producers shrinking as small, high quality livestock farms and ranches struggle to stay competitive with large-scale commercial producers. He’s also observed the impact to high-end restaurants when the economy dips. He has read the American Meat Institute's analysis on why meat prices rise and fall: "The meat industry is unique because it relies on live animals as its raw materials. Within livestock production, there is a classic, livestock price cycle. Prices rise and fall as producers raise more animals in response to high prices or low supply, and then cease producing when livestock inventories become high and prices fall." (North American Meat Institute, p.1) (North American Meat Institute, Jan 2015, Fact Sheet, retrieved on April 14, 2016 from https://www.meatinstitute.org/index.php?ht=a/GetDocumentAction/i/89479) VFMD's primary competitor in this market is Maine Avenue Butchers, which was established fifteen years ago and sells only high-quality beef products, both wet and dry-aged. Maine Avenue Butchers charges high prices for its quality beef, and sells primarily to caterers and specialty restaurants. There are a number of very large big box stores in the area who are competing for business from caterers by offering one- stop shopping for all their catering needs. Neither Maine Avenue Butchers nor the large box stores provide the level of service and expedited delivery as VFMD Victor and his leadership team have identified the following Keys to Success as part of their business plan: 1. Maintain high quality standards for its suppliers and continuously monitor this quality. 2. Provide unequaled customer service and delivery. 3. Preserve meats in optimal conditions to maintain freshness andminimize waste while in the facility. 4. Maintain excellence in the skill of butchering meats through hiring, training, and supervision of staff. 5. Listen carefully to customer needs and respond with custom-cut products, whether in person, over the phone, or through Internet orders. 6. Maintain appropriate profit margins on all products. 37. Increase productivity, management of the business and profit margin through the use of information technology. Victor is seeking your help to analyze his business and identify areas where information systems could help him better manage and grow his business. Review the Instructions above and respond to the questions that follow. Each is worth 10 points. Questions: 1. Analyze the Virginia’s Finest Meat Distributors business. This question has 2 parts. a. Discuss each of Porter's Five Forces in relationship to VFMD. FORCE List Porter's Five Forces JUSTIFICATION of your selected impact Minimum 3 good sentences that explain the impact of the force on VFDM to demonstrate understanding of the force. Refer to specific details from the business in the case study to support your explanations. You must mention relevant specifics from the case study to gain all points for your submission. Threat of new entrants The force of new entrants is weak in the meat distribution industry. This means that there are few to almost none individuals or businesses entering the current meat distribution market. This is due to the high capital as well as expertise and extra resources needed in the industry. Bargaining power of buyers 10The bargaining power of buyers illustrates how easy it is for customers to choose other alternatives from competitors over those that a company is offering (West, Ford & Ibrahim, 2015). This force is low for the industry and weak against VFMD since there is minimal competition in the industry. Customers including catering business as well as luxury restaurants can only access meat through VFMD or the Main Avenue Butchers who are main competitors in the industry. Threat of substitute products or services The 10threat of substitutes evaluates how easy or hard it is for new substitutes to what a company offers or does (West, Ford & Ibrahim, 2015). For the meat industry, this force is low or weak since there is only one single alterative that sells the same quality meat as sold by VFMD. VFMD is renowned for their quality meat and with only a single alternative; customers are willing to pay premium prices to enjoy the same quality of meat. 13Bargaining power of suppliers The higher number of suppliers, the lower the bargaining power an vice versa (QuickMBA.com, n.d.). Suppliers in this niche market and industry have high bargaining power since it is not easy to find farms that meet the VFMD standardization on drug and medication-free rearing and well-managed farms. Therefore, VFMD cannot negotiate much on how much they will pay suppliers since a reduction in prices would lead to low quality meat. Rivalry among existing companies The only competitor of VFMD is Maine Avenue Butchers. There is no serious rivalry between the both since VFDM is known its higher quality and sales after service such as expedited shipping. Therefore, VFMD is not under threat from any form of competitive rivalry in regards to management, prices, operations, or customer service among others. 6b. Identify which one of the forces should be the primary factor in the development of future business and their information technology strategy. Include the chosen force and your explanation of why you chose that force using information you have learned in this course and specifics from the case study in a minimum of 3well -written sentences. Your explanation must explicitly refer to the VFMD business in the case study. Based on the environmental analysis of VFMD and the meat distribution industry, the best option for the company to consider should be the high leverage of meat suppliers. VFMD operates in a niche market meaning that all the other forces are in its favor or weakened. However, the company cannot bargain easily with its suppliers since there are a few farms that meet the company’s standards in meat production or livestock farming. Consequently, I trust that VFMD should consider implementing an information systems and technology solution for enhancing their supply chain. The IT solution should enable them to compare industry prices, find new suppliers, and a means of working with current suppliers to meet the company’s standards. When suppliers are more, their bargaining power tends to reduce;therefore, the company will have a strategic solution for its future growth and operations. 92. Identify which of Porter's Generic Strategies is most appropriateto Virginia’s Finest Meat Distributors and explain why you selected it in light of your Five Forces Analysis.You must incorporate information from the case study to gain all points for your response. The best strategy for VFMD is the Focus Strategy or differentiation since the company offers a unique product from its competitors. VFMDoffers unique high quality meat chops from their aged and well-reared meats. Although meat is easily accessible from different places, the quality that VFMD offers is unmatched, which is the reason their customers pay premium prices to access their high quality meats. Therefore, the company makes it even by passing the high costs incurred in accessing its meat suppliers over to consumerswithout any apparent threat in the market. The differentiation or focus strategy best suits firms that are selling a unique product or service to a niche market. 13. Victor uses the three business processes listed below, and each of them could be improved using technology. Identify and explain how a type of information technology system solution could improve each one of the processes. Do not research a specific product (e.g., SalesForce) but it must be clear what type of solution this is – for example, CRM, human resource system, etc. An Enterprise Resource Planning System (ERP) accompanied by an integrated Supply Chain Management System (SCM) and a Customer Relationships Management System (CRM) best suit VFMD based on the company’s size, operations, and revenues. 8a. Purchasing meat products from suppliers. How could a technology solution improve this process? Technology can help in making the process of buying meat effective and efficient. This is because a technology solution enables buying of meat directly from suppliers and selecting suppliers based on daily pricing as well as the current inventory. 11b. Creating and managing a schedule to deliver ordered products (standing orders and special orders) to the right customers each day. How could a technology solution improve this process? The information technology solution will also offer an efficient and effective means of delivering ordered goods. This is because it is possible for all employees or staff to view the current status of each individual order where new orders are immediately viewable, rushed orders are easily distinguished from normal orders, thus enhancing effectiveness and efficiency. Currently, VFMD’s employees acquire information on an order through the phone and physically go to the butcher for the meat to be prepared and delivered. However, using a technology solution will allow both the employees and butcher to create orders, expedite, and have real-time access, thus the resource of time as well as energy are saved. The technology solution will be a good way to save crucial resources such as time as well as making the process of ordering and delivering more effective. 8c. Managing inventory.How could a technology solution improve this process? A technology solution can help to enhance the inventory process by enabling the company to keep up with corresponding and revolving stock levels. This is because VFMD uses about 15-28 days as its processing times for its dry-aged meats, meaning the stock rotates continuously. The technology solution will enable the company to plan their inventory in ensuring product availability, as well as special orders and requests are possible. Customers can also gain access to VFMD’s inventory through a technology solution allowing them to check for the availability of products they need. 14. Using the three business processes listed in question #3,identify one step in the process, and thenlist one input, one system processing action, and one output that would be part of that step in the process.Note: these 4 pieces need to relate to each other. Business Process Choose one step in the process listed and write it in the next column Step List the one step in the process you selected 7Input Information/data item entered into the system as part of this process step (input needed for the system) Processing Processing or action the system must perform for this process step (what the system will do with the input) Output Information/data item displayed or printed out for the user in this process step (what the system will output/display) PURCHASING PRODUCTS Meat orders based on inventory levels Enter the quantity and type or quality of meat required (based upon inventory levels) System will process information received by searching the quantity and quality of meat desired or entered against the supplier database System displays prices for preferred quantity and quality of meat including shipping/delivery times SCHEDULING DELIVERIES TO CUSTOMERS Corresponding orders with delivery schedule Sales staff inputs order in the system including customer’s information, order information, requested delivery time or date, whether it’s an expedited service or not. Systems checks for order info and verifies availability of particulars from the inventory database then computes time required to prepare the ordered products. Systems sends reverts to buying department if order is not available or sends prompt to butcher to prepare product and gives the buying department a delivery date. System displays order particulars and planned delivery time or date. MANAGING INVENTORY Managing inventory levels of high demand meat cuts Input the meat cut whose inventory needs to be verified System verifies the product from the current inventory level database. Illustrates the inventory levels of the inputted product and a forecast of its levels using the regular sales volumes 55. Victor has decided to use technology to improve one of the business processes identified in question #4 above. Select one of the processes and analyze the IT requirements as they apply to that process using the table below.Type the name of the process you selected on the line below: Business Process for Virginia’s Finest Meat Distributors Type the name the business process that you selected from #4 here: ¬¬Managing inventory levels of high demand meat cuts 1IT Requirement Importance/ Relevance High,Medium, Low, or Not Applicable (N/A) (each must have a ranking, including N/A) Explanation for Ranking Including N/A (Write a minimum of 3 good sentences for each. • Include why/how the IT requirement applies to the process you selected. • In your explanation, identify the data or type of data used, where applicable. • Specifically mention and relate your answer to the Case Study Virginia’s Finest Meat Distributors. Usability High Usability is used to describe how easy or difficult it is to use a system effectively (Microsoft Corporation, n.d.). This means that usability of any technology system should always be high since it will be easy for user’s to use and positive user experience. VFMD relies on a manual inventory system, which ineffective and inefficient. The system that VFMD should choose a system that offers increased usability especially in ensuring that the company has full access and control of the inventory system. This also means that all necessary information and commands are well displayed an understood as well as processed. Data Completeness High Data completeness is a means of determining whether all the data or information entered in the system is securely and accurately stored and handled within the system(Microsoft Corporation, n.d.). VFMD’s inventory is ever rotating and continuous, thus it is vital for all data to be accurate and complete to avoid any inconveniences or errors while processing orders. Database High Databases are the core of information needed to make crucial business decisions(Microsoft Corporation, n.d.). Therefore, they should be accurate, complete, secure, and consistent. The databases utilize a wide range of information to process it into context such as the number of customer orders reducing inventory. VFMD should seek an effective database system that is able to display correct, accurate, and complete information as well as process the information into business-based ideas. Reliability/ Availability High Reliability plays the most vital role in any technology system(Microsoft Corporation, n.d.). VFMD should highly focus on a reliable system that is always available and reliable due to their complex inventory systems. This means that the system should have no to minimal if at all downtime. Updates should be scheduled at night when most employees are not active to ensure that employees access services all day through. Security High This is the level of security or guarantee that data on the system is protected from unauthorized access or protection of the data from malicious attacks(Microsoft Corporation, n.d.). Security is important for all systems, thus VFMD should also go for a highly secure system. This is especially to protect any data loss or alteration since it would lead to loss in revenues and increased inconveniences to customers. 16. Using a cloud-based Software-as-a-Service (SaaS) solution, list and briefly explain three specific quantifiable (measurable) business benefits. These should reflect measurablebenefits achieved by using a SaaS solution specifically that would improve VFMD – 8not general benefits. Your explanation must explicitly refer to a SaaS solution and the VFMDbusiness in the case study. a. Business Benefit #1 and explanation: Improved sales: VFMD will have the ability to track their sales and income in a convenient and comprehensive level. The company will access reports, compare sales history data, track sales trends, and make forecasts as well as strategic plans for the future especially main holidays such as Christmas. Tracking trends and access to historical information will enable the company to stock their inventory in preparation for such holidays where customers demand more meat. b. Business Benefit #2 and explanation: Enhance customer satisfaction: Through SaaS, the company will improve the customer satisfaction in numerous areas. The SaaS will offer increased efficiency by working in real-time, and eliminating time-costing process such as the sales team manually entering orders and taking the manual orders to the butcher physically. These orders will be entered automatically and the butcher will receive them in real-time meaning he also saves time in executing the orders. All these process means that time is saved and other resources meaning the customer is able to get their product faster, thus increased satisfaction. Customers are more likely to turn to VFMD since through such a system they are guaranteed of faster delivery and convenient delivery of special orders. Enhanced customer satisfaction will enable the business enhance it sales, thus more revenues and profitability. c. Business Benefit #3 and explanation: Reduction in payroll: applying the SaaS will modernize many of the manual processes handled by human resources, which will directly influence the payroll. The system will eliminate some of the processes especially manual processes, which translates to more work hours that will increase employee productivity. This also means that employees will be able to complete their required duties in the normal workday, thus no overtime will be needed as well as the need to hire additional 4employees. 7. Victor has decided to implement a cloud-based SaaS solution to improve the process of shipping products to his customers. Identifyoneimportant activity that Victor would need to do during each of the following phases of the system development life cycle (SDLC) to implement his solution. Your answers should demonstrate an understanding of the phase of the SDLC and implementation of a SaaS solution. (An example answer is provided for the Programming phase—all other phases are applicable to this solution.) . Your explanation must explicitly refer to the VFMD business in the case study. a. Planning:Victor will not participate in the planning since he has chosen an existing system. Therefore, he only needs to ensure that his goals align to the system of his choice as well as ensure that the system is suitable for his objectives. b. Analysis and Design:This step is also not necessary since the SaaS system is on the developer’s side. 12c. Programming: Since the SaaS vendor has already developed the system, Victor is not required to take any action regarding the Programming Phase. d. Configuration: Victor will have to determine if the chosen SaaS system is compatible to the current system in the company by working with the system’s developers to ensure effective configuration. The system should also be tested if it meets all requirements identified in the planning process. e. Testing:Victor should conduct testing on the system to ensure that the process of shipping meat is effective from the order creation to the delivery. f. Implementation and ContinuedUse:Victor must certify that all his employees receive adequate training and support on using the new system. Continuous training or updates must also be ensured as well as adjusting the system setting to suit the needs of the staff. Victor must also ensure that the developer of the system works closely with employees to offer them training and support. 18. Victor would like to increase the profit margins on his products – increasing the volume on those products that yield higher profits. He wants to analyze the data he will be collecting in his new information system to help him do this. • Identify three questions that Victor would want answers to in order to determine ways to increase sales of the more profitable products. • Then, identify what information Victor would need in his information system 2to answer each question. • Finally, explain how that information and the answers to the questions would help Victorwith data-driven decision making. For example, to solve a different problem: If Victor wanted to know when he could schedule his delivery trucks for maintenance, he might ask: On average, how many delivery trucks have been sent out each day of the week (over the past 6 months)? He would need to know this so he could figure out when his trucks are least in demand. Using this information, he might see that he makes very few deliveries on Sundays. But, his maintenance shop is not open on Sundays, so he would have to look at the next least busy day. If he found that Tuesdays generally require the next fewer delivery vehicles, he could schedule his trucks for maintenance on Tuesdays on a rotating cycle. Victor can then use that information to ensure his trucks are in good working order without impacting his ability to deliver the products to his customers. a. Question, information needed and explanation #1: Victor should always ask this question to ensure that the company always has adequate dry-aged meat in stock when ordered. Considering the time it takes for the beef to age, enough planning is required to ensure that its ready when its required. Based on his clientele who include caterers and restaurants, the main business days should be mainly Thursday through to Sunday since most customers to the restaurants may be more. Nonetheless, Victor should also rely on historical sales data to ensure that the days are correct. b. Question, information needed and explanation #2: How much dry-aged meat is normally ordered on the identified days? Victor should only ensure that the right or needed amount is available since he does not want to over-stock or under-stock. c. Question, information needed and explanation #3: Can I buy the same quality of meat at a cheaper price than the current one? Victor should focus on getting more quotes or prices from numerous suppliers to enable him get the cheapest prices to maximize his profit margins. 19. Victor has asked you to explain how e-commerce could help him in dealing with his current and new commercial customers. (He is not interested in taking orders from just anyone ordering on the Internet.) • Identify two different categories of e-commerce (as defined in the Week 2 Learning Resource "Categories of Electronic Commerce") that VFMD could use to improve their business. • Explain how each e-commerce category would be used and what business process changes would be needed to implement it. Your explanations should include the name of Victor's business and demonstrate your understanding of each of the two e- commerce categories. a. E-Commerce category #1, how it would be used, and what business changes are needed: The Business- 2 -Business (B2B) is a form of electronic commerce class where a business markets its products and services to other business (Institute of Management Accountants, 2000). B2B makes increased sense to the case of VFMD since they market most of their products to luxury restaurants and hospitality businesses. The company should develop an e-commerce website that is only accessible to registered members with a username and password where access is only granted to their business customers. This will allow for businesses or their customers to make orders online or in real-time without making calls. Customers will be able to check the prices, available products, and make orders 24/7, a feature that is crucial to the hospitality industry that makes up most of VFMD’s clients. This will enhance the efficiency and effectiveness of running both VFMD’s operations and those of its customers. 1b. E-Commerce category #2 how it would be used and what business changes are needed: Business-to Business-to- Consumer is also an extra e-commerce strategy for the company enabling them to sell and market their products directly as well as to businesses(Institute of Management Accountants, 2000). This process would also apply the same strategy as the B2B strategy since the restaurants and caterers may sell to individual customers on their desire. Nonetheless, eliminating the small quantity of individual orders will enable the company to raise larger revenues, thus high profits. 110. Explain how each of the following could benefitVictor’s Virginia’s Finest Meat Distributorsbusiness. Use 2-3 sentences for each and be sure your explanations demonstratethat you understand each of the types of systems. Your explanation must explicitly refer to the VFMD business in the case study. a. Supply Chain Management System The Supply Chain Management System (SCM) is a seamless solution for VFMD since it offers the company the technical framework for input, process, and output enhancing all internal operational processes. This will have numerous advantages for the company including increasing profitability, enhancing general sales, and offering excellent customer service seamlessly (Chorafas, 2001). The SCM has the ability to manage suppliers, obtain product, receive payment, and process profits for VFMD. b. Customer Relationship Management System The CRM is of great importance for the company since they pride themselves in offering excellent and exceptional customer service distinguishable from their competitors. The CRM will help VFMD to manage current and future customers, store customer information on secure databases, enhance up-selling, enhance their marketing, and improve customer support(Chorafas, 2001). Customer’s data will be systematized and automated allowing for easy access. Enhanced customer service will improve customer loyalty, thus improved sales revenues. c. Enterprise Resource Planning System The ERP has the ability to support numerous processes conducted at VFMD. These include units for procurement, production unit, sales unit, investment management, human resources department, as well as finance and accounting modules among others that can be linked in a single database(Chorafas, 2001). VFMD is a large corporation meaning they should rely on streamlining their processes under a single system or the ERP. The ERP is customizable meaning all employees can easily use the system effectively. Basically, the ERP will improve efficiency, productivity, and offer cost-efficiency.