MGSC6204 Managing Information Resources: Case Study Questions

  

Case Study Questions.docxKL Enterprises Case Study.PDFMGSC_6204_Guide_to_Case_Study_Assignments.pdfWeek 1_Lesson 2_KL_Case_Questions_Vocabulary.pdfCase Study Questions
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Question 1

What are KL Enterprise’s core business processes and to what extent do KL’s information management (IM) practices and information technology (IT) platform investments align with and support these core business processes?

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Core Business Process:

Enabling Information Resource Management Practices/Platforms:

e.g. product design

e-mails, Microsoft SharePoint; data extracted from Oracle, SAP, and India and U.S. legacy systems.

add more as necessary

Question 2
2. What are the current strengths in the organization’s IM/IT investments?

e.g. executive team commitment to the uses of IM and cost-effective IT in running the business.
.
.
.
.
.
add more as necessary

Question 3
3. What are the current weaknesses in the organization’s IM/IT investments?

e.g. slowness of the platform moves across the firm towards a SAP standard.

.
.
.
.
.
add more as necessary

Question 4
4. What role does IM/IT enablement play in the following areas of KL Enterprise corporate activities? By that I mean, how does IM/IT help KL carry out day-to-day operations and transacting, how does it aid management processes, and does it enable KL product and service innovation?

Operations

Control/Management

Innovation

e.g. manufacturing and distribution operations enabled through SAP

e.g. day-to-day and near-term management of manufacturing and distribution enabled through both the Oracle and SAP/legacy system platforms; integration of data still a challenge

e.g. product innovation and design efforts poorly integrated and poorly informated from an IRM/IT point of view

add more as necessary

Question 5
5. If you were a member of the KL Management Team, what would be your top five IT investments? In preparing your response, recognize that time and resources are limited and therefore that you need to choose those investments that will have the greatest impact in the near term

.
.
.
.
.
case_study_questions.docx

case_study_questions.docx

kl_enterprises_case_study.pdf

mgsc_6204_guide_to_case_study_assignments.pdf

week_1_lesson_2_kl_case_questions_vocabulary.pdf

case_study_questions.docx

kl_enterprises_case_study.pdf

mgsc_6204_guide_to_case_study_assignments.pdf

week_1_lesson_2_kl_case_questions_vocabulary.pdf

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Case Study Questions
Question 1
1.
1. What are KL Enterprise’s core business processes and to what extent do KL’s
information management (IM) practices and information technology (IT)
platform investments align with and support these core business processes?
Core Business
Process:
e.g. product design
Enabling Information Resource Management
Practices/Platforms:
e-mails, Microsoft SharePoint; data extracted from
Oracle, SAP, and India and U.S. legacy systems.
add more as
necessary
Question 2
1. 2. What are the current strengths in the organization’s IM/IT investments?
• e.g. executive team commitment to the uses of IM and cost-effective IT
in running the business.
• .
• .
• .
• .
• .
• add more as necessary
Question 3
1. 3. What are the current weaknesses in the organization’s IM/IT investments?
• e.g. slowness of the platform moves across the firm towards a SAP
standard.
•
•
•
•
•
•
•
.
.
.
.
.
add more as necessary
Question 4
1. 4. What role does IM/IT enablement play in the following areas of KL Enterprise
corporate activities? By that I mean, how does IM/IT help KL carry out day-to-day
operations and transacting, how does it aid management processes, and does it enable
KL product and service innovation?
Operations
e.g. manufacturing and
distribution operations
enabled through SAP
add more as necessary
Control/Management
e.g. day-to-day and nearterm management of
manufacturing and
distribution enabled through
both the Oracle and
SAP/legacy system
platforms; integration of
data still a challenge
Innovation
e.g. product innovation
and design efforts poorly
integrated and poorly
informated from an
IRM/IT point of view
Question 5
1. 5. If you were a member of the KL Management Team, what would be your top five
IT investments? In preparing your response, recognize that time and resources are
limited and therefore that you need to choose those investments that will have the
greatest impact in the near term
• .
• .
• .
• .
• .
Case Study Questions
Question 1
1.
1. What are KL Enterprise’s core business processes and to what extent do KL’s
information management (IM) practices and information technology (IT)
platform investments align with and support these core business processes?
Core Business
Process:
e.g. product design
Enabling Information Resource Management
Practices/Platforms:
e-mails, Microsoft SharePoint; data extracted from
Oracle, SAP, and India and U.S. legacy systems.
add more as
necessary
Question 2
1. 2. What are the current strengths in the organization’s IM/IT investments?
• e.g. executive team commitment to the uses of IM and cost-effective IT
in running the business.
• .
• .
• .
• .
• .
• add more as necessary
Question 3
1. 3. What are the current weaknesses in the organization’s IM/IT investments?
• e.g. slowness of the platform moves across the firm towards a SAP
standard.
•
•
•
•
•
•
•
.
.
.
.
.
add more as necessary
Question 4
1. 4. What role does IM/IT enablement play in the following areas of KL Enterprise
corporate activities? By that I mean, how does IM/IT help KL carry out day-to-day
operations and transacting, how does it aid management processes, and does it enable
KL product and service innovation?
Operations
e.g. manufacturing and
distribution operations
enabled through SAP
add more as necessary
Control/Management
e.g. day-to-day and nearterm management of
manufacturing and
distribution enabled through
both the Oracle and
SAP/legacy system
platforms; integration of
data still a challenge
Innovation
e.g. product innovation
and design efforts poorly
integrated and poorly
informated from an
IRM/IT point of view
Question 5
1. 5. If you were a member of the KL Management Team, what would be your top five
IT investments? In preparing your response, recognize that time and resources are
limited and therefore that you need to choose those investments that will have the
greatest impact in the near term
• .
• .
• .
• .
• .
H
9B05E023
KL WORLDWIDE ENTERPRISES, INC.: PUTTING
INFORMATION TECHNOLOGY TO WORK
Professor Richard M. Kesner prepared this case solely to provide material for class discussion. The author does not intend to
illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other
identifying information to protect confidentiality.
Ivey Management Services is the exclusive representative of the copyright holder and prohibits any form of reproduction, storage or
transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services,
c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 6613208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca.
Copyright © 2005, Northeastern University, College of Business Administration
Version: (A) 2009-09-30
In 2005, the Boston-based sports apparel retailer KL Worldwide Enterprises, Inc. (KL) faced several new
threats to its business. Margins were tightening, as competitors with lower cost production capabilities in
China began posing a serious threat to the firm’s private-label business. And the Internet had become
cluttered with KL look-alike sites. Company Chief Executive Officer (CEO) Joseph Campbell and Jens
McCreary, chief operating officer (COO), were concerned. Noted McCreary:
We can’t let others steal KL’s thunder. We must reinvent our use of IT [information
technology] to both improve our production capabilities and capacity and facilitate the
rapid and economical integration of anticipated KL acquisitions. We need to be able to
turn on a dime and leverage our supply chain management expertise to outpace our
competitors in our markets. But to do that we need timely, accurate data that we can slice
and dice to forecast where we are headed and what to do next.
KL was also witnessing serious challenges in its key demographic markets — teenagers and young adults
— from Web-based enterprises with manufacturing largely sourced in mainland China. McCreary felt the
need to add “more sizzle” to the KL experience while keeping costs down.
It is a cliché that we need to do more with less. I would go beyond that, we need to find
creative ways to cut our operating costs so that we can invest more in product innovation
and quality and sales growth.
KL WORLDWIDE ENTERPRISES, INC.: A BUSINESS OVERVIEW AND HISTORY
KL Worldwide Enterprises, Inc., was established in 1983 through the merger of several small but highly
regarded sports equipment and clothing manufacturers, all of whom were located in the United States.
Incorporated in the state of Delaware but operating out of a headquarters facility in Boston, Massachusetts,
the founder of KL, Scott Porter (CEO and Founder of Skateworld USA and subsequently of KL
Page 2
9B05E023
Worldwide) envisioned a global company engaged in the production, marketing and distribution of
footwear, fitness and sports apparel, and equipment, favoring winter sports, such as skiing and ice hockey,
and rugged outdoor activities, including boating, camping, hiking, rock climbing and hunting. The initial
offering of KL stock took place in 1983 through the American Stock Exchange but as the firm grew into a
multi-national conglomerate, KL moved up to the New York Stock Exchange where it traded under the
letters KLWE.
As he put it to his board of directors at their first stockholders’ meeting, Porter’s vision was simple:
At KL Worldwide Enterprises we will expand rapidly and globally within our niche to
become the very best provider of high quality, yet eminently affordable sportswear and
equipment. We will become a household name among those devoted to outdoors activity
from professional athletes to the typical active family of sports enthusiasts. To that end,
we will acquire other quality providers of sporting goods — both at home and abroad,
teach them the “KL” ways of doing business, and integrate them into a thriving global
enterprise.
KL Worldwide Enterprise remained true to its founder’s strategy. When Porter stepped down as CEO and
president in 2003, KL stood at $720 million in gross sales and, as of the end of fiscal year 2005, eclipsed
the $1 billion mark. His successor, Joseph Campbell, continued KL’s winning ways by acquiring,
improving and growing a host of smaller sports product providers and merging them into KL. He has also
moved KL globally through the extension of KL’s manufacturing and distribution arms in India, Brazil and
Singapore.
KL had its headquarters in Boston, Massachusetts, and regional offices in all of the firm’s primary markets,
namely the United States, Canada and Europe. In addition, KL operated a highly successful eCommerce
arm through its Web site, KLBrand.com. In fiscal year 2005, the eCommerce branch of KL Enterprises
reached the same level of sales as KL’s own boutique sporting goods outlets. Campbell brought a focus on
business-driven information technology (IT) investment to KL. He explained,
If we are to remain competitive, KL must retain its brand recognition, maintain a
commitment to high quality and reasonable prices, and leverage its worldwide
manufacturing, design, and distribution capabilities. Effective and efficient use of IT is
essential here. This is why I have pushed for ever-improving eCommerce capabilities and
the very best, global supply-chain management that money can buy.
As always the challenges are around coordinating the various, and at times conflicting,
business priorities across the enterprise. We sure could use better IT tools for this as well
as ready access to timely performance data.
However, KL’s strategy was not built purely on its own store chain and eCommerce capabilities. Sales for
KL came primarily from neither of these areas, but from the distribution of KL products through
established retail chains in its three primary markets — the United States, Canada and Europe. Beyond
these well-established distribution channels, a growing segment of KL business came in the form of
“private brand” sales — particularly at the less expensive end of KL product lines — to third-party retailers
who preferred to sell sporting goods under their own in-house label. As noted by Evan McGinnis,
executive vice-president (VP) of Global Marketing and Sales:
Page 3
9B05E023
Like its competitors, KL must strike a balance in its approach to the marketplace. For
those who want the cache of the KL brand and our latest designs and product innovations,
and who are willing to pay a premium, we offer KL sports stores and KLBrand.com. For
those who don’t care to use the Web and don’t live in an urban center that offers access to
a KL boutique, consumers can get products from an array of middle-tier to up-scale sports
retailers. But in this highly competitive market and given our competitive edge in
manufacturing and logistics, we can also provide low-cost, customized goods for retailers
who promote their own branding.
In the end, it’s all about numbers (what is in the pipeline, where is it headed, who needs
what when) and KL’s ability to respond to changing patterns of sales and consumer
interests.
The company’s sales figures suggested that this approach had served KL Enterprises well (see Exhibits 1
and 2).
KL ENTERPRISE ORGANIZATION STRUCTURE
As of December 31, 2004, KL Enterprises had approximately 15,737 employees, including management.
In 2005, KL Enterprises employed a total of 16,680 employees stationed in operation facilities throughout
the world with 1,242 of these being management personnel (see Table 1). KL’s global management team
ran corporate operations out of its headquarters in Boston, Massachusetts.1 (See Appendix A for a detailed
discussion of KL’s corporate leadership). The overall growth in KL had many implications for its ability
to compete in global markets. According to Jackie Terrazas, the VP of Customer Service:
As KL has added more and more operations overseas, maintaining a common vision and a
common sense of the company’s value proposition has been a real challenge. It shows up
particularly in the issues around product design and quality where our salespeople have
difficulty in translating customer inputs into improved product offerings. Ultimately,
when customers are unhappy, it is my team that must address the missed handoffs between
sales, design and manufacturing. Given the seasonal nature of our business, the big chains
in particular get bent out of shape when our supply chain breaks down and we not deliver
their private label product or even our KL brands in line with their marketing and sales
plans.
The COO’s office oversaw all manufacturing, logistics, and distribution and warehousing services
worldwide, including extensive facilities in the United States, Brazil, India and Singapore. Each of these
centers focused on a subset of KL product line offerings, producing goods for KL Stores, retailers and
private-label customers.
1
The Boston headquarters included the offices of the CEO, COO, CFO, Corporate Counsel, Global Customer Service,
Global Marketing and Sales, Global KL Store Operations and Information Technology Services (ITS). The executive team
included the CFO, the General Counsel, the VP of Customer Services and the Chief Information Officer (CIO).
Page 4
9B05E023
Table 1 — KL Enterprises Employment Data, 2005
Location
Boston, MA, Headquarters
Waltham, MA, Data Center
KL Stores, U.S.
KL Stores, Canada
KL Stores, Europe
M&D, U.S.A.
M&D, Brazil
M&D, India
M&D, Singapore
Total KL Personnel
Management
83
13
150
29
75
242
187
293
170
1,242
Staff
485
82
1,523
475
796
2,437
2,828
4,745
3,309
16,680
KL Store Operations had its own management team led by an executive vice-president (EVP) reporting
directly to the CEO (see Exhibit 3). Global Marketing and Sales included eCommerce and Marketing, as
well as three sales teams for the United States, Canada and Europe respectively. These latter teams sold to
both traditional and the private-label retailers.
For its part, the ITS organization ran a global data center in Waltham, Massachusetts, and oversaw
operational centers within each of the four enterprise Manufacturing and Distribution (M&D) Groups (For
further details on ITS and the information technologies deployed at KL, see Appendix B. For more
information on members of the ITS global team, see Appendix C.).
PRODUCTS, MANUFACTURING AND DISTRIBUTION
KL originated in the United States and its core product line manufacturing capabilities for sports
equipment remained U.S.-based, supplemented by an expanding capability both in Brazil and Singapore.
However, over the past decade, KL migrated the majority of its clothing and sportswear manufacturing to
India and Singapore. KL employed its own and partner-provided facilities at home and abroad to enable a
highly flexible and responsive manufacturing platform for its products (The distribution of KL production
responsibilities is summarized in Table 2).
Table 2 — KL Production Responsibility by Region
Location
United States
Brazil
India
Singapore
Product Focus
sporting equipment, some designer sportswear, sports fashion
accessories, specialization in skiing and ice hockey equipment
leather and canvas products, including gloves, shoes, bags, etc.;
some sporting equipment lines
cloth for most product lines, low-end finished goods for clothing lines
most clothing lines, some sports accessories, low-end equipment
lines
With the exception of clothing lines that required tight coordination between KL M&D India facilities,
where cloth was produced and then sent on to Singapore, all of KL manufacturing was self-contained,
including the sourcing of raw materials through final assembly and distribution. After products were
manufactured, they were stored in distribution and warehousing centers located in Canton, Massachusetts;
Page 5
9B05E023
São Paolo, Brazil; Tanjong Pager, Singapore and Mumbai, India, until such a time as they were shipped to
regional KL distribution warehouses or directly to KL customers in the United States, Canada and Europe.
This massive operation posed a variety of logistical challenges for KL. From the perspective of those
involved, some things needed to change.
The U.S. operation is the oldest within KL and the most capital-intensive, yet we run on
the most outmoded SCM [supply-chain management] system. It is taking forever to
move us over to SAP. It is also nearly impossible to get information about the status of
work in our Brazil and Singapore facilities that will require additional finish work once
the product reaches the States.
— Jack Powell, Director of Manufacturing, U.S.A.
The operation in India is complicated by the number of outsourced services that we
employ to supplement and complement our in-house capabilities. The legacy systems we
use are also a barrier to managing our supply chain and logistics activities efficiently.
But the move to SAP is slowed by the product’s inability to address the unique
compliance requirements imposed by the Indian government as well as by the different
business and manufacture processes already in place here.
— Mukesh Vishal, Director of Manufacturing, India
Everything in Brazil takes a little longer to accomplish. We try to be responsive and our
new SAP system really makes a difference. However, we cannot get what we need from
corporate in terms of production line and delivery requirements. The designs emerging
from our colleagues in the U.S. do not work well with the factory configurations and
production capacity in KL’s Brazilian facilities.
— Pepe Simmon,
Director of Warehousing and Distribution, Brazil
Coordination between India and Singapore production facilities is a challenge. Our
systems are not compatible with one another and it is therefore difficult to get timely data
on where we stand with orders for raw materials and semi-finished goods.
Communication and collaboration tools are not in place that do us any good.
— Elizabeth Tan, Director of Manufacturing, Singapore
SALES AND MARKETING
KL Enterprises sold its products domestically and internationally through third-party retailers, as well as
directly through its eCommerce Web site and specialty stores. To manage the associated sales processes,
KL Enterprises employed three independent sales teams located in the United States, Canada and Europe,
all reporting to the same EVP for Global Marketing and Sales. Each sales office was responsible for
maintaining working relationships with customers, including private-label and third-party retailers. KL
eCommerce sales through KLBrand.com were managed by a separate marketing and sales team, and KL
Stores operated as a separate entity with its own direct relationship to KL operations, manufacturing and
distribution. Both the KL stores and eCommerce organizations utilized local KL distribution centers for
their inventory management and order fulfillment needs. These arrangements were not without their
issues, especially concerning inter-operating unit communications and coordination, as noted in the
following comments.
Page 6
9B05E023
Our Web site has been around for quite a while and is showing its age. We need to offer
the same sort of customer self-design of products that companies like Nike and Dell offer.
And we need a new look and feel.
— Ivan Henderson, VP of eCommerce
We need to offer a “boutique” experience and therefore the latest and greatest in design
but it takes too long to work our designs through the system to get new and improved
product out the other end.
— Alex Johnson, EVP for KL Store Operations
The designs we get from KLBrands.com and KL Stores look nice but at times require a …
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