Q1: What alternative designs for distilled liquor distribution in Michigan might be considered?
Re-designing the liquor distribution system in Michigan would be a complex business. There are two distinct aspects to this: (1) Dealing with the compliance issues that a regulatory agency, such as the liquor board, enforces with the states liquor laws (2) The liquor store acts as a wholesaler for the sale of spirits in the state. In addition any re-design of the distribution network would need to consider a number of important parameters i.e. (1) Increasing the states return by reducing distribution costs and inefficiencies (2) Placing Information Technology (Management Information Systems) to bring about improved inventory management and increasing overall levels of performance (3) To deal with four additional specific objectives, these being identified as follows:-
- Maintaining current service levels;
- Increasing inventory turnaround;
- Reducing administration costs;
- Gaining control over a complex socioeconomic policy area.
Further changes made would need to reflect important key operational issues that include such items as: pricing, service levels, projected retail sales taxation, supply chain and a number of economic and political considerations. Previous attempts at redesign of the system had not been successful because of failure to embrace all of the required considerations. The important elements in the redesign of a new system would need to address:
- Improved streamlining of business process and reduction of costs
- Inventory Control including supply chain management
- Improved Financial Controls within an integrated system concept
Q2 : Discuss the benefits and risks of alternative designs for distilled liquor distribution.
| Benefits – The benefits of system redesign may be considerable if this is approached in the right way. The revised system must be an integrated system that is fully inclusive of a wide range of considerations. The incorporation of integrated management information systems may speed up processing, reduce administrative costs, eliminate wastage and duplication of effort and improve both supply chain and inventory control. The combined benefits should adequately repay the cost of investment in setting this up. As these are relatively standard procedures there is a large amount of custom off the shelf software applications that may be adapted to meet this need. Integration can be accomplished by the introduction of Relational Database (RDBMS) to that of sophisticated inventory control and tracking systems. (Michigan Government, 2004)
| Risks – Risks are associated with the complexity of the business and the transition of change from the old to the new system. This may because cost over-runs if the system is not specified correctly or is poorly designed. The liquor board may need to introduce new resources with different skill sets and introduce training programs for other staff, all adding to the initial set-up costs. The system has to address a wide range of internal and external stakeholder requirements and this suggests a very good logical design of the system that encapsulates a wide range of mandatory and other requirements. The danger of using antiquated systems is that they are costly to operate and reduce employee motivation. Hence poor job performance overall hinders productivity and efficiency. Equally, the public sector does not have the funding capacity or capability as the private sector and investment in new technology is not often a priority item.
Q3. Are the historical conditions which the current liquor distribution system is based upon still important today ? what, if any other factors exist that require consideration?
Yes historical considerations are still important, consider : (1) Dealing with the compliance issues that a regulatory agency, such as the liquor board, enforces with the states liquor laws (2) The liquor store acts as a wholesaler for the sale of spirits in the state. Legal compliance issues have to be addressed and often these tend to get more complex over time. Wholesaling stresses the importance of inventory control and supply chain management. In order to change the system it will require a great deal of consultation with internal and external stakeholders. For example: (1) Increasing the states return by reducing distribution costs and inefficiencies (2) Placing Information Technology (Management Information Systems) to bring about improved inventory management and increasing overall levels of performance (3) To deal with additional specific objectives etc.
Q4: Does an inherent social conflict exist when state governments rely upon tax contributions from liquor sales to fund educational programs?
An inherent social conflict may well exist. Schools may be involved in campaigns to dissuade students from items like smoking, drinking (liquor) and drugs in order to safeguard younger people’s health interests; being more vulnerable to social pressures at this age. If state governments were reliant upon tax contributions from the liquor stores to fund educational programs this might seem both politically incorrect and being hypocritical by nature.
A counter argument might state that the two are not linked and that the government has to raise taxes from different sources, including that of liquor boards. If such taxes are then channelled into education this may be seen as a positive attribute coming from the consumption of liquor. The key word here is the government `relying` upon a single source of revenue for education, the source of the revenue does not make it morally correct. (EUP News, 2012)
Q5 : How would you organise the final report on distilled liquor distribution in Michigan if you were Joseph Duncan
One approach that Joseph might adopt in the presentation of his report is to utilise a PEST analysis report ( Fig 1 refers). This approach would divide the report up into four main sections that discuss different aspects of the systems redesign proposal. For example: (Quick MBA, 2012)
- Political – The opportunity to illustrate how changes of government and public attitudes influence the proposed direction of change. Will include such items as legal concerns, socio-economic concerns, regulations and mandatory items imposed on the business.
- Economic – Examines the economic and financial implications of proposed change in the system redesign and how any variables might impact future development.
- Social – This will look at the social demographics of what is being proposed. It will focus upon the stakeholder analysis and those factors that are important for successful business systems delivery i.e. the critical success factors.
- Technological – Embraces the technology changes that may be required in order to improve the overall system performance. This may include such items as improved communications, new hardware and software costs, education and training, alignment to strategic goals and objectives of the business.
This representation often includes a similar profile called a SWOT Analysis that illustrates the Strengths, Weaknesses, Opportunities and Threats to the business. Given the large amount of supporting data this report should be produced as an Executive Summary ( brief, concise and to the point in no more than 4 pages) relegating subordinate data to working papers.
EUP News. (2012, 1 12). MLCC Warns Parents of Underage Drinking Dangers. Retrieved from EUP News: http://eupnews.com/tag/michigan-liquor-control-commission/
Michigan Government. (2004). A Guide to the Rights and Responsibilities of Local Governments under the Liquor Control Code. Lansing MI: Michigan Government.
Quick MBA. (2012, 1 12). Pest Analysis. Retrieved from Quick MBA: http://www.quickmba.com/strategy/pest/