Lectures and handouts

Unternehmensübergreifendes Revenuemanagement als Möglichkeit der Optimierung von Supply Chains in der Luftfrachtbranche (Comprehensive revenue management – An approach to optimize supply chains in Air Cargo industry)

(Lecture at the University of Applied Sciences in Frankfurt am Main, November 13, 2012 in Frankfurt)

  1. Characteristics of air cargo industry are: offering perishable goods, spoilage costs, limited flexibility, predominant fixed costs, and heterogeneous demand. Customers appreciate the benefits of air freight with regard to speed, reliability, and frequency. 
  2. Optimizing capacity utilization is one major lever for succeeding in air cargo business. Revenue management provides suitable operational methodologies for improving capacity utilization, and hence is one of the most famous management approaches in air cargo business.
  3. Substantially, cooperation between logistic service providers contributes to higher efficiency in air freight supply chain. We have differentiated two types of cooperation: horizontal integration and vertical integration.
  4. Prerequisite for a successful cooperation is a win-win situation, independent on the type of cooperation and the planning model used. The companies have to agree on a contract, how to share the generated additional revenues.
  5. Using mixed integer linear programming models, we defined a core model with the following elements: a goal function maximizing revenue, and two restriction types. The shipped quantity of parts is limited, because of intra-corporate freight capacity and market demand. The assigned quantity of products must meet these capacity restrictions.
  6. Due to more overall flexibility, on each route and on each leg, our horizontal integrated planning model between air cargo companies contributes to the optimal coordination of capacity utilization and generates increasing total revenue. The market demand on air cargo will be distributed to the different air cargo capacities to optimize overall revenue.
  7. Due to better coordination between feeder and air cargo company, our vertical integrated planning model generates better capacity utilization. Crucial elements considered in the planning model are time management, managing the relations between predecessor and successor flights, and buffer.

Wirtschaftlich effizient im Bereich der Product Compliance agieren (Operating Efficiently in the Area of Product Compliance)

(3rd Global Standards Conference "Product Compliance" June 21 – 22, 2012 in Berlin)

The actual potential of product compliance management is only really utilized by companies when product compliance management is treated as a cost factor and a strategic success factor.
Prerequisites for the utilization of product compliance management systems as a strategic success factor are:

  1. Product compliance management systems must have a balanced approach in order to be successful. For this reason, they must contain elements from the areas of culture, organization, processes, and management which are coordinated appropriately. What is the point of processes for the implementation of product specifications if the associated values and targets are unclear? What is the point of a compliance representative if his/her role and responsibility do not correspond to his/her involvement and integration in the actual process? What is the value of a propagated compliance culture if the strategies for capturing new markets are developed without the necessary product compliance information?
  2. Successful integration of product compliance management also always demands dialog between designated responsible persons at all levels and in all areas of the company. Our exemplary continuum of the integration of product compliance management asks whether the dialog between designated responsible persons is determined by the wish for coexistence or the wish for integration. The most suitable product compliance management system must then be developed accordingly.
  3. A decisive factor for the accurate development of the product compliance management system is the relation between “non compliance risks” and “compliance costs”. This relationship is determined to a significant extent by the employees’ sensibility, attitude, and tolerance to risks.

ISO 31000 and ISO/IEC 31010 – risk management and risk assessment

(2nd Global Standards Conference ‘Product Compliance’, November 8 – 9, 2010 in Berlin)

Risks are an intrinsic part of life – and of all types of business activity. It is therefore not a question of whether a risk management system exists in the company, but of how efficiently the risk management system can deal with risks. The two standards – ISO 31000 and ISO/IEC 31010 – contain important information on creating a risk management system, in particular on the risk assessment process and the relevant supportive methods. The self-assessment concept with the web-based tool “SAMS interactive” illustrates which phases a company must complete in order to establish minimum risk management standards in the company successfully and sustainably.

Product Compliance – Überlegungen zur strategischen Bedeutung in Unternehmen (Product Compliance – Thoughts on the Strategic Meaning in Companies)

(Documents for the User Workshop ‘Market Access – Regulatory Affairs’ on April 14, 2010 in Esslingen)

The number and diversity of product specifications have grown to such a degree that it is difficult for large companies to maintain an overview of the current valid and relevant product specifications and to actually always satisfy these requirements when implementing them in their products. Besides globalization and market changes, technical progress and, thus, the companies themselves have contributed to this development (keyword: technology convergence).
We assume the following:

  1. Basically, all public information on product specifications is available to every market participant.
  2. All market participants are interested in the most efficient information processes for acquiring, providing, preparing, and transferring information.
  3. If the information processes do not provide strategic advantages over other market participants, the entrepreneurial benefits are obviously in the efficient development of these information processes.

Following this reasoning, it becomes apparent that the information on product specifications is not necessarily strategic relevant information. If you only consider the economic factors, the cost drivers when dealing with information can be split into two categories, which must be taken into account when planning the development of an efficient information process. The first category incorporates the course of action for reducing costs during the development of the costs phase, such as experience curve effects, specialization, fixed cost degression, and resource costs. The second category refers to the course of action in the area of cost distribution, e.g. the distribution of costs to several companies or the utilization of facilities which can provide such information free of charge.

System Compliance Management

(Global Standards Conference "Regulatory Product Compliance", June 9, 2009 in Berlin)

Just like any other system in companies, a compliance management system must be economically efficient so as not to waste resources. When developing a compliance management system, the first step is to determine the compliance level to be achieved. Targets, processes, methods, and controlling are essential elements of the compliance management system which must be developed in line with the defined compliance level. If the system is to be introduced successfully, the following expectations must be fulfilled: perception of responsibility, adherence to processes, integration in processes. The efficiency of the system can be increased by externalizing internal costs, engaging in cooperation, utilizing qualified resources, and optimizing processes at interfaces.

Industrieversicherer – Retter in der Not

(Industrial insurers – Helpers in the Hour of Need)
(CE Practice Days, July 8, 2008 in Pforzheim)

Companies take out industrial insurance to ensure effective and efficient protection of their assets and earning power against loss risks. But how much protection can the industrial insurer really provide? And how deceptive is this protection if the company fails to recognize and assume its responsibility in insurance management as an elementary part of its risk management system? The key features of an insurance management system as an integral part of an in-house risk management system can be summarized as follows:

  1. Even the best industrial insurance cannot replace an in-house risk management system!
  2. Risk prevention must take precedence over loss minimization! This requires an integrative overall concept which actively incorporates insurance management in the other company processes.
  3. A high level of awareness amongst employees of potential losses is essential for insurance management!
  4. Knowledge of loss assessment and claims settlement processes is important for efficient insurance management!
  5. If this knowledge is not directly available, you should at least know who to contact for expert advice!
Copyright © 2011 Unternehmensberatung Prof. Dr. Matthias Vieth – All rights reserved.
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