SmartKey is facing a decision about whether to consolidate its supplier network or continue with existing suppliers. Consolidating suppliers could help retain its largest client, GoodHealth2U, but that client may find other cheaper providers. Continuing existing suppliers could boost volumes from other clients, but technology improvements may reduce volumes from GoodHealth2U. To manage the conflict, SmartKey should focus on increasing volumes from other clients rather than relying on GoodHealth2U, acquire new clients, reduce dependency on individual suppliers, and consider GoodHealth2U's future business prospects before consolidating suppliers.
Original Description:
CRD Diagram for Service operations management case on SmartKey.
SmartKey is facing a decision about whether to consolidate its supplier network or continue with existing suppliers. Consolidating suppliers could help retain its largest client, GoodHealth2U, but that client may find other cheaper providers. Continuing existing suppliers could boost volumes from other clients, but technology improvements may reduce volumes from GoodHealth2U. To manage the conflict, SmartKey should focus on increasing volumes from other clients rather than relying on GoodHealth2U, acquire new clients, reduce dependency on individual suppliers, and consider GoodHealth2U's future business prospects before consolidating suppliers.
SmartKey is facing a decision about whether to consolidate its supplier network or continue with existing suppliers. Consolidating suppliers could help retain its largest client, GoodHealth2U, but that client may find other cheaper providers. Continuing existing suppliers could boost volumes from other clients, but technology improvements may reduce volumes from GoodHealth2U. To manage the conflict, SmartKey should focus on increasing volumes from other clients rather than relying on GoodHealth2U, acquire new clients, reduce dependency on individual suppliers, and consider GoodHealth2U's future business prospects before consolidating suppliers.
Prof. Shreekant Vijaykar Samarth Jain 16PGDM109 SMARTKEY WORKING
Entities and their assumptions for Content Resolution Diagram(CRD)
B: Consolidation of suppliers will
help SmartKey to retain the D: Consolidation of the business from GoodHealth2U i.e. existing supplier network which is the largest client in its portfolio
A: The goal is to make
business to be profitable
C: Concentrate on the other clients
D: Continue with the and get larger volumes of business existing network of by adding more clients to the suppliers portfolio of businesses
Possible assumptions for causal relations:
D-D: SmartKey cannot do both at the same time, i.e. consolidating suppliers and continuing with the existing supplier network at the same time B-D: Consolidation of suppliers will help SmartKey to retain the business from GoodHealth2U i.e. retain the largest client in its portfolio of businesses C-D: Continuing with the existing network of suppliers will help SmartKey to cater to large volumes of business from other clients A-B: Retaining GoodHealth2U as a client promises large volume of business even in future so as to be profitable i.e. it will generate more business from GoodHealth2U A-C: Focussing on other clients (existing clients, adding new clients) will ensure high volume of business so as to be profitable
Injections which make some of the assumptions void:
For assumption B-D: Consolidation of suppliers ensures that SmartKey will retain business from GoodHealth2U, but the client has already found service providers who can do the same data-entry job at lower costs without further outsourcing (unlike SmartKey). So, there is a possibility that they can shift to those service providers. This makes this assumption obsolete. For assumption A-B: Retaining GoodHealth2U as a client will generate more business in future, but with improvements in the OCR technology, the volumes for manual data-entry have come down, so further improvements in technology can further reduce the volumes to such an extent that GoodHelath2U doesnt have enough volume to outsource. They may be better-off doing it in-house. So, there is no guarantee that SmartKey will continue to get the same amount of business from GoodHealth2U
To manage the current conflict situation, SmartKey can adopt the
following measures: Continue with the existing network of suppliers to focus on higher volumes from other clients rather than sticking with GoodHealth2U Acquire new clients and keep increasing volumes from existing clients at home Reduce dependency on individual suppliers to avoid strikes or disruptions to their business Consider the future prospects of business from GoodHealth2U and consolidate its suppliers if GoodHealth2U promises consistent business in future