Aalsmeer Flower Auction - Essay Example

?Case Study Aalsmeer Flower Auction I. Aalsmeer Flower Auction Around 1911, Flower Auctions were only held in cafes around Aalsmeer when growers fromall over Holland and nearby communities meet to trade their flowers with retailers from other areas. By March 6, 1968, the Aalsmeer Flower Auction was organized from several auction houses to respond to the growth of the industry. In 2006, the Aalsmeer Flower Auction has started taking in international members outside the EU. In 2007, FloraHolland and Aalsmeer Flower Auction merged to become the biggest Flower Auction house in the world to respond to the challenges and growing sophistication of the flower industry. (Aalsmeer Flower Auction 2006) FloraHolland flower auction plays a key role in the Netherlands, land of Floriculture where its position as marketplace fulfils the role of matchmaker, intermediary and knowledge center. FloraHolland itself operate a nationally operating intermediary organization and import department (FLora Holland 2011). a. Business Objectives In a market that is characterized by up scaling and internationalization, FloraHolland wants to maintain and increase its strong market position. By offering the best and broadest assortment, FloraHolland wishes to tie (international) commerce flows to the marketplaces. FloraHolland offers its members the best sales opportunities at the lowest possible costs. FloraHolland is a service providing company that is not focused on generating profit – Mission Vision (FLora Holland 2011). b. Competitive Objectives FloraHolland or Aalsmeer Flower Auction need to refocus its resources to continue to be relevant in this day and age with the emergence of alternative, electronically driven flower markets. To widen its market base and influence Aalsmeer Flower action should meet the needs of retailers. Retailers are also dependent on its consumers that demand for fresh products, more varieties, smaller quantities and multiple deliveries each week. Rightly or wrongly, the retailers felt that they should have more influence on supply. c. Identify and Analyse Business Requirements Aalsmeer Flower Auction needs to meet the requirement of its retailers among other things with the use of information technology using the correct strategy. The information technology strategy should be able to enable the delivery of Fresh products to the retailers at the shortest possible time and with minimum expense. Generalized model of exchange processes – Kambil and Van Heck 1996 (Van Heck and Ribbers 1997) d. Identify and Analyse Information Requirements The Grower should make the following information available: Grower ID: Batch number; Batch Type; Batch Availability Schedule; Batch Volume; Initial Price; Last Price The Auction transaction file should have the following information: Order reference number; Batch number; Batch Type; Batch Availability Schedule; Volume purchased; Price; Auction reference number; Transport code Logistic Providers should make the following available for the retailers. Logistic Provider ID; Transport Schedule (Departure Time and place – Arrival Time and Place); Transport Type; Maximum Volume The Logistic transaction file should have the following information: Logistic Provider ID; Transport Schedule; Order reference number; The above data profile assumes that the retailer, grower and logistic-provider identification database are normalized. The process flow is described as follows: When a grower put a batch of his harvest to the auction, all details shall be flashed on the board. For each transaction using the auction clock where a retailer purchase a portion of the batch, the board display will display the new volume up for auction. When a retailer completes his transaction, he will then pick the logistical support provider and purchase a room for his newly purchased flowers. The Logistic provider shall make his availability or the available room he can still accommodate to the message board. Using only Transaction ID and the normalized information details about the grower, retailer and logistic-provider the actual item can then be transported automatically. e. Recommended Information Strategy: The following are some of the solutions that can be chosen from to respond to the business need of Aalsmeer Flower Auction. i. Supply Chain Management Blanchard quoted the Council of Supply Chain Management Professionals (CSCMP), definition of “Supply Chain Management as encompassing the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.” That includes coordinating and collaborating with channel partners, including suppliers, intermediaries, third parties, and customers. In short: “Supply chain management integrates supply and demand within and across companies.” (Blanchard 2007) “Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory – and the related information flows – through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost effective fullfilment of orders. “ (Christopher 2005) The above definitions of Supply Chain Management Systems as posited by both authors clearly resolve the business requirement of Aalsmeer Flower Auction. The movement of flowers from Growers to Aalsmeer Flower Auction to Retailers clearly resembles the business model that is solved by a Supply Chain Management System. The efficient management of the Supply Chain would not only create value to Aalsmeer Flower Auction’s services the system will also benefit the retailers through the quality of the flowers sold by them to their customers. ii. Customer Relationship Management At face value, a question could be asked why is a Customer Relationship Management system could be relevant to the overall strategy of Aalsmeer Flower Auction. However, a detailed analysis of their operation particularly how the auction is conducted a Customer Relationship Management System may enhanced Retailer, Grower, and Logistic Provider relationships. The speed in which the auction and the transactions are initiated and completed in the Aalsmeer Flower Auction business model has the potential to create a lot of tension and friction amongst the players. A Customer Relationship Management System would ensure that concerns are resolved and closed. Each concern shall be a learning experience for the organization and ensure that loopholes are plug permanently. The following authors have succinctly posited how Customer Relationship Management Systems are defined and how it can help an organization. Customer Relationship Management is a process that addresses all aspects of identifying customers, creating customers knowledge, building customer relationships and shaping their perception of the organization and its products (Peelen 2003). It is clear that the Customer Relationship Management system can create value for the Aalsmeer Flower Auction. In the area of customer relationship, facilitation and resolution of concerns Customer Relationship Management System will be a strategic business move. Strategic CRM is focused upon the development of a customer centric business culture. This culture is dedicated to winning and keeping customers by creating and delivering value better than competitors (Buttle 2009). In ensuring that the Growers, Retailers and all the logistic service providers are kept in line by an organization within Aalsmeer Flower Auction dedicated to Customer Relationship Management. Aalsmeer Flower Auction is assured that all its infrastructures are geared towards focusing on the customer’s need. iii. Knowledge Management Systems With the number of transactions, being culled in the Aalsmeer Flower Auction and each transaction considered a learning experience the wealth of knowledge that can be organized to resolve issues in the future can be considered a treasure. Knowledge Management as will be defined later by erudite authors knowledgeable in the field is a collection of data or information that can be used to benefit an organization. Knowledge management consists of Discovering Knowledge, Generating Knowledge, Evaluating Knowledge, Sharing Knowledge, Leveraging Knowledge (Jashapara 2004). Discovering of course is the collection of knowledge in the form of data, information and their relationship with each other. Generating knowledge is the continuous addition of knowledge to transform the current knowledge or affirm it. Evaluating knowledge is the process in which data or information are analyzed to affirm or transform the current collection of knowledge and their meaning. Knoweldge when not in used is just a collection of information, it is useless, the correct application or use of information is to share it. Through sharing a compedium of new knowledge is created that will add value to the information transforming it into knowledge. To leverage the knowledge that have been acquired is the ultimate use value of knowledge. Leveraging knowledge multiplies it value exponentially since it will create more knowledge. The contemporary importance of knowledge and knowledge management (Hislop 2009). Knoweldge as posited earlier is just a collection of information if not used as leverage or to advance further understanding. To illustrate: the importance of knowledge in Aalsmeer Flower Auction. The data collected from 1911 when flower auction started in Aalsmeer up to now should have provided auctioneer the cycle in which each grower can produce quality flowers due to their farms location. These knowledge assist retailers or participants in the auction to valuate the flower accordingly. Verily, other knowledge could reveal cyclical paterns in the way the different variet y of flowers are produced or grown that will assist in the determination of its value at the auction. II. Recommended Solution a. Methodology that will develop an information system There are different kinds of methodologies that can be used in developing the appropriate information system for Aalsmeer Flower Auction. There are also a number of ways the developed system can be deployed to have the least amount of resistance from the organizations. The systems development life cycle is the most traditional means of developing an application. To illustrate, the system development life cycle enable the Information Technology group to study in detail the business processes involved in an organization before actual coding. Determining the business process involved will enable the Information Technology group to create the minimum requirement that will address the automation concern of the business processes. Determining the business process will ensure that a detailed specification is developed first that will be the basis for coding of the application. Systems Development Life Cycle will enable the organization to compare the benefits of a packaged off the shelf application against in-house developed applications since each task is the escalation of the former task. Information systems need to be planned including information systems strategy.(Avison and Shah 1997). III. Change Management The rate of change and discovered outpaces our individual ability to keep up with it. Leaders of change need to balance their effort across all three deimensions of organizatinal change (Cameron and Green 2004). Thus, it is very important to manage change as change descends unto the organization. With the recommended solutions or success of the project Aalsmeer Flower Auction should be able to guide the the organization toward the path of total assimilation to the project. a. Impact of the new system to the organisation, management and employees The new system at the onset can never be perfected, however the dedication for it to work will come from the top management of Aalsmeer Flower Auction. Its impact as revealed by the System Development Life Cycle should be able to satisfy the requirement of the business. b. Effectiveness of the new system to the organisation, management and employees Any software assisted management application has one common theme. The use and dependency of its success depends on the wide implementation or use of the system by the users. A small error can reverberate to the other systems that could lead to chaos. IV. Conclusion Aalsmeer Flower Auction boasts itself of 100,000 transactions a day over several auction sites needs to update itself to respond to the increasing sophistication of the flower market. The business objective of the Aalsmeer Flower Auction is to respond to the needs of the auction participants most specially the retailers. The internationalization of the auctions provided the impetus for Aalsmeer Flower Auction to modernize its facilities including its information system. By employing a Supply Chain Management System the transactions flow from the Growers to the Retailers will provide a seamless transfer from one task to another. A Customer Relationship Management System in turn will ensure that any exception to the processes requiring further guidance and assistance will ensure that relationship between all the parties concerned are frictionless. While the wealth of knowledge that can, assist future participants and current participants in auctions can be managed through a Knowledge Management System. By employing the Systems Development Life Cycle methodology, the details and specifications of the business requirements can be determined. A full dimensioning of the Business Model of Aalsmeer Flower Auction can determine all the processes that can be included in the deployment of the Knowledge Management Systems, Supply Chain Management Systems, Customer Relationship Management Systems through the Systems Development Life Cycle methods. Aalsmeer Flower Auction’s management is recommended to ensure that the Change Management processes it will adopt should respond to the different concerns of its customers and the process owners within the Aalsmeer Flower Auction’s organization. It should be considered that the interest groups in the Aalsmeer Flower Auction are the Growers, the Retailers, and the logistic support organizations. These independent organization’s systems should also be taken into consideration to ensure that the provisioning of services will be seamless. V. Bibliography Aalsmeer Flower Auction. The history of the Flower Auction . March 27, 2006. http://web.archive.org/web/20070429145524/http://www.aalsmeer.com/Over%20ons/Historie.aspx (accessed January 29, 2011). Avison, David, and Hanifa Shah. The information Systems Development Life Cycle: A First Course in Information Systems. Berkshire: Mc Graw-Hill Book Company Europe, 1997. Blanchard, David. Supply Chain Management Best Practices. Hoboken, New Jersey: John Wiley & Sons, 2007. Buttle, Francis. Customer Relationship Management Concepts and Tehcnologies. Boston: Elsevier, 2009. Cameron, Esther, and Mike Green. Change Series: Making Sense of Change Management: A complete guide to the Models, Tools and Techniques of Organizational Change. London: Kogan, 2004. Christopher, Martin. Logistics and Supply Chain Management: Creating Value Adding Networks. London: Pearson Education Liomited, 2005. FLora Holland. About Flora Holland. 2011. http://www.floraholland.com/en/AboutFloraHolland/Pages/default.aspx (accessed January 29, 2011). Hislop, Donald. Knowledge Management in Organization. New York: Oxford, 2009. Jashapara, Ashok. Knowledge Management: An Integrated Approach. Edinburg Gate: Pearson Education, 2004. Peelen, Ed. Customer Relationship Management. Edinburg Gate Harlow: Pearson Education Limited, 2003. Van Heck, Eric, and Pieter Ribbers. "Experiences with Electronic Auctions in the Dutch Flower Industry." Electronic Market, 1997: 29-34. Read More