Creating Competitive Advantage Using Model-Driven Support Systems

Tom Cook
Senior Counselor
McKinsey & Company, Inc.

- Bob Crandall Story -
If you were the CEO of Ford Motor Company and somebody told you that gm just implemented a new payroll system or had just implemented sap for its financial or HR systems, would you say thatıs it I give up. We canıt compete? Would you even care? Of course not! If, however, GM had just implemented an effective JIT system for all their assembly plants worldwide that cut their work in process inventory by 25%, and their purchasing cost by 10%, you might start to get a little worried. If you further learned they had devised a market research-based customer information system that gave gm real insight into customer automobile buying behavior that could help their products capture a greater market share, you might start having some real concern. Bringing it a little closer to home - - if you were Bob Crandall, former CEO of American Airlines, and you believed you could improve your bottom line by 5 ­ 7 margin points on revenues of $16 billion by implementing an effective revenue management system that optimizes overbooking decisions and how you allocate your seat inventory amongst the various discount fare classes, you would be eager to make the necessary investment.