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Intangibles LEAD 6100 Measurement Concepts & Analysis January 24th, 2016

The first intangible I have chosen is determining the impact of using co-branded graphics, printing of the Toyota and Lexus logos on all service part packaging. How does it impact our customers? Are the customers aware that Lexus is the luxury division of Toyota? Do the co-branded graphics hinder or prevent grey/black market part sales? As for the method I suggest using random sampling from Toyota dealerships throughout the network for determining customer awareness of Lexus affiliation with Toyota. In regards to the grey/black market parts sales I am thinking of tracking the number of incidents since the implementation of the graphics to see if there is any fluctuation. Based on data from our legal department has there been any increases or decreases in identifying grey/black market sales since the packaging change was implemented. If so, were any of the new packaging specs involved? The second intangible that I selected is determining the value of a packaging spec paten. How does an organization like Toyota determine the value of a patented packaging spec? The patented packaging design has been proven to be successful with protecting the part(s) thus reducing damage claims. So in theory the dollar amount of damage claims prior to implementing the packaging spec could be used as a baseline. For example if damage dollars were equivalent to $100,000 and after the packaging spec was implemented the damage dollars declined to $10,000 I could estimate the value of the patent to be $90,000. Another way to measure the value of a patent would be to assess the market value. Is there another company that is interested in purchasing a license to use the patented packaging spec? Another intangible that I consider to be difficult to measure is daily functions performed with processing irregularities or what is referred as Drop Zone activity. Parts received with problems or issues that prevents processing them logically for payment to the supplier are staged in the drop zone area where team members investigate and correct. This task is considered to be an indirect hourly function, thus it is not considered when calculating the areas productivity however the headcount is included. The real problem or decision is to identify tasks within the drop zone that can be categorized as direct functions so they can be tracked and reported. Thus increasing the areas overall direct utilization. Observations can be completed along with analyzing data from the team member’s daily logs. In addition specific fast paths that team members use throughout the day can be grouped into categories, direct or indirect. Once the tasks have been grouped then processing times can be stratifies using time stamps from the queries. Identifying direct function tasks in the drop zone and establishing a measure will positively impact the overall direct utilization of the department. The last intangible that I decided upon is determining the value of a packaging spec database. When the operation group identifies an irregularity such as a part with two different types or sizes of packaging the Packaging Engineers spend a great deal of time confirming the correct size box, material spec etc.etc. Currently the organization has packaging specs in an Excel spreadsheet for approximately 80% of the part population. So when irregularities arise we have to sort through hundreds of files to locate the part number in question. Although there are KPIs established with processing these irregularities the time spent locating the supporting documents and physically inspecting the packaging materials are not included. The real problem is with time management with processing irregularities. In regards to the method of measurement I would suggest having each of the Packaging Engineers track the amount to time spent investigating the packaging irregularities before contacting the supplier(s). Time searching for the Excel files which document the specific details on material specs and how the part is to be packaged. Afterwards the Packaging Engineer visits the warehouse to determine when each of the boxes were received based on date codes on the materials. Once the data has been gathered and combined then we can take an average to use as a baseline. This baseline can used for comparison with the trial packaging database we are considering to purchase. Using the ridiculously simple decision model we can determine whether or not it’s a good decision to move forward with the purchase. There has to also be a review completed which assesses the risk involved with having a third party manage this database which require a legal input.

References Hubbard, D. W. (2014). Hot to Measure Anything Finding the Value of Intangibles in Business (Third ed.). Hoboken, New Jersey: Wiley.

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