Nordstrom Management - Case Study Example

? Management Case Study: Nordstrom Nordstrom Introduction Nordstrom is an apparel retailing company, and its revenue is mainly from the sale of clothing, cosmetics, shoes and other accessories. It was originally started in 2009 by John W. Nordstrom as a shoe store. It has grown over the years to become one of the highest top-quality stores in United States. Nordstrom emphasizes the importance of offering top-quality merchandise to a high level customer service. The stores expanded in apparel and fashion with time, and the prices for the products are realistic. This has enabled Nordstrom to be leading in delivery of standard customer loyalty and services, in United States. Despite of its profit being majorly from the retail stores, Nordstrom has extended its credit segment, the multiple boutiques, and the internet sector (Cakir & Canbolat, 2008, pp.1367-1378). Demand purchasing in minimizing leftover inventory Nordstrom uses the demand forecasting in minimizing the leftover inventory. The overall corporate leadership in Nordstrom is based on two goals. Nordstrom integrates purchasing with demand in order to keep the inventory lean. The items in Nordstrom are kept in stock for a remarkably short time to enhance easy purchase by the customers due to the limited time. Normally, Nordstrom keeps the items in inventory for a short time, usually 62 days. Apart from the daily sales, Nordstrom gives discounts on certain goods as well as planning for more productive and profitable sales prices. One of the greatest challenge facing retailers is customer retention. However, Nordstrom has succeeded in retaining its customers through piercing the insight into the minds of their customers. This has enhanced management and success of its inventory. The web-based system has enhanced monitoring of the demand. Customers check the items from the nearest local store, place an order and the items are delivered to them. The management and stock controllers are, therefore, able to access the movement of certain products to ovoid overstocking or under stocking (Cakir & Canbolat, 2008, pp.1367-1378). Benchmarks used to assess the success of web-based inventory integration The benchmarks used by Nordstrom in assessing the success of the web-based inventory system include monitoring other organizations and incorporate the ideas used by organizations in their normal operations. Nordstrom faces competition from companies like Nike and Macy’s. Taking certain qualities from their competitors and intertwining them in Nordstrom, a great success of the web-based inventory would be realized. Nordstrom uses the web-based inventory in informing the investors and the viewers of the financial statements. The website site, www.sec.com contains any additional information that they may need. Any concerns or questions raised from Nordstrom financials are discussed and addressed in the footnotes (Cakir & Canbolat, 2008, pp.1367-1378). The web-based inventory displays the items remaining in stock online; both from the warehouse and all the other stores. This helps in monitoring of the stock in all the stores from a central point. The web-based inventory enables the online transactions. The inventory to the website resulted in all the stores acting as online warehouses. The percentage of the customers purchasing good online can be used to gauge the success of the web-based system. High percentage of online customers is an indication that the web-based inventory integration was a success. Furthermore, the success of the system can be evaluated through the inventory turnover. Increased turn over indicates a positive response to the system (Spector & McCarthy, 2000, pp. 67-69). Application of participatory planning in product purchasing and groups involved Participatory planning encompasses people affected by the plans and those who are to implement them. Transparency and equitability will enhance increased customer trust in retailing. The interaction of employees with the managers determines the success of the process. Communication can increase mutual understanding of the objectives and the values among the customers. This will form the basis for good relations and promote future purchases. When the customers are comfortable with the purchasing in a certain company, they have a high likelihood of going back for more purchases. The group involved in purchases includes the employees due to their involvement with the company, and this means that they will be more comfortable in dealing with the company (Spurgeon, 2000, p. 1). Nordstrom should collaborate with other Accenture in enhancing a perpetual inventory. This is achieved through developing processes and tools at the unit level. The tool and processes ensure that the merchants and stores are provided with information to enhance decision making. Accenture will also facilitate the assortment of the management initiative like planning and pricing. These will also help design and implement the necessary infrastructure. The tools and the process will fact-based and better inventory management decisions. Also, the sale associates should be willing to call other stores and locate an item using the new web-based system. This benefits the customers since the merchandise is more precisely available. This promotes satisfaction for both employees and customers and contributes to the increased profitability (Spurgeon, 2000, p. 1). Conclusion The inventory system enhances operations in Nordstrom Company, which is involved with the sale of apparels, shoes and cosmetic among other items. The inventory system facilitates should provide a long term solution to the inventory management (Spurgeon, 2000, p. 1). Things that should be changed, revised or updated include checking process that desired, and new items can be added in the checkout cart. An item can be checked using the view order page, and there should be provisions for different search methods like item ID or the name of the item. All the details of the item should be included: quantity, brand, and manufactures, amount in and price. The inventory system should allow for the addition, deleting and editing of the items. This will help correct any mistake for the items in the inventory. There should be a ‘Manage User’ page to enhance monitoring of the users. This allows assignment of customer classes. The company can use this data to subsidize prices for the regular customers and customers with bulb orders. The website should be able to generate reports on hourly, daily, weekly, or in any basis as may be required. This will enable monitoring the effectiveness of the inventory system. The project deliverables should be checked as well as updated regularly. The directory structure containing the files and graphics for the products should be under constant monitoring by the management personnel. Any change in brand appearance of brand specification should be modified as soon as they occur to avoid inconveniencing the customers. Some stretch goals for enhancing better inventory include the increase accuracy of the inventory system, incorporation any changes in the system, to enhance the effectiveness of the online transactions and to attract customers. References Cakir, O., & Canbolat, M. S. (2008). A web-based decision support system for multi-criteria inventory classification using fuzzy AHP methodology. Expert Systems with Applications, 35(3), 1367-1378. Spector, R., & McCarthy, P. (2000). The Nordstrom Way: The Inside Story of America's Customer Service Company . New York, NY: John Wiley & Sons, Inc. Spurgeon, D. (2000). In Return to Power, the Nordstrom Family Finds a Pile of Problems. Wall Street Journal, B1. Read More