Technical Solutions to Track and Record Movement of Goods - Book Report/Review Example

Technical Solutions to Track and Record Movement of Goods It is very important that movement of goods should be tracked and recorded properly in order to provide the service in a best manner. Tracking and recording of goods is prerequisite in order to have better knowledge regarding the goods and also about their availability. This will always helps one to know about the demand of the goods if one has tracked the movement of goods properly. Besides this, this will help one to know whether the product is out of stock or not. That is “availability of product is the new battleground in the fast moving consumer goods (FMCG) industry.” (Improve out-of-stock methods at the shelf: Improving supply chain efficiency reduces lost sales, 2006). In UK from past itself these are considered as very serious issue. Once in past this has been considered as a serious issue in UK and it has been biggest consideration for British consumers. Root causes of out of stock: In order to provide solution to track and record the movement of goods it is necessary first to understand the root cause of the problems. Problems can be generated due to many reasons and problems can be in planning, ordering and replenishing practices. In ordering practices the problems can be happen in such a way that like “retail store may have ordered too little or too late, so that the warehouse could not deliver before the retailer ran out of the item, or when the retailer forecast may have misjudged demand for an item and ordered an insufficient supply.” (Doukidis & Vrechopoulos 2005, p.141). In case of replenishment practices the product will be available in the store that is may be in back room or in some other places so that it may not possible to meet the consumer demands and last one is planning practices, in this case item may be discontinued that is availability of item may not be there however it may not communicate to the retailers. In this case product drought may take place. Solutions to improve on shelf availability: In order to improve on-shelf availability it requires “an integrated approach based on process responsiveness, operation accuracy and incentive alignment to address the causes of OOS.” (Trautrims et al., 2009, p.235). “Clearly technological advances such as radio frequency identification (RFID) can improve inventory measurement and accuracy in the future. The final remedy, incentive alignment, is about scheduling staff to improve shelf filling in addition to optimising overall management objectives rather than subobjectives by functional area.” (Alexander et al., 2009). All sorts of process improvements can be related to many factors such as process improvements and improve operational accuracy. Process improvements: Under process improvements some of the factors for improving on-shelf availability such as assortment planning and space allocation, automatic reordering system, EDI, internet and real time ordering and inventory control. Assortment planning and space allocation: Most of the stores end up in dilemma in case of allocating the product correctly. What happen is normally allocation take place in such a way that for fast movers there will be too little space and for slow movers too much space. The problem can be solved by giving more space for fast movers rather than less. These spaces must be given for fast movers as they in take and out take the stock very fastly than others. So by giving them large space there won’t be the problem of out stack happening. Automatic ordering system: In traditional method store keeper seeks the inventory by walking across the store. This can create major problem as out of stock can be unnoticed or spotted too later. To avoid this phenomena by using computer assisted or automatic storing methods can avoid this kind of problems. This can produce better on-shelf availability condition and avoid problems. Internet and real time ordering: Batching of orders can disrupt the product flow. To overcome this problems internet and real time ordering can be implemented. By using this stock keepers can break the batches. That is there won’t be happens of any gap between the product availability. Tesco has been using this and they tried how this can accomplish in passing orders continuously. Inventory control: Suppliers and retailers need to work together in order to in order to reduce total supply chain inventory. It has been found that in UK there are several kinds of variations are investigated in on shelf availability across different categories such as frozen foods, dairy, health and beauty and all. In order to have correlation it is required that higher supply chain inventory and higher out of stock rates. Retailers having the lower inventory levels can always manage their supply chain in much better way and can place their inventory level at appropriate places. Improve operational accuracy: Automatic availability measurement: Advance technology based solution can automatically determine out of stock situation very easily. An automatic shelf availability monitor has been introduced in Sainsbury. The advantage of this system is it tracks down sales transaction data. It can flag the suitable items when its stock goes down. This will give notification for the store keeper about the products availability. It has been said that it can provide up to 90% of accuracy. Automatic identification: This is an exiting technological advancement that provides much better hope in order to improve on shelf availability. This technology provides intelligent tag system. Recently Procter and gamble jointly announced the use of this system. That is by radio frequency identification transponders (RFID). “Radio frequency identification (RFID) products use low, high, ultra-high and microwave frequencies to store, send, and retrieve data about monitored products or devices.” (Radio frequency identification (RFID) products, 2010). This is found to be one of the effective one and it uses three technology in it such as first one is active, second one is passive and third one semi-passive. Describe and explain the benefits of using a Pareto analysis in stores layout and profitability analysis: “Pareto Analysis is a statistical technique in decision making that is used for the selection of a limited number of tasks that produce significant overall effect.” (Haughey 2010). The main idea behind this it uses 80/20 rule. That is by doing 20% of work one can generate 80% of the benefit of the whole task undertaken. It has got many applications in quality control. Important issues can be plotted in the Pareto graph so that it will be very easy for one to find out the solution for it. The Pareto chart can figure out the actual declining and increasing of the profit according to the situation. The case study reveals that with the help of Pareto chart it is very easy to find out increase profitability of the product, availability of the product, unavailability of the product, cost reductions are all can be achieved with the help of Pareto chart. However, in this case, the use of Pareto chart does not really determine whether it is more profitable to go in for “own label.” (Trautrims et al., 2009, p.244). These are all very important factors in terms of considerations regarding on shelf availability. The use of Pareto style is considered to the deeper OSA research as it provide in dept to many specific product categories. This is of special significance in cases where the most profitable products also have “high substitutable score.” (Trautrims et al., 2009, p.239). (c) Carry out a critical literature review to identify what is considered to be “best practice” in the area of retail customer service from an availability viewpoint? Best practice enforcement: From the availability viewpoint, it is seen that customers wish to get quality goods at reasonable prices within reasonable time frame. For this reason they negotiate with sellers regarding prices and reach a consensus, regarding different aspects of the sale like, inter alia, pricing, terms and conditions of sale and after sales servicing. These are important aspects in the chain of business links and cannot be compromised since it bedrocks the fundamental business ethos and fabric. However, if the supplier’s point of view is to be considered it is often seen that goods may not be available in real stocks for a number of reasons, including the lack of proper storing and demand creation for certain goods and FMCG products. For instance, if a particular brand of food is not available in ready stock, it becomes necessary to stock in advance in order to tide over unexpected situations or rogue demands. “Strategic shifts” in business needs to be operationalised to tide over demand-supply- mismatches.” (Managing the environment: A review of best practices, 2001). Buyer’s perspectiver: While from a buyer’s point of view, it is necessary that demanded goods of the quality ordered, and the pricing being agreed upon in advance, it is but necessary that goods as per description or by sample need to be match with the finished goods and should be free from material defects that could render the contract untenable or voidable at the instance of the aggrieved party. Thus there is need for ‘trained staff’ who could take care of the system. (Trautrims et al., 2009, p.234). However, when looked from the sellers’ point o f view, either the goods must be available in ready stock, in stores or need s to be ordered from suppliers. In such cases aspects like lead time, quantity and quality of goods and description are major factors that need to be addressed to. “Elimination of stock out conditions and reduction in material costs are the greatest benefits derived from tool vending machines.” (Need for automated tool vending systems, 2009). How OOS situation could be eliminated: The next aspect that needs to be considered is that where the availability of stocks is hampered or OFS (Out of Stock) conditions may prevail. Aspects of “customer loyalty and their propensity to substitute” are also relevant. (Trautrims et al., 2009, p.236). The real blame for Out of Stock transactions are due to the stores problem more than anybody else and it is only in the fitness of things that the damages and detriment that arise out of this default should remedied by the concerned person only and nobody else.. It is believed that cost to serve customer is not very transparent – the intermediaries along the supply chain including wireres need to show better understanding on how to increase customer servicing, without compromising on quality or efficiency areas. Besides, the ‘cost to serve’ concepts which is widely used in supply chain and logistics is is not very transparent because the intermediaries along the supply chain, including manufacturers , are very much concerned about the costs and selling unit price of products and services. Besides, the aspect of extra distance covered, the distance the product lines need to traverse, delivery areas and simulated highs and lows of inventory, all need to be seen. The use of historical data setting, which involves the use implementation of precise method or shelf space, needs to be considered. Better and rational product display: Logistic planners also need to concern themselves with the fact that shelf spaces could, to a certain extent, play a useful and determinant part in lowering the instances of ‘:OOS’ or out of stock. Under such circumstances, it is but understandable that adding more shelf space for one product or product line, may, unless additional capacity is added, be at the expense and cost of another product line competing for floor space . The other reversing factor is that there is an assortment of products that lay claim to display space, and this could set off competition among a large number of competing product groups to seek storage or display space, to fulfill future needs of customers. However, while on the one hand, there is jostle for display space, on the other , it is necessary that a good range of products and unities be exhibited in store racks in order to meet the demand requirements of a wide variety of consumers having different kinds of product preferences . These could lead to a safe and efficient scene of some out of stock OOS) scenarios. From the conclusions drawn from your literature research review and your findings within the case study, create a proposition for the changes you would like to see introduced to solve existing problems of OOS) Out of stock scenarios. It is proposed to consider the e scenario of identify thefts and its consequences on OOS scenes. “While many misuses of credit cards are discovered quickly, the “classic” identity theft involves a long period of time to discovery, typically from 6 months to as long as several years. Evidence suggests that the time it takes to discovery is related to the amount of loss incurred by the victim. At this point the criminal justice system may or may not be involved and it is here that considerable research is needed.” (Newman & McNally 2005, p.V). Measures to counter OOS: Furthermore, it is also seen that while the identify thefts are virtually conducted over the internet, its modus oerandi is rarely known, since it is classified a trades secret From the purpose and view point of OOS scenarios, it is widely believed that the following measures need to be taken post haste : Maintain proper and upgraded inventory levels of stocks of different makes Provide at least rudimentary levels of stocks for slow moving goods, considering that there may be demand for such products later on OOS conditions mainly occur due to lack of inventory control and replenishments of such stock profiles- there needs t be better and well co-ordinated efforts to display as much product types as are necessary to avoid OOS, while at the same time, mean consumer demands and preferences. Special care needs to be taken regarding stock genres that are OOS. This could be in terms of a more the use of perpetual inventory systems for these brands, besides periodic checking at the stores and display shop floor regarding how these interventions could be translated into reality and added to existing stocks. “Understand how your warehouse layout, seasonal demands, material volume, and picking frequency impact which option to use.” (How to asses, compare and choose inventory count methods to avoid out-of-stock situations and achieve rapid replenishment, 2009). Reference List Alexander, T., et al., 2009. Optimizing on-shelf availability for customer service and profit. [Online] AllBusiness. Available at: http://www.allbusiness.com/company-activities-management/operations-customer/13301629-1.html [Accessed 4 April 2010]. Doukidis, G.I., & Vrechopoulos, A.P., 2005. Customer driven electronic transformation: Applying new technologies to enthuse consumers and transform the supply chain. Illustraed (Ed.). Springer, p.141. Haughey, D., 2010. Pareto analysis step by step. [Online] ProjectSmart.co.uk. Available at: http://www.projectsmart.co.uk/pareto-analysis-step-by-step.html [Accessed 4 April 2010]. How to asses, compare and choose inventory count methods to avoid out-of-stock situations and achieve rapid replenishment, 2009. [Online] Insider Multimedia Training. Available at: http://insidermultimediatraining.wispubs.com/ProductDetails.asp?ProductCode=23_200 [Accessed 4 April 2010]. Improve out-of-stock methods at the shelf: Improving supply chain efficiency reduces lost sales, 2006. [Online] Goliath. Available at: http://goliath.ecnext.com/coms2/gi_0198-334395/Improve-out-of-stock-methods.html [Accessed 4 April 2010]. Managing the environment: A review of best practices, 2001. [Online] Ontario, 1. Available at: http://www.ene.gov.on.ca/envision/ergreport/downloads/report_volumeone.htm [Accessed 4 April 2010]. Radio frequency identification (RFID) products, 2010. [Online] GlobalSpec. Available at: http://www.globalspec.com/LearnMore/Data_Acquisition_Signal_Conditioning/Data_Input_Devices/Radio_Frequency_Identification_Products [Accessed 4 April 2010]. Need for automated tool vending systems, 2009. [Online] Articles Base. Available at: http://www.articlesbase.com/technology-articles/need-for-automated-tool-vending-systems-982787.html [Accessed 4 April 2010]. Newman, G.R., & McNally, M.M., 2005. Identity theft literature review. [Online] U.S Department of Justice, p.V. Available at: http://www.ncjrs.gov/pdffiles1/nij/grants/210459.pdf [Accessed 4 April 2010]. Trautrims, A., et al., 2009. Optimizing on-shelf availability for customer service and profit: Methods to improve on-shelf availability. Journal of Business Logistics 30(2), p.235. Trautrims, A., et al., 2009. Optimizing on-shelf availability for customer service and profit: Pareto Analysis of Eight SKU’s. Journal of Business Logistics 30(2), p.244. Trautrims, A., et al., 2009. Optimizing on-shelf availability for customer service and profit: Substitution and customer loyalty versus availability and profitability. Journal of Business Logistics 30(2), p.239. Read More