Operation Managment - Case Study Example

In deed Lee (1) points out that the key differentiator between poor performing and high performing companies is the ability to increase inventory turns. Inventory management can be a daunting task for a mass retailing business with hundreds of products coming from a wide array of suppliers. Such a challenge can be even greater when the suppliers are located in different echelons of the organisation’s distribution network. Usually, most retail chains often use central distribution centres which source products from the suppliers and distribute them to the retail stores.

Though this proves effective in most cases, if not well managed and executed, it may result to excess inventory in terms of redundant safety stock, stock outs, and product allocations that are not optimal (Lee 2). This paper analyses LuLu’s hypermarket’s inventory management to identify a weakness and propose a re-engineered improved operation. LuLu Group operates some of the biggest and well performing hypermarkets, Lulu Express and shopping malls in the United Arabs Emirates and in other cities within the Gulf region (Retail Business Review 1).

The hypermarkets which are the retailing division of EMKE Group, a multinational company dealing in a wide array of sectors, prides itself in providing high quality consumer merchandise across the Gulf region through its 103 stores. Like any other mass merchandising store, LuLu hypermarkets offers a wide array of consumer goods and services under one roof (LuLu Hypermarkets 1; Hemalatha and Sivakumar 52). LuLu hypermarkets deal in a wide array of products ranging from grocery products, apparel products, baby products, cleaning products, beverages, health and beauty aids, electronic products, pet supplies, seasonal merchandise, home furnishings and home decor, kitchen appliances, tools and power equipment, office supplies, outdoor living, gardening products, as well as footwear.

All these products are from a wide array of brands, in different