Mis Case Study 1.docx z726r

CASE STUDY CHAPTER 1: Home Depot Renovates Itself With New Systems And Ways Of Working 1-12. What problems and challenges did Home Depot experience? The main problem that the Home Depot faced was technical problems – they failed to keep up to date with the technology, especially the technogoy to track inventories. At that time, employees spent 60% of their time on stocking and 40% on helping customers. The logistics infrastructure was expensive because the supply chain was organized very poorly (as bulky items were delivered directly to individual stores). Items were often out of stock and trucks often arrived empty.

1-13. Describe the relationship between management, organization, and technology at Home Depot. How did this relationship change over time? At first: everything is not coherent to each other. The inventories were sent directly to the stores, and the managers had too much work as they had to spend 60% of the time unpacked the items. They basicly handled organizing tasks and also technology tasks. Managers had to go to the shelves to find items and ordered themselves when when the items were out of stocks (organizing tasks). Besides, the Home Depot also lacked the hardware infrastructure for its CEO to send a companywide email, so the technical system was really poor. In 2007: Frank Blake invested on information systems to help company with competitive pricing. He purchased Black Locus – a competitive price intelligence software help it find out how it prices compare with competitors. However the technology was still outdated. However, from 2008: CIO Matt Carey worked with Mark Holifield (VP of Supply Chain) to make a process of managing suppliers by calling 75% of the inventory to move through Reginal Distribution Centers (RDCs) Each RDC could serve about 100 stores. The management is now focused, inventory management became automated. The demand-planning software also help reduce forecasting errors and increase profitability. 98.8 percent of the time customers found the products they wanted available.

Finally, the Home Depot spent $64 millions on devices called First Phone, which not only helped provide all the information that managers/customers needed, but also had scanner to check the inentories, which was way more convenient. At this time Management became really easy with a well organized system and better technology to make things fast and convenient.

1-14. How much was Home Depot’s management responsible for its problems? What about the role of technology and organizational factors? At first, the management team of Home Depot did not really concentrate on building a centralized system. When it grew, the old system became really heavy and expensive, and made a lot of inventory out-of stock errors. When CEO Robert became chairman, he believed improvement store-by-store sales were less important. He cut jobs, focused on purchasing software. The software did work, cutting job did produce some saving, but not enough. In 2008 Matt Carey helped improve Home Depot’s information technology infrastructure. The inventory management became more automated and the problem seemed to be solved. 1-15 . Mark Holifield, Home Depot’s Vice President of Supply Chain, has noted that the company didn’t have the most leading-edge technology but it was still able to make a major change in its supply chain. Discuss the implications of this statement. I personally believe that keeping track with technology is really important, especially to a company which has bulky products and heavy supply chain like Home Depot. If they don’t have an efficient software or some kind of technology that helps track everything, the RDCs will find it hard to work. The RDCs serve 100 tores and supplies leaves for stores 24 hours of their arrival at the centers. If the software they use for tracking all of them is not a good one, then they will face a big problem to with a centralized system. That’s why I think they will not be able to make a major change in its supply chain, without improving technology. SUMMARY Technical – they were behind

Keeping up to date with the technology to track inventories. Matt Carey introduced a new system that helped them  Home Depot was very low-tech, even by 2000, the Home Depot lacked the hardware infrastructure for its CEO to send a companywide email  items were often out of stock. For the first 25 years Home Depot set up as many stores as it could, they began bulding smaller stores lacked of space they didnt have all items in stock. Trucks often arrive enpty, stocking took too much time, bulky items costed too much because they delivered directly to individual stores. Robert became chairman in 2000. The store looked like lumberyards while Lowe’s (competitor) were modern and inviting. Robert cut jobs, pushed hard to make the company more efficient. He doubled earnings, reduced expenses but alienated store managers... He believed improvement store-by-store sales were less important  want the fastest growing area of business to be in-home instalation services, web retailing, sales to commercial and international operation.  Homegrown system became expensive to run and modify. “Large IT approach”  $1 billion to replace point-of-sale(POS) systing  data repositore; and software from People Soft and SAP  software access details, features, availability, customer info, plus check out system.  $2 million in management software to make work efficient. Goal: lower overall cost of operating, raise returns. Self-service checkout did some saving but not enough.  Still lose to Lowe’s because they paid less attention to customers. 2007: Frank Blake  serving and cultivating customers. Invest on information systems to help company with competitive pricing. - Purchased Black Locus  competitive price intelligence software help it find out how it prices compare with competitors. - Black Locus provided automated and optimized pricing tools for mid-market and large online-retailers. (which are able to combine competitive pricing data with customers online data)  Still outdated 2008: CIO Matt Carey (ebay walmart): company techno is like 1990 (Muốn xem thiếu cái gì vẫn phải ra kệ tìm. Store manager vẫn phải order từng lần)  Hàng tồn kho chở hết về RDCs, mỗi cái RDCs chứa được cho 100 stores. Shipment chuyển luôn trong ngày  ko cần phải chứa. Demand planning software: forecast error, nói chung là đo đạc khách hàng, hàng tồn hiệu quả kênh phân phối... các thứ  Dự đoán lỗi hàng tồn giảm đáng kể. % lỗi hết hàng giảm một nửa, 98.8% khách hàng tìm được sản phẩm có sẵn. VD đông 2010, Lowe’s hết hàng tồn kho nhưng HD trả lời ngay và bán đủ thứ xẻng xúc các thứ. Saving on delivery, service, inventory, transportation cost tăng HD cash flow lên $1 billion. Hè 2012 thắng Lowe’s.

HD tiêu $64 million to supply sale people with 30,000 Motorola (First Phones)  có scanner kiểm tra xem còn hàng không.  speed checkout times  thay vì cắt người làm thì người làm tập trung KH hơn  KH mua nhiều hơn  Slowed of opening of new stores. Website đẹp hơn, customer friendly, competitive. Separate business để bán Xbox Allow instore pick up