Course Project Essay

The purpose of this course project is to address the ongoing issues surrounding my companies, REI (Recreation Equipment Inc.,) inventory management issue and to see if we can find a software program better suited to the companies needs. The goal is to find products quickly and efficiently. Customer satisfaction is key to driving sales and profit in any company. As a result a software upgrade is certainly needed in order to compete with other companies in the same industry. Name of the Company REI is a privately held corporation that is run by it’s members. In fact it is considered to be one of the largest consumer co-op’s in the United States. It rely’s on the members to drive profits each year and allows them the chance to both vote and serve on the board of directors. REI does not report to shareholders and since it’s founding in 1938 has never done so. Sale’s exceed $1 billion dollars each year and due to that ongoing success the company can pay dividends to the members of the company each march. Also, contributing to the success of the company. Inventory management is extremely important as you can imagine in order to keep the members happy. REI makes it a point to track down items even if that means calling other stores around the country. The reason for this is pricing and member loyalty. â€Å"While the Anderson’s(original founders of REI) originally established the co-op structure in order to secure reduced prices for its members, REI today models itself instead as a full-service retailer, with a web site, including order-on-the-web and free delivery to a nearby store, rather than as a low-price retailer. â€Å"(wikipedia) Business Problem Statement The issue that I would like to address based on the retail business of REI is that of inventory management. Time is of the essence and having accurate counts is crucial to securing an item for the customer so that they do not leave your business and go elsewhere. REI’s current inventory management system is good but could be better. As it stands now the inventory system is automated through the POS system. This means that when something is sold through a particular store it is automatically uploaded through the companies database so that all stores across the nation are up to date on whats available at that store. However, the issue is that if a customer in our store wants a product that we do not have available, instead of being able to look into the system and see who has that product and order it directly, we have to physically has the customer to fill out a standard name, address and if a member their member number. Then we call the store have them locate the item, give th e customers payment information and place the order for the item(s). As you can imagine this takes a lot of time in some cases and can turn a customer away. Especially, if they waited several minutes for the person on the other end to locate the product and then come back and say they cannot find it. This goes on until the item is located at a particular store. Time and resources wasted, as well as money lost. This current system does not work. It does not improve efficiency and costs the company a good percentage of sales in some instances. My proposal is to find an inventory management system that would provide accurate inventory and allow products to be ordered directly from the pos system without having to call store to store and place the order manually. Much like how we can order directly from our distribution center, that is how we would order on a store to store basis. General Benefits for Company/Audience By taking this approach I believe that not only will the company itself benefit from the changes but the customers and employees as well. From the company side of things, they would see a higher profit margin from customers who would consider placing more orders. They would also see a drop in cost’s as far as employee payroll is concerned and telephone cost’s. Customers benefit by now having less time spent waiting for an item to be located, instead being readily available. When this occurs they are more inclined to come back and make similar purchases instead of going elsewhere because turnaround time is much quicker with less hassle and uncertainty on their part. Employees would be able to focus more on customer’s in their store and less time on phone lines or tracking down product’s. This eliminates customer dissatisfaction in stores and allows sales to grown since more customers would stay and shop as oppose to leaving angry for lack of help.