Feets Stores: Supply Chain Dilemma

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Table of Contents

Introduction
Analysis of the Current Management and Supply System
JIT Model and Strategic Implications of Lean Management for Feets Supply Chain
The Parameters and Considerations of New Employee Schedules
The Use of Specialized Software in JIT and Scheduling
Conclusion
References

Introduction

Feets is a large chain of athletic wear retail stores that encompasses over 400 shops across the USA. Its headquarters are located in Sacramento, California. It has 7 warehouses evenly spread across the country. However, Feets is experiencing certain difficulties associated with the opening of a new Fashion Squared store located in Sacramento. Fashion Squared is different from the other stores in a way that it requires small parties of athletic products that are not sold in any other Feets stores. The purpose of this paper is to analyze the company’s scheduling model, operational model, and supply chain in order to provide potential solutions based on principles of lean management as well as assess the parameters and considerations that need to be made when developing new employee schedules.

Analysis of the Current Management and Supply System

As it stands, Feets implements a standard demand forecast system in order to stock its shops. The efficiency of this system is based on two performance measures – the inventory turns and stockouts. Feets performs two inventory turns per year and its stockouts do not exceed 5%. The company values efficiency over responsiveness, so it prefers renewing its inventory in large batches. This strategy, however, contradicts the market philosophy of the company. On the one hand, Feets acknowledges that its business is very fashion-oriented, but on the other hand, the stores refurbish their stock only twice a year. Most stores offer autumn-winter and spring-summer collections, so they only need to restock two times. However, this practice does not allow the shop to present a larger selection of athletic products to their customers. It does not work in Fashion Squared, which demands more variety when compared to other stores. Essentially, instead of buying large bundles of athletic gear and distributing them across different shops, Feets is forced to supply Fashion Squared with smaller parties of different products. The traditional supply management chain is not optimal for such a task, which is why it is recommended to switch to JIT model.

JIT Model and Strategic Implications of Lean Management for Feets Supply Chain

JIT stands for Just-In-Time management (Chopra & Meindl, 2013). It is a supply chain model that strives to provide smaller amounts of products to various retail stores on demand. This system is more technologically-demanding and labor-intensive than other traditional supply chain models. Strategic implications of using JIT include the opportunity to utilize smaller warehousing facilities, meaning that it would not require building another large warehouse to service Fashion Squared’s needs (Chopra & Meindl, 2013). This system would also address the market’s increasing demands for product variety, as Fashion Squared would be able to order numerous articles of clothes in small parties, instead of having to rely on large shipments that limit its selection. However, JIT requires high levels of skill and employee dedication, as any delay in the supply chain may cause shortages (Chopra & Meindl, 2013). Total Quality Management is necessary for JIT, as it is a set of practices aimed at improving quality, responsiveness, employee dedication, and process efficiency from within. Implementing TQM in Feets would allow for streamlining the supply chain and increasing its efficiency (Chopra & Meindl, 2013).

Another method of increasing supply chain efficiency is MRPII. It is a forecast-based system that helps manage materials and procurement operations. It would allow Feets to improve its production planning, sales capacity, demand forecasting, and quality management tools (Chopra & Meindl, 2013). It has many similarities with JIT and requires the use of TQM in all stages of the process. However, its use is not recommended in this case, as MRPII is heavily-reliant on demand forecasting. It is easier to implement in a production plant that specializes in producing one or several similar products. However, in the case with Feets and Fashion Squared, demand forecasts would not be as accurate due to numerous variables stemming from a greater and more diverse product selection.

To summarize, the strategic implications of using JIT and TQM include the capability to acquire more stock variety and instead of presenting 2 collections per year, free up space to present four, according to each season: Spring, Summer, Autumn, and Winter. In addition, they would enable Feets to introduce a more streamlined supply chain, improve efficiency, employee dedication, management practices, and reduce delays caused by product misplacement and other related logistical errors. MRPII can be applied to Feets as well but is best used to optimize efficiency in other stores, rather than in Fashion Squared.

The Parameters and Considerations of New Employee Schedules

Should Feets choose to adopt JIT as a new supply chain model, managers would require to optimize and streamline employee schedules in order to make them more flexible and adaptable to changes in customer workload. A shop as large as Fashion Squared should have hundreds of employees working on it and even greater numbers of supply chain and support personnel. An effective roster consists of full-time employees, part-time employees, and many other kinds of temporary personnel. In order to optimize employee schedules to adhere to the principles of JIT and TQM, these parameters need to be kept in mind (Ingels & Maenhout, 2017):

Payrolls. In many cases, managers are limited in their ability to hire additional personnel during high sales seasons. This happens due to budget constraints, which is calculated in payroll dollars rather than sales percentages. Feets would need to change payrolls in order to enable managers to implement more effective schedules.
Peak sales periods. New employee schedules would need to account for peak sales periods throughout the day as well as for major events and holidays that could potentially boost sales.
Contingencies for emergencies. As JIT is very sensitive towards any kinds of disruptions, managers would need to be able to deal with the human factors. These include illnesses, accidents, personal issues, etc.

The Use of Specialized Software in JIT and Scheduling

In order to be effective, JIT requires many tools that facilitate the flow of information between the supply system, the warehousing system, and the retail chain to managers and employees. Digital software aids in decision-making and communication by providing important tools to every member of the process (Ross, 2016). Supply chain software, such as QuickBase, allows monitoring the status of shipments and deliveries in real time, ensuring no delays. Employment management solutions such as UltiPro provides solutions for strategic human resource management, talent management, payroll, and employee scheduling (Ross, 2016). Lastly, JIT operations software provides numerous logistics, manufacturing, and service operation tools to control the process (Ross, 2016). All of these tools can be incorporated into Feets retail store chain and supply system, greatly increasing its responsiveness and efficiency.

Conclusion

Although Feets’ current supply management system is adequate for their present business model, it will need to be modified to a JIT system in order to be able to provide all the necessary products to Fashion Squared in an efficient and timely manner. Employing the principles of TQM would help reduce errors that could threaten the integrity of the supply system. In order to create new employee schedules for JIT, extra attention must be given to payrolls, peak sales periods, and creating contingencies for emergency situations. Management software should be implemented to assess the proper levels of communication.

References

Chopra, S., & Meindl, P. (2013). Supply chain management (6th ed.).New York, NY: Pearson.

Ingels, J., & Maenhout, B. (2017). Employee substitutability as a tool to improve the robustness in personnel scheduling. OR Spectrum, 39(3), 623-658.

Ross, D. F. (2016). Introduction to e-supply chain management. New York, NY: St. Lucie Press.

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