What Happened to Kmart

Case Study What Happened to Kmart? 1. Evaluate Kmart employ the nurse scope and competitive forces models. What was Kmarts business model and business dodge? Kmart has legion(predicate) problems with its value chain. This is evident from the suppliers sending items that the suppliers want to sell, shelves remaining unstocked, the hand switch re hallow process for popular items, wares being allocated by primaeval externalizeners and non based on individual store demand, excess inventory stored in 15,000 truck-trailers behind its stores, shrinkage, and having to choose to either ship toothpaste or Christmas trees.Since its entrance as the first discount store in the 1960s, Kmart has not been fitting to guard off new entrants into the discount chain business. The new entrants, such as Wal-Mart and Tar start, have come on strong and surpassed Kmart. Kmarts suppliers seem to be career the shots with the retailer, since they are promoting the items that they can sell and not h elping Kmart address its upgrade problems. Kmarts customers are voting with their pocketbooks and shopping at its competitors stores.Kmart uses a promotions-drive business model. The fraternity uses announce circulars to promote its blue-light specials. 2. What was the relationship of information arrangings to Kmarts business processes and business strategy? How well did its systems support its strategy? Kmarts information systems and its business processes and business strategy were not in alignment. As an example, the information systems could collect info, but the information were not available for analysis and last- reservation purposes.As the character reference mentions, forecasting decisions were based on watchfulnesss judgment, not on the data. Kmarts systems did not support its strategy. One of the problems mentioned in the case is that its supply chain management system could not easily contain the sharp increases and decreases in demand. The dissemination cent ers everyplace-the-hill engine room led to supplies session on pallets for 24 hours until they were recorded in the central tracking system. When reordering popular products, the employees would hand sift through previous purchasing receipts. . What management, organization, and technology factors contributed to Kmarts problems? From the case, it appears that Kmart management is inconsistent with its implementation of the companys strategy. Management is unable to use data to forecast demand it has lost sight of its core competencies, and is unable to assortment Kmarts image. Although management precious to restructure its supply chain, it continued to expand its product offerings, as opposed to focusing on the fastest selling items. Mr.Conaways plan to restructure Kmart has obviously not worked out. Although Mr. Conaway wanted the local stores to make their deliver stocking decisions, the stocking decisions were still being made by the central planners. When the new system wa s installed, Mr. Buzek made the comment that the information would be useless because management save didnt believe in the system. Although the company uses a promotions-driven strategy, the company reduced its advertising circulars. As the case points out, no other alternative for achieving the strategy was provided.Although Kmart wanted to reinvent its supply chain, management was un bequeathing to unify the scattering systems deuce computers because the put up was too expensive. From an organizational perspective, the suppliers, central planners, business processes, individual stores, warehouses, and distribution center have definite communication problems and are not share data as efficiently as possible. One could argue that in truth little data sharing is going on. Central planners are making the stocking decisions for the individual stores, but what needs to be stocked at for each one store is not being effectively communicated.From a technology perspective, outdated te chnology and incompatible systems were in place. The new i2 understand did not keep an eye on for a variety of reasons, including the need for more hardware, the softness of the project to attribute the point-of-sale systems and inventory systems to the distribution systems, and not being robust copious to handle a large number of SKUs. 4. How master(prenominal) was supply chain management in contributing to Kmarts problems? Evaluate Conaways decision to use i2 computer software to improve Kmarts supply chain management.Supply chain management was very important to Kmart. Kmart has been unable to success to the full manage its inbound logistics, operations, sales and marketing, service, and outbound logistics. Unfortunately, the companys inability to effectively manage its supply chain led to ineffective advertising, wads of items being overstocked, popular items being understocked, a large product offering, ridiculous communication with suppliers and its business units, i tems sitting on pallets waiting to be entered into the central tracking system, and shipping problems.The goals for the i2 project were commendable, since the project was supposed to improve Kmarts sales forecasting, inventory sourcing, logistics, and reporting. The project was supposed to facilitate micromarketing, supplier product tracking, order execution, shipment scheduling, and delivery tracking. It is interesting that Mr. Conaway chose i2 Technologies for the new supply chain management project, since i2 Technologies had only recent and limited experience in the retail sector. The decision to use i2 Technologies was not a good decision, since the system was not knowing to work with the large number of SKUs, Kmart (according to some) wrote off and abandoned some of its i2 software, the project fell behind schedule, and the inability to connect the point-of-sale systems and inventory systems to the distribution systems. 5. Were those blaming software for the collapse of Kmart correct? Explain your answer. Actually, there is enough appoint to go around. 2 Technologies did a very poor job analyzing and pattern the system for Kmart. It also appears that Kmarts management did not get behind the project and was also unwilling to transform its core business processes. 6. It has been said that Wal-Mart uses their IT strategically, and they fully integrate it into their operating model. Does this statement apply to Kmart? Explain your response. This statement does not apply to Kmart.Kmart is using an outdated business model and has been unwilling to modification its model. Its unwillingness to change is one of the reasons why Wal-Mart and Target have been able to successfully compete against Kmart and why Kmart is in bankruptcy. 7. List the problems Conaway faced when he took over Kmart, and then describe the short- and long-range policies you would have followed had you been in his place. When Mr. Conaway took over Kmart, he faced several problems, includin g stiff competition from Wal-Mart and Target.The company was using an outdated business model, spending more money than the competition to get its goods into its stores, its information systems were collecting data but not using it effectively, it had important problems with its entire value chain, it had a frumpy reputation, its shelves were often empty, it offered a good range of products, it provided poor customer service, and it did not care about the competition. Students will provide a variety of short- and long-range policy recommendations.