Information Systems in the Consumer Industry/Appendix B
A case study of reengineering of information systems – industry — A case study of reengineering of information systems – retail — Introduction to methodology — General processes — Industrial processes — Retail processes — Conclusion — Appendix A — Appendix B — Bibliography
Processes – customer group level: here we can have more “general” (e.g. sale market analysis, purchasing) and more “specific” topics (e.g. shop emotional paths definition); this might change the level of standardization we can find. Let us consider a fundamental retail need:
Customer group level: product-satisfaction.
In this part we consider the processes regarding availability of the product for the whole time period, including after sale. We can spot the following subprocesses:
- Market offer analysis
- Stock management
- Sales area availability
- After sale behavior.
Assuming that request analysis (what does the customer group wants) has already been done, we want to use those informations.
Market offer analysis
In this process we match what the market offers with what our customers want. This process mainly takes place in two different ways:
- What: we want to find, in the market we have access (first constraint), the product which best gets near to our objective in terms of
- Nature (clothing type and category)
- Technological properties (composition etc.)
- Aesthetical and fashion parameters
- Price range
- Supplier characteristics (reliability etc.)
- How: this process used to be, and partially still is, fulfilled via information channels like technical papers or physical agents
- When: the search is made essentially when a new collection is introduced so there is little time for changing and this creates markets rigidities
- Where: a multibrand retailer has limited possibilities to make real geographical analysis, we are talking of a fairly strict constraint on this point
- Who: the real actor is the buyer, in small entities this corresponds very often to the seller
- How much: with the actual information systems this process is fairly slow, we might think of using, as a measuring parameters, the number of suppliers taken into consideration
- Why: we want to increase the knowledge of the market offer
This is a process in which there are very large possibilities of increasing the information quality, maybe standardizing the offer methodology; the problem seems to be related to multibrand confusion.
- What: in this process the retailer checks the correspondence of initial informations and controls certain unavailable data (garment fit, fabric real color)
- How: the process takes place where the physical garment is available (fairs, show rooms)
- When: the time must be compatible with market requests
- Where: as said, in fairs, show rooms or agents information points
- Who: people involved includes buyers and offering companies
- How much: it could be interesting measuring the distance between the catalogue offering and the real offer; we should interview the customers
- Why: to reduce wasted times
The information system support for this process is, in my knowledge, near to zero. The goal could be a historical feedback system for operators.
This process begins after product choice and includes operations related to purchase order creation and control. It is a standard industrial process which we only quote quickly without even getting into details like quotation, offer and order confirmation.
- What: it is the process of defining the characteristics of the supply in terms
- Physical: goods to be delivered, place and date of delivery, delivery context (packing, labeling etc.)
- Non physical: terms of payment, quality standard, information data.
- How: operational aspect of the purchase order (paper, electronic data interchange)
- When: purchase order can be made in various moments: fairs, later back home
- Where: as before it depends on customer/supplier organization
- Who: entities involved include customer, supplier and, sometimes, third parties like agents or credit companies
- How much: process dimension could not be related to the economical amount (think of small boutiques buying many codes and little quantities) but we could think in terms of SKUs
- Why: it is a steady state both from the physical and the information point of view.
From the information systems point of view, this is one of the best known process and there is plenty of knowledge on it.
In this process, after we have chosen and ordered the garments, we are to keep track of the physical location.
- What: the process is about knowing where the goods are; they could be at the supplier, in transit, in the warehouse or in the sale area
- How: our system must help us in giving the situation both at the moment and in the next future (e.g. passage from transit to warehouse)
- When: the system must be available always and must give response on inventories at any time
- Where: the process must support people anywhere it is needed, both locally (shops, warehouses) and remote (company headquarter)
- Who: there are operational actors (shop executives, warehouse employee) and control people
- How much: it is obvious that precision is a must; sometime fiscal limits are law defined
- Why: sales points are part of a larger system designed for customer satisfaction.
We need an information system which gives you the situation in any part of the customer dedicated world (supplier, logistics, shops); at the moment we are not yet in this situation.
Sales area availability
This point is about the way goods are to be shown so that customer probabilities, to find what he is looking for, get higher.
- What: as we know what the inventory is, we need to balance space vs. goods and to define exposition priorities (paths and areas)
- How: the choices we make must match customer needs and quantities taking into consideration that we might have to cope with missing quantities to be filled in the future
- When: the matching process between goods and space is obviously related to goods availability (spaces are generally fixed on the short term) and to customer visit frequency. It is usually considered a two-three weeks period.
- Where: where the sale takes place
- Who: usually it a is a visual merchandiser job, in smaller sales entities it is a senior sale executive job
- How much: department stores have long studied this problem, it is not in the aim of this paper to get into it
- Why: no doubt a good explosion helps the customer in finding what he is looking for.
From an information point of view, data concern customer and product presence (actual and future), customer revisit attitude and product appeal on the local market.
After sale behavior.
To satisfy the customer we must also project to implement after sale behaviors. After sale has two main components: returns and follow-up.
- What: we are essentially dealing with garments with quality standards not as expected
- How: returns are mainly processed via a shop physical hand back and the substitution with another garment or a refund
- How much: timing is mainly law defined and it might last from a few days (unsatisfaction) to months (quality problems)
- Where: the return process usually happens where the sale process took place
- Who: acting people include the customer, the retailer and the garment company
- How much: it is easy to be measured and, obviously, should be as little as possible
- Why: because this process is somehow part of the sale process, it is a side effect
- What: this process help us in defining our new sales standards, it should measure the difference between the relation perception at the sale moment and later in time
- How: we must identify customer correspondence between customer expectation and real result
- Where: we have to be able to re-reach our customers where they stay
- Who: this process is available only for trackable customers so we much try to increase this number
- How much: to be statistically significant
- Why: to drive future sales processes
As far as information system is concerned, returns is a typical summary process so it needs operational and control systems while follow-up is also an analytical process.