Kmart’s Supply Chain Disconnect

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Effective retailing technology allows companies to manage inventory by efficiently storing, shipping, and stocking items that its customers want. Inventory management is the key to a company’s success or failure, and Kmart seems to be the poster child of poor supply chain management. Since as far back as Joseph Antonini’s leadership, Kmart has had logistics issues (Young, 2002). Another recent CEO, Chuck Conaway, went so far as to admit that supply chain management was “the Achilles Heel” of Kmart (Carr & Cone, 2001). This paper will examine how investing in redundancy, having an increase velocity in sensing and responding, and by building an adaptive supply chain community could have reduced the risk that is damaging to a supply chain. The Supply/Demand Disconnect Poor supply chain management led to inefficient merchandise management at Kmart. Being able to query data regarding product sales would have allowed the company to be more of what customers were buying, less of what they were not, and to predict what merchandise mixes were going to be popular in the future. That is the epitome of an effective system. Or as Anne Obarski, executive director of Merchandise Concepts, explains it, the five rights of merchandising: the right merchandise, the right time, the right quantity, the right price, and the right location (About.com). This requires an increase velocity in sensing and responding to customers’ needs. Increase velocity in sensing and responding However, there is a time element involved, advises Liz Simpson. “Monitoring what sells quickly is key” she says. Finding out what customers want to buy is critical. “If you do not know what they need, then you are not in the best position to meet that need” (Simpson, 2002). ... ... middle of paper ... ...coming through its distribution system with the items it currently had on sale. They would get people to the stores, and then they did not have what was advertised. It is hard to get people back once they have had a bad experience. References Atlas, Partners and Watertown Capital. (2002). Presentation to shareholders committee for Kmart, June 14, 2002. Carr, David & Edward Cone. (December, 2001). Code Blue. Baseline Magazine. Kmart’s 2001 annual report, p.8 of its online document, May 2002. Kmart’s 2001 annual report, p.21 of its online document, May 2002. Simpson, L. (March, 2002). Not so special Kmart. Supply Management. Retrieved January 10, 2014 from http://www.supplymanagement.com/analysis/features/2002/not-so-special-kmart Young, V. (October, 2002). Coming around again: Kmart’s new ideas bear a familiar ring. Women’s Wear Daily.

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