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Great Korea is a manufacturer and distributor of Korean Groceries that specializes in canned foods and bottled drinks that are produced in Australia. The company carries out most of its administrative and business operations like sales, marketing, warehousing, purchasing, staff payroll and customer service with very little use of information and communication technology (ICT). However, the management thinks that for the company to be competitive in the market, supply chain costs have to be reduced with improvements in management using ICT.
This project involves a business analysis of the company including exploration of the functional units, job profiles and roles within the organization. The current scenario of the company operations have been analyzed to come up with a problem statement and a business case. The report also includes stakeholder analysis done for understanding the business requirements and business process modelling to understand the functional and business processes used in the organization.
In the current situation, the grocery store has a large number of warehouses from where it is operating that are operated manually. However, to gain competence in the growing market by improving their services, it needed that the business starts to innovate through the use of ICT and bring up the efficiencies of its operations and performance of its employees (Nielsen , 2013).
The Company has multiple business operations that include sales, marketing, warehousing, purchasing, staff payroll and customer service. These processes are managed manually by the staff of the grocery retailer with very little use of technology. The organization operates through its warehouses across Australia located in the capital cities of various states and territories. Products sold by the company are located in numbered isles on large shelves inside these warehouses. Whenever a customer needs a product, customer service staff assists the customer with locating the products in these shelves. Sold products are recorded on journal rolls and sales receipts are printed for customers at the sales terminal. The purchasing staffs checks the stocks manually for the reordering. The availability of any product can be discovered by the customer by visiting the store or calling the customer care (Bplan, 2016).
A stakeholder analysis of the company would help identify the resource that is required by the organization to achieve the goal of performance improvement. It would also help in identification of all the important stakeholders as knowledge sources, their influences on the improvement factors, their interest in bring improvements through ICT, their expectations, communication needs, and the knowledge that can be obtained from them including documentation for bring improvement in the organization (Chetcuti, 2008). The table below identifies various key stakeholders along with all the analysis information:
| Stakeholder group | Stakeholder | Influence | Interest | Expectations | Communication Needs | Mode | Knowledge | Documentation |
| Internal | Company owner | High | High | Project should get good returns on investments The implementation of ICT must bring performance benefits | The owner of the company has to be communicated about the project before approving it such that an approval is taken from the owner to go ahead with it | Meeting Physical document submission | Strategic goals of the organization Functional Objectives of the Organization Current challenges of the organization | Project charter would be approved by owner A business requirement document would be prepared based on the feedback |
| Internal | Supply Chain Manager | Moderate | Moderate | Simplification of processes through the use of ICT Training on using ICT systems for supply chain management | Supply chain manager would be approached at the time of the requirement gathering such that the objectives and needs of the ICT development project can be understood and the challenges faced by the company can be explored to identify ICT solutions that can solve overcome them | Meeting for gathering requirements Email for updates
| The challenges faced by supply chain used by the organization and the needs for automation of the system would be understood | Inputs for the business requirement document Documentation of the testing criteria (Brodar, et al., 2009) |
| Internal | Warehouse Manager | Moderate | High | Simplification of warehouse management processes through the use of ICT Training on using ICT systems for warehouse management | Warehouse manager has to be closely coordinated with for understanding requirements, ensuring provision of resources, and testing | Meeting with the project manager and the team Emails and calls for regular communication | Understanding the structure of the warehouse, processes used for managing inventory and other warehouse processes, and need for automation in the warehouse. | Inputs for Business Requirement Document Project planning Project Scheduling Resource Allocation Software testing (Reinartz, et al., 2011) |
| Internal | Customer Service Staff | Low | Moderate | Availability of the inventory data to serve customers Training on the ICT systems to be able to operate | Customer service staff has to be closely coordinated with for understanding requirements, allocation of tasks to resources, and testing | Meeting with the project manager and the team Emails and calls for regular communication | Understanding the structure of the warehouse, processes used for managing inventory and other warehouse processes, and need for automation in the warehouse. | Inputs for Business Requirement Document Project Scheduling Resource Allocation Software testing (Chetcuti, 2008) |
| External | Customers | Moderate | High | Availability of the information on the products in the grocery Ease of shopping at the grocery store Good customer service staff that can help customers appropriately and serve fast Customer service staff must have all the information on where the products are kept within the warehouse | Customer would be connected tom at the time of the requirement gathering to understand their needs, challenges and expectations at once at the end of the development of the ICT system when it is getting launched to communicate the changes that happened in the warehouse operations | Interview at the store with the staff or the project manager for requirement gathering Emails to provide updates on the changes in warehouse organization Face to face communication between customer and staff to communicate changes and provide guidance on how to use new services at the warehouse | Understanding the needs, challenges, and activities they have at the warehouse. Understand what expectations do they have with the warehouse services in terms of improvement in services Understand how they assess the operations of the company in terms of quality of the service Understand what would improve the satisfaction of customers if implemented as a solution | Inputs to the business requirement document Interview response document Invitation to visit the store with information on changes provided |
| External | Vendors and suppliers | Moderate | Moderate | Availability of all the information on business and operational needs as well as the needed products and ICT services needed for the execution of the project A clear communication on the requirement of the warehouse and the company in general related to ICT The contractual arrangement between the company and the vendor must be fair and beneficial to the vendor The requirements submitted to the vendor must be clear and accurate | Information on the available ICT solutions to assess suitability for the current organization Provision of the information on the contractual offers they have for ICT project development Communication on pricing, terms and conditions, deliveries and timelines | Face to face meeting to explain requirements Physical or e-document sharing for seeking proposals and communicating contracts if services taken Calls and emails for updates on the progress of the production and delivery of the ICT components needed for the project | High level and low level business requirements Needs for the ICT components including hardware and software components Contractual terms and conditions Delivery schedules Deliverables quality and quantity Testing procedures for assurance of quality of product and services. | Inputs to business requirement document Request for proposal Proposal documents Contractual agreements Product testing procedures Customer acceptance criteria Delivery receipt Project Schedule (Atkinson & Languiller, 2015) |
| Internal | Finance Manager | High | Moderate | Project must be completed within the allotted budget Finance manager must know all the components and their cost requirements for the development of the ICT system for warehouse management | Communicate the budget requirement of the project as well as cost allocation to the resources and individual resource requirements with associated costs. | Document submission for the approval of budget release Submission of the project plan and schedule for cost requirements Face to face discussion between the project manager and finance manager to decide on the timely release of the funds (John, 2007) approved. Email reporting on the progress of the project and need for funds | Approved budget Allocation of the budget to individual resources Limitations in terms of financial resources Availability of funds Procedure for obtaining funds on time as per the development requirement | Project Budget Resource Allocation Project Schedule |
| External | IT Solution provider | Moderate | High | Availability of all the information on business and operational needs as well as the needed products and ICT services needed for the execution of the project A clear communication on the requirement of the warehouse and the company in general related to ICT The contractual arrangement between the company and the vendor must be fair and beneficial to the vendor The requirements submitted to the vendor must be clear and accurate | Information on the available ICT solutions to assess suitability for the current organization Provision of the information on the contractual offers they have for ICT project development Communication on pricing, terms and conditions, deliveries and timelines | Face to face meeting to explain requirements Physical or e-document sharing for seeking proposals and communicating contracts if services taken Calls and emails for updates on the progress of the production and delivery of the ICT components needed for the project | High level and low level business requirements Needs for the ICT components including hardware and software components Contractual terms and conditions Delivery schedules Deliverables quality and quantity Testing procedures for assurance of quality of product and services. | Inputs to business requirement document Request for proposal Proposal documents Contractual agreements Product testing procedures Customer acceptance criteria Delivery receipt Project Schedule (Ambernathy, et al., 2000) |
| Internal | Project Manager | High | High | Availability of all the information needed to plan and execute the project Provision of needed resources for project execution including finance and human resources Support from top management for development and implementation of ICT systems Support and assistance from the customer service staff for project execution | Business requirements including functions and objectives of the ICT implementation Challenges, needs and processes of the warehouse and the company as a whole to be able to develop a solution for implementation of the ICT system in the company Information about the stakeholders as well as their needs and expectations to be fulfilled by the ICT implementation project | Face to face meeting with stakeholders for requirement gathering Emails for reporting progress by the project team Calls for communicating immediate challenges for seeking resolution by the project team | Project management methodologies and practices Expertise and experience of the execution of ICT projects Development of the technical project requirements from the business goals | Project management plan Project Communication Plan Project Risk management Plan Project stakeholder analysis Risk register Project Scope Documents Project charter Project schedule Work Break Down Structure Quality Management Plan |
| External | IT Consultant | Low | high | Receive all the information about the business and functional requirements of the company as well as the need for automation of the current warehousing components. Access to the company resources including staff and business documents to be able to assess the processes, their current structure, and come up with scope for improvement | Communicate the business goals and service requirements Conversion of business and management requirements into technical requirements Exploration of possible ICT solutions for development Need for resources for the ICT implementation including human resources and financial resources | Face to face meeting with the business analyst, project manager and the company owner along with the warehouse manager Emails for communicating requirements and exchanging process documents | Information on possible ICT solutions and their associated costs as well as human resource requirements Understanding the capability of ICT systems in helping company achieve its business goals Development of the business requirements document at the high level | Inputs to business requirement document Contract Agreement
|
| External | Business Analyst | Moderate | moderate | Receive all the information of the business goals, functional goals, current business resources, structure and processes. Access to business process documents as well as to the physical systems that can be assessed by the analyst to understand the needs of the system such that he can come up with an ICT implementation plan | Project objectives Business objectives Business requirements Resource requirements Business and operational challenges of the organization
| Face to face meeting with the project manager and warehouse manager Sharing of documents over email Calls for confirmation of requirements with the store manager or project manager | Technical requirements and functional requirements of the project Available solutions for ICT implementation Current structure, processes and scope for improvement in the organization | Business requirement document Research on solutions Project charter (ISBSG, 2012)
|
Situation: The objective of the ICT solution development and implementation is to bring automation in the warehouse of the grocery store such that the effectiveness and efficiency of operations can be improved through reduction in operational costs and enhancement in the productivity of the store employees as well as business processes used in the warehouse. However, the organization has some constraints that have to be considered before a decision is taken on adopting an ICT solution. These constraints include the limitations of the budget, limitations of the knowledge and experience of the employees working in the organization and the limitations of the time for the development and implementation. The key authority for this project would be the company owner who would approve the project proposal of development of the ICT system. The resources used by the organization for this project include the project team including company staff and other project team members, the suppliers of the ICT products including software and hardware, project manager, business analyst, and finances (Mohan, 2012).
Perspectives: For understanding the perspectives of the stakeholders, a stakeholder analysis would be needed that has been done in the previous section. Some the key requirements that have emerged from the stakeholder analysis for the development of the ICT system include:
Options: ICT technologies are used to bring coordination between different players in an organization or the supply chain such that the operational knowledge can be seamlessly shared such that the transactional costs between parties can be reduced. ICT has large number of applications that can be used by the grocery chain store for achieving its business objectives. Information technology as per Tomar (2009) can become an effective tool for decision making in operations. As per Lingren (2011), ICT can be used by organizations to develop a competitive advantage by increasing the speed of operations, enabling visualization of the business performance and reducing the operational costs in a business. IT can be used for collecting data of the store transactions, customer preferences, and business performance such that the same can be used for answering questions about customers such that things can be improved to enhance their satisfaction levels. In managing operations in retail or the grocery store, achieving efficiency is more of a necessity than a choice and thus, is the primary goal of the business.
The operational efficiencies can be improved with reduction in operational costs increase in speed of the service delivery and enhancing flexibility of procedures. Operational efficiencies can be related with the business profitability as they can reduce the operational and transactional costs of an organization (Dydacomp, 2014). ICT can be used for automating store operations which would reduce the cost of operations in the long run. The key beneficiaries of these improvements are the key stakeholders of the organization including supplier’s business owners, and customers. However, while taking decisions about adopting ICT technologies, the organization needs to be sure about the technologies that can be implemented and make a choice that fits best with the business model and business processes as ICT technologies can be expensive and time consuming in implementation as well as learning. The goal behind implementation of ICT technologies would be to develop a capability to meet the customer requirements in more efficient manner (ISBSG, 2012).
In the retail business like that of grocery store, operations involve various human resources that include customer service representatives, suppliers, sponsors, and goods that have to be managed in the warehouses. ICT can standardize customer services by separating warehouse services into those needing customer service executives and those that can be handled by customers individually. This can help the retailer achieve efficiencies in operations. This way, organization is able to achieve higher productivity and reduce overheads. There are various retail operations that can be managed using ICT technologies such as inventory management, point of sales, customer service, and supply chain management (Motorola Solutions, Inc., 2013).
A key strength of ICT is that it can be used to allow interaction between the machines and the customers directly such that there is no need to employ a person in operations. Common ICT solutions that are used in retail and warehousing systems include bar coding, POS system, automated supply chain management, and so on. Bar codes can be used for maintaining the stock levels of the goods stored in the warehouses such that each product is scanned at the POS and the information gets stored in a centralized computer system which can be used for updating stocks as well as checking availability of items in the warehouse. A combination of bar codes, automated stock performance, performance monitoring and control systems can help improve the effectiveness and efficiency of the warehouse. This can enhance the accuracy of records, save costs, improve integration, enhance control, and improve customer services. These opportunities can be used by the retailer achieve a competitive advantage in the grocery market (Heartland, 2015).
Requirements: An efficient warehouse management system is needed to be installed in the grocery store such that the operational efficiency can be improved. An automated warehouse management system may be used for performing various operations such as tracking orders of storage goods such that overstocking or under-stocking can be avoided, identification of product details such as quantity and pricing with the use of bar coding, collecting data on the spending habits of store customers through loyalty card systems, and analysing product and customer data to understand their preferences which can improve customer relationship management and customer satisfaction. The warehouse management system that would be implemented in the organization can begin with the basic control system to a complex full scale warehouse management system that works on the real time data (IBM, 2010).
For the optimization of the warehouse operations, the operation cycle of the grocery store has to be managed in the real time. This system must allow warehouse employees to control the material handling equipments and other processes. The system would reduce the need to have paper printing and physical documentation by allowing users to log into IT systems for managing processes such as scanning of the bar codes for recording product information which would be entered using the RF terminal. This would help the warehouse staff maintain a database that is updated with the real time quantities of products and allocations. The objective of this automation is to manage the complete operation cycle starting from the point where goods are received at the warehouse till the delivery is finally made to the customer. The system would be an integrated solution including a combination of bar coding system, Radio Frequency identification, electronic scales, scanners and printers. Software would be developed which would manage the complete set of processes and these systems (IBSCDC, 2009).
The warehouse management system would include multiple processes that can be categorized into various areas including optimization, inbound management, order processing,
Optimization: Optimization processes would include identification of products through identity control, warehouse zoning, workflow optimization, personnel management, labour standards management, recording of warehousing events, routing optimization, load tracking, task interleaving, layout visualization, system configuration, report generation, bar coding, and analytical data processing (Millstein, 2010).
Inbound Management: Inbound processes in a warehouse include notification of events, receipt of goods, unpacking of products, returns of products, cross docking, goods stocking, product age and expiry date control, product loading status control, load reallocation , product sorting, inventory management, warehouse balance management, safety stock management, physical product counting, cycle counting, and inventory updating.
Order Processing: Order processing in warehouse systems would include order planning, product reservations, staging, assembling, shipment, direct loading, forward picking, replenishment, order planning, order processing, order cancellation, exception handling and screening.
Personnel Management: Personnel management includes analysis of staff productivity, reporting, and recording of tasks (Spaho, 2013).
There would be some more functionality that the warehouse management system can fulfil such as preparation of warehouse put always, product measurements by parts, weight control, virtual stock support, load handling, palletizing, vehicle loading optimization, and so on (T-Systems International GmbH, 2011).
The warehouse management system would automat ht inbound, outbound and stocking operations by divided it into multiple areas including receiving, picking, put away, shipping, management and reporting. The storage locations or units as well as company vehicles would be marked with bar codes that would be used for material handling and transporting. When a product is assigned to the put-away, the storage conditions would have to be managed including temperature control, compatibility control, supplier’s management, product ageing management, and so on. The WMS would automatically choose the storage space based on the product characteristics at the time of screening at the RF terminal such that misplacement of loads can be prevented. Most optimal routes would also be identified along with the location such that empty runs by the customer service representatives can be avoided which would, enhance their productivity. More benefits that this automation would bring to the warehouse management include optimal assignment of vehicles to products when delivering, elimination of order picking errors, and continuous updating of the goods information including allocation, availability, tasks and personnel activity (TCS, 2015).
Technologies: The WMS would make use of certain technologies including the following:
This report was developed to explore the idea of the implementation of an ICT system to improve the operations of a warehouse. The project explored the business case of the Australian grocery store highlighting its current challenges and needs for automation. Based on the business case, the business context was studied that included exploration of the business needs, requirements, and options. Stakeholder analysis ws also did in order to understand the perspectives of the stakeholders about the project. Lastly, a warehouse management solution was suggested that divided the warehouse system into different sections and identified key processes that could be automated with the WMS.
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