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
Purchasing
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:

Catalogue analysis

Physical analysis

Catalogue analysis

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.

Physical analysis

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.

Purchasing

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.

Stock management

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.

Returns

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

Follow up

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.