Jimmie Beans - The Future Is Now

Introduction 

The success of a company is not anchored on size. Likewise, it is not pegged on how valuable or fashionable its merchandise is. Therefore, some companies are successful while others are not irrespective of their size or value of the merchandise . One of the core determinants of a company’s performance is its supply chain management (SCM). In this regard, for a company to be successful, its supply chain has to be excellent. Successful firms invest in an outstanding supply chain and incorporate it into their operations and strategy ( Mentzer et al., 2001). This is because being a leader in business requires a firm to excel in SCM. Consequently, this is vital in strategically positioning and differentiating the particular firm from its competitors. Ultimately, this results in increased market share, sales, and profits. 

Supply chain management is a vital component of any forward-looking business. In this regard, it is necessary to understand that supply chains are not linear. Therefore, they don’t entail the relationship between a single customer and a supplier. Rather , they entail multiple customers and suppliers ( Myerson, 2012 ). Each of the latter also boasts a supply chain of their own. This is compounded by the fact that three distinct supply chains come into play. These are information, product, and financial supply chains. These dynamics apply to all businesses despite their size, industry, country of operation as well as the market. Thus, in the midst of competition, a SCM that is below par is detrimental to a firm’s success. One crucial shortcoming is a failure to appreciate the entirety of supply chains or failure to recognize that supply chain processes flow across a whole firm . Moreover, successful businesses are proactive with regard to their SCM. 

Lack of a strong SCM in business results in wasted capital and other resources, increased cost of performing transactions and activities, reduced sales and incredible customer service, and lost opportunities for creating competitive advantage ( Myerson, 2012 ; Mentzer et al., 2001). In the wake of the global economic slowdown, properly planned and executed SCM is vital in ensuring survival for companies. Devoid of this, a firm is less likely to maneuver through hard economic times. On the other hand, it is crucial for a firm not to repeat past SCM mistakes. Likewise, they should respond appropriately to changes in the economy. 

Jimmie Beans (JB’s) success since its inception in 1974 can be attributed to such factors as its excellent customer service, the presence of unlimited stock and lastly its customer-friendly prices. The slower performance from the year 2010 can be attributed to many factors. However, competition from the already established web-based such as buy.com, eBay and Amazon can be viewed as a core driver of JB’s slowdown. This was compounded by the failure to re-strategize and the lack of innovation in shipping, inventory, and packaging. It is due to the factors that the department store’s profits and customer service satisfaction declined by 58% and 62% respectively. To reverse this trend , several strategies can be used to beef up JB’s SCM. 

Inventory Management/Control 

One of the strategies that JB’s can implement to deal with its challenges is revamping its inventory management/control. In this regard, the store could ensure that is capable of addressing the needs of individual JB’s stores. For instance, these stores can be given the opportunity to choose the most preferred delivery plan. This will considerably accelerate the delivery system given that these stores will be able to guarantee fast replenishment on a daily basis ( Myerson, 2012 ). To track the merchandise and sales inventories effectively , JB’s could invest considerably in communications and IT systems. With the store’s extended reach, an effective communication system will be essential in facilitating inventory management. One approach in this regard would be for JB to establish its satellite communication system. This will make communication across all stores easy. For example, in the satellite room, the technicians will be able to communicate with any store that might be experiencing a challenge with the system. This way, it will be easy to know precisely what is happening at a glance. The system will facilitate real-time tracking of the day’s sales as they stream into the bank. It will also ensure that any urgent information that needs to be communicated to the distribution centers and stores can be relayed instantly. Satellite communication will, therefore, make it easy to track the progress of various business activities. 

It is also crucial for JB’s to reduce any unproductive inventory. This can be achieved by giving stores the mandate to manage their stock. This will help reduce the pack size for different products and ensure timely price markdown. Jimmie Beans can also make use of information technology (IT) to ensure availability of more inventories especially for the most sought-after products, while at the same time reducing the levels of inventory . The store can also network its suppliers using computers. In this pursuit, JB can consider outsourcing such services as maintenance of inventory in all its stores, establishing an automated re-ordering system and linking all computers to JBs stores and distribution centers. Using this system , it would be easy to know what items are low in stock and subsequently send a re-supply to the respective factory via satellite communication. The item would then be delivered to the JBs distribution center or the affected store. This collaboration would present a win-win situation for both JB and its collaborator since it would be easy to monitor the fast-moving goods as well as the stock levels in all stores. This would result in cost saving for both the factory and JBs owing to better coordination. 

Through computer systems, JBs employees can keep abreast with the inventory in deliveries, stores and backup merchandise at the distribution centers. The systems will also come in handy in the management of orders and replenishment of goods in the stores . Based on each store’s inventory, it would also be easy to predict the specific quantities of the items to be delivered . This could be facilitated by big data, via which the accuracy of the information can be guaranteed . A centralized inventory data system could also be useful in this case. This is because employees at the stores can establish the level of inventories as well as where each product is located at all times. The system is also able to indicate the exact location of a product, by showing whether the product is being loaded or already in transit. 

To manage its stock, JBs can make use of advanced barcode or radio frequency technologies amongst other technologies. These options would make it easy for goods to be directed to appropriate docks followed by their loading and shipment. The technologies will also ensure efficient receiving, picking and inventory control of the necessary goods . They would also facilitate proper packing and counting of all inventories . Further, JBs could explore linking its suppliers. This system would make it easy for the suppliers to monitor the sale of their products and subsequently replenish the inventories. The system would also facilitate processing of all the daily transactions for use by JB. Despite the elaborate nature of the suggested inventory management/control system, it would be advisable to develop a contingency plan. All these will be geared towards ensuring an interrupted service to JB’s suppliers, customers, trading partners, and stockholders. This will play a vital role in re-engineering the firm. 

Procurement 

There is a need for JB’s to reduce its purchasing costs so as to offer best prices to its customers. In this regard, it is necessary for the store to procure products directly from the manufacturers, and in the process bypass all the middlemen. Likewise, it should negotiate the prices before finalizing a deal, in which case it is important to ensure that the price settled on is the most competitive. The need to negotiate is pegged on the fact that each customer deserves a good price ( Myerson, 2012 ). Therefore, by negotiating , JB will ensure that it continues offering the best price for all its products. In this regard, it is important that JB’s dedicates a considerable amount of time meeting its vendors and understanding their products’ cost structure. This is in a bid to ensure that the process is transparent, in the process ensuring that manufacturers cut down on their costs. Moreover, it is important for JB’s to establish long-term relationships will all its vendors. In this pursuit, it would be crucial for JB’s to settle for local and regional suppliers and vendors. 

Distribution 

Jimmie Beans should increase the number of its distribution centers. These centers should be situated at varying geographical locations in the United States (U.S). Likewise, the firm should ensure that the number of items stocked in these centers is considerable. There is also a need for JB’s to ensure that it has its own warehouses. These warehouses should also supply 85% of its inventory in comparison to its competitors. This would be geared towards making sure that JB is in a position to replenish within a short period compared to its competitors. This would translate into lowered shipping costs. Each distribution center should be divided into sections. The divisions would be based on the amount of goods received and according to the inventory turnover rate. However, allowance should be made for suppliers to deliver some goods to the JB’s stores directly. 

The distribution centers are aimed at ensuring that a consistent and steady flow of goods to support JB’s supply function ( Myerson, 2012 ). To ease and economize management of the distribution centers, modern computer and smartphone-supported technologies should be explored . This way, each employee will be able to access real-time information pertaining to the inventory levels of all goods at the center. Different technologies can also be used to label the shelves, products as well as the bins in a distribution center. This would ensure that an employee can easily locate a particular product at the center. For example, once the bin or shelf has been verified , a JB’s employee would be in a position to confirm whether the picked product is the right one. The quantity required can then be entered into the computer by the employee. Subsequently, the computer updates this data on the main server. 

Use of technology will also ensure that the packaging department receives the most accurate information regarding the products to be packed. F or example, a computer would be able to display such information as packaging, shipping, and storage, saving time in the process. It will also allow the distribution center supervisors to closely monitor their employees, give directions as well as guide their actions. This will enable JB’s to satisfy its customers' needs quickly . This is because lowered customer satisfaction is one of the reasons for the decline in its performance. Use of technology will also enhance efficiency in the management of the distributions centers. Efficiency will also be attained by ensuring that productivity of the center employees is enhanced . This can be achieved by establishing a gym at each of the centers. This can be coupled with providing the employees with food and ensuring that each enjoys adequate sleep. This way the distribution centers become venues of personal and business excellence. 

Logistics/Transportation 

There is a need for JB’s to invest in a responsive and fast transportation system ( Bowersox et al., 2002) . First, the distribution centers should be serviced by numerous trucks. Thus, JB’s should invest in company trucks. These trucks will be responsible for shipping goods from the distribution stores for timely replenishment of the JB’s store shelves. Thus, the trucks act as the link between JB’s stores and the distribution centers. Besides acquiring the vehicles , the management should make sure that all drivers are dedicated and committed to customer service. In this regard, before their hire all drivers must have substantial experience, having driven more than 400,000 accident-free miles and without violating any traffic rule. 

The trucks would be responsible for moving merchandize-loaded trailers from JB’s distribution centers to the stores that each center serves. In this regard, each distribution center should view the stores it serves as its customers. To make delivery efficient , each driver is required to report the number of hours worked to the transport coordinator on a daily basis ( Bowersox et al., 2002) . On the other hand, the coordinator will be tasked with the responsibility of scheduling all dispatches in accordance with the available driving time as well as the amount of time taken to drive from the distribution center to JB’s stores. Each truck should also be taken to a store’s dock only at the time when it ought to be unloaded irrespective of its time of arrival at the store. Ideally, the trailers should be delivered to the store either in the afternoon or evening. Subsequently, they are unloaded at night. A specific amount of time should also be allocated to unloading each trailer. The security of such trailers should be the responsibility of both drivers and the store personnel. 

The activities of each driver should be carefully monitored and a record of the same maintained. The development of a ‘Driver Handbook’ would also crucial to the enhancement of JB’s transportation arm. This would ensure that all the drivers are educated on the recommended code of conduct. It would also include the terms and conditions with regard to the exchange of trailers between the drivers and the stores’ personnel as well as the safety of JB’s property. The handbook would also contain the penalties for non-compliance as well as the actions that can result in termination of a driver. 

International Expansion 

International expansion can be explored as a strategy for turning JB’s fortunes. Pursuing international expansion would be aimed at acquiring new sales growth away from the firm’s traditional market. This would be targeted at new geographies and markets that are exhibiting rapid growth ( Luo & Tung , 2007). Jimmie Beans should thus expand into emerging markets in Asia and Africa. While the opportunities for this expansion cannot be overstated , managing the challenges that come with the expansion is vital. To minimize the risks, the economies whose populace boasts a considerable spending power should be targeted as an entry. Moreover, such factors as the ease of doing business and political stability should be considered before narrowing down on the specific nation(s). 

Jimmie Beans prospective global supply chain ought to be agile enough to serve and react to the multiple markets. Likewise, it must be robust so as to endure changes in the local demands. The company’s international expansion should be guided by the need to think locally despite buying globally. Thus, JB’s should balance its global aspirations with the rising consumer demand. For instance, consumers anticipate an ever-increasing variety of goods for them to enjoy. This is bound to drive the demand for supply chain development including near-sourcing . Thus the new supply chain should be more dynamic. It also should be more responsive to the consumers with regard to sourcing, products, transport, manufacturing, employees’ welfare and the welfare of the environment and animals. Further, it should move away from the conventional push and pull model. 

The supply chain infrastructure is instrumental in JB’s international expansion. Therefore, it is crucial for JB’s to know its supply chain’s effective range as well as its current limitations. It is therefore important for the departmental store to ensure that the supply chain is flawless. It should also be reactive and flexible. These attributes are important in fostering a healthy supply environment that is functional globally. They would also ensure that the supply chain can remain functional in different time zones and across different legislative trading jurisdictions ( Luo & Tung , 2007). Thus, it must be understood that traditional approaches cannot meet the demands of the global, non-linear supply chain. The global supply chain ought to be multi-faceted and capable of functional in complex environments that feature multiple suppliers ( Prater et al., 2001). 

Jimmie Beans should also ensure that the supply chain is ‘connected.’ This will ensure that both agility and visibility are assured throughout the entire chain. However, the appropriate level of process integration should be applied. One tool that JB’s can use in this regard is the Cloud. The Cloud is an appropriate tool for supply chain management. It is capable of ensuring that the end-to-end supply chain process is visible. The Cloud is capable of availing real-time data which is vital in global supply chain management. 

Supply chain harmonization is vital to the success of JB’s global expansion. The expansion is bound to extend the store’s business processes beyond its traditional market. This will significantly overburden its suppliers, most of whom may be ill-equipped to deal with the change. Therefore, harmonizing the supply chain process is vital for JB’s international expansion efforts. It is also important for the firm to ensure that it makes use of the data available to it. Also, it is important for JB’s to map out its supply chain. In this regard, the firm needs to explore the physical processes and supplier interactions in a bid to identify the weaknesses and leverage on its strengths. Besides ensuring cost efficiency, this will aid in preparing and planning for disruptions in the supply chain. 

Lean Six Sigma 

The Lean Six Sigma will be vital in improving JB’s business processes in numerous ways. This is through Lean’s role in getting rid of all forms of waste coupled with Six Sigma’s focus on reducing variance in the supply chain ( Christopher & Rutherford, 2004) . Lean Six Sigma will increase the efficiency of JB’s supply chain in numerous ways. 

Reduction of the order fulfillment time 

Reviewing JB’s order fulfillment system using Lean Six Sigma will help the firm to identify the areas with high degree of variance and waste. These shortcomings can then be addressed once identified. This can be done via reduced paperwork, automatic shipping, and picking planning. Likewise, they can be addressed through the automation of the shipment verification. These will aid in improving the current order fulfillment process. 

Creating a responsive supply chain 

A functional supply chain ought to the agile and responsive to its customers’ changing needs. It is therefore important for a firm to be attuned to its customers’ evolving needs. This acts as the first step towards addressing these needs. Six Sigma will thus aid JB’s in measuring its progress in ways that the customers consider responsive to their needs. 

Reduction of errors 

The supply chain that has been rendered inefficient due to errors could benefit from the Lean Six Sigma. For example, the technique can aid in mistake-proofing which aids in reducing human error. This can be achieved by ensuring the completion of tasks correctly. On the other hand, the 5S Lean principle aids in reducing errors by getting rid of the wastes that cause them. This approach stands for Sort out, Shine, Sustain, Set in order and Standardize. Lean Six Sigma will aid in creating a safe, clean, uncluttered and efficient environment hence reducing the likelihood of human error in JB’s supply chain management. 

Optimization of order fulfillment 

All orders ought to be received on time, bearing accurate and complete documentation, and without damage on delivery. In this regard, Six Sigma will be helpful in optimizing order fulfillment through spotting gaps in the system. These gaps include inefficient execution and obsolete planning processes. On the other hand, Lean will play a role in reducing waste and improving order fulfillment . 

Reduction of waste 

Lean will help in eliminating activities that have no value to the customer. These activities are therefore classified as waste. In this regard, Lean will assist in getting rid of non-value adding processes hence enabling the supply chain to be efficient. Thus, the core target of Lean will be the biggest sources of waste in JB’s SCM. Such sources of waste include; 

Overproduction: This occurs when speculative forecasting is used in building a greater inventory in a bid to meet the customer's demand. This leads to increased inventory costs. 

Transportation: This creates waste when materials are moved unnecessarily in the process increasing costs 

Increasing revenue 

One of the challenges that JB’s faces currently is a decline in reve nue. Using Lean Six Sigma will ensure that JB’s supply chain is more efficient. This will lead to the consistent provision of service to all its customers. This would translate to reliable service resulting in increased customer satisfaction. Subsequently, this will give JB’s more pricing power resulting in increased revenues. 

Conclusion 

Supply chain management is a core driver of any company’s performance. Therefore, the success of a company is pegged on the state of its SCM. Moreover, incorporation of the SCM in its operations and strategy is crucial. This helps to strategically position and differentiate an individual firm from its competitors. Any forward-looking business entity is also expected to understand that supply chains are not linear. Rather , they comprise of multiple customers and suppliers. Each supplier also boasts a supply chain of their own. T he fact that information, product, and financial supply chains come into play compounds the process. Thus, all firms, irrespective of industry, size, location and target market are expected to invest in proper SCM. They should also be proactive with regard to SCM. In the absence of a strong SCM, business is likely to waste capital and other resources and increase the cost of undertaking various activities and performing transactions. It is also expected to result in lost opportunities. Therefore, in the wake of harsh economic times, SCM plays vital in ensuring business survival. For JB’s to get back on its foot, it should not repeat past SCM mistakes. Also, it should respond timely and appropriately to changes in the local and global economy. Therefore, various SCM aspects can be used by JB’s to increase customer satisfaction and revenue generation. These include inventory management/control, procurement, distribution, logistics/transportation, international expansion and Lean Six Sigma. 

References 

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002).  Supply chain logistics management  (Vol. 2). New York, NY: McGraw-Hill . 

Christopher, M., & Rutherford, C. (2004). Creating supply chain resilience through agile six sigma.    Critical eye ,  7 (1), 24-28. 

Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective.  Journal of international business studies ,  38 (4 ), 481-498.

Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management.  Journal of Business logistics ,  22 (2 ), 1-25.

Myerson, P. (2012).  Lean supply chain and logistics management . New York: McGraw-Hill.

Prater, E., Biehl, M., & Smith, M. A. (2001 ). International supply chain agility-Tradeoffs between flexibility and uncertainty.  International journal of operations & production management ,  21 (5/6 ), 823-839.