K-Mart Corparation

INTRODUCTION

A management information system (MIS) provides information to managers at all positions--to support them in making timely, important decisions for planning, leading, and managing the procedures for which they are responsible. Managers can use an MIS to help them with project planning, controlling inventory, program implementation, and decision-making.

K-Mart is a mass merchandising company that serves America with over 1400 K-Mart and K-Mart Super Centers. K-Mart can be found within 49 states in America, Puerto Rico and the Virgin Islands. K-Mart employs over 133,000 individuals nationwide and provides a variety of services in each of their stores. Many of their locations provide pharmacy services as well as food services. Some of the popular food services offered include Little Caesar's pizza. Other services that can be found at K-Mart include one-hour photo centers, picture maker services, and portrait studios.

Depending on the type of K-Mart store they range in size from 80,000 to 190,000 square feet. In relation to the size of the store a K-Mart could keep between 60,000 to 150,000 stock-keeping units (SKU). Some centers are open and available 24 hours a day seven days a week while others keep normal business hours.

K-Mart has a history of disappointing their customers by not having what they want. A lot of the issues that have caused problems with their customer loyalty come from lack of stock and service. Customers that have a history with shopping at K-Mart get very discouraged when they shop K-Mart because the items that are on sale tend not to be in the store. The other thing that upsets their customers is the lack of knowledge that the workers have regarding the inventory.

We are implementing a new system that will ensure management has the correct information regarding their inventory. The information that will be provided using our system will help K-Mart with their inventory situation and also improve customer satisfaction. Deploying a new system to track this inventory will help insure that the merchandise that is most popular or items that are run in their ads are guaranteed to be in stock for their customers. Employees will also have this same information regarding inventory so they can help with consumer relations.

The new system we will be deploying will assign each product its own unique identifier. The identifier will allow the system to track all inventories and allow the system to work adequately and efficiently. Once implemented all K-Mart stores will always carry the products the customers want.

STATEMENT OF PROBLEMS

Retail is a competitive business and every retailer from Wal-Mart to the corner Ma and Pa Mart needs their shelves stocked with the latest products in order to compete. In recent years, K-Mart has not met the challenge and has fallen behind the competition. The challenge to keep shelves stocked with the correct product is not a new problem for retail. As long as there have been discount retail stores there has been a fight for shelf space by suppliers. For this reason, it is puzzling as to why there are any empty holes on a shelf or products that is yesterday's news. K-Mart has let its inventory control system fall so far behind technology that empty shelves and outdated items have become the rule not, the exception. Technology can change the way K-Mart does business and in turn change the way customers view K-Mart, which will result in higher customer satisfaction and higher revenues for K-Mart.

For these very reasons K-Mart, once a leader in the retail industry has fallen behind in sales and leading edge examples. Some blame poor management, others blame Martha Stewart, and some blame the retail power of Wal-Mart, for K-Marts fall from retail grace, truthfully, it is probably all of the above and then some. Management has the responsibility to manage the assets under their control and to increase the value of a company's stock. K-marts management has not used the tools that they have had at their fingertips, the technology that comes with a good IT system, to manage their inventory and keep their shelves stocked with the latest and most popular inventory. No one likes walking into a store to see empty space on the shelves and old out of date merchandise. If a customer visits the store a few times and finds these conditions, the chances are he or she will find other places to do their shopping. The problem is a lack of inventory control that is integrated completely though out the corporation and the business partners.

Locally, K-Mart, with the help of a good inventory control system can improve their retailing position. Management needs to ensure all of its stores are kept stocked with up to date items, items that match the geographic area and items carried to meet or exceed the expectations of the customers. Currently items that run out of stock take too long to replenish, which leads to empty shelf space. The empty space is then filled by a less popular item or not at all. The scheme of "product placement" designed to draw customer in, is blown. Seasonal items are over ordered and subsequently large clearance sales must take place to open space up for incoming items. Customer requests are not being tracked and action is not taken to add highly requested inventory items.

Regionally, K-Marts are spending excess on freight charges to ship poorly selling items to store not in need of the goods and are foregoing the stores that are lacking inventory. Slow and misrouted inventory requests cause unneeded delays in shipping. Customers are not receiving orders in a timely manner and are dissatisfied.

Nationally, corporate headquarters are not fine tuning poor performing stores because they lack information as to why the store is performing poorly. Top-level managers have not invested in new up to date IT systems to improve the transfer of information from bottom to top and from top to bottom.

An improved inventory control systems can solve most, if not all, of these problems in a relatively short time. It would improve communication through out the corporation and to the working partners of the K-Mart Corporation.

OBJECTIVES AND GOALS

It seems that many times we can go into a store looking for a certain something and the store does not have it. They may have similar items and have an abundance of them, but not that one thing you need. K-Mart stores are becoming very well known for this. They seem to have a difficult time keeping items in stock and on their shelves available for the customers.

The objective of our project

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