Nordstrom Free Essays

Nordstrom: Planning a better inventory Question 1 Nordstrom has famously been known for its lean retail prices and its tight inventory. Nordstrom uses demand forecasting to minimize leftover inventory. Nordstrom’s total corporate management is based on two main goals. We will write a custom essay sample on Nordstrom or any similar topic only for you Order Now One is to associate purchasing with demand to keep inventory as lean as possible. Second is to present customers and sales associates with a wide-ranging view of Nordstrom’s entire inventory, including all stores and warehouses. Nordstrom relates purchasing with demand to keep inventory lean and show customers and employees Nordstrom’s inventory. Nordstrom keeps its items in stock for an extremely short period of time so that if a customer wants it, they only have limited time to purchase it. Compared to Macy’s who keep items in their inventory for 119 days, Nordstrom keeps its items in inventory for 62 days. Other than relying on day-to-day sales, Nordstrom only discounts certain items and plans for more profitable and productive sale prices. Question 2 Nordstrom benchmarks to assess the success of their web-based inventor system by discovering what other organizations are doing to succeed and incorporate those ideas into their own operations. Competition for Nordstrom will be intense against Banana Republic, Macy’s, and Nike; big shoe selling companies but if they take certain qualities from each one and link them with their own, their web-based inventory will be a great success. They could make the web-inventory more user friendly, so it wouldn’t take as long for the customer to find that exclusive item that they want. Also, they could keep the items that are not in the store after the 62 days online, so the customers are not limited to a certain number of days. Lastly, they could add even more shops to the already huge online inventory. Question 3 Participatory planning includes the people who will be affected by plans and who will be asked to take action. Equitability and transparency are assets that will increase the customers’ belief in the practice of retail. The way employees and managers cooperate within the process will regulate the ending of the process. Effective communication can increase the common understanding of ethics and ideas among customers and form a base for relations and future purchases. The happier a customer feels with the company that they are purchasing from, the more often they will go back to that company and purchase more products. Groups that should be involved are all employees within the company, because the more they are involved, the more comfort there will be among the employees and the customers who will buy the product in the near future. Question 4 Nordstrom has done a lot to their technology department since 2009 to compete with competitors in the online market. If there were ideas that I could suggest for them, I would say that in their search area on the sites, they can still add more functions, such as a rating system where customers can rank the product on how good it is. Companies such as Macy’s and Nike have a customer rating system for clothing, so buyers know which products are being liked and which ones aren’t. Also, in the online inventory, Nordstrom needs to include which products are new, and which ones are old because it is not listed on their site. Companies such as Nike, Banana Republic and Macy’s all have a â€Å"new arrival† tab on their website while Nordstrom does not. Those would be the only inventory management overhaul ideas I would recommend to them. As far as stretch goals are concerned, I would say that Nordstrom needs to concentrate on watching its competitors and reinventing its store and online inventory to keep and gain many more customers. References Men’s Apparel: All Clothing for Men | Nordstrom. Nordstrom: Free Shipping. Free Returns. All the Time.. Retrieved February 28, 2013, from http://shop. nordstrom. com/c/mens-apparel? origin=leftnav Men’s Apparel: stretch shirts | Banana Republic. Apparel, Handbags, Shoes and Accessories for Women and Men | Free Shipping on $50 | Banana Republic. Retrieved February 28, 2013, from http://bananarepublic. gap. com/browse/category. do? cid=79399 Nike Store. Men’s Jackets Vests. Nike. Retrieved February 28, 2013, from How to cite Nordstrom, Essay examples Nordstrom Free Essays Nordstrom’s problems†¦ Nordstrom is a classic case of how complicated and counterproductive the business becomes if a system is not properly designed or implemented. Nordstrom’s intentions were very good when they launched their customized piece rate compensation technique called â€Å"Sales Per Hour (SPH)† for the first time in the retail industry. Their plan was to motivate all the sale employees to think and act outside the box and earn tremendous customer satisfaction thus augmenting the sales. We will write a custom essay sample on Nordstrom or any similar topic only for you Order Now Their intentions were good but they haven’t really anticipated the problems that they faced due to this idea, thus failed to create a system which was fool-proof and awarding for the employees. For example, the SPH system was set such that the employee with higher SPH gets compensation more than the one with lesser SPH. But it doesn’t account for the quality of work done in order to create that particular sale. What if a customer worked more hours to generate lesser dollar amount to satisfy the customer? Does that mean that the sales clerk deserves less money than someone who does a less intense work to create more SPH? The fine line between selling time and non-selling time was not properly documented or practiced, which in a way brought the entire system down. Nordstrom’s management always were on a single loop learning process of reacting according to that particular situation and focused on the motivation aspect of the employees to enhance their sales but never concentrated in a double loop learning process of how things can be improved or what might go wrong with this idea etc. If they had implemented the double loop learning and be more proactive in extrapolating the glitches of the system, they would never have ended in a position like the one the case mentions about. Nordstrom had used the expectancy theory of motivation for compensating their employees. When a sales clerk joined Nordstrom, he/she expected that they first will be valued and also will be compensated for their performance which is directly tied to rewards and reinforcements. This system proved to be fatal for Nordstrom. One more problem with the system failing is the decentralized process created within Nordstrom which never allowed good supervision of the employees and the sales clerks from the managerial side. A decentralized system has advantages of increased creativity, better communication and more efficient environment but suffers from lack of co-ordination and supervision between different departments thus creating silos within the work environment. This exactly was the case in Nordstrom where managers never realized the failure of the system and the issues of the sales clerks with the SPH system until it got nasty. Having said that, Nordstrom’s SPH system succeeded for a long time by motivating employees to give their hundred percent and generate more sales thus creating a name for themselves. Nordstrom’s culture also included punishment and reinforcement when the case mentioned that if an employee has lesser SPH, he/she served decreased hours or possibly was terminated. This brings all the employees into a vulnerable state where they cannot deliver their best. It also creates an unhealthy competition among the employees and they work against each other rather than working together towards a common goal. All systems, not matter how big they are, fall at some point if not properly designed or implemented like a small crack in the wall can dilapidate the entire house. Alas, that was the case for Nordstrom. How to cite Nordstrom, Papers