Analysis of Business Process

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It would be vital to develop sound strategies to ensure that this process is well received and succeeds in order to ensure that the automation process is well received in the organization.

One of the best ways to make sure the process change is accepted and put into practice in the store is through communication. If the process change is not managed properly, rumors will undoubtedly spread across the store. Many people will start to wonder why the new procedure was implemented so quickly after the previous one, whether it was a few months, years, or even just a few weeks. Therefore, it is the top staff members' responsibility to make this matter clear. Resistance to change is always common in many stores, firms or businesses; it is part of human nature. Many individuals also fear the unknown, and it is, therefore, necessary to clarify some of the issues raised. A newsletter or email service would go a long way in eliminating this state of resistance. This would seek to outline the purpose of the new process, how the business would benefit from it, and how the employees would gain from it.

Another strategy is employee involvement. This would ensure that the staffs in the store are involved in the designing and implementation of the automation process. They should be encouraged to give their opinion on how the automation process might impact their jobs, how they might gain or lose from the change and what should be done to solve the issues they raise. This would ensure that the store management and the junior staff are all on the same page. The major disadvantage is that they may end up rejecting the process, making the management to spend more time coming with another.

Motivation and coaching is also another way of ensuring that the automation process is received well and put in to practice. The store’s leadership team should provide support to junior members through training and one-on-one coaching. This would ensure that the staff is well-facilitated to handle the store’s activities as per the new process. The store manager, as well as the supervisor, should all be part of this process.

Lastly, there should be continuous observations and evaluations from the management to ensure that the process is going on well and that everyone in the store has adapted. This can be done through various performance metrics that would gauge the performance of everyone in the store. The advantage of this strategy is that everyone would always be ready to perform as per expectations and few would be willing to see themselves criticized for poor work.

Performance Metrics

Performance metrics or key performance indicators are the various methods of measuring the performance in an organization through the quantification of objectives. These KPIs are done weekly, daily or monthly and analyzed through various ways to gauge the company’s performance. They are then posted at various areas where the employees can view them easily. In storeroom management, these KPIs are very crucial in that they enable comparison of real performance from one period to the next. They can also be used in comparing the actual performance with other storerooms and with the industry’s best standards. As the business process advocates for computerization of procedures in the storeroom ordering process, it is important for the store to incorporate all the necessary details required to calculate the KPs into the store’s computer systems. This would ensure automation of the process; ensuring that the figures are available when required and hence ensures that employees know what they should do on time. The data should be accurate and always available. The most important metrics would be:

Inventory Accuracy

This metric usually compares the store’s accuracy in recording its inventory by comparing a headcount of all the products or items in the store with what is recorded in the books or the firm’s database (Trujillo, 2016.). This metric requires that the staff do a regular headcount of the store’s inventory to ensure that the data management as well as the bookkeeping is accurate and up to date. This is important as mistakes in this area can lead to decreased customer satisfaction, decreased customer satisfaction, and inventory inaccuracies. Sometimes, the company is forced to manufacture or re-purchase items they already have because they don’t know these items are available. This leads to double costs that would have been avoided if the process was accurate. Incorporating things such as barcodes can solve frequent inaccuracies in the organization and led to more effective ordering and tracking.

Inventory Accuracy= Actual count/ Computer on hand balance

This metric should be performed weekly. It should always be greater than 95, and in case it falls below that the organization should reconsider its tracking and recording techniques (Reliability Web n.d.).

Inventory turnover

This metric is important to the organization as it tracks the rate of movement of goods/stock from the store to the customers, i.e., how the goods are being bought (Trujillo, 2016.). It is important to know what is selling and what is not since most of the company’s cash is often tied to the stock. Slow-moving goods may with time become obsolete and hence lead to huge losses. They also take much of the available space for no particular good. This, therefore, leads to low efficiency in the store and the organization in general. To prevent this from happening, it is important to observe the customers’ buying behavior and base the company’s purchases and production on the observations.

Inventory turnover=Cost of goods sold/Average inventory

This ratio should always be greater than 12.0 for an effective movement (Reliability Web n.d.).

Daily Order Picking Productivity

The process of order picking is usually one of the most difficult, tiresome, and expensive. This process is therefore at times not done in the right or most effective way. The staff may at time ignore some of the picking duties owing to the menial work involved. This is, however, one of the most important activities as it determines the level of customer satisfaction realized. The factors to consider in this metric include the order cycle times, use of packaging, costs in picking, and orders picked per hour. How the item arrives at its destination and the duration taken will go a long way in determining whether the customer buys from you next time. This metric is usually measured through graph plotting and observation. The graph should always be rising.

References

Reliability Web. Key Performance Indicators for Stores and MRO. Reliabilityweb.com. Retrieved 18 October 2017, from https://reliabilityweb.com/articles/entry/key_performance_indicators_for_stores_and_mro

Trujillo, P. (2016). 6 Important Inventory KPIs That Can Make or Break Your Warehouse. Retrieved 18 October 2017, from http://www.business2community.com/product-management/6-important-inventory-kpis-can-make-break-warehouse-01479733#RumZa3xuH4S3mdDZ.97

February 22, 2023
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