Sears Logistics Management Practices

BYMohammed IrfanSai KrishnaM Hareesh babuSrinvas Gosula

INTRODUCTION

• Sears, Roebuck & Co. was founded by Richard Sears in 1886.

• Initially Richard started a R.W. Sears watch company.

• Appointing Alvah C Roebuck as a partner – renamed the company as SEARS,ROEBUCK AND COMPANY.

• Later on increased their business with Catalog of different products

• Initially they followed mail order Delivery.

• By constructing 40-acre, $5 million mail order plant.

Retail stores

• They Started opening retail stores to compete with chain stores in US

• By 1927 they had 27 retail stores.

• Later the company launched additional catalog program-

• “The independent catalog program merchant program”

• By 1930’s

-The number of retail stores carrying sears products were 400

- sears forward integration stores were around 600

Geographical coverage of storesUS

Central and south America.

Europe

Canada

COMPETITORSWal-Mart

Kmart

COMPETE WITH RIVALS.

“Store of the future” program- Renovating 600 stores to offer a more comprehensive collection of merchandise.

“New pricing Strategy”- they shutdown 824 stores for 2days and cut down the price to 50% for more than 50,000 items

-to compete more effectively with its rivals.

REVAMPING THE LOGISTICS MANAGEMENT SYSTEM

full line store

logistics

Off-mall logistics

Specialized channel

Direct delivery

Sears’s store

Sears business customers

Retail Consumers

Pagonis( Executive vice president of Logistics) implemented a set of military logistics practices at sears.Implementing four unique independent logistics channel

“Three ups and three Downs” Rule

This rule is used in military.

According to this rule every week executives had to list three positive things that happened during the course of project or within the group and three negatives.

By which the negative information can flow to the top executives so, that they can take corrective steps to rectify the problems.

Cross- Docking• This was the method followed in order to make the logistics system

more efficient in terms of merchandising division.

It works :

1. sears place a purchase order to vendor using Electronic Data Interchange(EDI)

2. After fulfilling the order vendor forward an electronic Advance shipment Notice(ASN) to Sears.

3. The vendor ships the goods.

4. On the arrival of Goods at the Distribution Center, the bar-codes labels were thoroughly inspected and Receipts were generated.

5. later cross checked through the ASN file

By this process Goods were dispatched in short time

USING TOOLS AND INTERNET TO MANAGE LOGISTICSElectronics Ordering System.

Strategic Performance Reporting System (SPRS)

Global Information System Technology (GIS)

Enhanced Home Delivery System

Voice Response Unit (VRU)

Sophisticated Logistics Algorithm System (SLAS)

Operational Contingency Cell (OCC)

USING MOBILE SYSTEMS TO MANAGE LOGISTICS• Sears had 7 RRCs, which supplied replenishment to more than 870

retail stores in US.

• One RRC controlled more than 25,000 pallets in a single day.

• Wireless Mobile Systems(WMS) installed in the RRC scanners, the network link between the server and hand-held devices

• System-related errors were eliminated, productivity increased by 30%

• Later 7 RRCs controlled 250,000 trailer loads of goods and reduced paper work significantly

IMPLEMENTING CPFR

• Stands for Collaborative Planning, Forecasting and Replenishment (CPFR).

( SEARS Michelin – Tire manufacturer )

• Four Stages of CPFR

1. Cross Functional teams of both companies work

2. IT divisions of both companies track product information flow.

3. Two sides collaborated in selling only private label tires.

4. Companies broadened CPFR implementation to accommodate the complete range of products