a.Provide a list of operations modules and its IT function.

b.Create a process flow chart (or swimlane diagram) for OfficeMax

c.Explain which areas can be further improved to bring process efficiency i.e., an IT problem

1. Review the business case below and answer the following questions. [25 marks \& suggested time 45 mins] 10.2 OfficeMax Gets a Handle on Its Inventory OfficeMax (www.officemax.com) is a leading which caused customer dissatisfaction to rise to retailer in the office products market, selling unacceptable levels. Additionally, the company office supplies and equipment to both busi- had very high inventory carrying costs. nesses and consumers. The company operates There were many other problems with the superstores in 49 states and in Latin America direct-to-store environment. The company had and employs more than 30,000 full- and part- no intermediate distribution points, so its entire time workers. inventory had to be located in its stores. This Officelax executives realize that there are problem was so acute that it affected store laymany competing office supply stores where outs. Stores had inventory atacked up to the customers shop if the selection, service, or other ceiling, blocking much of the lighting. Not only factors are more attractive. In addition to this did customers not like the dimness, but they intense competition, unanticipated shifts in the complained that they had difficulty navigating market for computers and other business-related through the store once they entered the "big products, coupled with a consumer spending valleys." slowdown due to the contracting economy, forced In addition, associatos in the stores had to the company to reconsider key elements of its manage inbound shipments rather than spendstrategy and to analyze its business operations. ing time with customers. Retail stores had to This analyeis revealed that the company's wait more than a month to receive replenishment businese model was faulty. OfficeMax had stock, and individual stores received hundreds of established supply chain processes where its small shipments every week. Further, the comindividual retail stores ordered products from pany could not take advantage of quantity pricsuppliers, and the suppliers shipped products ing from suppliers because individual stores did directly to the stores. This process, known as the not order enough products to qualify for quandirect-to-store environment, required individual tity discounts. The suppliors were not satisfied stores to purchase goods in minimum quantities, either, because they had to ship to thousands of which were determined by the supplier's mini- places, a very inefficient and expensive process. mum-order quantities rather than the atore's To help overcome these numerous problems, needs. The direct-to-store environment created OfficeMax developed a new supply chain model. a situation in which actual inventory levels were The key component of the new model was the too high for low-turnover items and too low for establishment of three large intermediate distrihigh-turnover items. Thus, OfficeMax regularly bution centers to eliminate the direct shipment experienced shortages of high-demand items, of products from vendors to stores