HELP PLEASE ASAP T.T

FINAL CASE # 2: E-COMMERCE PROVIDES DECISION SUPPORT TO HI-LIFE CORPORATION THE PROBLEM

Hi-Life Corporation owns and operates 720 convenience retail stores in Taiwan, where it sells over 3,000 different products. A major problem is keeping a proper level of inventory of each product in each store. Overstocking is expensive because of storage costs and tying money up to buy and maintain the inventory. Understocking reduces sales and could result in unhappy customers who may go to a competitor. To calculate the appropriate level of inventory, it is necessary to know exactly how many units of each product are in stock at any given time. This is known as stock count. Periodic stock count is needed since the actual amount in stock frequently differs from the theoretical one (inventory = previous inventory - sales + arrivals). The difference is due to "shrinkage" (theft, misplaced items, etc.). Until 2002, stock count was done manually using data-collection sheets on which the product names were preprinted. Employees counted the quantity of each product and recorded it on a data-collection sheet. Then the data were painstakingly keyed into each store's PC. The process took over 21 person-hours in each store each week. Moreover, the process was expensive and frequently was delayed, causing problems along the entire supply chain due to delayed counts and errors. Suppliers, customers, and employees were unhappy.

THE SOLUTION

The first phase of improvement was introduced in the spring of 2002, Management introduced Pocket PC from HP (Jornada), which runs on Microsoft Windows (Chinese version). Pocket PC (a handheld device) enables employees to enter inventory tallies directly on forms on the screen by hand, using Chinese characters for additional notes. Jornada Pocket PC has a synchronized cradle called Activesync. Once a Pocket PC is placed in the cradle, inventory information can be relayed instantly to Hi-Life's headquarters. The main menu of Pocket PC contains an order-placing program, product information, and even weather reports in addition to the inventory module. In the second phase, in 2003, a compact bar code scanner was added on in the Pocket PC's expansion slot. The employees scan the product bar codes and enter the quantity found on the shelf. This expedites data entry and minimizes errors in product identification. The up-to-the- second information enables headquarters, using DSS formulas, to compute appropriate inventory levels, shipment schedules, and purchasing strategies, all in just a few minutes. The stores use the Internet (with a secured VPN) to upload data to the headquarters intranet.

THE RESULTS

The results were astonishing. Inventory-taking was reduced to less than four hours per store. Errors were down by more than 90 percent, order placing was simple and quick, and administrative paperwork was eliminated. Furthermore, quicker and more precise inventory count resulted in lower inventory levels and shorter response times for changes in demand. Actually, the entire product-management process became more efficient, including purchasing, stocking, selling, shelf-price audit and price checks, reticketing, discontinuance, and customer inquiries. The new e- commerce-based system provides a total merchandise solution. The employees like the solution too. It is very user- friendly, both to learn and to operate, and the battery provides at least 24 hours of power, so charging can be done after hours. Finally, Hi-Life's employees now have more time to plan, manage, and chat with customers. More important, faster and better decisions are enabled at headquarters, contributing to greater competitiveness and profitability for Hi-Life.

QUESTIONS:

How was the decision-making improved? Relate your answer to the generic DSS components and flow of information.

Summarize the benefits to the customers, suppliers, store management, and employees.

The data collected at Activesys can be uploaded to a PC and transmitted to the corporate intranet via the Internet. It is suggested that transmission be done using a wireless system. Comment on the proposal.