Assignment – Case Study Assignment OverviewDescription:Information and communication technologies (ICTs) such as big data analytics and enterprise 2.0 tools can enhance the efficiency and...

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Answered 3 days AfterSep 25, 2024

Answer To: Assignment – Case Study Assignment OverviewDescription:Information and communication technologies...

Shubham answered on Sep 26 2024
5 Votes
1. Introduction
JB Hi-Fi is consumer electronics retailer in Australia that is known for providing wide range of products including electronics, entertainment and home appliances. The company operates in competitive retail industry and relies on fast and accurate decision-making. Data driven decision making is important in the environment that allows JB Hi-Fi to manage inventory, forecast demand and optimize marketing strategies. The key challenge includes inefficient stock management an
d the inaccurate demand forecasting can lead to overstocking and stockouts. This requires addressing issue is important to maintain competitiveness and ensure efficiency of operation.
2. Decision Overview
Ineffective Decision-Making Process
The decision-making process in JB Hi-Fi includes managing inventory that causes inefficiencies. The issue lies in demand forecasting that is important for determining stock levels in multiple store locations. The forecasting is inaccurate and this can lead to two major problems like overstocking and understocking. Overstocking occurs when JB Hi-Fi orders are more than requirement of inventory. JB Hi-Fi had a 9.7% year-on-year increase in inventory holding costs that has impacted gross profit margin (JB Hi-Fi, 2023). This can result in excess stock that can include capital and add warehousing costs (Dekimpe, 2020, pp. 11). The shelf life of some products can be due to rapid technological advancements. Overstocked items may become outdated and this can lead to discount sales and reduced profitability. Understocking can cause issue of stockouts and this can cause that high-demand products are unavailable. It can result in missed sales opportunities, dissatisfied customers and potential loss of market share to competitors. In 2022, JB Hi-Fi reported 6.5% decrease in profits from discounting excess stock during end of year sales period (JB Hi-Fi, 2023).
Underlying Causes
1. Lack of Real-Time Data:
The issue is absence of real-time data tracking in inventory system of JB Hi-Fi. In this sales data from individual stores may be collected. The lack of synchronization and real-time updates results in outdated and incomplete information for making purchasing decisions. The absence of real-time visibility, JB Hi-Fi is struggling to adjust stock levels that can fulfil fluctuating demand patterns.
2. Fragmented Information Systems:
The inventory management system of JB Hi-Fi is not integrated with other business functions like sales, marketing and customer analytics. The fragmentation of information systems means that important data like promotional activity and regional sales trends. The 2020 Deloitte report found that retailers like JB Hi-Fi that do not integrate inventory systems with promotional and sales data are 30% are facing issue like forecasting errors in high demand like holiday seasons (Deloitte, 2020)
3. Manual Reporting Processes:
JB Hi-Fi relies on manual reporting processes for gathering inventory data. It will slow down flow of information and increases likelihood of human error (Akter & Wamba, 2016, pp. 185). Manual data entry and delays in updating stock levels can lead to incorrect assumptions about inventory needs.
4. Slow Communication Between Departments:
Poor communication between departments cam hamper efficient decision-making. Marketing teams can run promotional campaigns in absence of timely coordination with inventory and procurement teams. The insufficient stock planning has resulted in 5.1% increase in customer complaints about unavailable products (JB Hi-Fi, 2023)
5. Lack of Advanced Forecasting Tools:
The decision-making process of JB Hi-Fi is dependent on traditional forecasting methods that relies on historical sales data. The method is limited in ability to predict sudden market shifts and emerging trends. The absence of advanced forecasting tools like that powered by artificial intelligence and machine learning in inventory forecasts of company can lead to suboptimal decision-making.
3. Recommended Information and Communication Technology (ICT) Solutions
Proposed Technologies
1. Big Data Analytics for Real-Time Inventory and Sales Tracking:
Big Data Analytics has important role in transforming inventory management of JB Hi-Fi by providing real-time information about stock levels, sales patterns and customer behaviour. It includes integration of point-of-sale systems, online sales platforms and supplier data. Big Data Analytics enables continuous monitoring of inventory on different JB Hi-Fi locations. The technology offers capability to process large amounts of structured and unstructured data. This can help JB Hi-Fi to make decisions on stock replenishment, distribution and inventory optimization.
2. Implementation of ERP System:
The implementation of ERP system in JB Hi-Fi helps the company to gather real time data. This would help to minimize overstocking and understocking,...
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