Chapter3' Case study what happened to Kmart

1
Chapter3. Case study-what happened to Kmart?-

• Team name.A-JA
• Kim soo-ryun
• Lim soo-yeon
• Choi jung-hee

2
1.evaluate Kmart using the value chain
and competitive forces models. What was Kmarts
business model and business strategy?
3

• Kmarts founder invented the concept of the
  discount store. But he didnt successful because
  Wal-Marts low price strategy.
• Kmarts strategy is using circulars inserted
  into local newspapers. And draw customers to
  physical stores by Web.
• they try to their goal was to make Kmart the
  primary destination for mothers looking for
  low-priced clothing, housewares, and packaged
  food for their families.

4
2.what was the relationship of
information systems to Kmarts business processes
and business strategy?How well did its systems
support its strategy?
5
(1)

• Kmart begun developing BlueLight.com,a Web
  Site to sell a few items in order to draw
  customers to physical stores and to polish its
  image

Using BlueLight.com
6
2) Because of Kmart spend a lot of money to
plan that restructure information system, Kmart
lose of 22 million

• Workers use bar-code scanners to locate each
  item and to track the flow of the goods.
• Save 15 million a year By increasing
  productivity and lowering labor costs.
• Track 30SKUs at the beginning of the Third
  quarter 119,000 in late November,and 500,000
  three months later.

3)
PkMS
7
3.what management, organization, and
technology factors contributed to Kmarts
problems?
8
they didnt invest to IT impatiently.
They use outdated systems as circulars. And their
WebBlueLight.comhad never become a profitable
Web business. They should have invested to more
up-to-date systems.
9
4.how important was supply chain
management in contributing to Kmarts problems?
Evaluate Conaways decision to use i2 software to
improve Kmarts supply chain management.
10
1)Kmarts problem
Allocating 60 of Kmarts goods to specific stores
Difficult to support with supply chain management
system that Everyday low pricing, popular
products were often empty. Inventory turnover
rate was very low
11
2) i2 Technology
Improve Kmarts management of sales
forecasting, Inventory sourcing, logistics and
reporting

• Connect these new systems to appropriate in-store
• Technology
• ex)bar-code scanner

Analyze Kmarts needs, and execute the required
orders, schedules shipments, and record the
delivery of products
Reduce excess inventory in stores and
distribution centers thus lowering costs, and
enabling Kmart to lower prices. And sales would
then grow and profits increase
12
5.were those blaming software for the
collapse of Kmart correct? Explain your answer.
13
The new system was so extensively
modified that it no longer could work well and
cost too much to maintain. Kmart also wrote off
65million for two outdated distribution
centers,replacing them with two newer ones. And
Kmart originally did not understand the complex
difficulties of the project.
14
6.it has been said that Wal-Mart uses
their IT strategically, and they fully integrate
it into their operating model. dose this
statement apply to Kmart? Explain your response.
15
improve Kmarts management of sale
forecasting, inventory sourcing, logistics, and
reporting. Also connect these new systems to
appropriate in-store technology such as bar-cord
scanners at cash registers.
16
7.list the problems Conaway faced when he
took over Kmart, and then describe the short- and
long-range policies you would have followed had
you been in his place.
17
problemUnify Kmarts two separate
computers in its distribution system. Warehousing
no more storage space Supplies often sitting on
pallets for 24 or more hours. Popular products
were often empty Inventory turnover rate was very
low.
18

• strategy
• increase the productivity of Kmart stores,
  inventories, and information systems closed 72
  stores, reducing staff by 5000
• spend about 1.4 billion for IT
• variety of its products rather than focusing on
  fast selling items
• rebuild its supply-chain systems.