Snyders of Hanover, which sells more than 78 million bags of pretzels, snack chips, and organic snack items each year, had its financial department use spreadsheets and manual processes for much of its data gathering and reporting. Hanover’s financial analyst would spend the entire final week of every month collecting spreadsheets from the heads of more than 50 departments worldwide. She would then consolidate and re-enter all the data into another spreadsheet, which would serve as the company’s monthly profit-and-loss statement. If a department needed to update its data after submitting the spreadsheet to the main office, the analyst had to return the original spreadsheet and wait for the department to resubmit its data before finally submitting the updated data in the consolidated document. Assess the impact of this situation on business performance and management decision-making.
–> Snyders of Hanover had a big issue with storing their data. They were keeping all the sales data manually, though they are selling 78 million bags of pretzels, snack chips, and organic snack items each year. And it consumed a lot of time to store data.
Firstly, they store the data on a spreadsheet in different departments of the world and then only they send it to the main department where the financial analyst checks and store data in a single spreadsheet. Another critical issue was also that, they are only able to prepare the result once a month.
So, the impact of this situation on business performance and management decision-making are as follows:
- The way they were collecting the data shows that they were not collecting all the necessary and important data as often as needed. So, it made it difficult to identify and record the changing demands and preferences of a particular product.
- As they were not able to update their cash flow regularly, it made them difficult to predict certain future events. And it made them difficult in long-term strategy development.
- They were only able to estimate gross profit but not the performance of their working capital management.
- They require a lot of manpower and will increase more pressure on Human Resource Management (HRM) department. And increases labor costs too.
Hence, Snyder should implement a system in which digital databases are used, with an integrated system so everyone in the company is connected. And the financial analyst should have a cash forecasting spreadsheet that predicts cash flow for the future.
The analyst should also require daily cash from each department. If these basic functions were implemented into Snyder’s financial department, they would be up to date and will run smoothly.
Dollar General Corporation operates deep-discount stores offering housewares, cleaning supplies, clothing, health and beauty aids, and packaged food, with most items selling for $1. Its business model calls for keeping costs as low as possible. Although the company uses information systems (such as a point-of-sale system to track sales at the register), it deploys them very sparingly to keep expenditures to a minimum. The company has no automated method for keeping track of inventory at each store. Managers know approximately how many cases of a particular product the store is supposed to receive when a delivery truck arrives, but the stores lack the technology for scanning the cases or verifying the item count inside the cases. Merchandise losses from theft or other mishaps have been rising and now represent over 3 percent of total sales. What decisions have to be made before investing in an information system solution?
–> Dollar General Corporation is a discount store that offers necessary items for the public. Products such as houseware, cleaning supplies, clothing, health and beauty aids, and food are all sold for around one dollar.
Because Dollar General corporation isn’t one of the top businesses in this industry, they lack the basic functions of an automated method for keeping track of inventory. This is a major problem when it comes to sales or revenue, and even theft.
The way that Dollar General Corporation keeps track of inventory at each store, is by the use of their managers. Managers know approximately how many cases of a certain item are being delivered to the store.
When the truck arrives with the delivery, the manager should manually count each item to have an exact number of each item delivered. This is not an efficient way to run a store with a big competition.
So, the following decisions have to be made before investing in an information system:
- Investment: They must first invest in necessary complementary assets, (mainly managerial and organizational). And they can decide, how much to invest in training employees, what equipment to purchase, how many employees to hire, etc.
- Hiring: Based on the company’s investment and budget, the organization should hire managers capable of managing the store profitably.
- Training: A company must provide training to all the members of all management levels to increase management skills and IT-enriched educational programs.
- Combating Theft: This can be done by implementing the new policies, using a store layout, and following the same type of common security practice. It would be beneficial to try to cut out as much middle-man action as possible.
An automatic inventory scanner should also implement by them, so all items are recorded properly and management has a better prediction of products in the store, on their path to be delivered, what is needed for the next day’s delivery and can also be used to track theft and other misbehavior that happen along the way.
If Dollar General Corporation implements ethics, security, an automated scanner, and a more effective way to collect data, it will generate more revenue to strive as a business and become more successful.
Hence, they will come together as a business and will be successful in the modern age of the retail industry.
Laudon, K. C., & Laudon, J. P. (2012). Management Information Systems: Managing the Digital Firm (12th ed.). Pearson Education.