Shopko and Pamida: Systems Triumph or Tragedy?

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CASE STUDY
ShopKo and Pamida: Systems Triumph or Tragedy?

I. Time Context

* November 2012

II. Viewpoint

* IT student.

III. Statement of the Problem

* What management, organization and technology actors prevented Pamida’s new distribution center from working successfully?

* What action plans are needed to overcome the challenges that will arise? How they will prevent it?

IV. Objectives

* The main objective is at providing the customer with merchandise which is always available as advertised.

* To make a decision and formulate action plan to solve organization problem.

* Getting rid of overstock items at highest possible price.

V. Areas of Consideration/SWOT Analysis

* Strengths

* Organization has structure that comprises in different level based on authority and responsibility.

* ShopKo information system enables company to price a product according to season, geography, local taste and past demand.

* Weaknesses

* The software made management difficult to layout and run a full service center in the most logical and efficient manner.

* The first few mark down buyer tend to take care are very conservative. So, ShopKo end up taking too many markdown

* Opportunities

* Pamida’s solution was to combine its 5 warehouse into 3. And modernize its inventory management system to increase store ability.

* ShopKo wanted to expand the number of Pamida store in small town.

* Threats

* The consolidation concept was to transfer the warehouse from a flow through facility to a full service distribution center.

* ShopKo also faces the stuff competition from GAP who rapidly changing product life cycle.

VI. Alternative Courses of Action

* Alternative A – Shopko need to empty its shelves in time for the arrival of the new cycle product and get rid of the overstock merchandise at highest possible price.

* Alternative B - Implement mark down optimizer from the spotlight to help the company in optimizing prices during the process.

VII. Recommendation

* The main objective is at providing the customer with merchandise which is always available as advertised, so, the company has to make a decision and formulate action plan to solve organization problem.

VIII. Conclusions/Detailed Action or Implementation Plan

* They need to implement Information systems that facilitate the acquisition, transformation, and distribution of information. Information systems can improve decision making, enhance organizational performance, and help increase firm profitability, thus contributing to corporate value. * Also, they need to plan technical approach to information systems that emphasizes mathematically-based models to study information systems and the physical technology and formal capabilities of information systems.

Case Study – ShopKo and Pamida: System Triumph or Tragedy? 1. Evaluate the role of information systems in the way ShopKo and Pamida run their business. How important are they?

ShopKo and Pamida's information systems are very important to the successful management of the businesses. However, the traditional information systems are ineffective and are not helping the companies achieve their business objectives. The new information systems are supportive of the businesses' requirements and enabling the businesses to achieve their overall objectives. ShopKo uses its information system to determine appropriate markdown prices for overstocked items. The traditional system determined a product's markdown price based on the clearance price used in previous years. Since the information system was unable to factor local geography and culture into the equation, a product's clearance price was the same at all stores. The traditional information system was ineffective, in that ShopKo was losing money, and the system was not helping the company realize its...
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