Over the last few years Lowe’s has used a variety of different techniques to improve its productivity and quality. Lowe’s uses global sourcing and expects high ethical standards from its manufacturers. It brings in products from all over the world using a method they call LGS sourcing. Lowe’s works with more than 500 vendors spread out among 21 countries, mainly concentrated in Asia.
They provide clear quality guidelines to insure product quality, safety, and social responsibility. All vendors are expected to comply with the laws of the company to ensure a steady ethical production. In order to ensure quality and reliability of products, Lowes uses internal and third party Quality Assurance teams to keep their vendors in check.
In 2010, LGS performed more than 800 factory certifications and nearly 600 random social compliance audits. 17,000 product tests were conducted at third-party testing facilities, many of which were pulled from production lines randomly for random production audits. LGS also currently requires pre-shipment inspections with more than 12,000 being conducted in 2010.
The company actively practices total quality management, a philosophy that stresses three principles including customer satisfaction, employee involvement, and continuous improvement. Lowe’s constantly takes suggestions about their work and even requests to start new locations. Customers come first at Lowe’s, and the company makes sure to ensure quality products above anything else. Employee involvement is also important to ensure quality at the source. Since most of the products are brought in from different areas of the world quality circles and special-purpose teams assist in the inspections mentioned above. Additionally Lowe’s is a strong advocate of continuous improvement, always looking to improve their production processes, and set new bench marks for quality and production. In stores, Lowe’s stores stock 40,000 products in 20 product categories ranging from appliances to tools, to paint, lumber and nursery products. They have several other products that are available through special order. Sales are booming for the company with market share growing in 10 out of the 20 product categories. Lowe’s has a very sophisticated business intelligence branch that is dramatically increasing their productivity. This environment contains industry-leading technology from MicroStrategy, Teradata, Informatica, and IBM. There are more than 30 full-time professionals and contractors dedicated to building a BI Center of Excellence at Lowe’s, with 25 reporting and analysis applications. The MicroStrategy used is called Data Access and Reporting Tools, which provides employees greater insight into key performance metrics. 150000 reports are run each week, and Lowe’s employees use the data to manage inventory, improve margins, review market specificity, and identify sales opportunities. Lowe’s also uses BI to analyze demographic attribute data to better anticipate the products that its customers will buy. Business intelligence has improved merchandising decisions, made it for more timely responses to information requests, cost reduction initiatives, enhanced employee productivity, and better service to our customers.
Lowe’s is a firm believer that by maximizing productivity in the areas of project labor and inventory the efficiency of its business will boom. Labor hours need to be used for installations versus other non-value-added activities such as material handling, which makes up about 40 percent of the laborer’s time. That will increase their profits. Electronically tracking statistics on activities such as labor, change orders, overtime, schedules, estimating, material handling and procurement from an operator’s point of view through Job Productivity Assurance and Control (JPAC) methods can be a useful measuring stick. Lowe’s distribution management team works to achieve a high level of operating efficiency.
Lowes uses essential equipment to operate their inventory and basic store elements.
A forklift (also called a lift truck, a fork truck, or a tow-motor) is a powered industrial truck that is used to lift and transport materials. The modern forklift was developed in the 1920s by various companies including the transmission manufacturing company Clark and the hoist company Yale & Towne Manufacturing. The forklift has since become an indispensable piece of equipment in manufacturing and warehousing operations.
Pallets, also known as skids are used for storage and / or transportation. They are platforms that can be lifted with a forklift or pump truck. They can be loaded with items. Some specialized skids exist and many use standard ones and then shrink-wrap the contents. Skids can be easily stacked and forklifts allow them to be placed on pallet racking. Whether your pallets are steel, wood, plastic, or some other material, it’s likely that you’ll want racking for them. Lowe’s recognizes the importance of using the power of technology to maximize their competitive position in the retail marketplace. This is one critical operation Lowe’s can’t afford to be without. By continuously investing in the very best hardware, software, telecommunications, and application development tools; Lowe’s is cutting edge.
Like many other retailers, Lowe’s experienced delays of one to three weeks in deliveries of seasonal products such as air conditioners and grills. The company is now rushing to reserve containers to ensure products such as Christmas decorations and space heaters are on shelves for holiday shoppers. The $25-billion home improvement chain, is also working with Celarix Inc. to create a collaborative global community that will connect the company's entire supplier network, including more than 700 international factories and multiple service providers. Lowe's merchandising, inventory, and logistics departments have access to all shipping and order information—giving the entire organization real-time, end-to-end supply chain visibility from the time products leave the manufacturing plants until they arrive at Lowe's distribution centers. By implementing Celarix' real-time web-based solution, they will be able to improve communication with our trading partners, reduce inventory in the pipeline, and increase efficiency with more accurate information on shipments.
Recommendations
Lowe’s Home Improvement has a few things they need to improve on to increase productivity, improve quality and cut down on costs. Some of these things include quality improvement, inventory management, employee management, distributors and suppliers. Lowe’s has been in business for quite a while but some things could use some correction.
Lowe’s is known for providing customers with low-cost quality products, but some customers don’t agree they’re living up to these expectations. Customers often had bad experiences with the quality of products Lowe’s retails. Customers complain that Lowe’s products are made with cheap material. This shows that Lowe’s might be cutting corners to increase productivity with the expense of quality. Lowe’s also has trouble managing their inventory. Inventory is managed using the first-in, first-out method of inventory, but because of Lowe’s poor inventory management it hasn’t been able to maintain a steady inflow and outflow of merchandise affecting sales. Lowe’s has not been regulating inventory levels, keeping an eye on sales trends or historical experience. Changes in consumer purchasing patterns could result in the need for additional inventory, or a downsized inventory.
Capacity is not an issue for Lowe’s. Lowe’s has one of the largest capacities for a retail store. But since Lowe’s poorly manages their inventory, capacity has been fluctuating more than it should be. Lowe’s might under stock the inventory and they might not be able to sell as much as they should be; or they might over stock the inventory and they might not be able to sell everything. Overstock leads to wastage and high costs for keeping the extra inventory. Lowe’s has to regulate inventory more closely. Some factors that contribute to poor quality and other problems might be the suppliers and distributors of Lowe’s. Lowe’s is always looking for new and different suppliers to help them fill the shelves. Lowe’s is always in need of different suppliers because they don’t have a lot of standing relationships with quality suppliers. Until Lowe’s builds strong relationships with some high quality suppliers the quality of their product might not always be as high as they like to claim.
Lastly, but certainly not least is the way Lowe’s manages their employees. Lowe’s had many employees dissatisfied with how they are treated. There have been cases where Lowe’s fired employees on questionable grounds as well as retracted benefits. Although Lowe’s is a big company and can’t make everyone happy, allegations such as these aren’t pushed aside so easily.Product quality is an issue at Lowe’s Home Improvement. Customers are getting cheaper quality products for their money. This will eventually endanger the chances for repeat customers. For example, a new LCD TV crashes into the living room floor because of a poorly constructed wall mount. Although in the short-term, Lowe’s saves more money, in the long-term, people stop buying your products.
As far as inventory management goes, all stores need to be adjusted. Home Depot spent $2 billion on inventory management systems and web-based kiosks. Lowe’s has to spend more in this area to ensure inventory is secure and efficiently distributed. Also, more money has to go toward Loss Prevention technology and management. Lost or stolen inventory costs Lowe’s a great deal. Then calculate the cost of the problems associated with an incomplete inventory. All of these factors add up to a lot in the long haul. There are many issues in terms of how employees are rewarded for their work. Lowe’s has to try and meet employee needs so the worker and manager relationship can improve. This will then make for a better work environment and then transferred to a better customer experience. So what are the cons for working at Lowe’s? Well you have low-pay matched up with horrible hours and schedules. Raises are under 3% and there are constant rumors of downsizing. A poor relationship with human resources doesn’t give security for the workers. Lack of communication between workers on the floor and management bring rise to issues concerning policy and its proper enforcement. Everybody in the store has to be on the same page concerning all things work-related.
Conclusion
This blog's purpose is to identify ways Lowe’s Home Improvement has improved productivity and quality in the past 3-5 years. We also recommended specific courses of action that would lead to further productivity and quality improvement in the next couple of years. Lowe's needs to make their products with better quality materials. They need to spend more in technology to secure and properly account all of the inventory. Employees need a better work environment where communication isn't lacking. These are basics most retailers tend to overlook. We learned that Lowe’s works with over 500 vendors throughout the countries and actively practices total quality management. Lowe’s seeks ways to have exceptional customer service, inspiring employees, and better management of expense controls. In the end, new and return customers are critical in achieving success.
Conclusion
This blog's purpose is to identify ways Lowe’s Home Improvement has improved productivity and quality in the past 3-5 years. We also recommended specific courses of action that would lead to further productivity and quality improvement in the next couple of years. Lowe's needs to make their products with better quality materials. They need to spend more in technology to secure and properly account all of the inventory. Employees need a better work environment where communication isn't lacking. These are basics most retailers tend to overlook. We learned that Lowe’s works with over 500 vendors throughout the countries and actively practices total quality management. Lowe’s seeks ways to have exceptional customer service, inspiring employees, and better management of expense controls. In the end, new and return customers are critical in achieving success.
