Systems Triumph or Tragedy

1
Systems Triumph or Tragedy?

• ShopKo and Pamidas case
• Team BRAVO
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2
The table of contents

• Briefing Case-Study
• CASE STUDY QUESTION
• Evaluate the role of information systems in the
  way ShopKo and Pamida run their business. How
  important are they?
• Evaluate the importance of Pamidas distribution
  center con-solidation project for both Pamida and
  ShopKo. What man-agement, organization and
  technology factors prevented Pamidas new
  distribution center from working successfully?
• Are ShopKo and Pamida using information systems
  effec-tively? Why or why not? How much value do
  their systems provide to the business
• If you were the CEO of ShopKo, how would have
  addressed the problem? If you were the CEO of
  Pamida when it was purchased by ShopKo, would you
  have recog-nized the problem? Explain. How would
  you have solved the problem?
• What management challenges does this case study
  illus-trate? Explain your answer

3
Briefing Case-Study
Green Box organizational movement Yellow Box
Personnel management

• ShopKo Pamidas History

• Early 2000
• Pamida was to consolidate its five warehouse
  into three
• the warehouse was expanded from 200,000 square
  feet to
• 418,000 square feet ,but the warehousing
  software was neither
• updated nor repalced
• ShopKo to lose 6.7 million in overall
  rev-enue.
• Pamidas New CEO arriving

• The end of 2001
• Pamida eventually turned around its
  distribution center
• and it became fully functional
• Pamidas new distribution system is closing a
  smaller warehouse
• in Missouri to consolidate distribu-tion at
  its Indiana and
• Nebraska centers.

• ShopKo purchased Pamida
• Pamidas the chain had a total of 180 store

july 1999 Steve Fishman in pamidas CEO
leaving

• may 2000
• ShopKo purchased P.M. Place
• Chain of 49 small town Midwestern stores
• Pamidas the chain had a total of 229 store in
  16 states

may 2001 ShopKos CEO william Podany
resigned asn chairman
the spring of 2000 The task of merg-ing
P.M. Place with Pamida
4
1. Evaluate the role of information systems in
the way ShopKo and Pamida run their business. How
important are they?

• ShopKo
• Info system
• Markdown Optimizer
• Purpose
• To help the company optimize prices
• during markdowns for overstocked items
• Function
• to price a product according to season,
• geography, local tastes, and past demand by
• analyzing historical pricing and sales data.
• Effect
• The products will sell faster and with
• a better profit at each store

• Pamida
• Info system
• Warehouse Management Information System
• Purpose
• to Providing the customer with merchandise which
  
• is always available as advertised.
• Function
• Goods arrive at the warehouse and are immediately
  
• shipped to the stores.
• Effect
• Pamidas earnings to decline

5
Evaluate the importance of Pamidas distribution
center con-solidation project for both Pamida and
ShopKo. What man-agement, organization and
technology factors prevented Pamidas new
distribution center from working successfully?

• Before consolidation

Pamidas information technology strategy is aimed
at providing the customer with merchandise which
is always available as advertised.
Store
Store
Store
inefficient methods
Store
For example-
Food Warehouse
Clothes Warehouse
Toy Warehouse
Tableware Warehouse
Computer Warehouse
6
Evaluate the importance of Pamidas distribution
center con-solidation project for both Pamida and
ShopKo. What man-agement, organization and
technology factors prevented Pamidas new
distribution center from working successfully?

• After consolidation

This con-solidation project is cause to increase
stores ability to keep their shelves stocked.
Store
Store
Store
Where goods arrive at the warehouse and are
Immediately shipped to the stores when needed
Full-service Warehouse
Full-service Warehouse
Full-service Warehouse

• More expanded space.
• Modern-ize inventory
• management system
• But the warehousing software was neither
  updated nor replaced.

The Lebanon Distribution Center
7
Evaluate the importance of Pamidas distribution
center con-solidation project for both Pamida and
ShopKo. What man-agement, organization and
technology factors prevented Pamidas new
distribution center from working successfully?

• - Three major factors problem
• Management
• The task of merg-ing P.M. place with Pamida
• (it be that ShopKo's resources and
  management were stretched thin)
• Focused on a three-year pro-gram
• Organization
• Pamida and ShopKo management many turnover.
• Technology
• Pamidas old warehouse management information
  system is not real flexible so the processes at
  the distribution center had to conform to the
  system

8
Are ShopKo and Pamida using information systems
effec-tively? Why or why not? How much value do
their systems provide to the business

• We think about They arent using information
  system effec-tively

Pamida have to their Old inflexible software
changes to New flexible software
old Hardware
Pamidas Business Strategy Procedures
Database
inflexible Software
Independent
Dis-communication
Distribution Center Service
Organization
Old Information System
The indepen-dence between organizations and
Pamidas Old information systems.
9
If you were the CEO of ShopKo, how would have
addressed the problem? If you were the CEO of
Pamida when it was purchased by ShopKo, would you
have recog-nized the problem? Explain. How would
you have solved the problem?

• Case in case
• 2002? ???? ????? ????? ?? ? ?, ????? ??????
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  ?????.
• If we were the CEO of ShopKo, we will develop new
  flexible Information System that it is able to be
  applied with all of Pamida and ShopKo after
  closing the Pamida's old system
• And we will use Markdown Optimizer to help the
  company optimize prices during Markdowns for
  overstocked items

10
If you were the CEO of ShopKo, how would have
addressed the problem? If you were the CEO of
Pamida when it was purchased by ShopKo, would you
have recog-nized the problem? Explain. How would
you have solved the problem?

• Strategy on selling of ShopKo
• Flexibility of information system between shopKo
  and Pamida
• Financial statement condition of ShopKo
• Flexible Connection between P.M. Place and Pamida

11
What management challenges does this case study
illus-trate? Explain your answer

• They didnt have enough information when
  consuming Pamida and P.M. place.
• There were few communication between ShopKO and
  Pamida.
• Unreasonable strategy on expansion of stores.