write a conclusion for a report already finished.

Anther location that should be known is Follett Corporation. It is located in Westchester, Illinois. Although it sounds a long distance. But every thing in Matador bookstore is operating by this corporation.

The location of the inventory of Matador bookstore is housed with in Matador bookstore. The reason of choosing this location is that to make inventory kept in storage areas adjacent to the sales floor, allowing associates easy access for restocking. Also that will save of the cost and time for moving merchandise from-to the store.

Matador bookstore does not have any factory. It is a retail store. So normally products will be deliver from different locations. Follett partner with many vendors that are headquartered in the United States (e.g., Nike, League Collegiate, Cutter & Buck, etc.) but produce their products in factories located throughout the world. Our team tried to get information about factories but it was reject on behalf of Follett vendor partners.

Customers:

Many different types of customers can Matador bookstore have, But the majority of customers are students. Matador bookstores does not want to be only a bookstore. The goal was to serve students of California State University, Northridge as much as possible. A lot of services can student have from Matador bookstore. Matador bookstore started to identify its customers needs thorough getting knowledge from other bookstores in United States. The method that Matador bookstore used to identify its customer’s needs will be explained later since Matador is operated by another company. But Matador bookstore ambition is to offer a complete store that can serve all students requirements. Also to help student find the course materials that work for them at affordable prices. Matador bookstore is a valued resource to our campus and has contributed to the success of our students.

A lot of services the bookstore offers, one of these services is to allow students to rent books. That service will help students to save money. Allowing students to purchase textbook rentals in-store, highlight text and mark pages, keep books until finals are over, return books in person or via mail. These will help students and fit their requirements. Also Matador bookstore has a unique service that a student can not find anywhere. All lab notes in our university classes a student can find in Matador bookstore. One more service that a student can find in Matador bookstore is finding a book by course number and professor name. This makes students feel more comfortable in dealing with bookstore. These were some examples of service Matador has offered to students of California State University. I think I can consider this is one of elements that make Matador a successful store.

As I mention earlier Matador bookstore deals with different types of customers. According to Follett estimation more then 90% of whole customers are students. This makes the priority in services goes to students. So departments were open in based on students needs in the campus. Also, Follett used some data of anther bookstore that Follett operate in identify customers needs. One more thing that Follett used professional team in identify customers’ needs If a visit were done for Matador bookstore. Anyone can tell the biggest department is Books. This department is running based on the time of the year. It close during the semester, but leave the front desk for helping students.

Anther department is Apparel and Accessories. One you go inside the bookstore; you can find anything related to that department in front of you. These department is targeting students who are looking additional CSUN brand things.

Gifts and collectible department is where a student can find anything needs for his house. This department makes Bookstore serve students outside campus also.

Two anther departments. They are Supplies and technology departments. I consider these two departments are the most important departments after the book department. This can make a student live easier. Technology offer great deals for students. Also they have maintenance section for students. Supplies departments cover all school requirement for students.

Forecasting:

Since Matador bookstore operated by Follett, demand forecasts is done by Follett, the method that used in demand forecasts by Follett is uses proprietary programs and processes to track and forecast sales of merchandise.

All Follett campus stores, including the Matador Bookstore, are supported by a General Merchandise team that are solely focused on tracking trends (national/local) and inventory as well as placing orders for new merchandise.

Follett look at each store individually so merchandise and sales will vary across its network. So The forecasting demand for each single department and each single product is different. Follett study the sales for each one and related to the time of the year. Based on that demand forecasts happens.

Follett increase supply for departments in Matador bookstore based on the time of the year also. For example, Fall and spring back-to-school are the busiest seasons for Matador bookstore. Most of sales are course materials and supplies. Predicting quantity for course materials is driven by enrollment numbers received from the campus. Looking at Follett broader selection of merchandise, Follett review historical data to estimate initial quantities and track when reorders are needed. Example of that if there are campus events that must be considered in planning.

Follett always have to ensure Matador book store have a strong inventory of supplies at the beginning of the term as well as during major test periods like midterms and finals. For clothing and gifts, Follett have to be prepared for increased demand driven by local events, from orientation to graduation. Unfortunately, our team could not get any hard data or graphs. Our team requested that, but the order was rejected.

Processing and Design

Matador Bookstore Inventory Control Process map

Matador Bookstore is owned by a private company called “Follett” that provide products such as books, clothes, school materials and so on. Follett is the main source to the Matador Bookstore where any needed items would be delivered from there. We have examined the inventory process as shown in the map above to see from the starts to the end of process. Through this paper we will explain in details about each and every part of the inventory process of Matador Bookstore.

Recognize the need

At this part of the process, Matador Bookstore has to focus at the need of stock and how many parts they should order for their demands. It is important to count the number of items for their demands and avoid any overstock which will cost Follett or the Matador inventory space and includes that money.

Categorize sections

When Matador Bookstore sort out their needs of products, it will start classifying every part of product to its own group. It is important to set up a well-organized location names for the products to make it easier for customers to find what they need. Also, in this part of the inventory process, every section of a product should be in a circle place. Such as, books in one part, clothes in another part and so on.

Label Items

After doing all the categorizing parts, Matador staff focus on tagging the products they receive from Follett. When doing that, staff should label items in a way that to be unique, short, and unmistakable item numbers. This will lead to avoiding time waste because sometimes some products will be stored in a wrong place and staff would be looking for it for quit sometime and locations will be referred to by more than one name and the organization will get disorganized.

Set reorder details

At this stage, Matador staff prepare to make a list of low on stock products in the inventory in order to start requesting them from Follett. This stage takes a quiet time and it depends on the availability at Follett because some of the products are already in finish good step and others may be WIP. This is why the Matador should estimate the amount of demand from costumers so by implementing that it will avoid reordering products. This can cost the company money and time because if costumers want a specific product and it was not available in the inventory, costumer will not wait to have the product and will find alternative ways to find the product.

Restock sections

In this stage, once all the inventory and warehouse are established and stocked with items the warehouse managers must ensure that acceptable inventory levels are maintained to meet customer demand. Warehouse manager at Matador must evaluate items balance data to use it to determine the appropriate times to issue renewal orders.

Inventory control

It is used to show how much stuck Matador has at any time of the year and how that inventory can be tracked. This inventory control can be applied to the items that matador use to produce a service or Follett use to produce a product from the raw materials to the finished goods. This inventory control covers all the process of the production of inventory starting with purchases to delivery and then reordering the stock.

Inventory adjustment

In inventory adjustment, Matador needs to reduce the amount of inventory that they have without making a sale. This can include any products that has been damaged and cannot be sold. Also, other products that is out of date or need to be thrown away. Moreover, products’ loss or any other reasons such as missing or stolen. However, inventory adjustment for Matador is to help them increase their inventory levels.

End of Inventory process

Finally, the Matador bookstore can apply all of these stages to have a well-organized inventory that can function well. An example of having a waste at the bookstore inventory is at this duration of time, after final exams is done, Students will return rented books. The process of which they implement is a huge waste of time and money. The books are stocked all together and then stored in the back. This will take a time to organize it and that cost them money as well (which is work overtime for staff).

Meeting demand while managing inventory cost:

Inventory Management

Business must have methods and procedures that offer ample flexibility to meet unusual and sometimes unreasonable demands on their resources -- personnel, equipment and facilities and operational. Exceptional customer service also includes providing top quality products at reasonable costs.

Businesses must keep a careful rein on their inventories. Having too much inventory and/or not having enough stock is considered primary direct causes of business failures.

Inventory Management is  “the practice of planning, directing and controlling inventory so that it contributes to the business' profitability”.  Inventory management can help business be more profitable by lowering their cost of goods sold and/or by increasing sales.

Inventory Costs

There are three basic costs associated with inventory:

1. ordering costs

2. carrying, or holding, costs and

3. shortage costs.

Ordering costs 

· these are the costs associated with replenishing the stock of inventory being held

· Ordering costs vary with the number of orders made--as the number of orders increases, the ordering cost increases.

· Costs incurred each time an order is made can include requisition and purchase orders, transportation and shipping, receiving, inspection, handling and storage, and accounting and auditing costs.

· Ordering costs generally react inversely to carrying costs.

· As the size of orders increases, fewer orders are required, reducing ordering costs.

· However, ordering larger amounts results in higher inventory levels and higher carrying costs. In general, as the order size increases, ordering costs decrease and carrying costs increase.

· Clerical costs of preparing purchase orders 

· Some spent finding suppliers and expediting orders 

· Transportation costs 

· Receiving costs (E.g. unloading and inspection) 

Carrying costs 

· These are the costs of holding items in inventory.

· These costs vary with the level of inventory and occasionally with the length of time an item is held; that is, the greater level of inventory over a period of time, the higher the carrying costs. 

· Costs of storage space (E.g. warehouse depreciation) 

· Security 

· Insurance 

· Forgone interest on working capital tied up in inventory 

· Deterioration, theft, spoilage, or obsolescence 

Shortage costs, 

· These are also referred to as stock out costs, 

· occur when customer demand cannot be met because of insufficient inventory.

· If these shortages result in a permanent loss of sales, shortage costs include the loss of profits.

· Shortages can also cause customer dissatisfaction and a loss of goodwill that can result in a permanent loss of customers and future sales.

· In some instances, the inability to meet customer demand or lateness in meeting demand results in penalties in the form of price discounts or rebates.

· Disrupted production when raw materials are unavailable: 

               Idle workers                  Extra machinery setups 

· Lost sales resulting in dissatisfied customers 

· Loss of quantity discounts on purchases 

Costs resulting from lost sales because demand cannot be met are more difficult to determine than carrying or ordering costs. Therefore, shortage costs are frequently subjective estimates and some times an educated guess.

Shortages occur because carrying inventory is costly.

As a result, shortage costs have an inverse relationship to carrying costs--as the amount of inventory on hand increases, the carrying cost increases, whereas shortage costs decrease.

The objective of inventory management is to employ an inventory control system that will indicate how much should be ordered and when orders should take place so that the sum of the three inventory costs just described will be minimized.

Demand

The starting point for the management of inventory is customer demand.

Inventory exists to meet customer demand.

Customers can be inside the organization, such as a machine operator waiting for a part or partially completed product to work on.

Customers can also be outside the organization--for example, an individual purchasing groceries or a new VCR.

In either case an essential determinant of effective inventory management is an accurate forecast of demand.

For this reason the topics of forecasting (Chapter 10) and inventory management are directly interrelated.

In general, the demand for items in inventory is either dependent or independent. 

Dependent demand items are typically component parts or materials used in the process of producing a final product.

If an automobile company plans to produce 1,000 new cars, then it will need 5,000 wheels and tires (including spares).

The demand for wheels is dependent on the production of cars--the demand for one item depends on demand for another item.

Cars are an example of an independent demand item. Independent demand items are final or finished products that are not a function of, or dependent upon, internal production activity. Independent demand is usually external and, thus, is beyond the direct control of the organization.

In this chapter we focus on the management of inventory for independent demand items; Chapter 13 is devoted to inventory management for dependent demand items.

Evaluating suppliers and supporting operations:

Introduction:

The evaluation and selection of suppliers, structuring the supplier base is an important task in any organization. It assumes utmost importance in the current scenario of global purchasing. Every Organization especially manufacturing organizations need to have a Supplier evaluation matrix or model in place. It also outlines ways and means to reward a supplier and establish long-standing relationships with suppliers.

Supplier Evaluation:

Principles

A supplier evaluation shall comprise all aspects that are important for a well-set and cordial working co-operation between the Customer firm and the supplier. A typical Supplier Evaluation Framework shall be used in all cases where the standard of a supplier for production material is to be defined. It can be used both for existing and potential suppliers. Existing suppliers can also be ”coached” with the framework to bring then up to mark and also used to monitor an existing supplier and help in its corrective action. It also helps companies in rewarding suppliers for their excellent performance and punishing them or de-listing them if found otherwise. If a firm or customer organization has various divisions and Organizations, then the division or SBU that is having the maximum business with a supplier will undertake to do the evaluation. This helps in a strategic focus of the supplier towards the highest buying organization.

Why Supplier Evaluation?

Supplier Evaluation is one of the fundamental steps to evaluate a supplier on the adaptability towards one’s organization. The Supplier Evaluation Framework (SEF) is a generic framework to achieve the objective of a customer organization in establishing a supplier’s credentials and capabilities in supplying specific goods/services to the customer organization.

Description of Supplier Evaluation Framework (SEF)

The purpose of the framework is to:

a) Make available a basis for evaluation of potential and existing suppliers. Supplier Evaluation – the first steps for effective sourcing Srinivasan Sarangapani

b) Provide a unified procedure for all companies to allow full exploitation of the results within the parent Organization.

c) Provide a supplier data set within various components, functional and technological

d) Areas.

e) Deepen the knowledge about each supplier.

f) Act as an improvement tool for developing suppliers and the supplier structure.

g) Assist in fact-based decision making.

h) Give basic data for running supplier reward programme.

i) Share information about suppliers to various other disciplines.

Specific company personnel earmarked for Evaluation need to carry out evaluations in cross-functional teams (Supplier Quality Assurance, Design, Logistics, After-market etc.). A Supplier Evaluation Framework’s-lead auditor normally located in the purchasing organization should manage the team. Evaluations can be performed for existing as well as new suppliers. 2.3.1 Preparations and collection of facts

In connection with the planning of an evaluation, the supplier company can be asked beforehand to present fact based data and presentation material in order to carry out the evaluation as effective as possible. Likewise, internally in one’s company, available data are collected to make the evaluation as objective as possible. These data collection tools will help in the auditor in getting prepared ahead of his evaluation exercise.

2.3.2 Short description of evaluation criteria

The Various criteria and parameters that are used to evaluate and short comments concerning what characterizes a good evaluation result will be discussed here. This gives a clear guideline on the various parameters and actions, which need to be carried out in completing a wholesome evaluation.

2.3.2.1Company profile

One of the basic parameters for evaluation is screening the profile of the supplier company and the various factors to consider are in screening a company profile are:

2.3.2.1.1 Ownership:

Stability in ownership and willingness to invest in long-term view. A person needs to evaluate co-operations and joint ventures from a risk point of view. This indicates the long-term stability of the company.

2.3.2.1.2 Global ability:

The supplier’s possibility to support the Customer Organization within all the Geographical areas where it’s operating. The supplier’s activities can contain all areas of manufacturing e.g. product engineering, industrial engineering, and production or delivery and distribution in a global context. For e.g. If a customer organization / Firm has factories around the globe, the supplier’s ability to supply components and assemblies to al its location is a major criteria to select a supplier for the customer organizations global sourcing commitments.

2.3.2.1.3 Dependency:

The business volume given by the customer organization and the size and importance of the customer business will give an idea of how dependent the supplier is on the customer. Large dependency as well as small should be considered. The supplier’s final customers structure is also analyzed to see if the supplier perceives the customer organization as a serious one.

2.3.2.2 Management

The Next parameter to consider is how the Supplier Company is Managed and various factors to be evaluated in establishing the management credentials are

2.3.2.2.1 Operations Management:

The application of modern work procedures, e.g. cross-functional Teams, long-term business plans etc need to be seen. This indicates the robustness of the management of the operations. 2.3.2.2.2 Customer satisfaction:

Do the supplier organization have effective procedures to monitor customer satisfaction? This helps in establishing a system and method of how the supplier will satisfy the needs of the customer organizations.

2.3.2.2.3 Quality Work procedures:

Does the Supplier Organization use any criteria for Quality awards in their own quality development and deployment? Examples are Malcolm Baldrige National Quality Award etc. In evaluating these the customer organization will come to know the importance the supplier organization places on Quality.

2.3.2.2.4 Risk management:

Does the Supplier organization have the Knowledge and procedures in the field of Risk management? Are they having any contingency plans, have fire protection and Plans for Environmental risks and administrative hazards; do they properly manage Data and what are their Data backup plans. These risk mitigation and Risk assessment plans help the customer organization in identifying the various Business continuing plans (BCP) of the supplier organization. These parameters will help in establishing the wellness and readiness of a supplier organization to meet the various demands of the customers.

Supplier Quality:

Supplier quality is not just determining the low cost of the purchase but also: The costs of transactions, communication, problem resolution and switching suppliers all impact overall cost. The reliability of supplier delivery, as well as the supplier’s internal policies such as inventory levels, all impact supply-chain performance. Since the group is a 140-year-old organization, the supplier quality has been improved over the years. There is a quality check performed at source.

Since it is a huge group with stores across the country, regional partners have been roped in to improve the logistics cost.

The Matador Bookstore complex has tie-ups with major brands such as Champion and Nike for the supply of school merchandise. For smaller items such as pencils, there is more of an inventory check rather than quality. But for high amount products like Apple products, the company has signed contracts wherein the Follett is not responsible for any claims and the supplier takes care of it.

Apart from this, Follett makes sure that the material that they received are of good quality by doing quality checks at source and also a visual inspection once the products arrives in the store. Thus, supplier quality is ensured through contract bindings and quality checks.

Logistics Management:

Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination.

Logistics management involves numerous elements, including:

· Selecting appropriate vendors with the ability to provide transportation facilities

· Choosing the most effective routes for transportation

· Discovering the most competent delivery method

· Using software and IT resources to proficiently handle related processes

· The Follett group, decides its requirements based on the semester time of the school.

· The start, end and the mid term periods are the busiest times and the bookstore has to make sure that the basic school supplies are in abundance.

· As for the big ticket products, their sale is mainly seen during the start of the new school year.

· Since the Follett group is a huge chain, the logistics part of the company has been improving over the years.

· The requirement of each product is calculated by estimation techniques.

· Each store has its own planner for the same. The main job of the planner is to decide the orders to be place for months in advance.

· The requirement at Matador bookstore has been growing in size with each passing year, the logistics has been more proactive by making sure that the required products are in stock at the Bookstore.

Conclusion

Recoginze the need

Categorize sections

Label Items

Set reorder detailes

Restock sections

inventory control

Inventory Adjustment

End Of Inventory Process

Outsource "Follett"

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