BUS644 Operations Management / Alliance Supermarket

Alliance Supermarkets Case Studies

Alliance Supermarkets has been using a point-of-sale (POS) system for some time to track

its inventory. The system uses a laser scanner to read the Universal Product Code (UPC) on each item at the checkout container. The UPC is a number that uniquely identifies the

product on which it appears. Currently, Alliance is using the UPC information to update inventory records for each item. Although the system has greatly improved the company's

ability to replenish inventory promptly, the company still has some pr oblems. For example, sudden changes in demand for a particular item can catch the company by surprise as it

bases inventory replenishment on historical demand patterns. Further, demand patterns

and preferences may vary from one store to another depending o n the customers served by each, but the inventory system groups all demand information together and treats each

store equally. Finally, the manufacturers that make the products stocked by Alliance

Supermarkets are always pressuring Alliance to help them ta rget appropriate customers for special promotions and sales.

The chief information officer (CIO) of Alliance realizes that much more could probably be done with the data collected from its POS system. For example, the company could analyze

the relationship between each product's sales and weather patterns. It is even possible to

analyze an individual customer's buying habits and identify instances when a customer

may be persuaded to try a different brand of a certain product.

Suppose you have been asked to study this situation and suggest possible new and innovative uses for the information generated by the POS system. Ideally, these ideas

should help Alliance better serve its customers by ensuring that adequate quantities of

each item are available, that costs are kept low, and that customers are made aware of new

products that may interest them.