Business Process Reengineering – Cargills’ Food City Supermarkets
The study is on the working of the Cargills supermarket in Staple street, Union Place. The objective is to study the goals of the supermarket and the current processes and propose a new technology to help redesign the processes. The aim is to meet the goals of the company by increasing profitability and reducing costs and inefficiencies in the processes.
The starting point of any BPR project is the customer focused processes within the company. This is due to the fact that customer is king and the firm should adopt to meet the needs and aspirations of the customer. By increasing the efficiency of serving the customer and reducing costs the firm will increase its organizational force and speed. To this end the customer focused processes should be looked at. The working and outputs of these processes can be examined and inefficiencies and non value added work will be removed. Hence the project will look at the sales process and of the supermarket as our major BPR initiative. We propose a radically new approach to sales which is a phone ordering/ home delivery service.
Cargills Ceylon Ltd.
Cargills was first set up by William Milne and David Sime Cargill over 150 years ago. It became a public limited liability company in 1946 named Cargills (Ceylon) limited. In 1981 it came under the controlling interest of Ceylon Theatres group. Today, in keeping with the vision of Ceylon Theatres’ founder, Sir Chittampalam A. Gardiner, Cargills has a broken new ground in retailing, manufacturing and restaurants. Today it serves over a million satisfied and loyal customers with products ranging from choice cuts of fresh and frozen meats, to fresh fruit, vegetables, dairy products, groceries, house hold products and pharmaceuticals. Today Cargills generates a rupees 4 billion turnover per annum.
However Cargills in synonymous with its “Food City” super markets. Currently it has 25 branches. The staples Street supermarket is one such supermarket. It was the first branch of Cargills and was established in 1983. It is currently the largest branch of Cargills and has a sales volume of over rupees 1.2 million a day.
With the increase of customers, the Staple Street Cargills had to face a problem with increased inefficiency in the point of sale process. The keying in of the products was done manually, taking time. This led to long queues and increased customer dissatisfaction. Also cashiers made mistakes in the data entry which caused them to complain. Redesigning this process is an urgent need of the company.
The manager is the head of the supermarket, which has a flat organizational structure. Below him are the cashiers, sales people and workers.
The manager plays a key role in the running of the supermarket. He makes purchases from suppliers. He has to also handle customer complaints and the daily running of the business.
The goals of the company
The goals of the company are given below.
* To provide maximum Convenience for the shoppers – Cargills seeks to pay close attention to customer requirements. This means taking appropriate steps that result in fulfilling these needs in the form of a hygienic, one stop environment, offering a large selection of reasonably priced quality products.
* To approve the best product and service to adequately satisfy the growing needs of our customers.
* To train and develop the staff of Cargills.
* To build long term partnership with suppliers for mutual benefit,
* To provide our shareholders with an attractive return, while enchasing the value of their investment and to build on our long established strengths and forge ahead to constantly grow and advance with time.
The major system that exists in Cargills Food City Supermarket is the Inventory Control System. This system has many features. The system updates Re-Order levels every month on a 3 month moving average method which ensures that stock levels are always kept up to date. Also when the reorder level has been reaches for any product this will be added into a file of reorder products automatically. The head office warehouse dials in and gets these orders. They will then transfer these goods to the appropriate branch twice a week. The POS system is linked to the Inventory system, so as soon as goods are sold the inventory levels are updated. When procurement occurs, the manager is able to easily update the system.
Before inter branch transfers take place, the branch Manager in the branch that seeks to provide the goods can access this system and verify whether adequate stocks exist to be transferred to the requesting branch.
The procurement process is a success at Cargills Supermarket. Stock levels have been maintained to required levels most of the time and customers have been satisfied.
The lead time to deliver stocks has been controlled, so that the external suppliers provide goods on time. This has led to losses due to shrinkage has been reduced to between 1% to 6% which is an acceptable level. This is especially true for fresh vegetables/ fruits, meat products and etc. The branch managers effectively liaise with the fresh meat and fresh vegetables warehouses in Mattakullia to get deliveries in time. External suppliers also provide milk products and other perishables.