OEM Stream combines Organizational Behavior, Technology Operations Management & Managerial Accounting courses

1. Alexandra Glazer, Solomon Sun, Wakeelur Miah,
Jenixie Reyes, Umur Gencoglu, Aakaanksh Pothukutchi

2. Industry Overview
Company Visit
Company Analysis
Recommendation
Questions?

3. "Our vision of TJX is as
a global, off-price,
value company. We
remain focused on
driving profitable
sales through sharp
execution of the
fundamentals of our
off-price business
model. "

5.  Treasure Hunt Experience
 “Shopportunities”
 Fashionista for Less
 Quick Inventory Turnover

6. Company Visit
Corporate
Headquarters
Distribution
Center

7. • Opportunistic • Increasing
Buying Operating
Expenses
Strengths Weaknesses
Opportunities Threats
• Global Expansion • Rise in Labor
Wages

8. CORE: Buying
& Selling
***STRATEGIC:
COMMODITY:
Delivery &
distribution

9. Plan &
Buy Distribution Sell
Allocation
Outsource

11. Focus on Core
Technology
Increasing Labor Costs
Effective Use of Assets

12.  Outsourcing logistics activities
Transportation
Warehousing
Storage
 IT related activities to control smooth flow of
goods

13.  Processes may not run smoothly
◦ Quality of Delivery
◦ Time
◦ 3PL employee working performance
◦ Location of the warehouse

14.  Relationship with service provider
◦ Communication between TJX and the 3PL
◦ Lack of control in the delivery process from TJX
◦ Adaptation

15.  Existing managers for 3PL
◦ Stabilize the process
◦ Existing knowledge
◦ Control
 Create metrics to measure the quality of the
provider’s work (time/item, delivery time)

17. Category Strategies (Action BSC Metrics Explanation
Oriented)
Financial Cut Overhead Costs Lower overhead costs for to Current overhead are equal
under (18%) to 18% of total costs. Due
to extremely low prices on
% Change in profits apparel, TJX should
continue to cut overhead
costs to increase
profitability.
Customer Educate Customers on off Average dollar sales per Ensure that TJX is driving in
Price Retailing customer new customers by helping
them understand the TJX
Increase in store customer business model, and fix
conversion rates current customer
perspectives about off-
pricing. A higher average
dollar sale, and increased
customer conversion rate
will reflect customer
perception of off-price
retailing.
Internal Process Buy and sell quality Time between distribution In order to maintain TJX's
products at low prices, in center and store striving business model, it
a timely manner must be able to turn
inventory and continue to
replenish it's stores with
the best quality clothing in
time.
Learning & Employee Training Quality of work life, Satisfaction Quality of work life,
Growth of environment satisfaction of environment

18. Savings From Explanation Amount
Reduction of Labor $8/hr *64,000 $512,000- $960,000
Cost employees
$15/hr * 64,000
employees
Reduction of Inventory Reduced by
Holding Costs outsourcing
distribution and
inventory holding to
another company
Utility savings 38,729,600 KwH * $ 2,645,232
0.0683 $/KwH
Workers Comp Save money on
employee
compensation based
on distribution center
injuries
Estimated Annual > $ 3,157,232
Savings

19. Revenues From Explanation Amount
Leasing/Renting current $6 /sq ft. * 494,000 sq ft. = $ 47,424,000
Warehouses $2,964,000 * 16 warehouses=
$47,424,000
Estimated Annual Additional > $ 47,424,000
Revenues

20. COST BENEFIT

22. 2004:105,000 2007:125,000 2011:166,000
Union Members earn between $14-$16 an hour

23. Pro Con
• No Unions • Social Responsibility
• More Focus on Core • Company Reputation
• Unemployment Rate
Union problems in the past
“If the unions threaten to strike unless their demands are satisfied,
then the retailer’s only defense is to either continuously give in to
the increases expected by the unions, or to outsource the
distribution operation to a third party and thereby create an arm’s
length agreement between the retailer and the labor force.”

24. Possible
Solutions
Contract with
Compensation Relocation Outsourcers

25. Never Pay Full
Price for