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Alexandra Glazer, Solomon Sun, Wakeelur Miah,Jenixie Reyes, Umur Gencoglu, Aakaanksh Pothukutchi
Industry Overview Company Visit   Company Analysis     Recommendation       Questions?
"Our vision of TJX is as a global, off-price, value company. We remain focused on driving profitable sales through sharp e...
   Treasure Hunt Experience   “Shopportunities”   Fashionista for Less   Quick Inventory Turnover
Company Visit                 Corporate                 Headquarters  Distribution  Center
• Opportunistic                                • Increasing     Buying                                         Operating  ...
CORE: Buying& Selling***STRATEGIC:COMMODITY:Delivery &distribution
Plan &Buy                  Distribution   Sell      Allocation                   Outsource
Focus on Core     TechnologyIncreasing Labor CostsEffective Use of Assets
 Outsourcing      logistics activities    Transportation    Warehousing    Storage   IT related activities to control...
   Processes may not run smoothly    ◦ Quality of Delivery    ◦ Time    ◦ 3PL employee working performance    ◦ Location ...
   Relationship with service provider    ◦ Communication between TJX and the 3PL    ◦ Lack of control in the delivery pro...
   Existing managers for 3PL    ◦ Stabilize the process    ◦ Existing knowledge    ◦ Control   Create metrics to measure...
Category           Strategies (Action BSC Metrics                                    Explanation                   Oriente...
Savings From              Explanation              Amount Reduction of Labor         $8/hr *64,000         $512,000- $960,...
Revenues From                  Explanation                AmountLeasing/Renting current    $6 /sq ft. * 494,000 sq ft. =  ...
COST   BENEFIT
2004:105,000   2007:125,000   2011:166,000         Union Members earn between $14-$16 an hour
Pro                                      Con• No Unions                            • Social Responsibility• More Focus on ...
Possible               Solutions                             Contract withCompensation    Relocation   Outsourcers
Never Pay Full  Price for
Organizing for Effective Management: TJX
Organizing for Effective Management: TJX
Organizing for Effective Management: TJX
Organizing for Effective Management: TJX
Organizing for Effective Management: TJX
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Organizing for Effective Management: TJX

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

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Organizing for Effective Management: TJX

  1. 1. Alexandra Glazer, Solomon Sun, Wakeelur Miah,Jenixie Reyes, Umur Gencoglu, Aakaanksh Pothukutchi
  2. 2. Industry Overview Company Visit Company Analysis Recommendation Questions?
  3. 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. "
  4. 4.  Treasure Hunt Experience “Shopportunities” Fashionista for Less Quick Inventory Turnover
  5. 5. Company Visit Corporate Headquarters Distribution Center
  6. 6. • Opportunistic • Increasing Buying Operating Expenses Strengths Weaknesses Opportunities Threats• Global Expansion • Rise in Labor Wages
  7. 7. CORE: Buying& Selling***STRATEGIC:COMMODITY:Delivery &distribution
  8. 8. Plan &Buy Distribution Sell Allocation Outsource
  9. 9. Focus on Core TechnologyIncreasing Labor CostsEffective Use of Assets
  10. 10.  Outsourcing logistics activities Transportation Warehousing Storage IT related activities to control smooth flow of goods
  11. 11.  Processes may not run smoothly ◦ Quality of Delivery ◦ Time ◦ 3PL employee working performance ◦ Location of the warehouse
  12. 12.  Relationship with service provider ◦ Communication between TJX and the 3PL ◦ Lack of control in the delivery process from TJX ◦ Adaptation
  13. 13.  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)
  14. 14. 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 TJXs 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 its 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
  15. 15. Savings From Explanation Amount Reduction of Labor $8/hr *64,000 $512,000- $960,000 Cost employees $15/hr * 64,000 employeesReduction 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
  16. 16. Revenues From Explanation AmountLeasing/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
  17. 17. COST BENEFIT
  18. 18. 2004:105,000 2007:125,000 2011:166,000 Union Members earn between $14-$16 an hour
  19. 19. 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.”
  20. 20. Possible Solutions Contract withCompensation Relocation Outsourcers
  21. 21. Never Pay Full Price for

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