Supply Chain Management

Best Buy focuses on a precise supply chain. The company focuses on moving nonsales activities higher up the supply chain to create a better effort on maximizing salespeople's time with customers. For example shipments are being configured to individual store floor plans so that store employees don't have to spend as much time moving products into their proper displays. Employees have more freedom to serve local market needs. Best Buy is also giving store employees greater flexibility in responding to demand. An example of this is to change the floor layout or eliminating a inventory management plan so the store can stock more of certain items to meet local product demands. The Supply chain has to react quickly to these signals from the store, updating shipments to accommodate a new floor plan. Best Buy is currently developing software to allow dispatchers to change the delivery schedules even when loads are already shipped. Best Buy believes in better information flow. The supply chain is being relied upon to improve the flow of information. Sales associates are able to access detailed information on product updates from the time an item is manufactured to its arrival at the store. This will create a more accurate date to when products will be actually available. Stores are now able to communicate changes in floor plans to distribution centers where loads are built and sent out. Anderson Best Buy CEO says he has just updated all IT communication systems.   

Recently this year Best Buy has been trying to make the supply chain more efficient so that there is less waste and greater accuracy in shipments. Higher delivery frequency and smaller shipments are starting to be implemented. Best Buy's customized network known as the Nibler Network is now putting more emphasis on distribution centers located closer to retail outlets. All imports from Asia are currently being shipped to two large Best Buy centers one being in Seattle and another in Long Beach, CA. These centers feed seven large distribution centers and fourteen smaller home delivery centers. The nibler network will now distribute more loads to smaller facilities. Anderson quotes again "We need a high-velocity distribution system, so that we are sending product to where it is needed, as opposed to just sending it". Best Buy along with their suppliers use another concept/SCM system known as Collaborative Planning, Forecasting and Replenishment (CPFR), which automates replenishment of products by linking suppliers and buyers electronically. 

1.) Delivery - Best Buy uses on demand delivery which is part of on-time delivery. If customers order a service or a product it is guaranteed to be delivered that day. If products are ordered online, the customer is able to track their order through the website. 

2.) Quality - Best Buy delivers the most high tech electronic goods for the most reasonable cost. Products quality is checked at the manufacturer using methods such as six sigma and no electronic good is sold if it is not in quality condition. Warranties and return policies are available to guarantee quality for the ultimate customer satisfaction.

3.) Time -  Best Buy's cash to cash cycle is averaged time to a month. It takes time for the manufacture to ship the product out of its logistic center to the actual store. From that day it takes time for the product to sell. Best Buy of course makes payments monthly to all it's suppliers.

4.) Cost - Best Buy spends alot of money on it's inventory and customer service. The company also spends a fair enough of money on it's supply chain systems because they have many suppliers. Logistics costs are another factor that money is spent on to get the appropriate to the correct stores. 

Recommendation 

I believe Best Buy is doing their best to get the right products at the right location. It makes me curious to find out if customers are unsatisfied with Best Buy's supply chain. Are the right products coming in at the appropriate schedule? I suggest Best Buy creates a customer survey evaluating their process. Find out if the customers actually know what a supply chain is and if so do they believe the products are coming in on time.