All in with online, can J.C. Penney get up to digital speed?

I had a few occasions chatting with the IT people of the company in the past few years. They were reluctant to adapt to the on-line trend of the retail market. One year, they wanted to expand their on-line catalog business; the next year, they closed the on-line catalog business and moves the majority of their IT people overseas in the following years. This time, it appears that the new SVP, Mike Amend, hired from Home Depot, is ready to face the on-line retail business challenges.

This article highlights a lot of positive actions for the company to transition itself from a traditional retail business to an on-line one.

  1. Recognizing its market strength: Research from comScore tells Penney that its customers have household incomes of $60,000 to $90,000, and they tend to be hardworking, two-income families living both in rural and urban settings. They don’t have the discretionary income to commit to membership fees.
  2. Last month, Penney added the ability to ship from all its stores, which immediately made about $1 billion of store inventory available to online customers and cut the distance between customer and delivery.
  3. About 80 percent of a store’s existing inventory is eligible for free same-day pickup.
    Last week, it offered free shipping to stores with no minimum purchase. Large items like refrigerators and trampolines are excluded.
  4. JCPenney.com now stocks four times the assortment found in its largest store by partnering with other brands and manufacturers.
  5. More than 50 percent of its online assortment is drop-shipped by suppliers and doesn’t go through Penney’s distribution. Categories added range from bathroom and kitchen hardware to sporting goods, pets and toys
  6. JCPenney.com now has one Web experience regardless of the screen: phone, tablet or desktop.
  7. Its new mobile app and wallet include Penney’s new upgraded Rewards program. Customers can book salon appointments on it. The in-store mode has a price-check scanner.
  8. Penney set out to “democratize access to the data,” so that not only the technical staff could understand it, now dashboards and heat maps allow the artful side of the business — the merchants — to measure such things as sales to in-stock levels or pricing to customer behavior.

Read more at All in with online, can J.C. Penney get up to digital speed?

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Managing risk in the digital supply chain

You may be aware of risks and problems in your own business, but increasingly it’s possible to be exposed to issues by other organizations that you deal with, particularly if you’re buying in IT services.

How can enterprises deal with these threats and ensure that their data and that of their customers is kept safe at all stages of the supply chain? We spoke to Dean Coleman, head of service delivery at service management and support specialist Sunrise Software, to find out.

BN: How difficult is it for larger organizations to manage problems that might occur further down the supply chain?

DC: It can be quite difficult, historically most organizations have a handle on risk in terms of what’s going on in the business, financial targets and so on. But when it comes to IT risks and the supply chain providing IT they don’t have the same visibility. These days IT is everywhere and businesses depend on it so IT problems have a larger impact. The understanding of risk needs to be something that key decision makers are more aware of.

BN: Is this a particular problem when dealing with smaller companies who might not have resources in house?

DC: Yes, from the supplier side of the fence we see that smaller organizations often don’t have the skills in house to deal with security, infrastructure, and so on. They rely heavily on these services but don’t see them as a core part of their business. Because they don’t have the skills and resources they will often turn to third parties to manage these things for them. However, in some cases the third parties also don’t do a very good job, they’ll be providing reactive services rather than the proactive ones that are really needed to predict problems based on risk.

Read more at Managing risk in the digital supply chain [Q&A]

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7 Reasons to Merge Revenue Cycle and Supply Chain Management

Using technology to merge supply chain management and revenue cycle departments may help advance cost-to-charge transparency and increase accuracy in terms of managing reimbursement costs. “In most provider organizations[,] supply chain management (SCM) and revenue cycle operations function in silos, occasionally responding to anecdotal evidence to make improvements in the processes linking the two areas,” confirms HSRC-ASU. “Hospitals and health care systems that become proficient in managing the revenue environment achieve strategic advantage by reaching their financial goals and assuring a stream of revenues to support their clinical efforts,” the researchers explain.

According to HealthITAnalytics, supply chain management should be considered as a marathon endeavor, not a short-lived sprint. Successful supply chain involves connecting costs with analytics to enact substantial long term change. Additionally, hospital executives claim non-EHR health IT acquisitions strengthen the supply chain, states HealthITAnalytics.

Consistency is an essential key to ensuring accurate coding and pricing efforts. “Linking the traditional aspects of supply chain management (e.g., strategic sourcing, logistics, and inventory management) to margin management decreases the probability of lost charges occurring,” the researchers state. “Prices should be strategically set to optimize maximum allowable reimbursement. Charge capture processes should be incorporated in pricing strategies in each of the targeted areas,” they add.

HSRC-ACU confirms seven reasons to combine revenue cycle management and supply chain management:

  1. Increased and more accurate reimbursements
  2. Strengthened contract negotiations and enhanced contract compliance
  3. Improved transparency
  4. Streamlined cross-check utilization of supplies and ease of monitoring supply revenue
  5. Capturing cost-to-charge data visibility will be smoother
  6. Billing will be more accurate
  7. Labor will be wisely utilized and not wasted

Read more at 7 Reasons to Merge Revenue Cycle and Supply Chain Management

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Cloud-Based Supply Chain Faces Scrutiny

Cloud-Based Supply Chain Faces Scrutiny

As the supply chain looks for new tools to manage increasing complexity, as well as a need to manage risk and other variables quickly and proactively, cloud-based solutions, which are relatively underutilized today, will become more common.

What are some of the common misconceptions around cloud computing and supply chain applications?

Supply chain has generally been a very slow adaptor to new technologies, and cloud computing is no exception. Besides data security and ownership, other factors come into play around how the infrastructure would behave in terms of excess volumes and concerns the in-house IT team may have with feeling helpless when it comes to issues around performance, managing downtime, and handling end customer pressures.

Often, lack of management support is cited as a reason for not adopting cloud technology. Why do you think the corner office is reluctant to support these sorts of initiatives?

Not all senior managers have yet to fully understand the implications of moving into cloud. They still look it as a pure cost saving initiative vis a vis the risks and the litigations they may end up facing in case they encounter issues around their data. Managers would like to hear success stories that [demonstrate that the concerns about] data security are all addressed by big product vendors, which are now moving over to cloud.

What are the best ways that supply chain managers can “speak the language” of business leaders to quantify the potential benefit of cloud-based apps for the supply chain?

The ROI of moving to a cloud-based service is very fast. Customers need not invest in capex for their expensive infrastructure, licenses, and upgrades. This can be very easily worked out. Another factor is that often, companies invest in large IT teams and have to constantly manage them – thereby deviating and investing in a division that is not their core business. By moving to the cloud, they can overcome this by maintaining a lean IT team.

Do you have any personal views about utilizing cloud-based system? What do you think are the advantages and disadvantages?

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