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.
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
9. Plan &
Buy Distribution Sell
Allocation
Outsource
10.
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)
16.
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
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
NAICS Code 448140 Department Stores2700 stores3 retail chains in US (TJMaxx, Marshalls, HomeGoods)Quality brand name merchandise 20-60% retail priceRevenue increase by 3.2% from 2009-2010Revs over 20 billion According to Cap IQ:Bed, bath and beyondBest Buy Amazon, BJ’s Wholesale Marks and Spencer Group
Not their core and strategic competencyFocus more on the core (opportunistic buying)No need to catch up with technological improvementsEffective use of assetsdecreasing labor costsFocus on coreTechnologyEffective Use of AssetsIncreasing Labor Costs
*TJX wants to get products to store as quick as possible, outsourcing will go faster
Relationship with service provider may not work as expected
Using existing managers as supervisors for the 3PLStabilizing the processTransferring existing knowledge to service providerMore ControlCreate metrics to measure the quality of the provider’s work (time/item, delivery time)
*** ZOOM IN ON INTERNAL PROCESS & FINANCE ON PREZI ****
***labor cost are daily *******CHECK NUMBERS IN UTILITY SAVINGS ***
Recommended Companies for Outsourcing Distribution Center Enter in Long term logistics contract with UPSGENCO Supply Chain SolutionsExel Logistics Company
Capital IQ 10KMinimum 70,000 working in DC
More focus on sales associates & office center employees