Executive Summary: Dick’s Bottlenecks and Capacity Analysis

Dick’s Bottlenecks and Capacity Analysis
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Dick’s Bottlenecks and Capacity Analysis
Effective inventory management by a business helps it minimize potential inventory mistakes and specific strategic problems. It is a good practice that every company committed to ensuring customer satisfaction has to observe. Some of the possible benefits of proper inventory management include improved accuracy and convenient inventory placement of orders. In line with (Bachman et al., 2016), it also saves time, and operational costs incurred and lead to organized and efficient warehousing. Therefore, it is a strategy that organizations can exploit to meet customers’ demands and maintain customer loyalty.
The following project focused on Dick’s Sporting Company and tasked with identifying the company’s bottlenecks within its automatic inventory ordering system and conducted capacity analysis. The company engages in the retail of extensive variety of authentic sportswear and equipment among others. It runs specialty chains which has expanded and now forms one of the biggest sporting products retailers worldwide (Gurvich & Van Mieghem, 2014). It has incorporated an automatic inventory ordering system which enables it to keep a detailed inventory for every store. In addition, it has fulfilled online ordering that minimizes costs spent in shipping and allows dissatisfied clients to return equipment purchased more conveniently.
The most effective way of identifying the company’s bottlenecks and conducting capacity analysis involves making an assumption and any other conditions deemed helpful (Bachman et al., 2016). For example, it was assumed that; the demand for Men’s Nike Men's Huarache 2KFilth Keystone Mid Baseball Cleats (Black & White) is high. The sales data reviewed indicated that every week from March to April, the inventory system had ordered new inventory in Dick’s stores weekly. Additionally, two conditions were set as follows; Condition 1: the Baseball cleats are available to replenish. Condition 2: the Baseball cleats are not available and cannot be dropped once the company has decided to replenish.
The analysis revealed two bottlenecks in Dick’s automatic inventory ordering system which are highlighted as follows. The first one involved the placement of order to the distribution center whiles the second one showed that Ship Inv. to Store took two days of the process time. They constituted the two longest and demanding procedures within the ordering process. The weekly ordering timing indicated that Dick’s capacity under the first condition totaled to about four orders made each week. It is because these two identified bottlenecks can only allow for one order to be processed within two working days. By assuming that the two conditions are independent and the company applies them for eight weeks then about four orders would be made per week. In that case, the average regular product for each order is about five items.
Therefore, for Dick’s to keep an effective automatic inventory ordering system, it is recommended that it should resolve bottlenecks discovered under the first condition. For example, the company could enhance its computer systems to reduce the period orders are placed with suppliers. Also, it could be addressed by upgrading distribution centers to save shipping time allotted. As explained by (Gurvich & Van Mieghem, 2014), the best way to attract potential customers is by mainta...