FreshDirect uses Business Intelligence
FreshDirect is an online grocery business that has grown since 1999. The business has undergone restructuring and change of guards to help improve on the cost-cutting measures and profitability. The company incorporated the use of SAP database system in its running that has significantly improved the company’s profitability and efficiency. It has also reduced the carrying costs and motivated the workforce to targeting new achievable targets.
- How is it possible, as Braddock noted, to have a great deal of data but little information?
How does the SAP database and business intelligence component change this? In answering this question, one needs to understand the history of FreshDirect business, as well as, to understand the work of SAP database system. FreshDirect has a model that relies on the internet platform for all its operations and primarily the revenues. The business offers farm to table services that rely on its distribution and marketing efforts via the online platform. The previous management focused on expansion at all costs disregarding considerable aspect of significance of the products. The fact that groceries are the everyday products the consumers use, it was important to focus on the loyalty of customers as a base for expansion. The management at the time focused on acquiring new customers with regard to the services to its existing customers. They had no knowledge of how many customers they were handling or whether the services offered were that efficient. Braddock noted with concern the amount of resources used in acquiring new customers and changed the policy to focus only on the customer loyalty. There were significant data that have not been well processed for easy understanding. The SAP database system changed the way how FreshDirect conducted its operations, starting from having suppliers’ data (whether produce is fresh or not), to the goods at the warehouse and finally, to the customers. The SAP database system has information on the existing and new clients with their specified product preferences. It enables FreshDirect to offer discounts exclusively to help enhance brand loyalty. The system incorporates the suppliers’ data with that of the consumers hence improving the efficiency and effectiveness of the business. FreshDirect enjoyed benefits of knowing its customers, and suppliers of products while being able to track the flow of goods in their warehouses. The system helps FreshDirect budget and mitigates on any shortages arising from the shortage in supply. It also helps FreshDirect enquire on its stocks, as well as plan on the pricing based on the flow of demand in its products. Having such a system helps transform FreshDirect with the restricting carried out in Braddock’s era (Kenneth & Mark, 2003).
What is meant by ‘visibility into the workflow’ and why is it important to FreshDirect’s success? What are exception screens and how are they used? Visibility in the workflow means that there is visuality or knowledge of the flow of products from the suppliers and channel to the customer. It entails having information on the ordering time, the costs and whereabouts of the supplier, the channel of delivery to either the store or to a customer directly. It helps keep track of the goods and their fresh status, as well as deliver them in the appropriate time. The flow of services and products, as well as knowledge of each department and workforce helps FreshDirect keep track of the lagging departments and ways to motivate employees. The use of the SAP database system has revitalized and accounted for most of the time the produce is on transit. It helps in the accurate billing of clients, as well as prompt payment of suppliers. The ease that the system brings in order to follow all the departments from billing the clients and delivery helps make the ample decisions, which, in their turn, help the company’s success. The exception screens are messages that help a customer or a supplier recognize the origin of the produce and whether it meets their requirements. FreshDirect utilizes exception screens to understand its suppliers better from the produce they bring based on the freshness and customer requirements. The customers have the opportunity to understand that the produce is from FreshDirect stores and their requirements are met as they placed the orders. The exception screens help the company know the re-ordering patterns of its different customers as well as their favorites. It helps to package these products in an appealing manner as well as offer discounts to their clients in an exclusive manner to help raise revenue and consolidate customer loyalty. The exception screens are essential to helping the FreshDirect in marketing and collection of bills. They show the customer relation patterns with the company’s produce as well as their expected time to reorder (Druehl, & Porteus, 2010).
- What has been the impact on employees of the changes brought about by the SAP ERP system and associated business intelligence applications?
The use of the SAP database system is a boost to the employees as it enhances efficiency and reduces time wasted in tracking down the position of stacks and suppliers. The system has reduced the marketing costs and delivery period as the accounts department finds it easy to bill the clients from automated ERP software. The marketing department has the clients’ lists and their preferred produce making it easy to customize offers for different groups of consumers. The logistics department has its work reduced in locating best fresh produce as they have suppliers’ locations, as well as ease in delivery with the clients’ location in the system. The software helps the workers fill the appreciated form of their efforts as it reduces the communication channels and overreliance on the company’s heads for directions and decisions. The communication with different departments of either marketing, logistics or accounts improves as more logic solutions are sought now than when the system was not in place (Boyer et al., 2005). Braddock knew that with the change in strategy to focus on the loyalty of existing customers, the employees had to work extra hard to make their work rewarding as there was a reduction in new customers. It incorporated with introduction of the system and helped motivate the work force to perform. Also, a noteworthy fact is that the database had the information about all employees and their contribution to the company. The employees had this knowledge and had to protect their positions through positive performance, which led to the success of the company. This ERP system has helped motivate and improve work relations at FreshDirect, as shown by the growth of the company (Laseter & Rabinovich, 2012).
- How is FreshDirect’s use of its database related to its brand image? What is the most important element of their brand?
The incorporation of the SAP database compliments the brand image of FreshDirect, which is fresh farm produce. The system is a compliment as it enhances the efficient and progressive transportation of produce from farms to consumers while being fresh. The company has continually advertised and boosted on the platform of providing fresh produce to customers directly to their tables in most parts of New York and its environs. The SAP database with the track of the best suppliers and prompt payment to suppliers has helped the company attain their produce fresh for the intended market. It stems from having all essential data of suppliers and customers, as well as of the market trends. The CEO knew that with all details in FreshDirect’s fingertips it was easy to defend the company’s brand image by providing fresh produce to the market. The inclusion of the system helped attain the previously missing details to perfect the delivery channel of service (Niu, 2008). Fresh produce is significant element of FreshDirect’s brand, which the company has been attaining for long through continuous advertisement and online marketing. It has endeared the company to its customers as well as attracted the new ones. In an effort to make the image more appealing, the company has put some customer centric values in its mission statement. It includes fresh produce, which reduces concerns of customers; improves packaging and recommender system on the customer favorites. It is significant to incorporate technology in branding the corporate image to help benefit from incentives of such moves (Xie, 2004). These values have helped to shape the relationship with the consumers as well as to protect the company’s brand image.
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