Project Management

One of the main projects that Blockbuster stores have is re-shifting the store and making sure it is set to Blockbuster corporate standards. Re-shifting is done about 2-4 times a year depending on how many changes corporate makes to the store appearance during the year. Re-shifting the store simply means that product has to be moved around and placed in the areas that corporate feels will make the product sale better. This process can take anywhere from 2-3 months to complete. It takes this long because the general managers must make sure that everything is exactly as corporate wants.

Some of the processes involved in this project are as follows:
Ø Shift game section and add a game sell-thru bay
Ø Move sell-thru section so that it is the first thing customers see when they walk in
Ø Make sure new release wall is set up to corporate standards
Ø Candy section done to candy diagram
Ø Soda done through diagram
Ø Make room in the middle section for all Blu-Ray and HD rentals
Ø Check all sell-thru prices and validate that they are correct

Blockbuster doesn’t use a Gantt chart for there projects but they use something like it. Each part of the project that needs to get done is written down on a paper and next to them is written the time that we plan to start it and when we should be finished by. This paper is kept upfront so that any manager who comes in knows what project needs to be worked on and what has already been done. This helps to ensure that everyone is working on the project and that the project will get finished in time. Usually following a re-shifting of the stores the District Manager and Regional Manager will come out to the stores to make sure everything was done properly and that the store has finished the project in the allotted time.

These projects always seen to run longer then they should, if managed properly this could be done in a month instead of three. Usually with these projects the general manager doesn’t take charge and make sure that everything is done at the time that was decided that it should be done by. If the general managers paid more attention to what processes where being completed and working on more then one process at a time then everything would get completed quicker.

Supply Chain Management

Blockbuster stores are constantly receiving boxes with product for sale. Distribution center sends a report to each store via email to let them know how much product they will be receiving so that the manager will know how much room they will have to make to accommodate for the new movies. This list called the open ASN report also lists what new games and sell-thru merchandise the store will be getting. This helps the manager to see what kind of new merchandise the store will be receiving and where this product can be displayed to help sell better. Blockbuster is not only a rental store anymore they are now trying to target a broader region of people, they don’t want to be thought of as a place you go just to rent they want people to also make purchases. They have started to introduce new products in the stores not only movies and games, they now have ipod accessories, flip camcorders, and soon they will be selling video game hardware systems.

Blockbusters products come to the stores in this order; products ship from the suppliers to the Blockbuster Distribution Center, once it is there rental product is transferred into Blockbuster rental cases and then labeled with each stores specific code. Then the product is boxed up and put on the trucks to be sent out the all the stores around the country. They also keep track of these boxes with an ASN number which is like a UPS tracking id so that Blockbuster knows where there product is at all time. These ASN numbers get tracked in a computer system and then sent to the stores so they know what product they are getting, These ASN numbers also keep track of not only the boxes but also what product is in the box and how many of it should be in there, this helps to control inventory because managers can see how much of something they are getting and report any missing product to the Distribution Center. Once the product leaves the Distribution Center it is shipped to the stores most stores will receive the product on either Tuesday or Wednesday depending on their region. Then once the product arrives at the stores the product is then received into the stores inventory.

When it comes to ensuring that Blockbuster stores get their product on time they have nailed it. Every store receives their intended products on their scheduled delivery date. Sometimes there is a mix up and product arrives a week late but that doesn’t happen to often. The Distribution Center works hard to try and prevent that from happening, they have made many improvements in making sure everything arrives on time. If they have forgotten to ship something with the Tuesday shipment they send it out later in the week to ensure that it arrives there as soon as possible, as long as the product gets there before Tuesday of the following week they are fine. Blockbuster also has its online service that they pride on there ability to delivery movies to customers in 1-2 business days. Usually they are really good with making sure that movies are sent to the Online customers in a timely fashion and they do receive there movies on time, but as with anything sometimes movies received to the customers come later then expected.

Quality is measured by customer complaints on the product. This is also true with the online program, if customers don’t receive the movies on time or the movies are damaged they can go online and file a complaint with the online program. Blockbuster will do anything that they have to ensure that they customers issue is resolve and that the customer is always happy.

Blockbusters replenishment time on there sell-thru products is very fast. Since their computer systems keep track of all the inventory numbers the company always knows what is being sold and how quickly. If a new movie comes out and it sells out the first day that store will have a shipment to replenish that movie in about 3-4 days. With their candy products stores receive shipments to replenish any sold candy once every week to ensure that they never sell out of a specific candy. The candy inventory isn’t run so well though, you do run out of product a lot because there is an inventory issue in the computer. When stores receive the candy many times they don’t do it properly, managers must ensure that the right barcode number is listed for the candy. Many times when employees scan in a candy for sale it will say no product in inventory, instead of telling managers to fix it they just let it go. Since that issue is never fixed in most stores inventory numbers get messed up and stores wind up stocking out of something because the computer says they have plenty in stock but in actuality they have none.

Blockbuster uses innovative supply chain management this helps them to ensure that they don’t run out of product. Blockbuster is constantly replenishing stores when they sell something, their computer systems keep track of what is being sold and make sure that the store is receiving more of that product that same week. This helps Blockbuster to continue making money because they have the product in stock. Blockbuster could benefit from making some infrastructure changes; a lot of Blockbusters loses come from inventory. Most stores have high shrink which means that their inventory numbers are very off, this means that the computer systems says they have 10 items in inventory when they only have 6. This happens a lot and it costs the company a lot of money.

They have introduced inventory teams to come to the stores to perform inventory because they believed that the issue was that product wasn’t being scanned properly when store associates where performing the quarterly inventories. This helped with some of the numbers but not really, the issue is with how stores receive, they don’t really train new management how to properly receive the product and this causes a lot of the issues. When receiving movies and video games there is only one way to receive it, by scanning the ASN barcode, this brings the product into the inventory system. If someone tries to receive the product again the computer won’t allow them to because the box has already been received so that doesn’t cause any inventory issues. What causes most of the inventory issues is the candy and soda inventory numbers, when receiving them you have to make sure you type in everything properly, unlike the product received from Distribution there isn’t a barcode that you scan. Sometimes after the candy and soda has been received the manager will just leave the slip upfront and not tell anyone that it has been taken care of, so the next manager comes on for his/her shift and sees the slip and receives the product again. Sometimes managers will also see the slip and not know if the product has been received or not so they don’t receive it and the product never gets added into inventory and then the following week you get a shipment of the same products and now you have to much in inventory and nowhere to put it. Blockbuster should find a way to make is so the candy and soda can only be received once, this can help in cutting inventory costs.

Quality Control

Blockbuster Video currently doesn’t use QC charts at their stores. The way that the General Managers and Corporate level managers can see if customers are receiving the service that they should is by filling out surveys. This practices just started up last month, at random customers will receive a receipt with there purchase that will encourage the customer to log onto a website to rate the service that they received. In the past they would have anonymous shoppers come in during busy shifts to ensure that employees where offering the best customer service possible even under stressful conditions.
The managers on duty also keep an eye out to see how well employees are taking care of the customers and if they are answering the phones on time. Blockbuster has a rule that all phones must be answered within three rings; this ensures that the customer is not waiting on the phone to long to have their questions answered. Managers also help to ensure that there are enough employees on the registers; Blockbusters rule is for every two customers in line there should be an employee on register.
I think it would be beneficial to Blockbuster if they did use QC charts in the store level. This would help to see which employees have been performing well in the past months and which ones could use some extra training on their customer service techniques. The charts can also help to see how many customer disputes there have been in recent months and which employee was there when the dispute happened. With the QC chart management can find a way to effectively train employees to ensure that the dispute will not happen again and further advance their customer service skills.
Blockbuster uses continuous improvement in their stores but they don’t use a diagram to show it. The only diagrams they use in the store are diagrams showing how much money their store is making and how much more needs to be made to reach the designated quota. They should use the Fishbone diagrams in the stores because it will help management to see why customers aren’t happy with a product or a service received in the store. Then managers can decide what can be done to improve the service and make customers leave the store happy and want to continue to shop there. They can also use Six Sigma to get a more in-depth understanding of what the key issues in the store are and what should be done. Most things can be fixed by training and if that still doesn’t help the employee and they continue to get complaints further action has to be taken.

Managing Quality

Blockbuster Video is all about customer service and making sure the customer gets treated with great respect so that they will come back many more times. When looking at Blockbuster quality design they meet the need of customers by provide a video rental service. Many people much prefer to rent videos and games before they go out and spend more money to buy them. Blockbuster saw the need and jumped on it. They offer a place where customer can not only rent these movies but if they do indeed like them they also can purchase them at Blockbuster, no need to go somewhere else to buy it.
Blockbuster prides themselves on there customer service skills. They expect every customer to leave each store happy even if the store doesn’t have what they where looking for. They train their employees on customer service, employees are expected to be able to answer most questions about movies and the products the stores carry. The more knowledgeable the employee the better they can service the customers. Not all stores meet the quality of design that corporate set up, if you have been to a Blockbuster you may notice that you don’t always get superb customer service. Sometimes the employees aren’t as knowledgeable as expected or as nice to you as expected. If the managers spent more time training employees and making the store environment more worker friendly then the employees would have better customer service skills. Employees get free rentals every week so they can rent movies and games and get familiar with them so they can discuss them with the customers. By making sure the employees are renting you can guarantee that the employees know the movies and can help the customers to pick out the right movie or game for them.
A big issue at any Blockbuster store is that the movies aren’t always available. Most stores don’t get enough copies of the most popular movies thus causing the customers to leave upset. If Blockbuster could stock more copies of these popular movies they can better serve their customers and make them leave satisfied. The DVD’s themselves don’t always work either, you do have customers who come in to complain that the DVD didn’t work because of scratches. I think Blockbuster should find a way to be able to check that the DVD’s don’t have scratches so that these movies won’t make it into the hands of a customer. You want everyone to be satisfied and by sending them home with movies and games that will actually work will make customers really happy because they won’t have to come back and try and get another copy of it. If customers do have any issues with something they rented or bought it is easily taken care of, customers can go to the store and pick up a different copy and all is well. The employees are always there if the customer has any issues. Blockbuster also has a service number that customers can call if they have any issues either with a product or with the store itself. Customers are encouraged to call this number if they have an issue that they feel cannot be fixed in store, they can also call the number to compliment the stores.
Blockbuster demands employees to treat all customers kindly and fairly. To make sure that their stores are treating customers the right way and following company standards they set up Mystery Shops. These Mystery Shops consist of an anonymous customer to come in and rate the service that they received; they then report it to corporate. Corporate will then review the report and send the results to each store to show where they are lacking in service and what needs to be worked on.

Technology

Blockbuster Video definitely uses technology in their stores. The main system they use called the Point of Sales System (POS) is used on all the main computers. This helps the store to keep track off accounts and it stores all the customer information. It also stores all the inventory numbers and helps employees to see what movies are carried and if they are only for rent or sale. The POS is an ERP system because it keeps track of what items are being sold and then these numbers are sent to the distribution center. With these numbers distribution can see what items need to be ordered because they are selling well in a specific store.
Blockbusters POS system is very old it hasn’t been update since 1991. The new CEO James Keys plans on updated these systems to get them up to the times. Blockbuster could really improve their in store system by using the internet in there POS system. Each store right now can only see what is carried in there inventories and cannot receive customers information from other stores if they have never been to that specific location. I think by integrating the internet it can connect the systems together and allow a much more convenient environment for the customers. It would help the stores to locate if another store has a movie that the customer wants. Currently the only way to locate a movie at another location is calling all the stores around you, this is very time consuming and sometimes not very efficient.
Blockbuster also has another system they use called Compass and the system does use the internet to connect managers and employees to corporate. It allows employees to clock in for their shifts and it allows managers to receive email from corporate about changes in store appearance and how the store is doing on sales. It is also a great way for district and regional managers to connect with the stores General Managers in there regions. Instead of having to call the stores to tell them the areas they are faltering in they can send an email that shows all the numbers and areas that need to be worked on. With this system all employees can partake in e-courses that help train employees to Blockbuster Standards. It helps new hires to learn all about policies and procedures and it helps potential promotional employees to learn about managerial procedures.
Blockbuster uses the internet also to connect their customers to the online program that they offer. Blockbuster is an e-retailer and e-service company. They have a website that customers can go on to purchase movies and games that they couldn’t find in the store/s that they visited. They also offer a service online which allows customers to order rentals to be delivered to them instead of having to leave there house. If they have any issues they have a number that they can contact for the online service.
Blockbuster can really integrate their stores by bringing in the internet into the stores main systems. This can make helping the customers so much better, possibly making more money for the company because the customers needs are being met better then before. It’s all about spending money to make money so if they could just take that next step and upgrade their POS system then they could better help everyone around them.

Product-Flow Process

When looking at Blockbusters production flow you can see that they use both the batch flow and line flow production. Blockbuster Video uses a batch flow when it comes to production of some of our products. Blockbuster receives 100s of copies of the same movie every week. They are all produced in a batch and shipped out to all the stores across the country. They also produce their product by using the line flow production. The Blockbuster distribution center receives the movie disk in their movie cases but the movies then go into a process that makes the movies Blockbuster rental ready. They must get rental labels put on and their boxes changed to the lockable cases that are used at the stores.
Blockbuster uses the make-to-stock customer order when it comes to making the products for the stores. Since it is a movie and game rental and sale business all the products are the same. Blockbuster pays a company to make a certain amount of movies for them but the quality of the movies don’t differ; they are all the same and can’t be customized for the customers. Customer don’t come into a Blockbuster expecting to get a customized DVD so the make-to-stock customer order works well for them and it keeps their costs down because they are ordering in bulk. By looking and this information it is safe to say that this would put Blockbuster in between two cells on the Process Characteristics Matrix they would land on Make-to-Stock side but right in the middle of line flow and batch flow. I think Blockbuster has chosen to uses these types of product flows because it helps to keep their costs down. Most movie companies bring down their costs if product is ordered in bulk so Blockbuster takes advantage of this by purchasing movies in batches. This helps them to receive big discounts and save them some money. So I believe that a big part of why they chose these product flows is because they want to save money so they can spend it on other things for the company. Blockbuster applies some form of mass customization of services in there stores as well as with their online program. In stores they have the Rewards program that keeps track of customer rentals and then offers the customers free rentals throughout the month because they have rented so much. The online program keeps track of customers renting patterns and sees what kind of movies the customers enjoy. As customer watch movies they can rate them and the computer generates recommendations for them based on the movies that they enjoyed.

INVENTORY

Blockbuster Video does a lot when it comes to maintaining inventory in their stores. They must make sure that the stores inventory matches what the computers say the stores inventory should be at. The difference is the calculated “shrink,” or stolen product. Blockbuster employees a division called lost prevention whose only duty is to keep track of inventories. They run quarterly inventories in stores whose shrinks are low and monthly inventories in those stores that have high shrink.
Blockbuster stores do inventory on their store supplies which are usually ordered in the beginning of each month. Supplies are ordered by using a system called the EOS system. The EOS system allows the store to use the computer system to order supply items, non-inventory office supplies, cleaning products and new retail movies from the Distribution Center (DC). The stores all receive a binder filled with an updated list of products that can be ordered. The General Manager or the Assistant General Manager will take an inventory to see which supplies need to be ordered and place the order the first Monday of the month, shipment arrives two weeks later. There is not calculation of when to order, it relies on the mangers experience and ability to estimate buying patterns using previous year’s sales.
Blockbuster runs inventories in every store, they have an inventory team that goes around to every store during their scheduled inventories. They scan every product in the store including rentals, sell-thru, candy and soda, and other items such as toys. A report prints up showing what is missing from the inventory. The inventory team will then go around and see if they can find the missing product, then scan any product in that was missed. This concludes the inventory, based on how much product is missing will determine if the store is high shrink or low and how often inventory will have to occur at that specific store. This helps lost prevention and management to see if there is any theft going on in the store possibly internal.
Blockbuster has a system called the Point of Sales System (POS) that keeps count of the entire inventory. When customers are looking for specific products, either for sale or rent, an employee can just look it up in the system. When it comes to the new release rentals corporate sends the store copies of the movies. They base the amount of copies sent based on the demographic of the area, if they think the movie will rent a lot then they will send more copies of it. No store places orders for sell-thru, that too is done through corporate. The system notifies corporate when the store is running low or has sold out of a specific title and ship more out to them for the following week. Corporate also recalls movies that don’t sell or rent, they will send a transfer through the computer system for the store to pull these movies and send them back to distribution.
Candy orders are filled the same way as movie inventory. The computer keeps track of how much of what candy is being sold and if more needs to be sent. The soda orders are filled differently. A Coca-Cola representative will go to each store and place an order that the manager gives them. The representative comes every 3rd week of the month so when placing the order the manager must make sure that the amount ordered will last for the next 3 weeks. Some stores also sell ice cream and the ice cream orders are ordered the same way that the soda is ordered. The ice cream vender will come once a month and place the order to be shipped the following week.
Blockbuster has a very organized inventory procedure. It is the General Managers job to make sure that all inventory procedures are being followed. They have to make sure that the product is being received into the store properly in order to maintain the inventory in the system. They most always check the receiving reports to make sure they match what the computer says. When it comes to new movie retail every store must check their system to make sure that the computer numbers match with the amount out on the shelf. Every store does these cycle counts every Wednesday, by doing this it helps to see if there are any errors in the receiving or the product is being stolen.