Analysis

Inventory Management – For the merchandise that is not on the sales floor, the store has a warehouse located in the back of the store. This warehouse includes three isles in which the first isle has one portion of the store, the second isle has the second portion, and the third isle contains everything that is displayed on the blue tables with merchandise that is generally big. For example, Miter saws, demolition hammers, compressors, and all merchandise of the sort. Each side of the isles in the warehouse contains fifteens sections with the exception of the first side which contains only seven.

The warehouse corresponds with the sales floor layout. For example the lighting and electrical merchandise are both in isles six, yet both of them have their own section in the warehouse that are not close to each other. These individual sections of the warehouse are called bays. Included in front of the bay is a label that tells you which section it is. It is visible when placing overstock on the shelves which section an employee is putting the box in, yet employees still manage to misplace the products therefore making it difficult to maintain the integrity and accuracy of the stockroom, not only do they misplace the product, if the box is heavy, the employees sometimes put the heavier boxes on top of the lighter ones therefore destroying the box and perhaps the product underneath it as well.

When unloading the truck, all the excess merchandise that would not fit the sales floor shelf would be placed into its corresponding bay. The merchandise would be left in its original brown case in order to easily stack similar products into the bay. Smaller products however, would be placed into medium sized boxes called totes. All totes are the same size and on each tote is a label that displays all the merchandise stored inside the tote and the quantity. In order to make these labels, we use a scanning gun which uses an inventory program. Some of these labels are sometimes placed on the wrong tote, and the labels may have SKU's that don't exist or match the products inside the tote.

In order to try to maintain a tidy and accurate warehouse, the totes are re-scanned every two weeks for accurate labels. One day every week, a process called an “outs scan” would take place. What this outs scan does, is an employee would scan every empty peg and spot on the shelf. Then a list would be printed with all the empty spots and the list will tell the employee what is actually in stock. This is considered part of the inventory process because if the inventory count tells the employee for example that there are three of a certain product but there are none in actuality, the inventory count would be adjusted to the correct amount. The employee sometimes inputs the wrong amount and the total on-hand remains incorrect.

Customer satisfaction is very important to every company. When a customer is satisfied with the expectations of a product or service then the company has achieved customer satisfaction. When a customer is satisfied they often refer to the quality of a product or service. There are many dimensions of quality such as conformance to specifications, value, fitness for use, support, and psychological impressions.

            Harbor Freight meets the first three dimensions of quality, which is conformance to specifications, value, and fitness for use. Conformance to specifications is met when the product, such as batteries, states it will last for three months and it meets its expectations. At our store, whenever a product offers a certain guarantee it will always be met. The top competitive priority of our store is cost and quality, which must be met to have value to the product. When a customer buys a product from us they expect to receive a good quality tool and at a low price. Also all of our products are simple and usually put together, which makes it easy for the customers to understand. In this situation, fitness for use is met.

            Another way a customer defines quality is by support. Support is one of Harbor Freights biggest problems. In order to achieve customer satisfaction, employees must know how to solve problems when dealing with customer’s complaints. Also employees should be trained properly and understand what deals are going on in the store. Customers get upset due to the unclear coupon policies and wrong answers they receive from the employees. In order to solve this, employees need proper training on how to deal with customers and an overview on the coupons and warranties available on each product.

            The last dimension of quality is the psychological impressions. Customers often evaluate their satisfaction based on the atmosphere or image of their surroundings. The appearance and actions of the provider also plays a big part. In order to achieve this dimension Harbor Freight’s employees should be nicely dressed, courteous, friendly, and understand the customer’s needs. They must also provide the customer with the right answer in order to meet the customer’s expectations.

If Harbor Freight Tools fixes the problem of low employee involvement, they can meet the goal of customer satisfaction.