Examining how Amazon, Kaiser Permanente and Nordstrom Exhibit Exemplary Quality Product and Customer Service

1.0 Introduction

Quality in supplies and purchasing management is the core of the success of any reputable business firm. A good management team ensures that the clients get quality services and products for their money. The best way to grow a company is to invest in customer relations. This ensures that the client is able to give feedback to the company. The feedback is then used in improving quality and offering better services. Knowing what clients want is critical in building a business and enhancing the effectiveness of the customer service for a business. Clients always tend to grow loyalty for a business that takes care of their needs as opposed to businesses that have little focus on quality. In supply chains, it is important to have loyal customers to ensure that business keeps moving amid the tough competition in the market.

There are three businesses that have diverse operation systems but have maintained good customer service and quality products – Amazon, Nordstrom and Kaiser Permanente. Amazon is internet based and most of its client base is virtual. It operates on trust where a client orders for an item, pays for it and it is delivered to them regardless of their geographical location via courier services. Nordstrom is a mix of online and offline high fashion shop that solely deals with fashion clothes, shoes and make up. Kaiser Permanente is a national health care facility. It is a non-profit prepaid health care system that operates in the eight regions of the United States of America. 

1.1 Abstract

The three businesses are centered on customer gratification. The health care system provided by Kaiser Permanente is only successful when the clients who are patients, get value for their money; that is good treatment and patient aftercare. Nordstrom deals with clothing, apparel and make up which can be considered a fashion shop. The store retails high fashion designers in clothes, shoes and make up. Amazon on the other hand is a general shopping store and sells everything including books, shoes, clothes electronics, and even groceries.

Quality assurance is the purpose of the study where the three stores are evaluated in their value for delivering quality services and products. The chain supply management systems of the firms that apply technology enhance their quality sensitivity. The systems of quality assurance are incorporated into the chain supply and management systems. There are challenges that the firms face like slow purchasing systems and the solutions they apply in solving the problems like introducing technology to their stocks monitoring systems. The suppliers have to ensure that the production is constantly improved in the quality and efficiency. Technology in chain supply management makes it easy to monitor and improve quality of products and service delivery.

1.2 Executive Summary

The three businesses are supposed to cater for the needs of the clients. Services and products are made effective when the supply and purchase department of the said firm is well equipped. For instance; Nordstrom has a very sophisticated and effective business model that is engineered around the client’s needs and gratification. It is effective and has put the store at the top of it game where other enterprises cannot compare. Kaiser Permanente is a non-profit health care system that goes beyond treating many patients to treating the many patients they admit effectively. Amazon brings the seller and the buyer together and beats the logistical inhibitors. The buyers and seller transact and each goes home happy with Amazon ensuring the security of both the seller and the buyer in the process. Amazon is based on technology and has utilized it to generate massive volumes of revenue over time. The three business enterprises capitalize on offering quality to all the stakeholders as well as the clients. The management of all three businesses is keen on ensuring the quality of products and services remains unmatched.

1.3 Literature Review

Kaiser Permanente is a non-profit health care provider that serves all eight regions of the United States. Nordstrom is a high fashion retailer that operates both online and offline. Amazon is solely an online site where buyers and sellers meet and transact virtually. The three firms have different operation models. Kaiser Permanente operates on a face to face basis of the firm’s representative and the client. Nordstrom exploits both virtual and physical modes of operations. Amazon operates virtually. The businesses that sell their products only use amazon as a market tool. However, amazon has the capability of keeping track of all the transactions that the sellers and the buyers make on the site. It means that Amazon can tell when a seller has run out of products and when they restock. The three chain supply utilizers are successful and have a broad market. For Nordstrom and Amazon, they reach a global market which means they sell beyond the borders of the United States while Kaiser Permanente is wide spread in the United States most especially California. Nordstrom is a very old establishment which can be credited for its current success rate in the high fashion retailers’ league. For the three business entities, quality of services and products is what keeps them ahead of competition. 

1.4 Purchasing and Supply Management in the Three Organizations

The purchasing and Supply management in the three organizations is different. The Kaiser Permanente health care system is funded by the money people pay for the services.  The purchasing and supply management of a health care system is concentrated on the supply and procurement of the medical supplies from the producers to the hospital suppliers to finally to the health care providers. The Kaiser Permanente being a non-profit health care provider does not focus on how many patients they treat in a day. The health care systems in Kaiser are based on the number of members they have and how much it would cost or actually costs to treat a patient enrolled in their system per day. Infrastructure without quality products and services cannot generate revenue for the company well enough. Quality assurance has to be well incorporated into the running of the businesses.

1.5 Amazon

Amazon is an online store that stocks commodities for sale. It is a platform where sellers supply Amazon with their products and buyers purchase from the site. The purchases are only mediated by Amazon. The suppliers sign an agreement with Amazon agreeing to deliver quality and timely products and services. The Amazon closes the logistics gaps between the buyer and the sellers. Amazon engages the buyers and the sellers and connects them to various delivery services (Kennedy & Dowling, 2013).

Amazon profits off of the fees paid by the sellers for the site to host their products and advertise the same to potential and eventual buyers. The incentive of free shipping services is a design to attract more buyers to use the site for shopping. The suppliers on the other hand have to invest in quality products and services for Amazon to make the advertising services far reaching.

1.6 Kaiser Permanente

The implementation of Oracle’s PeopleSoft Application as EPR system in Kaiser Permanente has reduced the time the nurses spend looking for supplies and increased the time spent with patients means better care for patients. The application makes it easy for the organization to keep records and track of the movement of their stock. It also makes it easy for the hospital to ensure that funds dedicated to health care are not wasted on solving unnecessary logistical difficulties.

The product scanning integrated in the system of Kaiser Permanente ensures no waste of resources goes unnoticed. Chain and supply management is supposed to optimize their funds and at the same time offer quality to their clients. In the case of Kaiser, the health care integrates the health information of the patients in a way that the doctors can keep track of the effectiveness of the health care they have received from Kaiser. The change in systems to apply Oracle’s PeopleSoft Application, centralizes the access the patients have of health care because all the information is on the same database. This means that a doctor will know that the medication the patient has received previously was effective or not. This scanning system also enhances the inventory management (Banker, 2014). When supplies from a particular company are faulty, it is easy for the Kaiser management to know and recall from their health facilities.

1.7 Nordstrom

Nordstrom having an online and offline market, has to engage the services of excellent e-commerce systems. The system must have the ability to provide real time inventory of the store products. The customer service at Nordstrom is the central operation point of the business success. The employees are trained to handle the customers in ways that they cannot find in other stores and it has put them in the lead of retail markets. It is the e-commerce that Nordstrom has integrated that has led to its progress in taking the largest high fashion portion of the market. 

Nordstrom has included a portion of private sellers. This means that the private sellers use the Nordstrom platform to sell their products. Nordstrom has a strong brand name and therefore, the sellers are assured of large exposure provided by Nordstrom (Hiiemaa, 2015). The private sale site that Nordstrom has integrated encourages more suppliers to work with Nordstrom. The private sale site online hosted by Nordstrom brings the market to the seller.

Nordstrom has shown what it means to value quality products. They drop designers from their display when they realize that the designer is not selling. Sales could decline due to poor quality or irrelevance to the clients. For instance, when a designer is accused of copying shoe and clothing designs, the sale of the designer’s merchandise drops. This affects the progress by Nordstrom in terms of revenue generation. 

1.8 Supply Chain Management Strategies

Supply Chain Management has to engage the use of information technology better the quality of the goods and services the customers can access. Supply chain management requires the incorporation of information and communication technology to allow real time records of operations. The stock taking is made easy by technology as each movement in the stock is recorded by the system. It is also time saving for the stores. For instance, Amazon and Nordstrom operate globally. Kaiser has also integrated the information technology in their operations and the nurses have more time to do their work as opposed to when they had to physically look for supplies for the hospitals. Better operation systems means better quality services and products for the customers who are the reason for the success of businesses (Stadtler, 2005). All the three firms have one common goal in their operations; to offer quality to their clients. 

The process orientation ensures that the operations of the purchasing and supplies departments are seamless and change in management will not affect the firm negatively. The firm has the ability to plan ahead of time for the purchases based on their prior performances. For instance, Amazon will notify a grocery seller that their products are not of the quality that the consumers want once the customers forward their concerns. This can only be possible when the firm has an effective analysis system. Planning is always done with previous analysis in mind. In Nordstrom for instance, a brand that has lost popularity over time will always be dropped from their list of purchases once the current stock is exhausted. This means that the retailer has the ability to plan their stock ahead of time so that when making purchases, it is an easy task. Key in the purchasing systems is ensuring quality. Continuous quality assurance inspections by the retailers will ensure that the business thrives on genuine profits. 

1.9 Challenges Faced In Purchasing and Supplies Management

Purchasing and supplies of retail stores can be challenging. A producer cum supplier may want to regularly apply the total quality management approach for the purposes of improving the quality of their production. A retailer like Nordstrom will not compromise their market share by stocking goods that are of poor quality. The same way, Kaiser Permanente will not buy poor quality medical supplies given the risk that will pose to human lives. Quality assurance is very important for a supplier to monitor regularly.

The traditional systems of purchasing and material requirements’ planning was slow and prone to errors. The traditional systems include the old supplies’ records and paper-based procurement procedures. With technology, the delays are eliminated and the bulk of the procedures reduced to the minimal possible levels. The amount of time taken to list down all the supplies was prone to mistakes when done manually as opposed to now when technology is used. The purchases are now made easy because, when preparing to make stock purchases, the firm has an accurate list of what needs to be replaced and after a period of time a pattern of purchases is developed (Stadtler, 2005). The retailer and supplier employ technology in testing the quality of the goods. Services are hard to monitor using technology, the only way to do this is to have supervisors looking at live surveillance footages to ensure that the clients are performing their duties well.

1.9.1 Solutions to Common Challenges in Purchasing and Supplies Management

The retail market is always subject to change. There is always a possibility of changes in economic statuses of the clients which could either increase or decrease demand. This will in turn affect the pattern of the retailer to purchase and distribute the goods to their branches. For instance an increase in demand for goods in Nordstrom will put stress on the retailer’s ability to satisfy if they do not increase their purchases of the supplies (Stadtler, 2005). This broad market access exposes the retailer to more uncertainty which requires that they have a better contingency plan, like the rolling schedules, to cushion them from adverse effects of the instability of the market.

The purchasing models have to be in line with the trends to ensure that the purchases are market relevant. Kaiser Permanente will for instance stop purchasing the outdated on-call machines used for diabetic patients, the supplier in this case will be interested in upgrading their production to suit the demands of the market. This scenario means that the supplier will have to apply the lean-six sigma approach to alter the production. This is the approach that entails changing the production technology to suit the current market demands as opposed to the traditional quality management which encourages improvement of existing systems.

1.9.2 Value of Continuous Improvement in the Purchasing and Supply Industry

Continuous improvement in the purchasing and supply industry is always open to new things that the customers find appropriately trendy and efficient. For instance, in the case of Kaiser, a new system that stores all the health records of the patient will be attractive to the patient because they do not have to keep paper records for the doctor to refer to each time they need treatment. In the case of Amazon and Nordstrom retailers, a new courier service that reaches places that did not enjoy the delivery services will appeal to more clients. Such an improvement will bring more customers on board and profits will be realized. A new supplies and purchases technique will make the businesses easy to conduct for the retailers. This move will improve the quality of the services by the firm.

Capacity utilization is an important aspect of the supply chain management systems. A retailer with the capacity to serve a larger market is able to do so with the help of a centralized inventory system. This is because the employees that would be working the inventory now have the ability to serve in customer service and distribution of merchandise (Bhagwat, & Sharma.

Technology makes a lot of things easy for the retailers. It might be complicated to design a system that serves the retailer as they require as in the case Nordstrom. The system Nordstrom applies in their daily businesses is centralized and effective. The scheduling at Nordstrom is seamless. The customer service is never compromised neither is quality of their products. They only sell quality high fashion products which is the reason why they drop some brands when the market gives negative feedback on the items repeatedly. Nordstrom capitalizes on quality and effectiveness. Given the fact that the store stocks expensive fashion items, their services have to match their target clientele (Bhagwat, & Sharma. The scheduling techniques have so far been effective for Nordstrom.

1.9.3 Tools Used To Align Supply Chain Objectives with Strategic Business Goals

The supply chain has to constantly look at their operations in terms of performance and achievements. For instance, it is easier for a company to prepare a report with details when they have a centralized inventory system. This means that all the purchases are recorded in real time and the management can access the same instantly or even look at the numbers changing in real time. It also means that the analysis of the stocks is always a click away. Technology brings the management of the retail stores to a new level. The reports can always be generated when required and better strategies can be set in motion quicker than when the systems were mainly manual and time consuming.

The performance of the chain supply firms is always measured against the rate of improvement or maintenance of the economies of scale. For instance, in Kaiser Permanente, the less money is used on looking for supplies, the better and more facilities the health care system can offer. It is also easy for the health care system to ensure that their clients get quality services when there is more attention offered by the nurses. The time saved in looking for medical supplies gives the medical personnel more time to examine the quality of the supplies they purchase for their clients.

Measurement systems incorporated into the daily operations of the chain supply systems can be generated in the form of financial reports and charts to indicate the performance of the firm over a given period of time. An integrated dynamic performance measurement system has to have access to the daily activities of the chain supply system. This means that the performance is monitored and analyzed by the technology in place and the management can use the information to decide on the appropriate steps to take to improve their business (Bhagwat, & Sharma, 2007).

For instance, in the case of Nordstrom, the statistics are available unlike Amazon. Nordstrom has reported to annually stopping the purchases of up to 10% of the designers whose merchandise dropped in sales and replacing with a similar number of highly selling designers.

This chart shows the growth of Nordstrom in the last quarter of 2016. The remarkable growth can be attributed to the quality of services and products offers that has seen a 40% increase in loyal customers (Caplinger, 2016). 

1.9.4 Conclusion

The purchase and supply management systems in a firm are very important aspects of a firm whether it is a non-profit or for profit firm in ensuring quality of the firm. The Kaiser Permanente, Amazon and Nordstrom firms are very different in operation and target market. The analysis of the three gives insight into what it takes to protect the clients and customers from poor quality products at exorbitant prices. It does not matter what the firm deals with, the key point is to factor in the need for an effective quality supply chain management and proper purchasing systems. The ability for retailers and firms to take inventory of their stock and movement of their products is important and saves a lot of time. The purchases and supply chain management in a firm could make or break it for a firm. A good system enables a firm to expand operations and generate more revenue or reach more people if it is a non-profit firm with quality being their selling point.

References

Banker, S. (2014). Kaiser Permanente and their Journey to Transform their Supply Chain. Forbes. Retrieved from https://www.forbes.com/sites/stevebanker/2014/10/08/kaiser-permanente-and-their-journey-to-transform-their-supply-chain/#9e9399c109e8

Bhagwat, R., & Sharma, M. K. (2007). Performance measurement of supply chain management: A balanced scorecard approach. Computers & Industrial Engineering53(1), 43-62.

Caplinger, D. (2016, November 10). Nordstrom Sales Soar as Retail Looks Up. Retrieved from The Motley: www.fool.com/investing/2016/11/10/nordtsrom-sales-soar-as-retail-looks-up.aspx

 Hiiemaa, k. (2015). Case Study: How You Can Copy Nordstrom’s Secrets to Massive Retail Success. ERPLY. Retrieved from https://erply.com/case-study-how-you-can-copy-nordstroms-secrets-to-massive-retail-success/

Kennedy, S. & Dowling, P. (2013). How Amazon.com can turn the page on supply-chain sustainabilityGreenBiz. Retrieved 16 March 2017, from https://www.greenbiz.com/blog/2013/08/07/amazon-turn-page-supply-chain-sustainability

Stadtler, H. (2005). Supply chain management and advanced planning––basics, overview and challenges. European journal of operational research163(3), 575-588.

Foster, S. T., & Ganguly, K. K. (2007). Managing quality: Integrating the supply chain (pp. 256-266). Upper Saddle River, New Jersey: Pearson Prentice Hall.

Yang, X. (1995). Globalization of the Automobile Industry: The United States, Japan, and the People’s Republic of China (1st Ed.). Greenwood Publishing Group.

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