When Puma experienced efficiency issues in its Swedish warehouse after a rapid growth, the management steered the adoption of a mobile system that could save the situation. This system became one of the most supportive elements of the warehouse afterwards. Therefore, this paper investigates the motive that led to this adoption, the various components of the system and the benefit it had on the firm, employees and customers.
Puma has always been committed to positioning itself in the marketplace through technology adoption including automation, IT and social media (Laird 2012; Palli, Biogiotti & Melchiorri n.d.). The motive behind the establishment of the mobile system by Puma revolves around three major factors.
First, the earlier paper-based system had become inefficient due to the rapid growth of the company. For Puma which dealt with consumer products, efficiency was paramount as it determined the creation of a royal customer base as well as the relationship between the firm, employees and customers.
As compared to the computerized system, the older system required the physical efforts of the human resources to be put in all activities which greatly reduced efficiency. Indeed, Palli, Biogiotti and Melchiorri (n.d.) explain how Puma has continued to enhance efficiency through operational systems’ flexibility and performance.
The other factor involves errors that led to many customer complaints and unnecessary wastage of resources. It can be argued that unlike an automatic system, a manual system such as the paper-based system can and has resulted into numerous human errors. Therefore, when the system made incorrect deliveries, the customers obviously complained and lost the trust they had in the company.
As a matter of fact, the company could not accommodate loss and had to implement a more reliable system. In addition to customer complaints, tangible and intangible resources were wasted. Human resources were employed in large numbers and had to spend more time in order to complete an order which eventually led to low profitability.
Another factor that could have driven Puma to use the mobile system was speed. It is apparent that an automated system could work faster than a manual system and the many activities involved in ordering and delivering products required a faster system.
Advanced planning and scheduling being important to the company compelled it to think of a system that could synchronize deliveries with warehouse needs. In fact, Puma is not only committed to faster warehouse processes, but has also used speed as a branding strategy.
For instance, Digital Buzz (2012, p.1) observes how the firm uses a discount campaign that is designed to increase the purchasing speed of customers in Mexico.
The mobile system
The mobile system implemented in Puma comprised of three core components: handheld computer, bar codes and a central server. The hand held computer identifies the correct bay and confirms that the scanned items correspond to the orders. The bar codes separate the incoming and outgoing deliveries by coding them in a manner that the computers can identify each of them.
The central server allows for the synchronization of the computers and the bar codes with a wireless network. This is enhanced by 17 Cisco Wi-Fi access points that connect the handheld computers to the central server. In this manner, the system allows different orders to be sent and received by different users automatically.
The mobile system increased Puma’s profitability through higher performance and low cost labor. The increased speed enabled the firm to serve a wider customer base which directly related to higher profitability. The efficiency of the system allowed the management to concentrate their decision on other issues such as marketing thus enhancing the performance of the firm.
As compared to the previous system which demanded for more employees, the mobile system cut the labor supply provided by shift workers thus reducing the cost of labor significantly. Moreover, the enhanced performance of the employees also increased the unit output of an individual employee hence lower cost per employee.
The mobile system adopted by Puma is beneficial to the employees in that it eliminated most of the tedious activities and increased their motivation. The automation eliminated activities like writing down every order or walking up and down the warehouse restocking orders. In addition to that, Roos (2005) related job satisfaction to employee motivation and the new system allowed the employees to be more self-dependent and resourceful thus adding to their motivation.
On the side of consumers, the mobile system allowed the company to create customer value. This came about due to improved customer service and expectations. The firm was able to speed up order requests and eliminate any errors that could have occurred in the process (Kolesar, Van-Ryzin & Culter 1998). As customers expected to be served reliably by such a reputable company, this achievement met the needs appropriately.
Due to rapid growth, Puma experienced some problems related to their warehouse operations and meeting the needs of customers, employees and the firm as a whole. Therefore, the motivation to adopt a mobile system for the warehouse originated from the need to increase efficiency, reduce errors and increase speed.
This system that comprised of handheld computers, bar codes and a central server was able to automate most of the warehouse operations. The benefits accrued inform of increased profitability, employees’ satisfaction and creation of customer value.