Business Consultancy Report For Lidl Tooting London Company

Business Problem and Analysis

With the increasing ramified economic changes and complex business functioning, each and every organization needs to manage its business effectively. Organization takes the managerial and strategic decisions to achieve the certain goals and objectives to achieve the set goals and objectives. In this report, business problem and issues faced by the particular company has been discussed. After that, proper analysis has been made to evaluate the internal and external business factors which are further used to make the effective strategies of the business. In this report, Lidl Tooting London which is general retail Store Company indulged in providing the retail stores goods and services in market. This report reflects the consultancy for the company which could be used to mitigate the business issues and problems faced by company in the particular time period. In addition to this, further focused is made on the Lidl Tooting London company which is another branch set up in London to sell and buy the quality products. The main problem which has been found in the Lidl Tooting London Company is related to inventory loss and less systematic work chain. This problem has not only increased the overall cost of products sold in its retail stores but also lower down the efficiency of its business. Newly hired physical security guard in retail stores or warehouse will be the prime option for company to reduce the inventory loss in warehouse. These employees will have the proper surveillance in the warehouse and make efforts to lower down the warehouse theft issues and challenges. Company needs to hire physical securities employees who could check inflow and outflow of goods from the warehouse. In addition to this, the below given action plan divulges all the required actions which need to be taken by organization to mitigate the possible issues and reasons of inventory losses. The inventory loss program has lower down the efficiency of the business and resulted to destruction of its undertaken program in determined approach. It is analyzed that if Lidl Tooting London Company does not overcome these inventory issues then it will have to face high loss in its business and also impact the return on capital employed. The main focus of company should be on hiring more physical security staff members; installing new cyber computing system and undertaking new internal control system in the inventory management program.

The Lidl Stiftung & Co. KG, formerly Schwarz Unternehmenstreuhand KG is German global discount supermarket chain that operates more than 10,000 retail stores around the globe. It is analyzed that company has faced high complexity in its business and endeavored towards developing the product differentiation strategy by following the customized business strategy. All the employees of the company are accustomed to act as per the directions and instructions of the Jesper Højer who is the current CEO of company. There are several rivals of company such as ALDI, Tesco, Morrison and Wesfarmers who gives tough competition to the business operation of organization. These all companies are the closed business competitors of Lidl organization on international level. The Lidl Tooting London Branch is one of the stores that belongs to the Lidl group situated Lidl Tooting London Branch. The main focus of this company is to serve retail services to clients with its cost leadership and product differentiation strategy. The main aim of this Lidl Tooting London Company is to buy and sell quality products from its retail stores. This company has been leading the London retail business with a view to achieve its set objectives and satisfy clients with its quality products (Hovav, 2015).

Inventory Loss in Lidl Tooting London Company

The main vision of Lidl Tooting London Company is to provide the best quality services and products to its clients at very low cost. It wants to lead the market with its cost leadership strategy.

The mission statement of company is related to strengthen the market share and achieving at least 40% market share of the retail store on the international level.

With the increasing complexity and automation in the business process system, Lidl Organization has faced high employee turnover and inventory management issues in its business. It has been observed that due to the changes in the operational functions of the Lidl, many employees have failed to adapt with the new system and designed installed in the business, Lidl Installed the cyber computing system in its value chain activities to set up the online payment system for its clients to create international card accepted process in its payment window. However, many of the employees failed to overcome the issues come from this change and left the job due to the fear of this adaptability. It resulted to high amount of employee turnover and ultimately resulted to increase overall cost of its business. In addition to this, the other challenges faced by company are related to less effective inventory turnover ratio. This issue arise when company fails to manage the inventory as per the expectation of the market (Hovav, 2015). This will not only hamper the satisfaction of clients but also jeopardise the brand image of company on international level. Nonetheless, due to the less effective training and development program, company has failed to motivate its employees. It will not only negatively impact the business but also lower down the overall outcomes of the Organizaiton. This issue arise in the value chain activities due to less effective inventory management plan and increased complexity of the process. Another issue which company has faced is related to increased inventory goods theft from the stocks. This issue arise as company has no proper inventory management program and there is no security alert available in the stores. The manager of the company needs to analysis all the possible issues in the value chain activities. It is analyzed that in order to manage the inventory in all the retail stores of the organization, company needs to first focus on measuring the inventory of the process and developing the proper inventory management plan. It requires setting up the economic order quantity point so that company could place order after when particular stocks reaches the certain points in business. In addition to this, Lidl also needs to be proactive to determine the minimum stock level and maximum stock level. Lidl has faced high cash outflow and blockage of funds in its inventory which not only increase the overall cost of the capital and also ultimately impact the inventory costing of the business. Company could lower down the employee turnover if it manages its employee motivated and effective which could strengthen the team development and output of the organization. There are other several issues which Lidl Tooting London Company has faced such as non-efficient physical securities guard presence. Company has been lacking with the physical securities guard presence in its value chain activities which increase the chances of theft and loss of items in the stores. The detective set of work chain undertaken in the retail stores of Lidl Tooting London Company is also not up to the mark which might increases the complexity and increase chances of stock loss. These issues will have several negative impact such as increased cost of goods, low level of return on capital employed, lack of trust and high business loss in the sluggish market condition. The Lidl Tooting London Company has also observed loss of stores while loading and unloading of the undertaken goods in warehouse due to the less effective detective program. There is no line manager indulged in counting of the stocks and keeping surveillance on the purchased goods in the stores. It has allowed customers and other persons to easily grab the certain stocks from the stores. In addition to this, another big issue which company has faced is related to bar code system. The Lidl Tooting London Company has not been used the bar code detected Manual bar code system to detect the incoming and outgoing of the goods from the system (Szegedi, et al. 2014). This bard code system will be helpful in handling the inflow and outflow of the goods from the system and assists in marking the bar code and system process for the item which don’t have any physical bar code attached need improvement. This could be done by using the bar code detected system in the organization which will assist process manager to have proper surveillance on the security and loss of flow of goods and services. The manual bar cod system could be used by Lidl Tooting London Company in its process to strengthen the work process system and increasing the overall output. It will not only reduce the chances of the manual loss of goods but also increase the overall security program in the process system (Plazibat, and Dadi?, 2017). However, in the process system of Lidl Tooting London Company, it might be complex for the company to handle the inventory loss by arranging the bar code system and hiring more physical security guard presence. It will require high amount of cash outflow from the organization which will not only increase the overall cost of capital but also impact the return on capital employed. The most of the inventory loss in the process have emerged due to the loading and unloading of the stocks in the warehouse. Company needs to arrange the loading vehicle accompanied with the refrigerator and other programs which could save the goods from being perishable and other losses. The inventory management issue and loss of stock in stores could be reduced by undertaking the systematic work approach. In addition to this, Lidl Tooting London Company might also face issue in the inventory management due to the complexity of the process and uncertain minimum and maximum stock quantity in the process. It will be hard for the inventory manager to determine the economic order quantity in the process. If company fails to determine the required stock level and the point at which order to be placed to buy stock from the market then it will not only increase the overall cost of capital but also increase the inventory loss in the process. These are the some of the issues faced by the Lidl Tooting London branch and if company uses the proper action plan then it could lower down the inventory theft and inventory losses in the process (Hovav, 2015). However, undertaken action plan of company should be properly doubled checked by the internal control system to lower down the problems and issues. The inventory loss in warehouse if controlled then it will be beneficial for the Organizaiton to survive in long run.

Challenges for Lidl Tooting London Company

With the increasing ramified complexity of the process system of Lidl Tooting London Company, it is obvious to find the issues and complexity in the process. It is analyzed that company has faced issue due to the loss effective inventory management program and less effective manual bar code system in the line (Blanquart, Seidel, and Lenz, 2014). In order to mitigate the issues such as uncertain minimum and maximum stock quantity, manual bar code system, not enough physical security guard presence and other issues and stock losing in warehouse. There are several action plan and strategies which could be used by Lidl Company to mitigate its inventory management issues, employee turnover issue and process complexity problem. However, proper management and effective training and development program would be the effective approach to mitigate these issues. The main theft issue program could be managed by company by installing the cyber security alert and program functions which will detect the outgoing goods and stocks from the stores without getting billed.

There is several action plans which could be Lidl Tooting London Company to mitigate these issues are given as below.

Company also needs to set up the strong risk management analysis with the undertaken situation analysis which will assist in mitigating the issue of the inventory management. It will not only strengthen the overall inventory management strategy but also increase the overall outcomes (Geppert, Williams, and Wortmann, 2015).

Management of Lidl needs to determine the economic order quantity numbers for placing the orders. It is used to determine the order to be placed, minimum order quantity and maximum order quantity of the organization.

The management of Lidl Tooting London Company needs to hire physical security staff who could consistently check the process issues and loss of stocks in warehouse. These security staff members would be given proper level of training and development program sot that they could be more effective in handling these type of issues. .

Company could also use the CCTV program which could detect the theft in warehouse for 24 * 7 hours. It will not only increase the overall outcome but also lower down the complexity of the process. It will assist in identifying the issues and problems faced by company in handling these stock loss issues in the process (Jones, and Robinson, 2012).

Lidl Tooting London Company also has to re-engineer its store layout in customized manner. This will requires rotating the staff members and hiring of line managers in the particular warehouse section. In addition to this, all the stocks and items kept in the warehouse would be controlled by the proper CCTV program (Hovav, 2015).

Possible Solutions for Lidl Tooting London Company

Company needs to hire more expert staff members in its value chain activities to develop an effective internal control system. These employees will double check the issues and problems faced by managers in the warehouse in Lidl Tooting London Company to lower down these stock loss and theft issues (Plazibat, and Dadi?, 2017).

In addition to this, Lidl Tooting London Company could also use the online recheck system which will be based on the cyber computing enterprises resources planning. It will allow company to detect the issues and stock theft in quantified manner. All the stock entries are done on the systems which will assist in identifying the stock loss in the warehouse.

The main issue arise in the inventory management is related checking by the physical security staffs who could indulged in the physical inventory checkup program. They will ensure the flow of inventory and assists in lower down the inventory losses in the stores of Lidl Tooting London Company (Dobson, Starkey, and Richards, 2009).

After analysing all the problems and issues in Lidl Company, it is analyzed that company should use the proper action plan and planned activities which will be useful to mitigate these identified issue in the certain given time (Balasescu, 2015).

Activity	Description	Months	Predecessors
1	Arrangement of finance	2
2	Re-engineering of value chain activities	2
3	Hiring of physical security guards and staff members	3	1
4	Evaluating the stock warehouse loss	2	2
5	Implementing the required changes	3	4
6	Follow up	2	3

These above given action plan is prepared on the basis of required time involved or time which will be taken by Lidl to mitigate the possible issue and problems in the process system of organization (Kamran, 2018). However, company should raise funds for undertaking new development program by using the debt capital. It will eventually lower down the overall cost of capital of Organizaiton (Carr, Hostrop, and O’Connor, 2012). The action plan has been prepared on the basis of time involved in the particular action and required development actions for mitigating the inventory loss issue in the process.

There are several finding which have been found after analysing the annual report and other required details of the Lidl Company (Angerer, 2007). The main issue is related to high inventory loss and no effective security program to lower down the inventory loss in the process system. It is analyzed that company has faced issue related to high complexity business process and less effective inventory management program in its value chain activities. This problem has emerged as company has failed to use the effective inventory management control system process. Lidl needs to make the several improvements in its business process. In addition to this, proper motivation theories and system process needs to be developed so that management of company keeps its employee motivated and lower down the employee turnover issues. There are several motivation theories such as ERG motivation factors, Herzberg Motivational theory and factors need analysis theory which could be used by managers to strengthen its business process program (Wells, and Singh, 2012).

Conclusion

The main issue which Lidl is facing is related to high complexity of the process, less effective inventory management and increased employee turnover. There are several proposals to solve the issues and challenges which company has been facing in its business (Widyadana, and Irohara, 2018).

Use of motivational theories- Employees leave the organization when they feel demotivated and less effective the process system. Therefore, company uses several motivational theories such as Maslow’s needs hierarchy, Alderfer’s ERG theory, McClelland’s achievement motivation and Herzberg’s two-factor theory to keep its employees motivated. These theories are used strengthen the work functions of employees and keep them motivated towards the work in the organization (Christopher, 2016).

Training and development- The main issue which Lidl is facing in its value chain activities is related to its increased business complexity. This issue could be managed by implementing the proper training and development in the process system of organization. Company needs to use the proper training and development process to make its employees more employable so that the complexity of the system could be reduced (Feng, Li, McVay, and Skaife, 2014).

Use of financial analysis tool to manage stocks- It is analyzed that company could use economic order quantity, minimum order quantity and maximum order quantity to determine the right amount of stock in the process functions of organization. It is analyzed that company could easily maintain the inventory in its business by using these financial tools in its business (Gambi, et al. 2015).

These developed action plan and identified methods could be used by organization to mitigate these possible issues to strengthen the work program of organization. However, these are the particular proposal which could be undertaken by organization on the basis of particular condition and identified issues. The main focus of Lidl Tooting London Company should be on using the proper inventory reporting methods to mitigate these issues. Company should follow the daily inventory reporting frameworks to strengthen the outcomes and lower down the inventory loss in the inventory process system (Bruque-Cámara, Moyano-Fuentes, and Maqueira-Marín, 2016).

There are several complication and changes in the Lidl Company which needs to be improved if company wants to improve the value chain activities. I have found that company has faced high cost of its goods in its business process due to the inventory loss issue in its process. I have found that company needs to use the proper online mechanism and hiring of physical security employees to control the flow of inventory loss in its value chain activities. I have found how Lidl has faced high loss in its business due to the non-effective inventory management issue. I have considered that company firstly needs to use the cost and benefit analysis in its process system before implementing the developed action plan. If the cost of the new process inventory management program is low then only company should undertake the project proposal of hiring new physical security staffs and online cyber computing system. I have learned that re-engineer of the value chain activities and undertaken inventory management program will require high amount of efforts and proper training and development program to make employees more adaptable with the changing process. I have learned to analyse the problem and issues of the particular company and how company should re-engineer its value chain activities to mitigate these issues. I have developed divergent thinking to implement the proper strategic approach and identify the future possible issues. There are several documents which I analyzed such as annual report, costing documents, and order quantity report and job sheets. These documents assist in identifying the possible issues and problems which company has faced in its business functional program. I have learned several things in this project such as setting up inventory management policies, determining the minimum and maximum inventory management program, need of security system and inventory management program and undertaken strategic approach which company could take to save company from the possible inventory losses. I have found that Lidl Tooting London Company is accompanied with the main issue of mismanagement and errors within its reporting framework. Company needs to follow the FIFO method in its reporting of the inventories. It will allow company to follow the first in first out procedure in its inventory management program. I have analyzed that company has faced issues related to the complexity of the work process and increased business complexity in the system. i found that if company wants to manage the flow of inventory in its process then it could easily use the economic order quantity, efficiency ratio particular inventory management method. Ideally, the ratio of inventory is based on the quantity sold and opening balance of inventory. If company keep the surveillance on the opening stocks and inventory sold during the period then it would be easy to identify the inventory loss. I will simply suggest that Lidl Tooting London Company should hire more expert employees in its process and CCTV camera should be used to mitigate the possible issues (Elking, Paraskevas, Grimm, Corsi, and Steven, 2017). After evaluating all the details, I could infer that Lidl needs to adapt its inventory warehouse process towards the advance technologies and system which will help it to establish automation in process.

Conclusion

Lidl Tooting London branch has faced several issues and inventory loss in its value chain activities. The inventory issue and loss have arisen due to the Not enough physical security guard presence, non-effective store layout design, which increase the inventory theft, stock losing between the warehouse to store, and lack of bar code of system process. The main issue which company has faced is related to inventory reporting frameworks. If company has followed effective inventory reporting frameworks or strengthen the overall reporting program then it would have saved from the possible inventory loss and issues in the process system. Nonetheless, in order to determine the loss of inventory, company could use economic order quantity, minimum order quantity and maximum order quantity to determine the right amount of stock in the process functions of organization. Lidl also needs to change or re-engineer its store layout in customized manner which could easily be used to catch the inventory loss in the process system of organization. Company has faced high inventory loss program has lower down the efficiency of the business and resulted to destruction of its undertaken program in determined approach. In order to increase the overall return on capital employed, company needs to strengthen its inventory reporting framework and online cyber computing system to detect the inventory flow in the process system. Now in the end, it could be inferred that the main problem which has been found in the Lidl Tooting London Company is related to inventory loss and less systematic work chain. If company wants to survive in long run then it will have to mitigate its increased inventory goods theft from the stock stores. Lidl tooting needs to be proactive and follow the inventory methods to mitigate these issues.

References

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