Supply Chain Management

Best Buy has many suppliers from overseas as well as the United States. Best Buy has a supply chain system linked to our RSS (inventory) system to monitor product reordering. Delivery time is usually very fast for all Best Buys. The RSS (inventory) system learns customer trends. If a product drops to a certain number, a message will automatically be sent to our warehouse and suppliers to send out more products to our store. Best Buy products such as Sony and Panasonic have to pass their own quality test and inspections by their company and then by Best Buy to guarantee their customers great quality. Best Buy offers guarantees to the customers on their products to reinforce the quality Best Buy offers. Best Buy’s suppliers have supplier certification in which the suppliers are guaranteeing good quality as well. Cost is very minimal since if a store needs more products it will be shipped from the local warehouse. Best Buy usually transfers products that are not selling as much to different locations. Every location has different customer segments which will determine demand. The current system Best Buy uses is RSS (inventory) for its supply chain management. Best Buy has a pretty solid supply chain management and it seems to work. I do not think changing a formula that already works would be a good idea. After all, Best Buy is doing something right since they are still the number one electronic retailer in the world.

A good example of a project that Best Buy created was Magnolia Home Theatre. A few years back, major retailers carried only the basics- home theatre setup with televisions on the walls and basic speakers. Now, Magnolia sells higher end televisions, speakers, and receivers. Only Magnolia certified professionals can work inside Magnolia. Best Buy had to bring all the materials and supplies to its locations while their everyday business was still operating. This presented a major challenge of scheduling and constructing with customers still shopping in the store.
Best Buy does not use Gantt charts or network diagrams; instead they use the daily business tracker and scorecards. The scorecards will tell you exactly how much you are budgeted for that day, how much you should sell in service, geek squad black tie protection plans, and accessories. With the scorecards you have to stay at a certain percentage to stay profitable which consequently affects labor and hours they give employees to work. Best Buy should consider using Gantt charts which would be less costly and can be very beneficial to all its employees and the company overall.