Reference no: EM133092880
You are a business analyst at a large wholesaler of fine wines. The firm buys cases of wine, then resells the wine to high-end restaurants. Average sale price is $600/case (or $50/bottle).
They are initiating a large inventory process automation project using RFID. You've been assigned the feasibility study. During interviews you have learned:
CURRENT STATE
A key business objective is to increase inventory accuracy. The warehouse shuts down for a weekend each month, while 2 staff members each work 10 hours of paid overtime to complete a case-by-case, bottle-by-bottle physical inventory. The Inventory Manager is present and often helps.
The Sales Manager told you that during each inventory weekend, sales are lost since emergency orders are not accepted. He estimates that he loses the sale of about 50 cases each inventory weekend.
The CFO tells you that inventory shrinkage is 'not a huge problem'. He estimates about 1% of average inventory is lost to shrink annually
FUTURE STATE
Cases of wine and single bottles will be labeled with RFID tags as they enter the warehouse.
RFID readers will keep accurate count of inventory; and will also monitor storage temperature and humidity. The Sales Manager is really excited about his ability to know exactly the temperature at which each bottle has been stored ! He is going to market this capability to his customers.
RFID readers will also be placed at the doors to minimize shrink.
Your task: based on this description, identify and explain both the tangible (hard and soft) and intangible benefits of implementing a system to achieve the future state