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Sport Spot Jack and Manny Inc


October 21,2011




Shellion Williams


Manny Ramirez


Isis Pope


Ricardo Ferreira


Kean University
Operations Management
Group 4


Please don't forgot to check out our video on the store's day to day operations in the appendices section.

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Acknowledgements

We would like to thank Vice President of Manny and Jack Inc. and Owner of Sport Spot, Jack Katz and also, Duke Bagie, Manager of Sports Spot for allowing us to do this project.

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Table of Contents

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Introduction

Sport Spot is a Jack&Manny Inc. clothing store founded in 1992 by the current president, Manuel Munoz, and vice president Jack Katz. At the time, it seems like a great idea because there was no store in the neighborhood who sold footwear and athletic clothing. There was also no store selling the latest designer wear for women or men or children, when people were willing to pay a lot of money for it. As a result, Sport Spot because a million dollar company making an estimated $1,345,729 annually. Sport Spot currently has 13 employees including rotating security guards who are police officers and, the manager Duke Bagie, who have been working at Sport Spot for about 13 years.

The store is located in East Orange New Jersey, however, Jack&Manny Inc. have about 5 other stores located in other cities in New Jersey. Sport Spot sold clothing and footwear for men and women, and only footwear for children. However, starting in 2008, it became strictly a men clothing store, but still sells footwear for men women and children. Sport Spot sells brands such as Nike, Jordan, True Religion, Mek Denim, Buffalo, Pepe, Champions, Coogie, RockAwear, Morrise, Timberlands, and many other brand name products. These brands are mixtures of Jackets, sweaters, hats, jeans, sweats, boots, and even accessories like belts, book-bags, scarves, and gloves. As of 2010, Sport Spot started selling uniforms in compliance with the high schools’ new dress codes in the neighborhood.

The company uses regular computer based cash registers and receipts to generate sales in the system. The same computer registers are used as time-clocks and to check inventories. Unfortunately, Sport Spot do have an owned website, it only has basic information in other intonation systems such as www.manta.com (http://www.manta.com/c/mmsn4cb/jack-and-manny-inc) or www.powerprofile.com (http://www.powerprofiles.com/profile/00005161040670/JACK+AND+MANNY+INC-EAST+ORANGE-NJ#). However, making a website would definitely improve the operation system.

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Critical competitive factors and priorities of the operation function

Sport Spot hires well trained employees to help out customers in any situation. Customer Service is the most critical operational aspects in gaining orders and in retaining customers. Without any customers there will be no orders to be made. Sport Spot has always been making the customers happy, the happier they are with their product the more customers they will receive. Sport Spot teaches their employees about "Delivery speed". Delivery speed is quickly filling a customer's order. The way they utilize this process is by cutting down lead time. Their entire inventory is on their computer and their backroom is organized so the employees can reach out to the needs of their customers as quickly as possible. Sport Spot is incorporated with about 5 other stores located in other cities in New Jersey under the Manny&Jack Inc. This is a fantastic position to be in considering that it started alone.

Sport Spot is running their store as a "Low-cost operations" process. They have such low prices that at least 90% of people, who visits, buy at least one item. Low-cost operations is delivering a service or a product at the lowest possible cost to the satisfaction of external or internal customers of the process or supply chain. Sport Spot follows this operation by researching competitors’ prices. One of the competitors is "Footlocker", they are an American sportswear and footwear retailer operating in approximately 20 countries and have over 3,000 stores, including the store on the same block as Sport Spot. The general products of Sport Spot sell around $10 to $30cheaper as to Footlocker.

Sport Spot began selling clothes and footwear for men and women. In 2008 it went from selling clothing for men and women, and became a men’s clothing store. However, it still sold footwear for men, women, and children. From 2010 to present with combination of a men’s clothing store/footwear their new approach is selling uniforms in compliance with the high school dress codes. All of Sport Spot's uniforms are 10% off. There aren't many uniform stores in the city of East Orange, so that is a plus.

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Analysis

Sport Spot’s main process and flows does not have the same procedure as Footlocker or many other big franchises. The way Sport Spot manages their footwear inventory is much simpler because they use codes to identify their products. Their quantity flow is a big part in this industry because they have a vast variety of items. The C.E.O. Jack Katz told us that they have the most popular brands for their customers. Mr. Katz has been in this business for a long time in the same location, so he knows what his customers like. For example, they sell sneaker brands such as Jordan’s, Nike, and Adidas, Polo’s, Converses, Levis, Nautica, True Religions, Lacoste, Vans, BBC, Uggs, Timberlands, and much more. For the clothing inventory, they have Levis, North Face, Buffalos, Mek Denims, Lacoste, True Religions, Nurtica, Nike, uniforms, and much more. North Face, Uggs, Jordan’s, Nikes, Lacoste, and Buffalos are the biggest sellers in the store, but also the most expensive brands. Since these brands are favored by many customers, they sell regularly every week. Many clothing brands are accompanied by footwear.

Sport Spot’s revenue has been satisfying for many years since they are well known in the city and neighboring cities. Since the recession hit in the late 2000s, Sport Spot did suffer a hardship. Despite the some slow months, Tax Reimbursement is always a kick up season (March-April), along with Father’s day (June), Valentine Day (February), Christmas (December) and mainly on the other big holidays. Due to that, they make up for the other slow months. The ways the inventory is setup, Sport Spot have two types of ordering processes. One process method is that they order seasonally (every two to four months). This is only on products that never go out of style and is a frequent demand (such as ACG Nikes, Timberlands, and Air Force One Nikes). The other ordering process is just buying whatever the new style is for that season, meaning, just ordering whatever they want to order at that moment in time. There are no special orderings; no “we will order your size.” We had asked the manager if this was ever a problem for their customers, he had said “There are times when we do not have what a customer want, so we may suggest something different. If that doesn’t work then they just won’t buy anything. However, although we may lose a sale that day, we never lose a customer… Well, at least we try our best” –Duke.

Sport Spots’ inventory size for both sneakers and clothing is roughly about 2000. When they order those constant yet seasonal products (especially footwear) they might order 200 to 250 pairs. Their lead time is 2 weeks to 3 weeks at most. When a customer asks for a size that they don’t have they will just have to tell the customer that their next order shipment will be in the next month or the next season. There are never any manual reminders of what product to buy when it comes to the set continuous inventory because of the perpetual system. The computer automatically knows what they have or do not have. We witnessed two different customers; one customer came in and ordered a “low top, all white Air Force Ones,” the employee knew he had them in stock since these are one of the continuous items and it is very well know. In less than one minute, he came back with his sneaker. The other customer asked for “black low top Adidas Shell toes,” the employee also knew that these were common and frequent, but they usually do not order as many as the Air Force. Unfortunately for the customer, they did not have the size. They told him that the next order of those will not come in again till the early spring season. However, she made a different suggestion.

Sport Spot has different types of tools and equipment that they use to make their process quicker.

Their computer is their main equipment in their store which works as their cash register and inventory organizer. On their sneaker boxes they have codes to determine where they can find their item in the stock rooms. For example 251-825which means “2”is a sneaker “5” is a low top “1” means black. The ending number (825) identifies the sneaker.

1st Number (2)	Type	Sneaker(2)
2nd Number (6)	Style	High Top(6)
3rd Number (1)	Color	Black (1)

However, only the cahiers and the manager, and the guy who is responsible for organizing the inventory (Jose) are allowed to use them. All the seals associates have to check manually for products. Sport Spot has a big stock room that divides into sections for sneakers, boots, shoes, clothes (Bags, hats and scarves). Sport Spot also have another room for the footwear that sells frequently; usually less than a week. They call is Jose’s Room. It saves time putting so rapid sellers there because it would be difficult to make space in the correct section for only a few days. On their sneaker boxes they have codes to determine where they can find their item in the stock room; this process makes it quicker for them to get to.

The diagram above indicates how the daily Operations of Sport Spot is. First, the customer makes a request; a sales associate checks the inventory for the item, then they are checked out at one of the two registers.

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Recommendations

Based on interview and analysis of company there are a few recommendations that may help with boosting sales and income. First, they should pick a type of ordering system, instead of ordering inventory whenever. The best inventory system style would be a hybrid of optional replenishment system. A system used to review the inventory position at fixed time intervals and if the inventory has dropped below a predetermined level, to place a variable- sized order to cover anticipated inventory. This would benefit them due to ordering consistent inventory during high seasonal demand and less during an off season. A major problem due to improper inventory system is bottlenecking. A constraint that relates to the capacity shortage of inventory which limits store’s ability to meet the requirements demanded by store. To fix the constraint of a bottleneck flow should implement the following steps:

1. Identify where the bottleneck is.

2. Identify inventory that sells quicker than bottlenecked items.

3. Evaluate the bottlenecks.

4. Reduce bottleneck by changing inventory process system.

For example a customer comes in to purchase a pair of Jordan sneakers in a size 9 and store does not have any in that size. Another example, a store associate tells manager that we are low in various sizes for a certain high demand sneaker and manager replies that shipment will be in the following week. The next week comes around and shipment is not there and manager replies that it will be in the next week, but meantime customers have been turned away because new sneaker shipment was never received. That alone reduces income and productivity for store, which is why store needs to be on an optional replenishment system.

Secondly, since the manager orders inventory when there’s next to nothing or nothing at all, he should pick a system and distributor that meets company needs. So he would have to determine distributors based on certain criteria on the quality he wants to establish for store. Criteria concerning best distributor for low freight and material cost but cheaper quality of inventory or high in costs but better quality, but with on time delivery as a main benefactor.

Since this is a small store, and sometimes business gets slow, the hiring process should be a level strategy only, as opposed to a mix strategy or chase strategy. This way, employees could do overtime in busy months, and under time in slows months instead of being hired and leadoff.

Another recommendation for a place that has been about for 19 years with many loyal customers would be a bonus/discount card. Upon our visit to the store, we realized that customers usually won’t get a discount on new or expensive things unless the manager approves. This understands because of the already low prices on some of the goods. However, if there are customers who have shopping there for many years, they should feel appreciated in some way. So, each time a customer shops and uses that card, they get bonus points or dollars towards another purchase. This strategy with build a better customer relationship and will generate more revenues.

We also came to the conclusion that the store would be better off with a website or even a Facebook page. With websites there are server fees but facebook is free. Nonetheless, they do have information with others sites such ashttp://www.manta.com. By doing this, it will traffic more customers. Maybe by promoting discounts and new products on either of these services will definitely help to improve product.

It may also be great help if they have biweekly meeting for all the employees with and Board of Directors. Since these employees are front office employees and are interacting with the customers more often than employers, they will gain more information about customer demands. In these meeting, employers will become aware of what they need to work on as far as ordering. These meeting could be something fun, like a pizza party or bowling as an incentive to motivate workers.

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Conclusion

This Operations Management class teaches that every entity of a business are based on how it's operations work. However, not every business operates the same because some businesses provide products, services, and even both. Sport Spot, provides both products and services by selling sneakers, shoes, boots, clothing, and other apparel products. The business' operations consists of buying products which are demanded by customers for sale. Their ordering system is not the usual either. Many businesses use EOQ (Economic Order Quantity), which is the lot size that minimizes total annual inventory holding and ordering cost by having a target inventory, and a re-order point. By doing this, they will not have extra/costly inventory sitting, or spend too much money ordering too often. Sport Spot uses neither of these. They just order when they have the money or feel the need to. The manager Duke, feels that it is better when working with products that are seasonal, especially when clothing trends change a lot. It is hard to know how many of what to order and when. However, the store is still doing a great job and still attracts customers. We’ve also noticed that there were many faithful customers. If Sport Spot actually decides to take our recommendations into consideration, they will be a lot more successful than they are now.

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Appendices

Sport Spot Video

http://www.footlocker-inc.com/company.cfm?page=about

Foot Locker leads the pack in the race to capture the biggest share of the athletic footwear market. The company is a leading retailer of athletic shoes and apparel, with about 3,400 specialty stores in 20-plus countries in North America and Europe, as well as Australia and New Zealand. Its 1,895-store namesake Foot Locker chain is the #1 seller of name-brand (NIKE) athletic footwear in the US. The company also operates stores under the Lady Foot Locker, Kids Foot Locker, Footaction, Champs Sports, and CCS banners.

http://www.manta.com/c/mmsn4cb/jack-and-manny-inc

Jack And Manny Inc Business Information

Jack And Manny Inc also does business as Sport Spot .

Location Type	Single Location
Annual Sales (Estimated)	$1,345,729
Employees (Estimated)	12 12 **
SIC Code	5661, Shoe Stores
NAICS Code	448210, Shoe Stores
Products, Services and Brands	Information not found
State of Incorporation	New Jersey
Years in Business	19

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