Point of sale systems (POS) entail a combination of software and hardware that enables organizations to conduct transactions and simplify business sales operations. POS systems involve application of computers as opposed to usage of cash registers in numerous retail applications (Van Horn et al., 2016). This system aids in tracking inventories, accommodating debit and credit cards payment, and printing invoices and receipts. Therefore, Burningham Discount Department Store Chain needs to upgrade to a fully functioning POS system in its 468 stores across the United States to enhance payment efficiency and easier retrieval of sales data (Van Horn et al., 2016). However, Burningham is financially constrained to facilitate huge installation costs across its multiple stores. Hence, the organization ought to exercise financial shrewdness to facilitate its sustainability in the market while upgrading its operations as discussed further in this report.
Advantages of Point-of Sale systems Uniformity
Before Burningham conclude on the number of stores to be upgraded with contemporary POS systems, including 356 of the high and medium-volume stores, while omitting 112 low-volume stores, the organization should weigh the advantages associated with uniformity among all stores, data retrieval, customer services, and sales operation efficiency (Van Horn et al., 2016). Centralization of operations for all stores is fundamental for the effectiveness and efficiency of the organization (Hugos, 2018). Further, the organization should consider uniformity with the quality of the systems rather than installation of differentiated systems that might conflict with the retrieval of data. The organization may also consider installation of low storage systems for the low and medium volume stores, and use higher storage systems for the high volume stores.
Moreover, POS systems would aid in uniformity among all 468 stores that it operates in several locations in the U.S. POS systems help in streamlining operations in the entire chain store. For instance, Burningham would have uniformity in case of advancements and alterations of prices in the entire system through integration of POS among all stores. This may aid in boosting the level of sales in the low volume stores rather than omitting them, which might worsen their situation. Besides, POS would record all transactions undertaken in the entire organization (Van Horn et al., 2016). This would enable the managers to automatically compare their sales to inventories. Additionally, if the number of sales fail to match with the inventory, POS would display the inconsistencies and aid in discerning causes of discrepancy (Van Horn et al., 2016). This practice of good record keeping in all stores would enhance managerial efficiency, prevent duplicitous activities in all stores, and ensure deliveries are made on time. This would further boost the movement of inventories in the entire organization, hence shifting the entire organization’s supply efficiency curve as explained in fig 1;
However, if low-volume stores were omitted, they would result to the entire organization’s supply inefficiency that would on extreme operate along the brown curve that depict under efficiency.
Albeit advantages associated with installation of efficient POS systems in Burningham, financial prudence is equally important for the operation and sustainability of the entire business. Hence, financial resources must be effectively and efficiently managed to bring about the intended changes and results in organizations (Brigham & Houston, 2012). Despite the inefficiencies that would accompany omission of installation of POS in low-volume stores, the organization is constrained by financial resources to fund upgrade in all stores; hence, installation in low-volume is perceived as unjustifiable by the management. Additionally, for operational efficiency, the organization needs to have a strong financial system that would propel its objectives, provide reliable financial information, safeguard assets and records, evaluate financial allocation efficiency, and encourage commitment to outlined policies and regulations (Brigham & Houston, 2012). Similarly, deficiency of variance in POS among its stores would complicate collection, retrieval and analysis of sales data and further compromise the entire system. Therefore, the organization should consider uniformity in the entire organization to enhance managerial efficiency.
Recommendation and Solution
Omission of any store whether high, medium, or low-volume in the system upgrade is unjustifiable. All stores should be upgraded to enhance operational efficiency in the entire business. Therefore, Burningham may consider obtaining loans to fund its system upgrade project in the entire organization. Similarly, the organization may also shut down low volume stores and concentrate on upgrading the medium and high volume stores. Consequently, this would eliminate inefficiency and expand profitable stores.
- Arkieva. (n.d). Supply chain efficiency and smart planning engine. Retrieved from blog.arkieva.com/lessons-from-ibm-supply-chain-efficiency-smart-planning-engines/.
- Brigham, E. F., & Houston, J. F. (2012). Fundamentals of financial management. Boston: Cengage Learning.
- Hugos, M. H. (2018). Essentials of supply chain management. Hoboken, N.J.: John Wiley & Sons.
- Van Horn, E. et al., (2016). Multifunction point of sale system. U.S. Patent No. 9,412,242. Washington, DC: U.S. Patent and Trademark Office.