Case of Ito Yokado

Current Scenario
History of Ito Yokado

Comparison with competition

Challenges vis--vis Japans economic conditions

and changing customer needs

About Reform Program

HR and empowerment of the employee

Rationalization of distribution
Utilization of sophisticated MIS system

Reform Program and improvements

Improvements
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Return on Sales Graph (%) Ito Yokado

Daiei

10 8 6

Return on Assets Graph (%)

Ito Yokado Daiei Jusco Top Five Companies Average

4
Jusco Return Return Return Return Return on on on on on sales sales sales sales sales 1984 1985 1986 1987 1988 2 0 -2 Return Return Return Return Return on on on on on assets assets assets assets assets 1984 1985 1986 1987 1988

60 50 40 30 20 10 0

Income after Tax Graph (Yen)

Ito Yokado

Daiei Income Income Income Income Income After After After After After taxes taxes taxes taxes taxes

Jusco

1984

1985

1986

1987

1988

All graph shows exceptional performance by Ito Yokado as compared to its peers. The company performance has shown good growth in the year 1987 and 1988.

Reform Program and improvements

Inventory Turnover
20 15 10 5 0 1982 1983 1984 1985 1986 1987 Total Ito Yokado Inventory Turnover 100 80 60 40 20 0 1982 1983 1984 1985 1986 1987 Total Ito Yokado Return on Inventory(%)

Return on Inventory(%)

The graphs displays that the inventory management of Ito Yokado has become efficient over the years. Problems with the current MIS system:*Executives considered MIS to be less important then innovative human resource program and the rationalization of distribution *Employees are not confident of using the current MIS system *Employees still calculate the number of units required to be ordered

Reform Program and improvements

Improvements

Where can MIS intervene?

MIS

HR

Inventory Management

Distribution

MIS AND HR
Knowledge Management

Strategy Management
Innovative idea repository (store-wise

%implemented and % dropped)

MIS AND Inventory Management

Extend efforts for rationalizing distribution to

products with lower volume

Utilize LAN connectivity for maintaining inventory

records across stores

Set up a parameterized model for forecasting

demand validate actual against targeted sales for fine-tuning the model
Provision for automatic notification before stock-

outs

MIS AND Inventory Management

Specific Examples:
Tunafish: Reduce dependency on human judgement and estimation to predict future sales Train employees so that they learn to trust the figures generated by the computer Apparel: Reduce element of human intuition for predicting expected sales Utilize trend analysis on a daily basis to further reduce response time to changing fashion trends

Thank You!