With an experience over 60 years in the context of the global economy, Toys “R” Us has become one of the leading companies in the retail industry. Though restricting the scope of its operations to selling goods for a rather specific age group (i.e., toys, which are typically aimed at the audience aged 0-15), the company has succeeded incredibly, peaking at the outstanding $11,802 of gross annual income in 2016 (Financial Information for Toys “R” Us, Inc., 2016).
Despite the overall efficiency of the SCM model based on setting a set of very rigid quality standards and consistent quality verifications, the organization has been suffering a significant drop in revenues, which calls for creating a framework for the mutual integration of the SCM and a new marketing approach.
The current SCM framework of the organization can be deemed as very efficient in the context of the global economy. For instance, the Supply Chain strategy that the firm currently adheres to was designed specifically for the needs of Toys “R” Us. Referred to as the TRU transformation (Toys “R” Us, 2016b), it serves as the primary means of enhancing collaboration between the partners; as a result, the information management process is improved significantly. Similarly, the Information Management approach is based on the principles of information sharing and the use of the latest e-commerce approaches (see Appendix A).
A very tight focus on the Assets Management process, particularly, on the allocation of the firm’s human resources, contributes to the creation of an outstanding Quality Management strategy. As the official statement issued by the organization states, the ethical standards of the company are very rigid. Moreover, regular assessments of the parties involved, as well as complete clarity and transparency are promoted as the foundation for the SCM framework (Toys “R” Us, 2016a).
The Logistics Management approach, in its turn, is defined by the application of the Just-in-Time (JIT) concept (Schroeder, Goldstein, & Rungtusanatham, 2013). A time-tested approach, the JIT system allows the entrepreneurship to meet the deadlines despite the workload and the challenges that the global economy environment sets for it. To be more accurate, JIT permits to “reduce logistics cost and helps identify opportunities for significant improvement” (Othman, Sundram, Sayuti, & Bahrin, 2016, p. 44).
The Procurement department, however, could use a significant improvement. As the recent records state, the company has been out of stock for quite a while (Lim, 2016). Therefore, it is essential that a renewed and efficient marketing channel should be incorporated into the current SCM strategy of the company. As soon as the managers of Toys “R” Us come up with the approach that will allow for catering to the needs of the target audience without being dependent on the current trends extensively, it will be necessary to update the SCM approach correspondingly.
At present, it is strongly suggested that the company should consider the model that is typically referred to as the “process perspective” (Jüttner, Christopher, & Godsell, 2012, p. 107).Jüttner et al. (2012) speculate that the above approach is likely to contribute to a rapid increase in customer value, therefore, allowing the SCM framework to be deployed in a rather favorable environment: “From a marketing perspective, processes are seen as an element of the organizational context in which marketing is embedded and which should be influenced in such a way that customer value creation is maximized” (Jüttner et al., 2012, p. 107).
As a result, being viewed “as the conceptual domain, per se” (Jüttner et al., 2012, p. 107), marketing can be introduced into the SCM system successfully without disrupting any of the current processes.
Reference List
Financial Information for Toys “R” Us, Inc. (2016). Web.
Jüttner, U., Christopher, M., & Godsell, J. (2012). A strategic framework for integrating marketing and supply chain strategies. The International Journal of Logistics Management, 21(4), 104-126.
Lim, V. (2016). How out-of-stock inventory is killing Toys ’‘R” Us. Supply Chain 24/7. Web.
Othman, A. A., Sundram, V. P. K., Sayuti, N. M., & Bahrin, A. S. (2016). The relationship between Supply Chain integration, Just-in-Time and logistics performance: A supplier’s perspective on the automotive industry in Malaysia. International Journal of Supply Chain Management, 5(1), pp. 44-51.
Schroeder, R., Goldstein, M. J., & Rungtusanatham, S. (2013). Supply chain management. In Operations management in the supply chain (6th ed.) (pp. 222-250). New York, NY: Richard D. Irwin, Inc.
Toys “R” Us. (2016a). About our supply chain. Web.
Toys “R” Us. (2016b). Toys“R”Us, Inc. strengthens leadership team to drive “TRU transformation” strategy. Web.
Appendix A: Toys “R” Us and Its SCM Framework
