Kroger's warehouse management system implementation and brand strategy

Kroger is the largest grocery retailer in United States with the net revenue of more than sixty billion dollar. The Kroger has established number of outlets in different states of United States 'with store formats that include grocery and multi-department stores, convenience stores and mall jewelry stores. Kroger operates under nearly two dozen banners, including Fred Meyer, Dillon's, Ralph's, King Soopers, Smith's, City Market and many others' (Robert, 2006). Since 2000 onwards the Kroger has given due consideration towards the deployment of an 'internally-supported Warehouse Management System' (David, 2000), which turned out to be successful and efficient system. The Kroger introduced rapid and instant implementation of the supply chain objectives, and a strong enhancement program meant that technological up gradation. During 2002, the company hired the services of the ESYNC for providing project resources which can support the roles and functioning of the 'Project Management, Functional and Technical Design, Testing, Training and Startup and Integration Support'. The company has developed an internal goal for itself as per which the company has to avoid any loss of production upon the implementation of the technology, and therefore every subsidiary of the organization experience 'soil project roadmap and thorough testing before go-live with the new' (Ronald, 2003). The service of the ESYNC was utilized on 'several Warehouse Management System conversions', and has exercised different tasks and reforms, including 'leadership assignments' (Ronald, 2003). The purpose of the entire exercise has been to improve and upgrade the performance of the Kroger, and such a policy was undertaken to restore, develop and strengthen the trust of the customers. During the start of 2007, the Kroger launched its Kroger Value line, which is the substitute of the for Maximum Value brand which was being offered by different outlets of Kroger. The brand was modified in white blue and red, and was replaced by typical orange-fade-to-yellow. After the acquisition of Fred Meyer with Kroger, offered Kroger with wider variety of the products including cheese made with water & partially hydrated soybean oil. The Fred Meyer was previously accused of offering low quality product at cheap rates, which adversely affected the sales activity of the Kroger. The merger was therefore an opportunity to offer the quality brands at nominal rates, far above the mark of Fred Meyer in quantitative and qualitative terms. The Fred Meyer Value has been replaced by the Kroger Value Brand, which has been responsible for offering such offerings through which Kroger brand and Kroger Value brand were sold at parallel, in homogeneity without any major difference of quality except for the packing and prices. Such an acquisition was responsible for the growing market shares of the Kroger brand, and the variety of the brands helped the Kroger to achieve market dominancy without any major competition (Susan, 2004).

Success and Failure

At the end of 2004, the total sales of the Kroger increased by six percent and reached the mark of approximately thirteen billion dollars, the total earning of the company stood at $142.7 million which is thirty percent rise as compare to the level achieved in 2003. According to David B. Dillon, the Kroger chairman and chief executive officer, 'we are very pleased with our sales performance, Kroger's identical food-store sales showed strong improvement. Our continued focus on fulfilling our customers' needs is an important part of our strategy to increase earnings through strong, sustainable identical food-store sales growth'. The company expected investment of more than $1.8 billion, excluding the negotiations of acquisitions with other consortium. Surprisingly, the Kroger was able to sustain major labor contracts without causing any halt in the normal affairs and working of the company, the labor contract encompasses the services of more than twenty thousand employees in Seattle, Cincinnati, and at Food 4 Less in southern California, the ratification of labor contract agreement without any interruption and stoppage of the work further ensured the attainment of the Kroger objective to continue progress 'toward its goal of labor cost competitiveness'. The sales of the Kroger have reached a record level of $42.7 billion, and the net earnings of the company are estimated to be $548.0 million. According to Mr. Dillon, 'Thanks to the hard work and tremendous contributions of the entire organization, Kroger have made considerable progress in a number of key areas. But there is still much work to be done. We will continue to focus on becoming more competitive in every aspect of our business so that we can provide a shopping experience that makes our customers want to return' (Susan, 2004).

The Dairy Foods Group, one of the subsidiaries of the Kroger, has recorded exceptional growth; the group has achieved expertise in the packaged ice-cream and frozen categories, frozen novelties and refrigerated juices. The company has been able to achieve good share in the market, and was able to reverse the previous sales pattern declination. The Senior Marketing Manager of the company revealed that the operation of the ninth dairy plant of the Kroger achieved 'double-digit tonnage growth' (Catherine, 2002) in wide range of dairy products. The company has been able to achieve good results in the sales of the fluid, and other juices. The success achieved by the Kroger through their production in frozen desserts arena has been associated with the implementation of the revised policies for the capitalization of its previously achieved success in the frozen yogurt category, adding Toasted Almond and Strawberry Banana varieties (David, 2000).

Interview of Human Resource Manager

The Human Resource Manager was recently interviewed; during the discussion he revealed the major scope of activities within his domain, and shortcomings which he witnessed and experienced during the course of his tenure. The Human Resource Manager identified different challenges which he experienced at Kroger. The Kroger inherited diversified employee recruitment program, as per which the religious, ethnic and racial affiliations were ignored and the recruitment was purely offered on the basis of the merit and previous performance. The Human Resource Manager revealed that it has been a challenging task for him and his team to hire and handle multicultural workers, in particular those who were strange to the legal practices of United States. The coordinating the multicultural force was toughest responsibility for his department, and it was difficult for him as a manager to maintain equilibrium between the legal compliance relevant to the issues with the concerns associated with the productivity and profit. The hiring of the diversified workforce has created extreme panic situation for the human resource department, the department and the organization was placed at legal risks on different intervals, much due to the unfamiliarity of the migrant workers towards the employment laws of the country (Robert, 2006). The manager admitted that the department adopted a transparent policy towards its employees, and the promotion and allowances awarded to the employees were purely offered on the basis of their performance, such an approach created difficulty for the human resource department which was suppose to practice thorough and detailed evaluation of the candidates before forwarding any recommendations to the authority. The human resource department on their behalf were supposed to evaluate certain characteristics and qualities in the candidates so that the discussion between the high command and candidate turnout to be shorten and conclusive. The human resource manager however revealed that his department experienced difficulty in their search for the managerial professionals only because the company introduced extreme criteria which barred the average applicants from the submission of their candidacy, and therefore the hunt for the professionals was confine to few, but those few were either untraceable or unwilling to make a move to Kroger. The manager revealed that to expedite the recruitment process, and to further ensure that right candidates are short listed, not purely on the basis of their fabricated resume, but required and inherited skills are extracted, on the basis of which the recruitment was to be conducted. In this regard, the manager proposed that each of the candidates should be provided with series of case studies, their opinions and literature should be reviewed and evaluated by the managers of the respective team, the manager further proposed that the length of the literature should be restricted for easy and quick analysis. The manager revealed that on his insistence the company agreed to collect series of the case studies experienced by the company since their inception, and each relevant authority was referred for the evaluation of the case study which had particular reference to their department (Randall, 1999).

The manager shared wide range of activities which he launched during his association with the company, initially on his insistence the company agreed to range monthly and quarterly seminars and conferences for the managers and their departments, the purpose of the exercise was to explore the expected challenges which the company was expected to face, and at the end of each gathering the opinion of the participants was sought and discussed in details. The findings of the discussion were to be further summarized and discussed with the directors for their information and references. Such an approach was in actual a proposal to involve the human resource department into different activities, and the domain of the activities was enhanced, thus the participation of the human resource department was more consistent, and it was not to be considered a door step to the institute, but the department which was deeply rooted with the problems, issues, developments and other occurrences inside and outside the organization.