North West Pull System Strategy

Submitted By IRLUSM
Words: 736
Pages: 3

North West’s customers are unique geographically, and financially. Carrying and copying the strategy system that work well with one company, it doesn’t mean work same thing with another. A lot of factors need to be considered in applying Pull System Strategy for North West Company. The Company have to consider investment new IT Technology software whether it is worth it in relation with Return of Investment, target of customer, location whether inaccessible or accessible, effective management system and culture heritage. Based on these reasons, I would offers 3 alternatives:
1. Apply localization for some accessible location, started with limited number of categories and let all store managers participate from the outset.
Category Manager analysed the sales and work together with Store Manager to markdown trends and determine products to stock.
2. Thinking for the long run, to apply localization with the investment IT Technology. However, this option is not worthy to be applied at 95 small and inaccessible communities and considering the less than $10 Million investment for new IT Technology project.
3. Keep existing Push system plus working together with Giant Tiger Stores to open new stores at the regional communities that are generally accessible by all- weather roads.
4. Keep the current Push system with new innovations such as repositioning store location and distribution center, realigned warehouse processing and shipping schedule plus working together with Giant Tiger stores to open new stores at the regional that are generally accessible by all- weather roads.

The North West Company is a leading retailer of food and everyday needs to rural and urban neighborhoods across Canada, Alaska, the South Pacific islands and the Caribbean. In early 2003, North West had negotiated a master franchiser agreement with Giant Tiger Stores Limited (Giant Tiger) with the objective of opening stores west of Winnipeg. In contrast with North West's ""push"" system of product replenishment, Giant Tiger had developed a successful ""pull"" system that gave individual store managers tremendous leeway in ordering decisions. Inspired by Giant Tiger’s example of a “pull” system in action, North West management was considering giving store managers more control over their inventory ordering by moving to a “pull” merchandise replenishment strategy — also known as localization. Currently, North West employed a “push” strategy in which category managers at North West’s Winnipeg headquarters analyzed trends, placed orders and allocated products to stores. Typically, category managers worked with store managers to review the previous year’s lineup, orders and actual sales. Using historical averages and the next year’s forecast growth rate, category managers estimated demand for products at a company level. Category managers met frequently with suppliers to review the product lineup for the upcoming year, which often differed from year to year. The shift towards localization promised to tap into the local knowledge that resided with store managers, allowing them to