Technology

Lowe’s has a lot of technology that can be found in any retail store such as barcode readers, computers, scanners, etc. Lowes also uses some more advanced and more recent technologies such as the internet and self checkout systems that were both mentioned previously. All of these things while some may be somewhat recent inventions are pretty basic and can be found anywhere. What really is separating Lowe’s from other home improvement retail stores is there new inventory systems and how they use it. Lowe’s teamed up with Celarix Collaborative Technology to develop a global supplier network not to long ago. This system improves communication with partners, decrease inventory in the pipeline, provide more accurate shipments, and improve efficiency. Lowe's uses “Celarix Connection” and “Celarix Management” to connect with its supply chain partners and give the company real-time visibility of all inbound shipments, moving through its inventory routes. Celarix's solutions enables Lowe's shippers and inventory managers to connect with the company's Asian factory suppliers, trading suppliers, and transportation partners, empowering them to communicate directly with one another throughout the entire process, from the time products leave the manufacturing facility to the time they arrive at each Lowe's distribution center. Lowes invested a lot of capital into this project but it’s an investment that is paying off and is expected to keep paying off. Using such an advanced system surely gives Lowe’s an edge other home improvement stores don’t have.

Service Matrix And Customer Contact

The services that go along with Lowe’s are pretty standardized for the most part. Checking out items is the same for every customer. It’s basically set up like an assembly line. There are several checkout stations, the customers line up next to the checkout stations and are dealt with in an assembly line fashion. Once they reach the employee at the counter they will check out their items. This system is highly standardized, very repetitive, simple, and gives the customer low decision making power. This was designed to deal with a large amount of customers in the quickest way using the least amount of time as possible. This process of highly standardized interaction with customers is classified on the service matrix as provider routed or standardized service and it matches the process that Lowes uses to interact with their customers perfectly. Since Lowe’s is a huge retail store it needs to use this service in order to deal with its huge demand. As mentioned before Lowe’s is in the process of becoming even more standardized as it eliminates some of the interaction between employees and customers and replaces that interaction with machines.
The self checkout systems are also effecting the way customers make contact with the company along with something that made an even more dramatic change in the way customers contact the company, the Internet. Traditionally when a customer would go to Lowe's to buy a product they would have a face to face type of customer contact where the employee could give basic information to the customer. This is a very high level of customer contact. There is a lot of room for customization, and change. While the productivity is low it can make the customer happy because they will get the information they want in making a purchase. Today this process has changed to the point where there is virtually no contact between employees and the customer. Today the process has changed so much that the customer doesn't even need to leave the house. Thanks to recently new inventions like the internet and the increasing use of computers in peoples everyday lives a lot of customers can buy just about anything on Lowe's website that they could at the actual store. In many cases the products online are actually cheaper than what they would cost in the store. The internet has really changed the way customer deal with companies in a huge way and the trend seems to be going more and more into shopping online everyday.

Service Product Bundle

When most people think of going to a retail store like Lowe’s they probably think that there aren’t many services involved during the experience. For the most part that’s true but no industry is one hundred percent goods or one hundred percent services. A company can rely heavily on goods but they will still need to provide at least some basic services.
Lowe’s, being a home improvement retail store, relies pretty heavily on selling goods. Most of their business is in selling tools, wood, nails and other home improvement items. However, there are also several services that are provided to you when you buy any item in the store. If you are in the store for a while looking for a specific product and you can’t find it there are employees throughout the store that can help you find what you are looking for. They can also give you information about the item and tell you how to use it. When you are finally ready to make a purchase then you are provided with another service, another employee will check out your items. There are also some services that are provided for your convenience that are not as easy to notice such as stocking and the overall layout of the store. These employees like the ones that are helping you find what you are looking for or the employees that check out your items in the store are providing you with Implicit or Psychological services and explicit services which contribute to your feeling about the store and give you something tangible.
While Lowes may provide a few services they are still making even more of a shift to becoming more associated with selling goods and less associated with services. Just recently many retail stores have been adding self checkout systems to their stores which cuts out the service of having an employee check out your item.

Process Characteristics Matrix

For the process characteristics matrix we found that Lowe’s best fits into the continuous assembly Made to Stock cell. We came to this conclusion because most of Lowes products are made in mass quantities. Things like nuts and bolts are kept readily available and are constantly being produced because there is such a high demand. This means that their product flow is continuous assembly. In order to satisfy the huge demand the company needs a process that can keep up with it. For their customer order we found that Lowe’s uses make to stock because once they produce their products they stock them for when customers are ready to buy them.
We also found the Lowe's could fit in the continuous assemble, assemble to order cell or the Batch flow, made to stock cell because of the other products they offer. In Lowe’s you could order certain customizable products like kitchen cabinets and such that are made in batches and can be changed to suit what the customer wants. Also, some of these products are also only made when the customer orders them. In other words once a customer places and order for a specific set of cabinets that have been customized to the customers liking then the product is made and delivered to the customer.

Customer Order

As I've stated before Lowe's carries many different items in its store which lead us to the conclusion that Lowe's must use different product flow types and when we researched Lowe's customer order process we came up with a similar answer. Lowe's carries items that are produced in different ways because they are demanded differently by the customers.

Make To Stock (MTS)

As we stated before Lowe's uses the Continuous/Assembly product flow to make certain items such as nails, screws, bolts, and etc. So the customer order type that goes hand in hand with that product flow is the make to stock. This means that when the product is made it is then stocked and ready for the customer to purchase it. There is a diagram that explains how this process works where the orders are forecasted and then put into production. In the next stage the finished goods are put into inventory and then finally purchased by the customer and the process repeats over again.


Assemble To Order (ATO)

We also decided that Lowe's probably uses the Assemble to Order process for some of its other items. Assemble to order is relied on more for mass customization of items that can still be produced in a fairly large quantity. Some of Lowe's items such as its furniture cabinets are not mass produced. They are made in parts and then assembled when a customer has ordered them. This is what made us believe that Lowe's also uses the Assemble to Order process.

Product Flow

Lowe's is a huge home improvement retail store. They carry many different sorts of items such as tools, nails, screws, bolts, furniture, wood, etc. It would be hard to say Lowe's only uses one type of product flow because of the variety of items that it sells. Here's what our group came up with...

Continuous/Assembly

The assembly line is used for products that have a high demand and need to be produced in high volume. This is a low cost procedure but it has low flexibility and requires all of the products to be standardized. We think that Lowe's uses the Continuous/Assemble product flow for most of its items. A lot of Lowe's items consist of tools and various things to repair your home such as nails and bolts. Some of these items have a high demand, don't cost much to make, and are highly standardized and they are produced in very high volumes. This lead us to the conclusion that for these types of items Lowe's uses the Coninuous/Assembly product flow method.

Batch Flow/Job Shop

Items that are produced through the Batch Flow or Job Shop product flow type are produced in batches. They share the same machine for different items. Items produced in this way are not too cheep but also not too costly and they are produced at a medium volume as well. We thought Lowe's might also use this type of product flow because it has many other items that are not mass produced such as it's furniture. Lowe's sells things such as cabinets which are not mass produced. They are somewhat customizable and are more costly to make than screws or nails. This led us to the conclusion that Lowe's probably also uses the Batch flow production flow for these types of items.

Lowe's

The company our group chose to research was Lowe's Home Improvement Warehouse. Lowe's was founded in 1946 by Lucius S. Lowe. Lowe's started as Lowe's North Wilkesboro Hardware in North Wilkesboro, North Carolins in 1921. The store was taken over by Lucius Lowe's daughter Ruth and then was sold to her brother Jim Lowe the same year. Lowes grew to be one of the biggest home improvement warehouse stores in the world. Lowes is now a very successful company with $47.2 billion in revenue for the year of 2009. Lowe's has recently stepped into the international market and has opened several stores in Canada. With all Lowe's has to offer in the home improvement industry it is easy to see why they have become so successful.