Monday, November 28, 2011

Analysis, Recommendations,& Conclusion

Analysis of Empire Auto Parts Accounts Receivable Department

The department that we chose to analyze at Empire Auto Parts is the accounts receivable (AR) department. When one thinks of AR, the first thing that comes to mind is taking payments, but the AR agents at Empire do much more than just that. The responsibilities of an AR agent include checking local drivers in and out, collecting and applying payments from all the local drivers, applying mailed in payments, applying satellite location payments, creating collection plans with customers, and applying credits.

The everyday life as an AR agent at Empire Auto Parts begins with checking drivers out using the dispatch program. While drivers are our delivering parts the AR agent is taking phone calls from customers regarding balances and credits. Also during the course of the day, drivers from all locations are calling in with collection problems. For examples if a shop is closed or the owner who makes the payments is not there, the AR agent needs to make a decision. Here the agent would use the AR program to find out what king of term the specific customer is on, whether it is cash or monthly, etc. The AR agent would then instruct the driver to leave the part being delivered and create a collection for the payment after speaking with the customer or to take the part back for redelivery. The AR agent would then note the account accordingly in the system so other agents would know what happened. Everything comes into play when the AR agent is making decisions like this, the terms the customer is on as well as how good of a customer they are. This includes sales and if they pay on time. To help the agent make these decisions is the AR program. In this program the agent has everything at hand, all the customers’ information including the sales of the customer. Empires programs are specifically designed so that there would be no silos and miscommunication between the different departments. Below is an example of just that.



This is a print screen of the sales portion in the AR program. This is an example of how Empire Auto Parts has great enterprise information system. Click on the picture to enlarge.


When drivers start to arrive back in, the AR agents are responsible to check them in and apply the payments they received. If the driver is not finished for the day and has more deliveries the AR agent checks them out and the whole process starts again. Throughout the day the AR agents communicate with one another about problem accounts through email threads as well as live chat. This is all used with the Google email accounts every agent has set up. This is one critical procedure the agents must use to help the workflow. Proper AR notes on the account also make the Accounts Receivable department work more efficiently.

The computers at Empire run on Microsoft Windows but the program is not a commercial program. The program that Empire Auto Parts uses is called Sync. The database was custom developed by the three partners that own the company, mainly Leon Young, along with a programmer that had worked for the company seven years and other members of the company. The program is custom built to fit Empire perfectly. Who knows better of what kind of program the company needs then the ones who will use it. The network that Empire uses is Wide Area Network. This network is for companies that have different locations in different locations like Empire. Empire has warehouses located in New Jersey, Connecticut, Pennsylvania, and New York. Empire is using their programs as well has the World Wide Web to help sell their products. Empire is an inter- organizational company. Empire buys the parts from its vendors and then sells to body shops. Empire not only sells parts over the phone but customer can set up an online account. This would be considered to be an e-commerce merchant company. Empire is a B2C company; they have a web page in which they sell their products as business-to-consumers. Most of the orders are placed over the phone but more and more customers are placing orders online. Also customer can come down and pick up their parts themselves.

Over the past year Empire has grown in its AR department. Many new technologies have changed the way Empire’s AR agent close up the day. At the end of the day the AR agents need to count the payments that they received throughout the day. Two new technologies, a check scanning machine and a money vault were brought into the company to make this process less time consuming. In the past, at the end of the day every AR agent needed to add up all the checks they had using excel or a tape calculator to see if the total matched the total payments in the AR program. This was very time consuming and easy to make mistakes if typed in the wrong number. Empire decided to try out the check scanning machine from Chase Bank. This machine is hooked up to one of the companies’ computer that is only used for this purpose. All AR agents have a profile at Chase in which they scan the checks right into the companies account. When the check total on the website matches the total in the AR program the agent simply clicks on one button and the checks are deposited straight to the bank. This also saves the time of actually going to the bank the next day to deposit all the checks. The same is to say for the way the cash is counted at the end of the day. A money vault counts the money and automatically checks for any fraudulent money. When the agent sees that the cash amount matches up, the agent presses one button and deposits the money into the vault. The two technologies are just one example of the new hardware the company added to their list. These two new technologies changed the way the agents close up at the end of the day. It is a much more efficient and timely way of closing the day. Also it eliminates any human mistakes that could have happened the old way of closing the day out.

Empire uses business intelligence to help run the company. All of the information taken from the customers is put under their specific account number. This information is then taken and used to increase the profits of the company. Empires custom program Sync is a great example of a knowledge management tool. The customer information is available to all the employees at Empire. Below is an example of how the program has all customers’ information at hand.


Here is another print screen of the ledger in the AR program. This shows the date an order was taken, a quick description of the order (what model and year the car is), the invoice number, the amount of the part, the total balance the customer has, and any payments. The ledger also has stated what form of payment the customer used whether it is cash or check. It even shows the check number so if a customer has a question about when he or she paid or what form of payment was used this would be a quick and easy way to look it up this information for the customer. Click on the picture to enlarge.

Recommendations

Empire Auto Parts strives to keep up to date with all the recent technologies. There is always room for improvement in a company especially with today’s growth in technology but Empire throughout the years has grown with the increase in technology and has a great system that works for them. When asked the one of the partners of Empire Auto Parts Leon Young at the interview about Empire’s weakness he answered with a smile on his face “not enough time.” He went on to explain that the company as a whole always looks to improve the systems, whether it is the actual work flow process or the systems and programs used, there is just not enough time in the day to keep up with all the recommendations and ideas to help improve. The top managers at Empire help this along. When a worker in a specific department has an idea or recommendation to solve a glitch in the system Leon is the first to hear them out.

One recommendation our group would give Empire Auto Parts is to go more green. The waste that we observed is the only recommendation we have for this company to try to solve. When drivers go out to deliver they have log sheets where they write the form of payment, the customer’s signature, and any other necessary notes. We recommend that the company find a way to go paperless. Possibly the company could have the driver use some form of pad or tablet that the customer could sign and the information could be sent electronically to the AR program and on the customer’s account.

Conclusion

Empire Auto Parts was a very interesting company to do our project on. We learned many different aspects of the company for example, we learned the process of how the company deals with backordered parts. We learned much about how the Accounts Receivable Department works. We also learned that Empire Auto Parts is a company that strives to better themselves always and keep their customers happy with great customer service, great products, and the latest technology. The partners at Empire know exactly what they want for their company and Empire only continues to grow for the better. They are growing so much that the main warehouse and office located in Garfield, New Jersey became too small for the company. Right now they are in the process of moving the warehouse to Wayne. The move should be complete by the end of December, 2011. Empire is a very well organized company which keeps it so successful. Leon Young (one of the partners of Empire who we interviewed) was very helpful to us and gave us all the information we needed for our project. We are very thankful that he allowed us to come in and see the company and how it runs. Empire Auto Parts is a very successful company that in the future I am sure we will hear much more off. The company is just growing and growing.

Tuesday, October 18, 2011

Business Strategy

Business strategy is a long term plan designed to achieve particular goals or objectives. Strategy is a management plan for strengthening a company."M.I.S. is essential to survival; no aspect can function correctly without it." (C.E.O Leon Young) Empire Auto Parts has chosen differentiation as their competitive strategy. Empire focuses on competitive edge by implementing M.I.S., offering high quality products, quality customer service and availability. Some M.I.S systems implemented by E.A.P include inventory scanner technology, G.P.S. order tracking, and employee training.
Empire’s business processes include materials ordering process and sales process. Empire purchases parts from a vendor which then delivers goods to its warehouse where they become part of inventory. After an order is placed by a customer, goods are then loaded onto a delivery truck where a driver then delivers the parts to the customer. These processes flow well because Empire is focused on being detail-oriented in order to ensure the best service. Operating each process efficiently has resulted in positive margins.
One way in which Empire uses M.I.S. to better their company is through inventory scanning. Inventory shelf items contain "pickle numbers". A pickle number is the receiving label an item has before it is "picked" off the shelf. Items are picked and scanned when a part is ordered. The moment the item is taken off the shelf it is bar-coded and the order is locked in. This simplifies the process of sending orders out by saving time, confirming parts sent out, alerting items on back order and keeping track of the exact quantity of items. Once items leave the warehouse, customers can track the location of their order. Each delivery truck contains a G.P.S. system which allows tracking at all times. Customers do not have to worry about not knowing when their orders will arrive. With GPS order tracking, they can find out exactly where it is and have an idea when it will arrive.
Empire has one of the best customer service staffs in the industry committed to providing customers with the most efficient service possible. Quality customer services are strongly emphasized at Empire. Building good customer relationships by assisting and reaching out to customers is how they build customer loyalty. In order to maintain this level of service, employees are required to undergo extensive training.  Employees are kept up to date about any policy changes or new training information through email threads. Management also uses these threads to inquire employee feedback.
There are five forces that determine competitive power of a business which include supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry. Supplier power is weak. Empire buys their parts from different vendors which does not give the supplier much power over them. Empire shops around to see which vendor has the best quality parts for its customers. They understand that prices never remain constant and so they are alert and watch price changes daily in order to offer customers their best prices. Buyer power is moderate. Empire does not offer the lowest prices available but understand customers want the best for their money and offer different specials throughout the year. Empire Auto Parts’ competitive rival is Keystone. Keystone is another well known auto part distributor. Though Keystone may focus more on cost differentiation and have better competitive pricing, what Empire lacks in low pricing they make up for in quality, service and availability which is their differentiation strategy.
Empire “locks” in customers by making it easy and convenient to shop with them. At Empire, drivers deliver parts to local areas two to three times a day. If a customer orders a part in the morning, afternoon, and evening, Empire will make two, even three deliveries to make sure customers have everything they need. If a customer is in need of a product, availability may outweigh price. They keep a well organized system of information about each customer which includes past purchases, payments, payment plans, sales and record of calls. Customers can set up payment plans, which allow them to make monthly payments on purchases instead of having to pay upfront in full. Customers who make consistent payments form a better relationship with Empire which in turn is rewarded with trust and leniency with that particular customer. Switching to a different distributor will require extra time and the inconvenience of re keying customer information and will not guarantee the same service or delivery availability.
Threat of substitution is weak because car parts can not be substituted. Threat of new entry is also weak. Empire is very well established as it used to be two separate companies, P.O.Y. Auto Parts Supply and Champion Bumpers which emerged and formed what is now Empire Auto Parts. For a new company to compete with E.A.P. they would have to overcome entry barriers such as high start-up costs, switching costs, strong customer loyalty and cost advantages of existing companies. A new company will usually experience a net loss in its first year or so before making a profit, it will take a while before they can catch up to Empire financially. They also have the disadvantage of not producing a high volume of business because of switching costs and strong customer loyalty. Empire’s regular customers may not want to switch over to a new distributor because of their existing relationship. Switching over would require time and effort. Fresh new companies need years to grow. They would not have the same cost advantages (economies of scale) of larger distributor who is “to big to fail” and have accesses to a bigger market.  It would be difficult for a newly emerging company to compete unless two established companies merge together or an established company enters into this segment of the market.

Tuesday, September 13, 2011

Introduction



Management Information System Report For Empire Auto Parts
Prepared by Team 1
Beatriz Fernandez
Michael Ribeiro
Renee Szewc
Marienela Ward
Prepared for Professor Thomas Abraham
MGS 3040*04



The purpose of this project is to find out just how important Management Information System is to a company like Empire Auto Parts by using our own collaboration information systems. Our team used different collaboration information systems to make this report possible. We had great face to face communications as well as using technology like smart phones to communicate about the project. We had a great workflow and were each assigned different areas to complete in order to create this report. In this report you will find a background of the company and how Management Information Systems is being used by them. This includes their business strategy, any problems or concerns the company may have in their information systems, and the steps the company is taking to better themselves and step more into the future of Management Information System.





Company Background


Empire Auto Parts was founded in 1995 when two previous companies, P.O.Y. Auto Parts Supply and Champion Bumpers teamed up to form the new company. Today Empire has come a long way. The company has three main distribution warehouses and ten different satellite office locations, all located in the Northeastern US. Empire is a auto part distributor that strives to keep up to date with technological systems that would help better the process of getting parts to their customers. Due to the great management information systems the company has, Empire delivers parts to their customers sometimes twice or even three times daily. Empire specializes in auto body parts, wheels, cooling replacement parts, and other accessories for automobiles of all makes. The great management information systems as well as the three hundred forty two well trained employees all make the experience of buying products from Empire Auto Parts the best it can be. More information on Empire Auto Parts can be found on the company website http://www.empireauto.biz/