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Mar 12, 2019 in Technology

Obstacles in Adjusting to New Technology in a Family Business

Abstract

Our family operates a warehouse that has stagnated for a very long time due to failure to embrace technology in its operations. The company uses old inventory system, lacks CCTV cameras and has poorly motivated employees. Such challenges have greatly affected the performance of the warehouse in the market and reduced its chances of expanding to a global scale. However, it is possible that the management of the warehouse can change, adopt technology to enable it streamline its operations. Installation of CCTV cameras in the warehouse will enable the enterprise deal with employee theft as most employees will be afraid to steal due to the presence of cameras. The warehouse should also consider acquisition of barcode software. The software will aid in the reduction of errors that are often witnessed in the manual system and thereby increase efficiency in operations. In addition, the warehouse ought to embark on employee performance management in order to increase productivity and attain better consumer satisfaction. Overall, resorting to technology will help the warehouse eliminate errors and inefficiencies that characterize manual systems. It will also eliminate or reduce employee theft and damages due to carelessness. In addition, the shift will ensure that employees are well-motivated and customer needs are met effectively. Such changes will enable the warehouse expand its activities to a global platform. Current paper examines the challenges facing the warehouse and possible solutions to the challenges. 

Obstacles in Adjusting to New Technology in a Family Business

Problem Statement

My family operates a warehouse that imports textile from various South Asian countries, including China, India and Pakistan. The textile materials include tablecloths, curtaining, linens, suits and towels. The firm was established 21 years ago; however, the inability to embrace technology has jeopardized the warehouse’s ability to advance. Its operations are still confined within South Africa. Nonetheless, the business has the potential of becoming a global brand if proper technological advancements are embraced. Despite the new wave of technology in the business arena, my family’s business has failed to embrace it. Such failure has jeopardized the business’ ability to grow in the last few years. 

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The premise lacks proper inventory management system. Instead, it employs the manual inventory system that hinders development at the warehouse. The purchasing department normally orders goods without a clear picture of what is in the stock. Consequently, the warehouse normally experiences cases of overstocking, thereby resulting in dead stock. In addition, the warehouse is continually experiencing complaints by retailers who receive consignments either in excess or less than they order. Some of the errors occur due to the difficulty in handling goods in bulk through the manual system. Carelessness of employees in handling inventory is also evident in the warehouse. Cases of employee theft have also increased due to lack of CCTV cameras. In essence, most employees do not steal due to need. Rather, they steal due to available opportunity to do it. Others also take advantage of lack of inventory software to make wrong entries and thereby steal from the management and customers. Finally, poor management on the junior staff has resulted in lack of motivation among employees. Poor employee motivation has led to poor performance. Consequently, the level of production is usually low. Payment to the employees is normally made regardless of the profit made by the warehouse. The management does not control employees to ensure that they are working appropriately. In addition, the warehouse lacks software that can be used in tracking employees’ performance. 

Solutions to Challenges affecting the Family Business

Installation of Surveillance System 

Installation of CCTV cameras in the warehouse will enable the enterprise deal with employee theft. Although our family business normally carries out a comprehensive interviews and thorough background checks on employees, it was not very helpful in avoiding employee theft. According to Bennett et al, 30% of business failures often occur as a result of employee theft. Despite the amount of loss, the company incurs due to employee theft, it is worthless to pursue the culprits without substantial evidence. Pressing charges, recovering losses or firing employees who steal from the company remains a challenge without evidence. CCTV cameras have the ability to unearth such culprits. 

If installed in the company business premise, CCTV cameras will aid in reducing cases of employee theft within the company. Once the cameras are installed, the management can monitor operations of employees. Images streaming from the cameras can be monitored from a computer, Laptop or mobile devices. The oversight role can be done by managers even if they are away from the business premises so long as the transmission of signals can be attained. Employees with the intention to steal will avoid doing it if they know that they are being watched or might be caught later. In case of theft, the CCTV footages would help the police trace the thieves thereby enable their prosecution. 

Meanwhile, the company can also use CCTV footages to accurately apportion blames. Occasionally, the management might accuse an employee of theft when he or she is not the real perpetrator of the theft. Such accusation might not be convenient to the company. Therefore, the CCTV cameras will prove valuable to the management in apportioning blames in the event of theft or serious mistakes that transpire within the business premise. 

 
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Notably, installed cameras are likely to increase employee commitment to their duties. Employees will always attend to their duties promptly when they know that they are being monitored. The cameras can also improve the working relationships between the employees thereby increasing productivity. For instance, no employ would harass a colleague when he or she is aware that there is a surveillance system.  

Installation of CCTV cameras will also help the business achieve a substantial level of employee satisfaction. Occasionally, employees engage in theft due to poor satisfaction with the working conditions. The cameras will enable the management watch operations of the employees and obtain ideas that will be essential in streamlining business activities that can be enjoyable to the employees.

Installation of CCTV cameras can also help the family business minimize fraud from clients. Occasionally, customers might present complains against the company concerning the services or goods they received. Such claims might often be valid or fabricated by clients who want to defraud the company. CCTV recordings can also help the company settle disputes arising from such customers who unfairly demands compensation. In essence, just mentioning that the management will first verify the recordings before compensation might prevent an individual from lodging false complaints.

The CCTV employs wireless technology. Consequently, such devices do not succumb to failures that characterize any type of wiring. In addition, the devices lack wires that can be cut by bandits in order to tamper with its operations. Apart from ripping the entire CCTV unit out of place, there is not much that even a clever thief can do to slow the unit from recording events. 

Although the family business is struggling financially, such equipment is affordable. Furthermore, like other wireless devices, CCTV cameras demand much easier installation. Such ease of acquisition and installation of CCTV cameras explains why most businesses are resorting to wireless security cameras to reduce theft and other eventualities from their premises.

Apart from expense, there are a few challenges associated with installation of CCTV cameras. First, there are fears that CCTV cameras can be vulnerable to hacking, as well as hoaxing through the Internet. Regrettably, criminals can hack into the business’ surveillance system and monitor the staff and available security measures. Such moves can facilitate criminal acts. In addition, installation of cameras in private places may prove costly to the company due to litigation. However, employees’ privacy can still be maintained by keeping the cameras in public places within the warehouse, such as offices and storage areas. Although there are challenges that are associated with installation and use of CCTV cameras, while they will generally be beneficial to the family business. 

Acquisition of Proper Inventory System

The warehouse should consider employing WMS in streamlining its operations. Challenges in managing warehouse are not unique to our family business. Warehouses face various challenges, while performing everyday tasks. Such challenges affect various activities from delivery of goods, scheduling to equipment malfunctions and supplier issues. While the challenges cannot be prevented, the manner in which warehouses respond to them is essential. Most warehouses have adopted warehouse management software (WMS) to respond to the challenges. However, the failure by the family business to embrace technology has thwarted its ability to overcome the challenges. Having an effective inventory system will enable the warehouse to manage its stock effectively. A computerized inventory system has several benefits that will ensure that this textile warehouse will improve its operations.

The company will have to train the employees before allowing them to use the barcode system in inventory management. Essentially, a barcode reader comprises a scanner and a decoder. The readers are not cumbersome to use. Therefore, employees can learn to operate the readers without much effort. In addition, the company will not spend much in training the employees; it lasts a few minutes before one can begin operating the barcoding system. Since the scanners are mobile, the staff can receive and take data concerning purchases at different points. Such flexibility will allow the warehouse to handle large consignments at any time. Apart from barcoding inventory on the arrival of goods, the barcoding software has numerous benefits. Acquisition of barcoding software and barcode scanners will ensure better management of inventory. Barcoding software will help the warehouse overcome several challenges. Although instigating a barcode system might appear elementary, it is among the most effective ways of maintaining inventory. The system will enable the company attain lean status, as well as safeguard the warehouse from carelessness and against theft. 

Since the warehouse handles goods in bulk, manual entry of ordered goods has proved to be expensive. Computerized inventory system is normally swift and accurate. Such new system will minimize data entry errors that are common in the manual system. The automated data capture is normally fast; its implementation eliminates or reduces reliance on the hand-keying of data. The latter method is typical of the manual physical inventories and is usually time-consuming. The improved system will enable the warehouse reduce the high cost incurred in conducting manual data entry, thereby lower operational cost due to reduction in labor needs. Hence, the warehouse will relocate some staff to areas that need attention and minimize the need of more staff. The reduced labor cost will ultimately be reflected on the returns.

The effective management enables generation of detailed reports in record time. In turn, the real time generation of reports enables the management to plan and ensure that it meets the precise needs of the customers. The new inventory system will reduce overstocks and understocks as such challenges usually affect the warehouse ability to perform well. Instances of overstocking and availability of dead stock in the warehouse constantly reduces cash flow that the warehouse needs for other expenses. Apart from reducing money that ought to be invested back into the business, overstocking also increases the cost of warehousing. Similarly, dead stock diminishes turnover rates, as well as profitability. The barcoding system will effectively deal with such problems. 

The barcoding system will also eliminate understocking which is a major cause of customer dissatisfaction at the warehouse. Several customers have often left the warehouse for others after asking for certain products and finding that they are out of stock. The technology will ensure that the purchasing department has a clear picture of what is needed. Therefore, materials will be supplied before the warehouse lacks the stock.  

Barcoding will ensure proper organization of the warehouse; it will help the warehouse craft a perfect layout for operation. An effective stocking system, either by item, lot or serial number, will ease operations in the warehouse. It will ensure an optimized storage system that minimizes space wastage and makes retrieval of materials efficient. Conversely, the inefficient warehouse layout that the family business employs directly impacts labor. Employees have to take a long time and spend more energy in completing everyday tasks. Consequently, they have reduced efficiency leading to low productivity levels. However, the barcoding system will ensure real-time visibility within the warehouse. The system can track inventory, enabling the staff to locate the exact position of any item at any time. 

Such inventory tools will empower the warehouse to monitor inventory levels and movement of textile materials in the warehouse. Therefore, the tool of inventory management will give the executives of the warehouse greater visibility into the stock. Having complete visibility into the whole incoming, as well as outbound materials will allow the management to craft solutions to complex challenges that characterize the warehouse. The management will be able to maintain dynamic stock levels that match the clients’ demands and purchasing power. Such process is essential in the reduction of dead stock in warehouses. With real-time visibility, the warehouse will not find it necessary to shut down regularly for stock check. Rather, the automated system will perform regular cycle counts, thereby reducing the frequency for conducting full inventory counts. The latter is often associated with loss of revenue due to suspension of operations and additional cost for hiring more staff. 

Inventory write-offs and shrinkages are also among challenges that the new inventory system will help eliminate. Properly managed inventory system will effectively eliminate inefficiencies in the warehouse by removing ambiguities in the system. Lost sales, as a result of inaccurate entries, will also be effectively dealt with by installing barcoding system. Hence, customers will no longer complain of being given less or more goods than they ordered. In addition, it will increasingly become difficult for employees who are making entries to defraud the company or retailers that buy from the warehouse. The barcoding system will be integrated with the warehouse’s ERP system to enable the accounting department track the entries. Such integration will enable the warehouse realize timely processing of invoices.    

The initial cost of implementing a computerized inventory system might prove expensive at the beginning. The management of the family textile warehouse has been reluctant to acquire the system due to the high initial cost. However, such cost should not be a deterrent to the acquisition of an inventory management system. Inventory system normally pays for itself in less than a year. Reduction of losses in sales due to insufficient stock and saving on labor costs are the principle ways through which the return on the investment accrue.

Motivation of Employees

The management needs to institute a proper performance management at the warehouse. Such move will help direct and motivate the warehouse staff to maximize their efforts on the warehouse’s behalf. Poor employee satisfaction is also a reason for poor performance of employees in the warehouse. The management should employ incentives in order to motivate employees to be more productive. In current system, employees receive their salaries regardless of performance. Tying payment to performance will motivate the staff and ensure that they are committed to service delivery. In addition, the top management should adopt other incentives that have achievable goals. Such incentives provide for a positive situation for both the warehouse and the employees. Employees motivation can only be realized when their performance is being monitored. Employing software tracking, as well as personal observation can help in establishing the performance level of the staff.  

The warehouse should also engage employees in training programs that will enable them perform their duties in a better way. Employees who have confidence as they perform their duties often have high level of satisfaction. The training programs will help the staff understand how to be consistent in meeting their targeted standards. For instance, the management can train junior employees on most efficient techniques that they can employ in unloading freight. After the training, it might be essential to use labor management software to monitor the performance of the employees. Once all the trained employees have demonstrated the ability to meet targeted standards, the management will begin to issue financial bonuses to those who surpass the targeted standards. 

The warehouse stands to benefit greatly, since all employees are able to meet the standards and even put more effort to surpass the same. The management can also offer free tickets to exiting entertainment sites and popular sporting events as incentives to employees who meet their targets. The management should clearly state what employees need to do in order to win the tickets. Displaying charts and graphs on employees’ progress and the advancements made by the warehouse can motivate the employees to work towards achieving the overall goal. In addition, it is necessary to praise employees for whatever effort they make towards achieving the set goals. To those who struggle, the management should be careful to offer constructive criticism that would help them improve. It is also prudent the top management grants the employees necessary autonomy. Reasonable level of autonomy will allow the employees to perform their duties and make decisions in a free and less tense environment. It is only necessary to give them the management’s expectation so that they can align their decisions to the overall goals of the warehouse. Consequently, the employees will feel more esteemed.   

Employees at the shipping department can be motivated by instituting paid time-offs to performers. For instance, all employees in the department who avoid accidents by careful observation of safety rules for a period of thirty days can be rewarded. The motivation can be done by giving the employee one day-off with pay. The management can employ software tracking alongside with personal observation to establish the employees who are worth the incentive. The concerned manager should regularly walk through the department to monitor how employees work. It will enable him to see the employees who are not floating safety rules. Review of footages from cameras installed at the working area can also reveal those who deserve the paid time-offs. It is important to inform the employees beforehand that such incentives exist. Moreover, it is essential that such employees are taken through the safety standards and explained how to approach them. Settings goals that are not achievable might end frustrating the employees and reduce their productivity. 

Conclusion

The inability of the family warehouse to grow is largely due to failure by the management to embrace technological advancement. The warehouse is experiencing poor and inefficient management of inventories due to lack of technological advanced inventory system. Lack of insecurity and employees tracking system at the warehouse has given employees opportunities to steal from it. Low employee motivation has prompted poor management of inventories. Customers’ satisfaction is also wanting due to poor and inaccurate services. Such challenges can be overcome by embracing technological advancement. The warehouse should acquire barcoding system to enable accurate entries and efficient management of inventories. Employee tracking software, such as CCTV cameras, will help the warehouse deal with employee theft and poor performance. Embracing employee motivation techniques will ensure improved employees’ commitment towards performance.

The initial cost of software for embracing technology might prove expensive to the warehouse. With the current financial strain, the company might find such input cost as an insurmountable obstacle. However, although the system might prove challenging to install, the management will increase efficiency in all operations. Such transformation will ensure reduced average costs and overall growth of the company. The company will, therefore, be able to sell textile materials on a large scale to retailers. The large scale operations will enable the warehouse to enjoy economies of scale that will further reduce operation costs. Such developments are likely to boost the warehouse’s revenues and profits. With increased money in circulation, the company will have the potential to purchase more sophisticated machines that will improve its operations. In addition, the company will be capable of hiring more experienced and skilled staff. The high level of efficiency, presence of skilled staff and technological advancement will enable the family business to present its operations on a global platform. Efficiency in operations is likely to increase the level of customer satisfaction. Improved customer satisfaction will elevate the firm’s reputation in the public sphere. It will further increase the firm’s ability to continue expanding the market both in South Africa and overseas. 

 

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