E-commerce and challenges in O.M

Recently in class we talked about operations strategy in a global environment as well as the challenges in Operations management, we touched on some of the reason why companies decide move their headquarters elsewhere and the advantage that globalization brings. One slide from the PowerPoint presentation jump out at me as I was contemplating on what to write for my second blog post. The slide was about the cultural and ethical issues that these companies experience when globalizing, and immediately one company came to mind, Nordstrom. From research that I have done, Nordstrom’s focus is to provide “fair” treatment wherever they do business. Nordstrom expects his business suppliers to comply with the applicable laws and regulations of the United States as well as having set up an internal risk department that conducts annual risk assessments through internal audits. These risk assessments help to identify areas of potential risk in Nordstrom supply chain. This assessment includes monitoring for human trafficking and slavery risk within the supply chain.

Nordstrom is one of those companies that work through an e global commerce provider, border free, that allows them to offer international shopping. Through this global commerce provider, Nordstrom customers are allowed to convert from American dollars to any local currency they also show the customer all the duties and taxes that need to be paid by that customer, they comply with customs; making sure that packages are Customs-friendly and meet all the requirements both in the U.S. and around the world, and they are aware of product restrictions. This e global commerce provider facilitates Nordstrom’s communication with the rest of the world, it facilitates business transactions and it provides a good understanding of Nordstrom product to other people who are not familiar with their products.

This global expansion has been very successful for Nordstrom. In 2012, it increased e-commerce sales 42.4% to $1.3 billion from $913.0 million, and they are expecting in growing web sales to 6 billion in 2020. E-commerce sales account for part of 25% of total revenues for Nordstrom.


Today, Nordstrom continue to increase with web sales growth of 33% in their first quarter. According to Mike Koppel Nordstrom executive vice president and chief financial officer, they plan to invest 3.9 billion in capital over the next five years, the main focus being on serving more customers through store and online growth.


Nordstrom has also taken one of the new challenges in operations management, which is sustainability. People today are more concern with “protecting the planet” as well as recycling. Boxes given to customers when there is a purchase are made from 100% recycled fiber, saving 400 tons of paper annually. Bags are made of 80 percent recycled content and are recyclable, catalogs too, comes from certified sustainable managed forest and it also comes from paper already used. Their restaurants are local, healthy and ecofriendly.


My questions is:

Do you think that the operations management challenges such as sustainability is increasing Nordstrom e-commerce?

Quantity versus Quality


Every day I encounter the question, “what is better, quantity or quality?” Should I buy a shampoo from L’Occitane of 8.5 ounces for $20 or should I purchase a shampoo from the brand Suave of 12.6 oz. for $3.49? Should I pay $4 for coffee from Starbucks or should I just go to Dunkin Doughnuts and pay half of that for a coffee? Recently I have experienced the other side of the quality vs. quantity debate, no longer as a customer but as insider. The questions that I ask myself are no longer “should I buy this or should I buy that? Should I spend a few extra dollars in the organic restaurants or will McDonalds do?  Instead they have become questions such as, Is the company that I work for working towards providing the best quality service possible or are they just choosing on having more quantity and leaving the quality in the backburner?

I worked for a small catering company who specialized in wedding, house parties and corporate events. If you were an employee from that company you knew that quality was always the top priority. I guess you can say we lived by the motto “the customer is always right,” and “there is never such an answer as a no.” To other people who work as servers like me, who knew about the company, they knew that not only were the customers would be treated with the outmost quality but that the staff will be treated the same way. The quality given went from the food to the service provided.

A few months back that same company was bought by a much bigger company who specialized in event planning. Their goal is to gain market share in the catering business, and possibly become one of the biggest catering and event planning business in the city.

The strategies used by this company in the overtaking was to let go of the personal and bring new and innovative minds. New workers were hired for less, without being properly trained or told what the company stood for. Old employees were left to train new employees on procedures and principles that were not in place any longer and that new ownership had yet not communicated.

As we saw on our first day of class with the activity paper puppets, sometimes certain activities take so long to accomplish or we are just so focused in reaching that goal in the fastest possible way that we sacrifice the quality put into a product. In paper puppets, some of the paper that was damaged, passed through the line of workers completely unnoticed.

The questions presented are:

Do you have to sacrifice quality in order to obtain quantity? Can there be a balance?

Does hiring cheaper labor means sacrificing quality?

Is ten thousand replicas of a Picasso painting worth more than a real Picasso?