Checkpoint Company. Managing Information.

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Checkpoint is a US company that was formed in the year 1969. The company has global operations in retail security, labelling and merchandising. It has its presence in South America, Europe, Asia, Australia and New Zealand. The company has good profitability that it achieved $688 million as sales revenue in 2006.

Task 1 – Information systems

Existing information problems at CS

Problem began for the company in 1990 when it expanded its operations in Europe through the acquisitions of three major firms in Netherlands, Germany and UK. The major problems faced by CS are as follows:

  1. The management reporting in CS consumed more time and cost. Even matters that can be solved or reported with least effort took many days and consumed more cost for reporting. The major reason for this is the different skill sets of administrative departments. The company also faced difficulty in knowledge sharing between the national branches.
  2. Duplication of efforts between countries is the second major problem faced by the company. CS has its operation in many countries. The branches in the concerned country follow the common procedures that are practiced in the country for IT, e-commerce logistics and other related activities. Since different branches follow different system there is no uniformity in the operations of branches of the company.
  3. The third problem faced by the company is declining prices for its products in the market as a result of competition from low cost producers in the Asian markets like China, Taiwan, Vietnam, India, etc.

Even though CS faces the above mentioned problems it was sorted out by the implementation of SAP R/3. SAP R/3 is the world’s most widely used standard business software for client/server computing. It is designed to support complete business management task of a corporation like invoicing, production resource planning, financial accounting, etc. It provides the company with single uniform software platform and database that will facilitate transactions among the different functional areas within the firm and in some cases between the firm and its customer and vendors. Implementation of SAP finds solution for the three problems in the following ways:

  1. Management reporting is made easier by the implementation of SAP. SAP brings together every activity under one roof. As a result of this the activities in different branches and different departments within the branches will start following same principles which will make management reporting easier.
  2. It is seen that under SAP the branches of the company will follow similar procedures. This will reduce duplication of efforts in the company.
  3. By the introduction of SAP inventory levels were brought down and sales increased by market intelligence. This cut down the production cost and the firm became more competitive.

Staff roles in CS

Implementation of SAP has created great impact on the role of staff in CS. Many of the employees were shifted to the new positions for performing new functions. Many of the roles were shifted and added to the service centre and that added to the efficiency. And also there is more automation in the business which makes the employees to manage the same set of customers. This results in higher efficiency of operations. The system also resulted in an increase in the number of activities carried out by the Company. This is a better strategy because CS will gain better profitability in the present as well as in the future since efficiency in increased.

Benefits for customer and supplier

Implementation of SAP has resulted in fast delivery of products leading to higher customer satisfaction. This is achieved by making major changes in its warehouse. Before the company operated shipments from 15 warehouses which is now integrated and formed into two that made easy shipment of products. The buyers are able to process the enquiries, purchase orders and invoicing faster.

Since CS receives the payments from customers in time it is able to pay the suppliers debt at the earliest. This is advantageous for the suppliers as it will help the suppliers maintain better relationship with CS. The product specifications have been standardized to enable supply, recruit exactly as per the client requirement. Suppliers can stock standardized material so that they can quote off the shelf and effect faster deliveries.

Future developments

CS has planned to introduce new supply chain management which is a recent innovation. The number and location of factories, warehouse and retail store is an important decision in supply chain since they are major decisions involving large expenditure. An effective chain management results in cost reduction, quality of service and flexibility. Its new plan in the supply chain management is automatic replenishment at customer sites. “Finally, Checkpoint plans to leverage SAP to plan supply chain activities at the enterprise as opposed to plant level.” (Lykkegaard 2007)

The company is also planning a new customer relationship management system. According to the new system the sales people of the company are given a device that will help them access SAP. Access to SAP will help the sales people to deliver quality services to the customers. The company has also planned to implement a customer interaction centre for maintaining better relationship with the customers.

Task 2 – Implementation

Implementation approach

In 1999 a pilot project was commissioned. Internal team was responsible for implementation except Norway where a consultant was appointed. The thrust was on Germany which is the motherland of SAP. Between 2002 – 2005 it spread to France Poland, Norway, UK and England. Therefore it can be noted that the project adopted a phased approach instead of parallel or direct approach. The reason for implementing in phases is that errors occurred at one phase can be rectified in subsequent phases and need not be repeated. This is not possible in parallel or direct approach as it involves implementing all the activities simultaneously.

The SAP implementation faced the following problems or challenges.

Time and effort requirement for matching the SAP terms and CS business terms is the first challenge. It took time to match the skills of CS to adopt the principles of SAP. To solve the problem special training was imparted to the existing employees.

Language barrier is the second major challenge for implementation. SAP implementation team belongs to an international group. The branches of CS are located in many parts of the world. The implementation team has to train the employees of CS in SAP. But it became difficult for them to train the employees in some instances due to the lack of knowledge of local language by the implementation team. The problem was solved by the company by inducting local SAP team’s in order to overcome the language barrier.

Cleaning up process is the third constraint. For implementing new system in the computer networks, the existing system has to be completely removed. Therefore the time taken for removing the existing data resulted in considerable loss of precious time.

Integration issues

Prior to the implementation of SAP system each functional area had its own software and data base. They were incompatible and hence transactions within systems were difficult. SAP is a new generation software system that links the functional areas. SAP system provided infrastructure with a common IT platform. This linked all the functional areas with a single database. The SAP solution integrates finance and accounting, sales orders, material and inventory management, production planning, logistics, manufacturing, human resources and payroll, business intelligence, customer relationship management and franchises. Before the major issue in the company was that all the above functions had different systems and it was difficult to operate. But under SAP it became easier to manage when everything was brought under one platform. By having a single database the errors occurred at different data bases could be brought down. Faster customer response and better communication within the organization are the added benefits of SAP.

Electronic Data Interchange (EDI) is a system used for electronic information exchange in a business organization. It refers to the transfer of structured data from one computer to another. There is no human involvement for carrying the data from one department to another. It has a set of standards and procedures which help the data flow in the best possible way. In short EDI enables the transmission of data in electronic form which were once transmitted in the form of papers.

Lotus Notes is the client server that is developed by IBM for business organizations. The software enables the users for accessing the business emails easier. Apart from that it also gives access to calendars and other applications. Lotus Notes have better security features that help the business organizations for safe transfer of data.

TNT is the reputed US Company that provides mail and delivery services for business and other clients. It operates in over 200 countries. IT transfers goods and services around the world through their wide network. The major strategy of TNT is to serve beyond the expectations of the customers.

DHL is another leading logistics company in the world like TNT. The company operates in international express, overland transport and air freight. The company has its presence in more than 220 countries. The company has specialized services in document transfer.

Task 3 – Retail Crime Statistics

The mean is the average of a set of data and the standard deviation is an indication how closely all the data are clustered around the mean value. The central limit theorem tells us that no matter what the actual shape of the distribution is, when samples of a given size are repeatedly drawn from that distribution and the means of samples are calculated and plotted on a graph. These sample means will be normally distributed.

Region Mean Standard Deviation
UK 40 2.5
Europe 35 6.3

This shows that number of thefts per store in UK in 2006 is higher for UK than Europe because the mean (average) is higher and standard deviation is lower.


Correlation indicates the degree of dependence of one variable on another variable. For example y = bx where ‘x’ and ‘y’ are the variables and ‘b’ is the correlation coefficient. In this case the correlation coefficient is -0.58. This shows that y = -0.58 * x, where y is the amount stolen by the customer and x is the amount spent for theft prevention. So there is a negative correlation between the amount spent on security and the amount stolen by the customers.


Linear regression is used to define a functional relationship between two or more correlated variables. This relationship is usually developed from observed data where one or more parameters (independent variables) are used to predict another dependent variable. Here the formula given is Theft = £10,700 – 0.2 x Security. Regression is used mainly for forecasting based on the relationship of the variables in the past. This regression equation can be used by CS in forecasting the security demands of the society. In this case if we spend £1000 for security the theft will be 10500.

Analysis of Pareto Diagram

The Pareto diagram shows that the frequency of customer theft is 40% against 20% by the staff. It shows that the frequency of customer theft is double that of staff theft. Therefore remedial action should be taken to reduce customer theft.

The opportunity for CS is that it can concentrate more on the market where the customer theft is higher. CS can also develop new and improved security systems for grabbing the market share.

Analysis of the graph showing average amount stolen by the customers and staff

The analysis shows that the average amount stolen by the customer is 5 times than that of the staff. It varies from 4 to 6 in different years. Whereas the Pareto diagram shows the frequency of theft in each category the bar chart shows the actual amount stolen by the customer and staff every year. Comparison of Pareto diagram and bar chart indicates that the customer steal high value items because where the frequency is only double the value is four to five times higher. The benefit for the company is that it can develop new security products for satisfying the demand of the market particularly to reduce customer theft.


LYKKEGAARD, Bo (2007). Special study: Future plans. [online]. IDC 2007. P. 7. Web.

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