When I first began working in a retail superstore as a teenager, I often clocked out at 10pm; just as the nightshift was deployed. “Deployed” being the right word. An army unit of stockers would gather as the night replenishment managers drilled them – “Joe – Pet Food”, “Mary – Frozen”, etc. Endless squadrons of pallets – pallets of stock, pallets for cardboard waste, pallets for plastic waste – rolled onto the shop floor like an invading force. The nightshift team were warriors as they got as much of the heavy lifting done as possible for the next day.
I was jealous as their job was so much easier without customers in the store. On the day shift we had to adhere to the “day-time” rules; no pallets on the shop floor, no containers for waste on the shop-floor, 6 feet of walking space between everything, etc. It was nearly impossible to do as the stockroom was so crowded you often couldn’t see the stock through the stock.
My teenage self didn’t have a solution other than to work harder and work faster, and none of the department managers had one either. And, years later, in countless supermarkets and superstores around the world this is still how it works.
However, a few years later, corporate announced an initiative and new process for managing stock and our forward-thinking store manager decided we were going to adopt it – knowing many of his peers would dismiss it.
Turning Stock Warriors into Stock Analysts
Before we could begin we needed to know how much stock we could hold on the shop floor. So, we started by scanning each item, working out the shelf-capacity for them and entering it into the stock system. The other pre-requisite was the installation of shelving in the stockroom. Going forward no overstock would be kept on the apparatus it was delivered on; no roll-cages, pallets, dollies, etc. – it had to go on a shelf.
The new process began with nightshift ignoring all overstock. Anything in the stockroom at 10pm was to stay in the stockroom. Instead they began by moving new deliveries onto the shop floor, replenishing stock on shelves and returning the new overstocks to the stockroom. The hardest part was for the nightshift warriors to ignore the stockroom overstock. What about date-codes?
The early morning shift then counted all the overstocks as they moved it onto the stockroom shelves, date-rotating it with the pre-existing overstock. First all items in the stockroom got counted, then any additional inventory of these same items on the shop floor. Products with no overstock was ignored. Everything was then entered into the inventory system and any item that was completely out of stock on the shop floor had its on-hand stock set to zero.
At 9am we knew that the on-hand figures were 100% accurate.
Instead of having the day shift draging pallets of stock out onto the shop floor and then return it to the stockroom when it didn’t fit, they could now make lists of the gaps on shelf and bring out exactly the stock that was needed. As the process matured things changed so that the only overstocks in the stockroom were exactly what the day shift were looking for, all neatly organized on rows of racking – no more hunting and searching for the right products while availability scores fell.
This process would continue into the evening, until overstocks dropped to almost nothing. The shop floor gaps could then be scanned and set to zero to ensure the on-hand figure was accurate.
The result? We became the only store in the region to be under budget for waste that year; any employee could walk into a stockroom and find an item – it was no longer an obstacle course, the reduction in stockholding was unbelievable. And we accomplished this with hard work and little technology.
Now let’s fast forward…
In the last 10 years, technology has virtually eliminated the middle-men in the form of booking agents as we book directly with airlines and AirBnb, taxi companies as we deal directly with owners/drivers with Uber, video rental shops as we stream on demand and the postal service as we pay our bills online. But what could technology mean to the middle-men, the store managers and stockers, in my story?
We can’t replace the store operations guys, although I saw a couple of robots at the NRF show earlier this year trying, but what I’m questioning is why do they have to be the middle-men in this process.
What I anticipate is technology finding a way to engage all of the stakeholders in one collaborative platform.
The assortment planners and buyers setting the range of product for each store, the merchandising team turning it into visual planograms and the supply chain analysts making sure what is planned is possible, are often in the same building yet far too often their activities aren’t integrated. While at the same time the store operations team’s input is rarely heard. What I anticipate is technology finding a way to engage all of these stakeholders in one collaborative platform.
We’re looking at a bright future for retail planning
It’s easy to forget that I’m recalling a time before the invention of the iPad and when smartphone usage was still in its infancy. Many retail planning software vendors are now offering a mobile/tablet version of their tools, but a revolution in retail planning will have to be driven by more than replacing paper print-outs with mobile devices.
Today every store associate has an internet-ready device in their pocket. They could be feeding information about available shelf space in their store, accurate inventory counts and feedback on assortments and planograms into a collaborative platform. They could also scan an out-of-stocks as soon as they see them.
The centralized planning team could then use the data feed in by the store operations team to adjust the forecasts in the same collaborative system. The merchandising team could build planograms to suit the busiest sales days, not just the weekly average, so the stock that arrives fits perfectly onto the shelves – with no need at all for the stockroom for many categories.
Recalling what we achieved back in my store operations days, it is difficult not to get excited about what we could achieve with a collaborative platform to bring all the stakeholders together – the same way as we can’t imagine how we used to run down to the video store on a Saturday night. It’s getting easier to see how technology is going to streamline our retail planning in the same way it’s streamlined our lives.
If you’re looking for tips on how to organize your inventory management team for maximum impact, have a look at this whitepaper. We’ve come up with recommendations based on the approaches we’ve seen that work well in tackling the challenges our customers have faced.
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- MIT Research: The Effects of Dynamic Safety Stocks on Inventory and Service Levels