Sunday, October 30, 2011

Shop floor insights - freinds and foes

TOC for retail is based on the statistical characteristics of forecasting. Specifically the fact that the more general the forecast - the better fit you will get between results and reality. The other side of this coin is, of course, that the more specific the forecast - the worse fit you'll get. Therefore TOC calls for holding inventory centralized and moving it closer to the end costumer as late as possible.
Pushing the merchendise into the final storage rooms earlier creates local shortages and surpluses. These increase the workload for the sales staff, of course. Since they can never know what is available and what is not, so they are always checking. Another very significant impact this has is the increase of the customer's percieved risk. Since you can't know ahead of time, even when you know for sure the SKU is part of the store's stock, if it will be available in that store at that moment and if they will have the size and color wanted.
As I described in earlier posts, the chain I worked for pushed the inventory forward as soon as possible. I am sure this seems logical to them, after all - if the item is not in the store it can't be sold, so that seems like the best place to store you inventory, no?
The stores also had access, through the central database, to the tracked inventory of all other stores in the chain.  This data is used to reduce lost sales by cross shipping from oher branches. There were always calls from one branch to the next requsting the relevant SKU (though we were always describing, not using the codes) and issueing a cross shipping. I don't think there was a morning we did not have packages of cross shipments coming in AND going out.
A couple of things I noticed. First off - we never checked the warehouse inventory. This makes total sense in retrospect, since the warehouse was automatically replacing any shortages we had if there was stock. So, if the warehouse had it, we knew we'd get it. Even surpluses were rarely sent of to the warehouse. Everything was worked out between the stores. Second - cooperation between shops was choppy at best. Finding the garment you need to get the sale was always a good thing, but sending off a garment wasn't such a hit. We were directed to limit the outgoing shipments to those garments we had enough stock off and the ones that were not selling well. When a branch "overdid it" the manager would stop answering their calls and direct us to do the same. Then, if one of us inadvertedly did answer, the manager of the other store would give that poor bastard such a talk to.....
From my point of view, as a simple sales clerck, this was a no win situation. If I help out the other store - my manager gets mad at me, if I don't help them I have the phone going on all the time and at the end they manage to get a hold of us and they are mad at me.
Taking the owners point of view this whole situation is not in their best interest, either. Don't you think?
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