Retailers Take Stock - InformationWeek

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Retailers Take Stock

Casual Male revamps supply chain and inventory management to make good on promise that clothing will be in stock.

To pull it off, Gaffney says, Staples spent a lot of time integrating disparate technologies. It installed kiosks in all of its stores so employees can check inventory at other stores and at distribution centers. It established links with shipping companies so employees can schedule next-day deliveries electronically. An order goes to the closest warehouse and is packed and shipped that night. "In the past, each store did its own thing. Now all of our 1,200 stores in the U.S. use these tools in the same way, giving us an accurate view of what's in every store," Gaffney says.

Safeway Inc., which operates more than 1,800 grocery stores throughout the United States and Canada, is planning to test, with several of its suppliers, an application from One Network Enterprises Inc. that triggers replenishments whenever a point-of-sale system indicates a product has been sold. The grocer tested the software for three weeks in November at 127 supermarkets and a distribution center in Seattle. During the test, Safeway managed to cut in half the number of times four promotional items weren't in stock. Safeway says its inventory is out of stock about 8% of the time. "If you can get to 4%, we thought, it was excellent, although there's still room for improvement," says Roger Lekberg, senior VP of supply chain at Safeway.

If a shopper can't find an item in the store, Casual Male will ship it at no extra cost. -- Photo by Bob O'Connor

If a shopper can't find an item in the store, Casual Male will ship it at no extra cost.

Photo by Bob O'Connor
When Safeway expands the test, the application will be integrated directly with a number of stores' point-of-sale systems, and data feeds will be done every 15 to 20 minutes. It also will cull data from Safeway's forecasting software from i2 Technologies Inc. That way, Safeway can correlate forecasts with sales. "Many times it's difficult to forecast product requirements accurately at each store, but if you have the real-time data, you can react quickly to what's being sold, push products out to the shelf, and reduce stock-outs," Lekberg says. Suppliers also may be given access to the same data, allowing them a clearer picture of Safeway's inventory so they can replenish stocks as shelves are emptied.

Combating stock-outs is one of the primary drivers behind the move to radio-frequency identification technology. RFID initiatives at the world's largest retailers, including Wal-Mart Stores Inc. and Target Corp., are intended to track inventory more accurately. (Safeway also is testing RFID.) So far, these retailers are using RFID tags on pallets and cartons. Eventually, retailers hope to use item-level RFID tagging to signal replenishments the minute a store shelf is emptied.

All these technology efforts are intended to do one thing: serve the customer. Says Casual Male's Hernreich: "We want to impress upon our customers that they can expect consistency when they come into our store."

-- With Laurie Sullivan

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