Good Guys Gets Good At Planning

Electronics Retailer seeks to modernize its inventory-replenishment systems.
Good Guys Inc., a retailer of high-end entertainment electronics products, is overhauling its merchandising- and demand-planning systems to better match demand with product availability and cut inventory costs.

Good Guys, which operates 71 stores, now uses an application built in-house, which merchandising systems director Bert Nelson describes as "archaic," to replenish store shelves from inventory in a distribution center. The company's inability to predict demand has meant that stores were sometimes out of specific products customers were looking for, even if the distribution center had those products in stock. Spreadsheets are used to manage the distribution-center inventory and place orders to vendors to replenish that inventory.

Photo by Carlos Chavez/LA Times

Good Guys is overhauling its merchandising systems to synch inventory and delivery with customer demand.

Photo by Carlos Chavez/LA Times
The goal of the new merchandising- and demand-planning project "is increasing our service levels [to customers] while maintaining the lowest inventory levels to achieve that," says Matt Levy, director of strategic planning and supply-chain management.

Good Guys is installing a merchandise-planning app from Evant Inc. to strengthen the link between suppliers and the retailer's distribution center, helping those vendors respond quicker to Good Guys' inventory needs. It's installing the same software between the distribution center and the retailer's stores, too. The Evant app uses collaborative planning techniques and, when linked to the Good Guys' mainframe purchasing system, automatically generates and transmits purchase orders to suppliers. The system is expected to go live next month.

In November, the retailer will install Evant's demand-planning and replenishment application that managers will use to create a schedule to maintain optimal levels of inventory in the distribution center. The application, which has statistical analysis and forecasting capabilities, will help the retailer develop product-sale forecasts as far as a year out. Early next year, Good Guys will expand use of the app to help with demand planning and inventory replenishment in individual stores.