Friday, December 24, 2010

Inventory Control and Distribution Centers

I was in a smaller department store (NOT Target or the GSR) recently, and learned that a clerk did not understand how the inventory control restock Distribution Center system works at Wal Mart and other major retailers. 

What happens at the "Big Guys" is that when you buy a bag of Oreo's or a Shirt (One of my recent purchases at Penney's), the computer automatically updates the inventory when it goes past the scanner at checkout, and orders a replacement from the Warehouse, or Manufacturer as the case may be.  Indeed, Walmart's smoothing out of this "Supply Chain Management" is touted as one of their advantages.  It's why they have "Distribution Centers" (DC), not warehouses.  Instead of keeping pallets of say, cat food on hand (another recent purchase),  they order precisely as much as they are forecast to need to arrive at the dock on one side of the DC, and it goes through the DC and directly onto the trucks for each store.  Let Purina bear the cost of warehousing the stuff.

These days, Walmart shares this (proprietary) data with it's major vendors (the "Retail Link" system) 
This huge data base of sales and trends is one of Walmart's advantages.

Actually, K-Mart had "Point of Sale" inventory control thirty years ago;  I remember my boss when I was the Driver for the CEO of a regional Department store (A story I will have to tell some day) saying, no, he wasn't going to even look at it, basically because they did not have the money for that kind of capital investment.

But still we have retail level sales people who don't understand these things.

And I still have no skills....