Client Challenge
A $14 billion specialty retailer, operating over 800 stores across multiple banners, brands, and formats, needed to implement a new inventory management system specifically designed for softlines. This initiative was part of a broader store operations transformation effort. As the project unfolded, it became clear that a thorough assessment of the retailer’s current store inventory activities was necessary. The store inventory assessment objectives were twofold:
- Identify potential inventory management areas for improvement
- Pinpoint existing business processes that might hinder the successful adoption of the new system and the realization of transformation benefits.
Parker Avery Solution
Parker Avery assessed the retailer’s inventory management systems and processes to identify high-value opportunities related to in-store handling and merchandising of products. Parker Avery’s approach to the store inventory assessment included:
- Reviewing organizational structure, roles, and standards
- Participating in system configuration and design workshops
- Leading stakeholder interviews
- Conducting store visits for all store formats in multiple districts and states
- Gapping current processes against best practices
- Documenting system configurations and exceptions
- Defining a business case and deployment plan to support the improvement opportunities
- Identifying multiple improvement opportunities across truck processing, back-of-house (BOH) management, sales floor procedures, replenishment/restocking, price changes, and store transfers
Parker Avery recommended ten action items with prioritized tactical plans for the near term and to drive a successful inventory system rollout. High-priority items included:
- Developing SOPs for shipment exceptions, carton processing, item ticketing, and inventory counts
- Establishing replenishment procedures for basics/never-outs
- Implementing a formal store-to-corporate communication channel
- Cross-training store associates to improve process execution and merchandise knowledge
Results
As a result of the store inventory assessment project, the retailer expects to achieve an average increase of $65 margin dollars per square foot in the softlines business along with the following benefits:
- Sales improvement
- Markdown reduction
- Improved inventory turn
- More efficient BOH organization
- Replenishment efficiencies
Are your store inventory processes as efficient as they should be?
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