Retail Inventory Optimization
Transforming a 600-store inventory process into a 4-hour streamlined operation.
SITUATION
A large home furnishings retail chain struggled to complete physical inventory across its 600 stores in the U.S. and Canada during the limited window between Saturday night closing and Sunday morning opening. The existing process was riddled with inefficiencies:
- Physical inventory had to be conducted while stores were closed to customers, creating a tight overnight deadline.
- One-time buys with unique SKUs often didn’t appear in the corporate inventory system, making greenbar printouts unreliable.
- Store managers resorted to starting inventory days in advance, blocking shelves and frustrating customers.
This outdated system was not only time-consuming but also disrupted store operations and customer experience.
COMPLICATIONS
- Unreliable Data: Greenbar inventory printouts failed to account for one-time buys and unique SKUs, leading to incomplete or inaccurate counts.
- Operational Disruption: Managers began inventory early, blocking shelves and thus manually tracking items sold between counting and inventory completion.
- Resource Constraints: Completing inventory within the overnight window required all-hands participation, creating significant labor costs and inefficiencies.
APPROACH
To tackle this challenge, I focused on understanding the perspectives of all stakeholders and designing a solution that addressed their needs:
- Stakeholder Interviews
- Engaged corporate leadership to clarify current processes and desired outcomes. Interviewed representative store managers to understand their pain points and gather insights on ideal solutions. Consulted IT personnel to assess the capabilities and limitations of in-store systems.
- Data Collection and Analysis
- Gathered data, documents, and sample artifacts from the current process to identify gaps and inefficiencies.
- Solution Design:
- Developed prototypes and a Product Requirements Document (PRD) to outline the proposed solution. Presented the solution to corporate operational leadership for feedback and approval.
- Project Approval
- Secured buy-in on project scope, budget, timeline, and deliverables.
EXECUTION
I led the team through an Agile development process, delivering the solution in phases to incorporate feedback and refine the system:
- Software Development
- Created a reusable barcode scanner interface to streamline data capture. Designed functionality to handle exceptions, such as inventory not found in the corporate master and one-time purchase items. Integrated the new software with existing POS systems to ensure seamless operation.
- Documetation and Training
- Developed a user manual detailing new procedures and software usage. Conducted training sessions to ensure store employees could quickly adapt to the new system.
- Pilot Rollout
- Tested the solution in five stores, gathering feedback to address any issues before full deployment.
- Mass Rollout
- Successfully deployed the solution across all 600 stores, ensuring consistent implementation and support.
RESULTS
- Time Savings: Inventory times were reduced by 80%, allowing two employees to complete the process in just 3-4 hours.
- Efficiency Gains: The new system exceeded PRD requirements by 200%, turning an overnight all-hands process into a streamlined operation.
- Data Accuracy and Speed: Entire store inventories could now be transferred digitally and uploaded into the corporate master 75x faster than the prior process.
LESSONS AND TAKEAWAYS
- Stakeholder Collaboration is Critical: Engaging corporate leadership, store managers, and IT personnel early in the process ensured the solution addressed all key pain points.
- Agile Development Drives Success: Delivering the solution in phases allowed for iterative improvements and ensured a smooth rollout.
- Efficiency Creates Value: By reducing inventory times and labor costs, the new system not only improved operations but also enhanced the customer experience by eliminating disruptions.