Inventory Issues

You’ve all heard me going on about inventory control issues before (at least the handful of you who are actually reading this blog have, anyway), but over the past few days I’ve discovered some new examples of inventory control mistakes that are so stupid they bear repeating. I’m not implying that inventory control is simple or easy; on the contrary, knowing how much of which products to order how far in advance is never simple, and when you are trying to run a general merchandise store with literally tens of thousands of items for sale, it’s all but impossible to get it exactly right every time.

That doesn’t mean that we as managers shouldn’t try to get it right, however, since any time you fail to have the product that a customer wants to purchase in stock, not only are you in violation of the First and Second Laws of Business (“When somebody comes to you and says, ‘Hello, I would like to give you a lot of money now,’ you say, ‘YES!’” and “Don’t annoy the customer!” respectively), but you have also lost a sale (and whatever margin you might have made on that sale). If you do this too many times, your company WILL fail, no matter how sound it might be in every other respect.

Consider the case of a purchase we needed to make this week: a decorative screen, to hide the part of our basement where the washer and dryer live from the nicer part of the room. I checked a few places online, and Plummer’s had just the thing: a five-panel folding-style screen of just about the right length. The price was a bit higher than I wanted to pay, but the item looked nice and would fill need we had at the moment. The only problem was, Plummer’s didn’t have any in stock. Not in either of their locations in the area. They could order one for us, and have it in five or six days, maybe, but we needed it for the following day. They lost the sale…

In the end, we found a similar product on clearance at the Expo Design Center near our house, at less than half the price Plummer’s wanted, too. It worked out well for us, and for the Expo Design Center, but Plummer’s just saw a large purchase wing its way out the door. Even worse, however, was tonight’s trip to the market to get some toilet bowl cleaner tablets and a package of the special meal replacement bars for diabetics called Glucerna Bars. These can be extremely helpful in getting through the day, particularly if the food available to you is unpalatable or loaded with sugar (in which case a diabetic can’t eat it but also can’t afford not to). I’ve purchased both of these products for years at the supermarket around the corner from us, a part of the Albertson’s chain. Only this time, I was not able to…

When I looked for our brand and style of bowl cleaner, I discovered that this location no longer carries the ones I wanted; only the “blue” variety that my wife can’t stand (and which make me sick to my stomach). This would have annoyed me, but they had also eliminated the entire section of meal-replacement, zero sugar and modified carbohydrate products for diabetics. Now, I know some clown at their corporate office was looking at the store diagram and decided to go with more shelf-feet of bottled water and powdered soup than these very specialized food items; the same clever fellow probably figured that if we had the “blue” cleaning tablets, why did we also need the white ones?

Unfortunately, in doing so he is not only eliminating the products I want to buy; he’s also telling me that my needs are less important to his company than those of the group(s) he imagines will by the replacement products. I didn’t choose to have diabetes anymore than I chose to be nauseated by the blue toilet bowl tablets, but the local Albertson’s has decided that my business is less important to them than somebody else’s. It’s hard not to take that sort of thing personally…

I mention all of this, again, not to criticize the people who made this decision (although it was stupid) or to belittle the people at Plummer’s who decided not to carry the inventory I needed (although it cost them a large sale, and was, ultimately, stupid). I call these things to your attention because sooner or later you are probably going to be faced with similar choices.

Chose wisely…