1. Who says the recorded inventory balance on the inventory control system is correct? Manufacturing and retail companies have struggled for years to get inventory “correct” and it’s still not fixed, even with perpetual inventory and regular auditing.

2. Even item-level tagging will not be a complete fix. The problem is that the inventory in the shopping card is still (legally) owned by the retailer until the buyer has paid for the goods AND has also taken physical possession of the goods. So the inventory system needs to have at least three inventory balances for each item: 1 “In stock”; 2 “Reserved” for items in shopping carts; and 3 “Paid but not collected” for items bought by a customer in another store who will collect the item at some point in the future. Note that problem number one applies to the inventory system balances for all three statuses!!!

Regards from Charlotte, NC.

Sean Connolly

You touched on an important
cause of supply chain black hole syndrome. In addition to hot seasonal products languishing in shopping cart limbo, vendor sponsored and other TPR promotions can create a run on items that wipe out shelf stock before corporate merchandisers know what hit them. Any thoughts on the role demand elasticity plays in forecasting how quickly product managers should be replenishing their shelves. Clearly I have a few suggestions in a pinch but would like to hear your perspective.

Regards,

Warren Love
Director of Sales – Grocery and SCM
Retalix USA