Home Depot's Inventory Control Problem

[Bill]

With computers and barcodes on everything, reordering is supposed to be "just in time". That is they get a new shipment in just before they run out of something.

But it is not working that way at some stores. I frequently see things out of stock in many different stores.

This is a "management system" and it is not designed well obviously.

It should take into account how frequently an item sells > predict when the store will be out of an item.

Take into account how long it will take for a new shipment to arrive at a particular store.

Alert management when any item is out of stock so they can tweak their reordering of that item - prevent being out of stock in the future.

And incorporate all of this into stocking regional distribution centers.

Then based on the item selling (the computer would know because of barcodes), automatically reorder that item - Just in time.

In some cases the item might need to be reordered when the stock is down to

3 items. Other cases when the stock is down to 1 item. Etc.

[David]

Computerized inventory just needs to be updated in the HD where I live. I was looking at a certain bookcase which was on display but none were on the shelf because they were sold out. When the clerk checked the computerized inventory, it showed that they had 3 of them. Nobody could have shoplifted them because of the size and weight of the boxes.

David

[dpb]

...

I think if you would/could see the actual inventory algorithms you would find they're far more sophisticated and global in their logic than this. The actual target is to maximize overall _profitability_, not just to restock individual widgets in a bin.

If targets were set so high so that _no_ product were ever out of stock inventory and delivery costs would cost far more, overall, than the occasional loss of sales.

The largest difficulty in making such models work continues to be data collection at the POS and controlling shrinkage and on-shelf damage (as somebody else noted) that reduce inventory out of the observability of the collection system (as well as the actual loss, of course). The effectiveness of local management and particularly department managers in ensuring accurate data input makes the difference other note between better/lesser-stocked stores within a given chain. It is certainly true that if corporate makes a decision to remove power from local managers to effect corrections into the data system the quality of the data will go down and the effectiveness of the system will degrade with that loss of data--"garbage in, garbage out".

I don't have local BORG available but when I do visit one on occasion on treks to "the big city" :) I still observe there are some HDs that are clearly far better managed locally than others. In general, for the areas I see, it seems to me that Lowes in general are better than HD in terms of numbers of people and general selection--that of course, could reflect only on what my particular likes/dislikes are more than any real difference--others could visit the same stores and undoubtedly draw the opposite conclusion. Since the Lowes re-vitalization effort some years ago it has seemed to me that what little lumber I've bought at either that Lowes is better in general than HD in that particular area.

[Pete C.]

Employee theft out the loading dock with their own forklift...

Pete C.

[me]

I live in a small town of 17,000 and walmart has DECIMATED this town of its mom and pop stores

[Doug Miller]

Well, that's what happens to people that don't have a college education...

[mm]

Former Georgia Congressman and former civil-rights activist Andrew Young, I just heard on the radio, resigned today from a pro-Walmart organization, after he was criticized for remarks he had made.

I have the story very close to accurate: He was asked if it was a problem that Walmart drove small businesses out of business.

He said, No, because they are owned by Jews, Koreans, and Arabs and they charge too much anyhow.

When I heard the start of the story (on NPR iirc) I didn't expect him to have said anything this flamboyant or flaming. I guess Andy only cares about non-discrimination when he's the one being non-discriminated against. And he's so off the wall anyhow. Maybe where he lives, but I'm sure the majority, probably the vast majority of stores in the US put out of business weren't owned by Jews, Koreans, or Arabs. I wonder if he got this line from meetings with Wal-mart or he thought of it himself.

[Edwin Pawlowski]

What retailer pays like that? Going back 50 years, Sears, Gimble's, Macy's, were mostly staffed by women that had a husband working a full time job. They were just a second income. Maybe someone knows for sure, but I don't think theypaid health benefits or enough to fully support a family. If you worked at Sears for 20 or 30 years, you got a good pension.

Are you ready and willing to pay 10% or more for all of your purchases? Wal Mart may be greedy, but so are most of the consumers that hunt for the lowest possible price, then complain they did not get the service and quality of years ago. The department stores I mentioned were put out of business, not by Wal Mart, but by the consumer that made the decision to save money by going to Wal Mart instead of the local retailer that paid his help a few dollars more at the end of the week.

:We have met the enemy, and it is US" Pogo (how many even know who Pogo is?)

[jtees4]

Or delivered straight to the employees home...I've seen this done too.

[bigjim]

[Percival P. Cassidy]

But there are jobs without which society would not continue that do not require a college education. Think: ditch digger, sanitation worker. If these people are making a useful contribution to society, why should they not receive a living wage? Is it only work for which a college education is required that society really needs?

And many jobs for which employers are demanding a college degree do not need one. And when enough people have college degrees, employers will demand that sanitation workers have college degrees too -- end they still won't have enough to live on. (Many years ago, a trucking company in Madras, India, was demanding a Bachelor's degree for truck drivers because there was a glut of graduates and the employer was able to make unreasonable demands.)

Perce

[Buck Turgidson]

Did you also read the part about the burden that Walmart's employees place on Medicare because they can't afford health insurance, their foodstamps, etc?

[HeatMan]

Gonna throw something in.

You most likely won't find *real* pros in any department at HD or Lowes. A good tradesman can make $18-$24 per hour (or more) in their respective trade, maybe half of that at the box stores.

HD was great when Bernie and Arthur ran it. Now that Nardelli, the General Electric reject, runs it, the stores have turned to squat.

[Buck Turgidson]

HD has the same problem here in the DC area. Unfortunately, most of the Lowes are in the outer suburbs, so there is really no competition. Lowes apparently likes the lower rents in the outer areas.

However, I find it worth it to drive another 15 minutes to Lowes, cuz when HD is out of stock, I end up doing so anyway.

[Buck Turgidson]

Aw jeez. I hope this thread ends here....

[HeatMan]

You have a link to that story?

[HeatMan]

Talked to a gent at HD yesterday, an employee. He and his wife were out on a camping trip and came home to water flowing out the garage of their ranch with a full basement house. The plastic sink (as opposed to toilet) supply line broke.

[HeatMan]

Been there, done that.

[Pete C.]

Here is the CNN version:

Pete C.

[Pete C.]

You used to find real pros at HD, typically evenings and weekends when they had time to kill to make some extra money.

Pete C.