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Thought Leadership

Are Retail Stores a Dinosaur waiting on the Big Asteroid IoT to Hit?

Are Brick Stores Really the Dinosaurs of Retail?

When will the asteroid IoT (internet of things) change the retail landscape into a permanent waste land? Some claim retail brick stores are a dinosaur waiting for the big asteroid IoT to hit and end it all. Many say retail is at the end of its days and point out how giants like Sears are almost extinct.  Writers and consultants highlight how the IoT is tearing away at the basic ‘how to make money in retail’ assumptions. I cannot count the number of columns written that say retail stores are the showroom for Amazon and eBay. There are hundreds of software companies that ‘claim’ to have the magic mobile solution to solve the showroom crisis and meet the IoT threats. Don’t see that working out so well either…
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7-Reasons-Your-Lead-Time-Is-Wrong-&-Its-Costing-You-MillionsDo You Make These Lead Time Mistakes

Shoppers use technology today at a dizzying level to gain leverage over retail. Mobile phones offer limitless shopping options for products at the right price and place. Key to the shopper process is deciding where to purchase the product.  This changing speed of retail decisions shortens the retail response times in a manner legacy technology cannot manage due to their base code designs in a time where mobile shopping and omni channel were not even words to consider 10 or more years ago.

One core component of inventory replenishment is lead time, how long from when the purchase order is placed until the goods are available to ship/sell to a customer. If you plan a lead time of 10 days and it takes 17 days you will have 7 days of lost sales.  If you plan a lead time of 20 days and goods are available in 12 days, you will be forced to hold 8 days of safety stock.  While everyone will admit lead time is a critical part of replenishment, most retailers are not using their lead time data in an effective manner, the costs are astronomical.

Attached is a link to my slide share on the 7 most common Lead Time mistakes you make when managing or ignoring our lead time. I am often asked to speak about lead time and the problems created in replenishment.  These 7 are the most common problems of managing lead time for inventory replenishment.   I can even share a startling fact: every one of our customers made their investment in our software back from corrected lead time mistakes alone, everything else was additional return on investment.   To help you we provide a link in the slide share to a lead time forecasting kit with more education materials. Think of the dollars you can recover with just one or two corrections in lead time.  Enjoy the slide share and read more at Data Profits blog.

Watch the Slideshare here and use the link for free download:


I look forward to your comments and idea on the lead time Component of replenishment

Does Your Forecasting and Inventory Replenishment Software Prevent or Encourage Fires?

baby-its-cold-outsideHow often I walked into the corporate office of my former employer and thought ‘whew, is it HOT in here’? Knowing I was headed for budget and planning meetings that were going to steal my day with the end obvious result: wrong products and /or wrong locations.

How can you survive when customers expect new product almost monthly? The expectations of customers and the resulting changes to their shopping habits have been dramatic in the past 3 years. In the past a retail/ wholesale company could change product assortments 2-4 times a year to keep customers satisfied. Today social media has forced a new world order where product assortments need to change monthly to meet customer expectations. How do you respond? The great ‘idea’ is to find new sources and buy new products more frequently, operating more like the grocery industry has for years, right?!?! (just pretend the 60+ day lead times will not matter)


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6-seasonal-index-mistakes-you-dont-want-to-makeSnakes! Why Did It Have to Be Snakes?

Dr. Henry
Walton “Indiana” Jones uttered this famous line in the movie Raiders of the Lost Ark released in 1981. The scene begs the question does ‘Indy’ think alligators would be better than snakes or maybe lions? Indy is asking the wrong question at the wrong time.  Often the business problem that envelops our company will be misdirected by leaders asking the wrong set of questions that fail to address the root problem.  The result is a bad solution that delivers the same bad results.  Seasonal curves in businessare created by events that repeat on a schedule. That schedule can be the first week of every month, a season like spring, a holiday like Thanksgiving or an event like a Super Bowl. They all repeat based on a time schedule.

Most legacy inventory management software doesn’t have the math to manage seasonality correctly.  While a seasonal index is just a multiplier used with a base forecast, the real issue is how to determine the base forecast and the multiplier.  People review the simple math needed and fail to realize the real questions should be focused on how you are calculating the index (multiplier) and base demand forecast.

In the 15 plus years I worked in retail and later for software companies, I can say without question the two biggest opportunities for business are in managing seasonal inventories and lead time (see my last post).  Today I have a brief slide share that my friend and associate Heather Palmer assembled on the 6 seasonal index mistakes you do not want to make. A translation of that title is these are the 6 mistakes we see the most often that are the easiest to fix and have significant ROI.

The reality is too many people ask the wrong questions, forget about bad results as they run to the next season’s fire drill; doomed to repeat the same mistakes and bad results over and over.  Maybe this is the opportunity to stop asking the wrong question and ask yourself: Do You Make the Same Seasonal Error Seasonally?

Watch our slide share: 6 Seasonal Index Mistakes You Don’t Want to Make 

does-the-obvious-ever-escape-you-during-the-holidayI am amazed at where my education has failed me at this point in life. Allow me to clarify, when I was a child I looked at older people and thought, I can’t wait to be that smart one day. Now after years of school, college, grad school and a wealth of experiences I am amazed at the things I just don’t know.  Don’t misunderstand, I’m not saying I expected knowledge to solve world hunger.  I mean basic stuff like why things on my desk on Monday are still there on Friday or why have I procrastinated with my holiday shopping…again. You see what I mean, simple obvious stuff that I should just know how to solve at this point.

When I managed the inventory for the retail chain Upton’s I was puzzled at why some inventories seemed to explode on the shelf, regardless of the processes that were in place to avoid the overstock. This was not just slow or intermittent demand; at times this was high volume product that a buyer believed we needed a 3 month supply on a 10 day lead time – obvious right? I know….

As the holiday starts to wind down, and we review our inventories and make plans for the spring, maybe it’s time to start thinking about what we can do different in 2016.

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