For years, many of your grocery operator peers have run for cover when any thoughts or requests came in even remotely close to the topic of…perpetual inventory. Why does this seemingly benign word evoke such strong emotion in our industry? Other retail verticals have it, so why can’t grocery where some of the most savvy people work each day?
Here’s what we’ve heard most often: “Everybody wants it and knows the benefits, but they are outweighed by the maintenance effort.” Many of you feel this way, or have heard from a colleague whose career was impacted by deciding to engage with a perpetual inventory vendor. So a significant benefit to you may be put-off another year until your IT and Operations budgets are reviewed.
We are here to say: You can have PI. It can be store-level. And real-time!! And you don’t have to over-burden your people to get it. Well-designed systems do great things, and ours is one of them.
Think of what you could do by being able to see, at any time of any day, exactly the number of boxes of Cheerios in a store. Pepsi six-packs. Pounds of Red Delicious apples. Roll those inventory counts to any level in the organization for strategic decision-making. Give merchants a reliable view of chain-wide inventory. This allows them to better evaluate manufacturer deals and allocate them by-store…optimally.
“You name it, you’ll be able to see it.”
Everybody wants PI
Everybody feared it
Now you can have it
Magic’s Perpetual Inventory particulars
For every merchandise SKU flagged for perpetual inventory, Magic maintains the:
The total quantity (in inventory units) of the product currently within the four walls of the store. (Includes “unavailable” merchandise.) Quantity on hand may be negative, due to misinformation or delays in the receipt of transaction information.
The number of items (in inventory units) which are unavailable for use as store replenishment. This may include, for example, damaged merchandise that is waiting to be picked up by the vendor.
The current inventory valuation. The average cost per unit can be calculated as the cost on hand divided by the quantity on hand. The intent of providing cost on hand is to provide a measurement of the actual costs paid for merchandise so that a more accurate measurement of gross profit for an item can be produced. (By comparing sales revenue to the costs.)
The total billing retail value of the merchandise on hand. For most items, this will equal the quantity on hand times the billing retail of the item. Certain items, however, may consists of more than one UPC – each with it’s own retail. (For example, a cents-off version of the same product or two different consumer packs of the same item.) Retail on hand is never negative.
With Itasca, put all your fears aside regarding perpetual inventory.
Inventory Optimization and PI together form the future of retail. It’s no-longer a luxury exclusive to the more well-heeled or sophisticated companies.