TRUSTED ORDERS should be a foundational part of any CGO system. If you are going to take the time and resources to implement one, why is it so important that the system generate orders you can use untouched? Possibly more important, or at least impactful to labor and actual usage of the system is this:
“When you do the simple maintenance things required to keep perpetual inventory up-to-date and accurate, you SHOULD NOT also then have to review each order by line item.”
If BOTH are happening, the system is making you work too hard. These important topics can easily be overlooked in the evaluation process.
The orders you get from Itasca are accurate, mostly because the information used to produce them has been processed using every transaction up-to-the-minute before the order building process runs. The result is an order where little to no changes are made to individual items…including promotional items.
Overall system trust is negatively impacted. Inaccurate orders (defined as an order that no reasonable inventory manager or order writer would ever use without detailed review) don’t elicit trust in other areas of the system. No matter the reason for a nonsensical order, human nature will likely cause store associates to naturally question other areas of the system (forecast, PI, on order quantity, shelf capacity, presentation value, etc.)
PI is a very important component, and in order for orders to be accurate, PI needs to be correct. Not updating it with EVERY transaction means it’s out-of-date the minute anything else happens. You don’t try to sell dated product, so why let your inventory management system run on dated data?
Detailed order review requirement. Mistrusted orders mean that humans have to interact with each order, to the line item. This takes us right back to where we started in this whole endeavor to make ordering more accurate, less time consuming, and with less human emotion in play. Detailed order review often completely defeats the purpose of having a CGO system in the first place and is often cited as a reason for decommissioning of previous tries at CAO. If we have to spend all this time with counts and checks, and STILL have to review the order in detail, are we really getting financial benefit?
DSD item management and vendor measurement. In order to take back management of DSD, inventory orders must be accurate. Vendors won’t use them if they aren’t, and they can easily “see” they aren’t. If they don’t use them, their performance can’t be measured against the order, which is derived directly from the all-important consumer demand forecast.
Potential labor savings unrealized. One of the biggest benefits of a CGO system is removing the monotonous, error prone, human emotion laden and time consuming process of manually generating inventory orders. We replace it with accurate orders that are generated by the system automatically. This frees store associates to perform other, possibly more important activities like interacting with customers, stock rotation, store cleanliness, and increasing product knowledge, and saves labor!!!
Consistent execution across stores. Another benefit of Magic™ CGO is that you have your best order writer in each store. Cute, but what do we mean? With the system, you will set strategy for look-and-feel of stores GLOBALLY – at headquarters. Of course, not all stores have the same footprint, and you price zone them for good reason. Implement your merchandising strategy as it relates to replenishment at the level you choose. Whatever it becomes, it’s instituted in stores by default as the system orders to the standards set, not a human. In every store.