Inventory too hot to hold

For companies inventory management is essential as their exists economic downturns and upturns. These trends in the economy can drastically effect company cost as holding onto inventory can become expensive. Demand is often a difficult thing to get correct. We see many companies looking to sell and reduce inventory as soon as predicted demand for goods do not pan out the way they suspected. Often times the ridding of inventory is a difficult task as the liquidity to react quickly historically is not there. Inventory can be stolen, it can become obsolete and it could be sold but many companies are now starting to believe dedicating money to inventory is a high risk with a high cost. What are the alternatives as the companies need to keep up with the demand by their clients as the cost of a shortage is even greater? Through problem solving initiatives like Six Sigma companies are more fit to react to customer demands. Theses investments in a higher level of inventory management rather than in inventory can be more competitive and eventually get more bang for the buck.  Companies, in order to remain competitive, have to reevaluate where their resources are being focused and the use of technology is a resource that would be very beneficial in their future. The Ford Motor Company reportedly saved $600 million by the implementation of a Six Sigma management system. In 1999 Ford started to train their top level management then the officer group, and then the leadership group. After a year and half Ford has reportedly spent $6 million in training their several levels of management in Six Sigma. Ford rates the level of training by way of colored belts like that of a karate dojo:

Green Belt: “They receive one week of training that includes a basic understanding of how Six Sigma works and an overview of the Black Belt tools. Green Belts learn to help Black Belts do projects faster. Green Belt training allows the people who are affected by the Six Sigma projects to be able to continue to monitor and control the improvement and to do their jobs better”

Black Belt: Process full time for two year. The training includes, “define-measure-analyze-improve-control cycle” , “mapping, cause-and-effect diagrams, failure mode and effects analysis, design of experiments, and mistake proofing”

Master Black Belts- Handpicked by upper management; describes duties are.. “My core job responsibility is to help Black Belts with the tools, eliminate road blocks and support them during the various phases of their projects”

Project Champion- Work alongside master black belts and provides them with necessary resources to complete tasks.

This sort of implementation depends on the companies dedication to customer service and by senior leadership. With such a large company as Ford Motor Company making a commitment to new, nimble approaches to inventory management there can be an example for companies of all sizes that there are very good alternatives to the negatives that come with projecting demand the traditional way.

How often do you believe companies tend to under estimate the demand in the market?

Do you feel that smaller companies have the chance to save proportionally the same level of capital a company like Ford did using something like Six Sigma?

Too Much of a Good Thing is Bad, Especially Drugs

break(great for any design)

Many of us have not reached the the point in our lives where we are trying to reverse the effects of father time and because of this we may not know what much about the company Allergan. Allergan is the company that makes Botox, a prescription drug that is injected into the skin to help alleviate wrinkles. But this is not all they do, Allergan is a  $53 billion pharmaceutical company with an inventory of products ranging from headache to glaucoma medication.

Recently Allergan was in talks to acquire Salix Pharmaceutical Ltds, a company that specializes in a bowel medication, but during the due diligence Allergan spotted something that threw the deal off. This key detail that ended the acquisition of the $9 billion company was inventory. Salix management seemed to have misjudged how much inventory they had and had overstated the amount sold. This meant that Salix has a large amount of inventory on hand, which we know is one of the most expensive asset of a company, that they could not sell to make revenue.  Another problem with this is that these products were finished goods meaning that they were not raw materials or even work in progress products so this prohibited them from re-purposing the drug.

The effects of inventory is profound. The effects of a misjudged inventory estimate is devastating. In this case not only has Salix lost the chance to pay back stakeholders by being bought out by a large corporation such as Allergan, Allergan may have lost it’s chance to protect themselves from a takeover. Allergan is in the midst of being taken over by an even bigger pharmaceutical company, Valient Pharmaceuticals International Inc. The acquisition of Salix was suppose to make them too expensive to be taken over, but because of this inventory mistake they are ripe for the taking.

As shown above inventory is a major factor in a company, whether they want to be bought out or are just running their daily operations. The management of inventory is crucial to a companies daily operations in that the company needs to have enough inventory for the demand but not too much that a company does not seem liquid enough. The company also needs to balance the right amount so that their financial standings are not in question. Not only do managers need to understand how inventory needs to be ordered they need to what type of inventory needs to be ordered.  Balancing inventory is something that will take a lot of experience and knowledge to achieve , hopefully we all reach a point in our careers where we are at this level.

Do you think Allergan should not have put so much weight on the inventory of Salix ?

Are you surprised that Allergan did not go through with the acquisition of Salix if it meant they would not be taken over?


Inventory IS Important

According to Brightpearl, a business management software company, keeping track of accurate inventory is not only essential for great customer service, but also for keeping accurate accounting records and having an efficiently running business. For certain business inventory may be as simple as office supplies for the employees, or as important as goods that are being sold to customers. Brightpearl has emphasized 10 main reasons for why keeping accurate track of inventory is important.

  1. Loss of sales due to out of stock items
  2. Loss of cash in overstock of inventory
  3. Improve accounting and profit reporting
  4. Identifying issues early on
  5. Customer Service
  6. Efficient Re-ordering
  7. Minimizing theft and losses
  8. Trust in your information systems
  9. Minimize warehouse costs
  10. Efficient stock take and end-of-year process

All ten of these reasons are great motivators to implement a more accurate inventory count within a business. I have witnessed firsthand what happens to a business that has no inventory tracking structure. I previously worked at a fitness club that had a section dedicated to nutrition and athletic clothing sales, and in the two years that I worked for that company I never saw a productive account of inventory. Every so often we would have a group of corporate representatives that came in to take count of our inventory. I was not surprised that they would report a huge loss for us; the thing that did shock me was they acknowledged the loss as if it was completely normal and acceptable. When looking at the ten reasons as to why taking inventory is crucial, I can definitely point out several things that took a hit by not being proactive with it.

In regards to customer service and losing sales, there were multiple instances where customers decided to opt out of a purchase because we didn’t have the products that they wanted. As customer service and sales representatives we had two options to help them; we could either try to transfer a certain product that they wanted from another location, or we could ask our manager to check if it will be on our next purchasing order.  The problem with those solutions was that we weren’t able to close that sale, since nobody would want to pre-pay for a product they were not receiving.

Another huge issue was that our inventory would consistently cause inaccuracies with our purchasing orders. Since there was no theft or loss reported, purchasing managers thought that we still had certain products and wouldn’t place an order for them. The fact that we were not aware of the losses as they were happening, would carry over for when corporate would come in and result in a huge sum of money that was being lost.

In our case, upper management was not interfering with the fact that their investment was being accounted for as a loss. In order to make other people want to be responsible, they had to implement it at the top.

From a managerial standpoint, would you rather invest money into keeping an accurate inventory, or save your time and money and focus on making sales, accepting the loss as a natural aspect of business?

Lego-lution: The Early 2000s were a Disaster and Now

Continue reading “Lego-lution: The Early 2000s were a Disaster and Now”

Sticky Notes – so much more helpful than I thought!

As I mentioned in my last post, we have a difficult time finding software that works well for our jobs – and is within our budget.  Event Management isn’t always viewed as Project Management and this affects the tools we have at our disposal.  This class has gotten me thinking about a few different, and low cost, ways to organize our work.

I am not a sticky notes person.  I am a clean desk, organized folders, constantly creating and editing my To Do list person.  Sticky notes are cluttered and unorganized.  However, as we talked about using sticky notes for managing work flow, I saw how many ways it could be helpful.  Right now, we are planning the closing event for our successful $300 Million campaign, Many Dreams, One Mission, The Campaign for DePaul University.  It is hard to keep all of the pieces top of mind, and remember who is responsible for what.  Sticky notes help so much with this.  We can move tasks around as one person gets too busy, or we find a better way to do something.  It allows us to see patterns and to fit together work pieces that otherwise do not seem correlated.

We can also use Sticky Notes to place items in the program.  We are frequently talking over who is speaking when, for how long, and in between what other elements in the event.  Being able to put times on the notes, move them around, and adjust other elements really helps us be able to see how our decisions affect timing and over-all event flow.  Also, it does not require us to create 15 versions of the event plan for everyone to look at and compare.  This saves a lot of time on our end.

I was really surprised to find something like Sticky Notes, which I really don’t like in my normal activities, to be such a help to us.

In trying to find other options such as this – low cost but helpful, I did a little research.  I found Scrumy!  It is an online version of Sticky Notes!  Yay.  Now, I don’t have to have a cluttered up wall, but I can arrange and change my order of things just as easily.  It is a cleaned up version for people like me!

I also found a ton of other uses for post it notes:  and post it notes with a fancy name:

I have to say, I really didn’t see myself find a use for post it notes, beyond the occasional one stuck to my phone with a number I can’t forget, or a message I attach to my computer as I am running out the door.  I might have to put this on my next Staples order though.  Post It Notes – you are going to revolutionize my life.  Thank you 3M.

Technology in the Workforce and the Rise of the Nontraditional Work Environment

Technology is changing the way people do business. With applications that create faster overall processes and improved communication, the key to success is often accomplished through the use of the right technology. Managers must be aware of what these changes are and how technology is facilitating them. There are a number of growing trends that demonstrate how the workforce is shifting towards nontraditional work environments and which technologies are being used to support these environments. Remote employees working in virtual work environments are becoming more commonplace in today’s workforce, whether it is through outsourcing work to other countries or US employees based in different geographic locations than their teams/managers. No matter which type of nontraditional work environment, it is clear that technology is a crucial key to success.

There are a number of different tools that a remote or virtual employee can use. Working in teams with people located in different geographic locations requires extra attention on communication. Managers must make sure that remote employees feel included and equal to their non-remote peers. In order to do so, there are a number of technologies that help bridge the geographic gap. Video conferencing allows individuals who are in different physical locations to interact as if they were all in the same place. Having a round-table meeting over video conference allows individuals to express themselves through gestures and expressions. It also creates a sense of familiarity amongst employees since it is a social environment. Another tool is web conferencing, which allows people on different computers to simultaneously view one person’s screen. This allows individuals to host a meeting where they can present to a large group and not have to send out loose documents. Another online tool that allows people in different locations to communicate is Instant Messenger. AIM (AOL Instant Messenger), Gchat (Google Chat) and Facebook Chat all allow you to communicate in real time via text with many other individuals simultaneously.

While these technologies have many benefits, a word to the wise is to be aware of everything that comes along with the use of technology in the workforce. On the positive side, technologies like video conferencing and web conferencing allow many different people to get together in one virtual location. Being able to type at the rate of a normal conversation (through an instant messenger program like AIM) also allows people from far distances to communicate. However, both of these positive benefits have the potential to be negative as well. Video and web conferencing can sometimes be difficult to set up and if the Internet is down you often lose access to many of those tools. Typing a conversation can also lead to things taken out of context because you lose tone and expression. Overall, technology can be used successfully as long as individuals are mindful of the potential roadblocks.

Have you seen nontraditional roles emerging in your work environment? What technologies does your company use (or have you personally used) to help you stay connected to your peers?

Sending Inventory to the Clouds


Since the creation of inventory management software, many small businesses have not been able to take advantage   of the expensive computer solutions available only to large corporations. But things are about to change, thanks to  BrightPearl and cloud. The Internet cloud, that is.

In traditional inventory management systems, the company is required to purchase the software and install it into the specific office computers that need to use it. The cloud changes the way people can access the software, and it can support hundreds of computers simultaneously. It also can save companies money by regularly updating, without having to install new versions manually. Initial installation is low cost, and does not require highly skilled IT professionals to set up. Brightpearl currently supports Magento, eBay and It starts at only $99 per user each month, and there is a $120 connector fee to set up the connections to different e-commerce


The Cloud is useful in a number of ways. Real-time monitoring allows the system to update across the entire system instantly, therefore reducing the amount of error that can occur between the transfer of information from one computer to the next. Just like Google Drive, the cloud will update across offices, and will allow everyone to see the inventory purchases across divisions. The cloud even supports devices such as smart phones and tablets, so you can monitor your inventory at home, in meetings, or on the go. Departmental communication will also be increased, so everyone will know each departments demand, inventory, or when items need to be restocked or shipped. It also allows you to see where the bottleneck issues are, what the fixed orders should be, and how to calculate ROP.

Although there are many upsides to the cloud, there are also several drawbacks. Security is main concern for the use of the cloud, and is very controversial within the industry. If the system was hacked, people could see how many orders are being made, and therefore use the information to their advantage. It could also lead to a loss in IT workers, since the cloud service would handle all customer service problems and issues. IT people would no longer be of service, and many would lose their jobs. Another drawback to using an inventory monitoring system in the cloud is performance risks. According to IT specialist David Kim, “Leaving out integration issues alone, cloud-based ERP are essentially related to threatened speed, reliability of network, outage risks, and limitations on data transfer” (Kim, 2013).

Do you think BrightPearl and the cloud is a good place to monitor the entire inventory for a company, or should they stick to the original software systems? Do you think the cloud will eventually take over business computer systems, or is it too risky for companies to vitally important information like their inventory management systems in a cloud that could be hacked by outside competitors?



HTC First to HTC Last


Facebook-hoaxImagine if you were Mark Zuckerberg, the CEO of Facebook, and your product attracted 175 million people on a daily basis.  I don’t know about you, but I would be thinking of other ways to capitalize on this already loyal fan base and try to introduce more products targeted toward their needs without stemming off the confines of what has made Facebook successful.  Hey, what about a cell phone?!

This idea has apparently caught AT&T’s eye when they decided to allow the new Facebook Home software to be integrated in the HTC First cell phone.

Facebook Home is software for your phone that allows Facebook to essentially take over your phone.  This allows users to take advantage of their already established social base on Facebook and communicate with these friends on their cell phone “more conveniently”.  It consists of features such as the cover feed that allows you to glance at your phone for photos and posts, chat heads that allows you to send and receive texts and Facebook messages in one place, allows notifications to be accented on your home screen and an app launcher.

To me, the advantages this product are allowing cell phone users to no longer have to pay a texting fee due to the chat heads feature and from a company point of view it allows Facebook to mass distribute its product without consumers having to buy a cell phone.   However, from a product design standpoint, I don’t think Facebook Home targets the cell phone market very well.  It tries to reinvent the cell phone world too much by focusing the cell phone software design around people instead of apps.  As a consumer would you enjoy having your cell phone constantly flowing with your friend’s pictures and status?htc-first-slide-01

Apparently the majority of Facebook Home users did not enjoy having their phone being constantly engulfed with their friend’s updates when the first month sales reports came back.  “ says that sources at AT&T indicate that fewer than 15,000 of the phones had been sold by the end of its first month.  By comparison, in the three months of the year AT&T sold 6M smart phones, of which about 1 M were android phones- an average of more than 300,000 per month. “AT&T then cut the original $100 price to $99 cents on-contract. The mistake HTC First made to integrate their product with Facebook home has seemed to have left them with an essentially useless product with a lot of inventory.  Now it is rumored that the HTC First will soon be discontinued and unsold inventory will be returned to HTC.

I would question management’s decisions during the product development stages when designing the product, how they reviewed Facebook Homes design, and most importantly how they tested the market.  If these stages were done efficiently I feel that AT&T could have better understood the consumer demand for the HTC First Facebook phone and could have been more aware of this disaster before it occurred.

As a consumer would the HTC First Facebook phone satisfy you?  How do you feel management could have avoided this disaster?



Abercrombie & its Hitch.

Abercrombie & Fitch has been affected by a dramatic decrease in sales in the US. ANF’s stock had once been gaining 20%, when the stock market barely moved. However, everything came to an end on May 24, 2013, when ANF reported its earnings. ANF’s store sales declined 17%. Their shares then went down 8%. Even though they reduced their loss to $7.2 million from $21.3 million, it completely blew Wall Street’s prediction of $0.05 loss per share.

What could be the cause of these huge losses that Abercrombie is facing? Is it the result of CEO Mike Jeffries’ comments that resurfaced recently from a 2006 interview, on how the Abercrombie and Fitch brand don’t carry plus sizes for teens, because the brand exclusively only goes after the cool, good-looking kids? Or could there be something more?

Well, it turns out that Abercrombie started declining before the CEO’s comments reemerged this year. Even though there has been a lot of consumer out lash at the company, the CEO insists that the main problem facing Abercrombie is inventory shortage issues. Abercrombie hasn’t been able to bring in their spring merchandise quickly into the stores, compared to most of their competitors like H&M, who believe in fast-fashion. To gain a competitive advantage and to get back on their sales track, Abercrombie is changing the way they order their inventory, for a quicker turnaround. The CEO stated that most of their inventory issues have been resolved now, however, their sales profits forecasts has been lowered for the rest of the year, compared to previous years. With the company operating 1,053 stores currently, they also predicted to close 40 to 50 stores in the United States. Abercrombie has been acting really quickly on addressing key issues throughout their company to get their profits back up.

In class, we learned about the ten critical decisions which includes inventory management, then we learned about ethics and social responsibility and finally forecasting. Abercrombie’s situation ties in all of these things we’ve learned and teaches us how important these factors are in a business.

The company is now dealing with their losses and their shares plunging, just because of the inventory issue. Another issue, I think they’re facing is the social media. As a reputable company, they have a social responsibility to respect all of their customers. Ever since the CEO’s comments appeared in the media, many people have been fighting against Abercrombie (Examples: A man donating Abercrombie clothes to homeless, a plus size blogger posing in similar Abercrombie ads, a teen activist who petitioned for an apology from the CEO with 68,000 signatures). Do you think that Abercrombie is dealing with these losses solely because of their inventory management or because of the recent outlash at the company? Also, will Abercrombie  remain confident in their solid brand equity, when its competitors like H&M, American Eagle, and Aeropostale are attracting teens with their prices and fast fashion layout, bringing in new merchandise to the stores more often?


Plus size blogger:


Man giving homeless people, Abercrombie & Fitch clothes:

Retail to E-tail

There are a lot of pros and cons to doing online shopping as opposed to in-store shopping. Online shopping seems like it only affects consumers by giving them a different medium to make their purchases but we fail to realize that it affects the sellers as well. Through online purchases, businesses gather a lot of data about consumers. Sellers can track which sections of items are the most popular, which products are the most viewed and for how long, and which products are most browsed at but not bought. This gives online sellers a competitive advantage over in-store sellers as they know more about their customers. And everyone knows that the understanding your customer is one of the most important factors in having a successful business. This is empowering in-store sellers to seek e-commerce level data.

The article talks about one company that brings customer tracking data to in-store businesses. This is in hopes of slowly bridging the competitive gap between in-store purchases and online purchases. How can they possibly get consumer data without changing the in-store purchase process? By simply observing the customers! Prism Skylabs specializes in in-store surveillance equipment that tracks customer movement. Prism installs special cameras that captures everything in the store and then is sent to the store’s computers where it is processed by Prism’s special software. The images of the actual shoppers are cut out to respect their privacy.

What is so different about Prism’s techniques than regular surveillance cameras? Prism’s software allows them to “look at which products are hot, which are being moved around and touched, and all kinds of data that allow merchandise teams to understand what is going on across a wide range of stores”. This allows the sellers to get information that the type of information that online sellers use to enhance their systems to get more purchases.

Who is using Prism? Right now, Prism has partnered up with 30 retailers. Retailers that Prism is working with include T-Mobile and Famous Footwear. Does it actually work?  A candy store in Oklahoma City was using Prism in their stores and after close observation they changed their premium display to low-selling seasonal candy rather than their famous candies that buyers usually take the time to look through the store to buy. This allowed the store to quantify the customer’s thoughts and make an effective decision in their operations.

Moreover, Prism is not the only data providing company that is emerging. Other companies are picking up on the importance and building unique strategies and techniques to sell to businesses. For example, Shopkick is an app which personalizes deals for a customer in real time as they walk through the store.

Is it worth it to sellers to invest in these data gathering companies?

How do you feel as a consumer towards this type of innovation? Do you feel that you will be making more beneficial purchases or do you feel manipulated by the sellers to buy their preferred products?