I was briefed recently by Vocollect, a leading provider of voice recognition for warehouse picking.  Vocollect is looking to expand from providing voice solutions for the warehouse to also providing solutions to support retail store operations.  One of Vocollet’s clients, Cabela’s, a leading specialty retailer of hunting, fishing, camping and related outdoor merchandise, has logistics personnel working in its stores and they are responsible for managing inventory in the stockrooms and shelf replenishment.  The Cabela’s implementation is also noteworthy because the company uses its warehouse management system (from Manhattan Associates) not just at its distribution centers, but also at its stores to manage stockroom inventory.   

This strikes me as a very good idea.  In college, I helped support myself by working in a grocery store where I was primarily responsible for the frozen food department.  But when it got busy at the front of the store, I would often get pulled from my duties to help bag groceries.  The store manager put more emphasis, perhaps rightly so, on keeping the check-out lines moving quickly than on keeping goods in stock on the shelves.  This might make sense for a small-footprint store, but for larger stores, I think there is a good argument for having dedicated store inventory positions controlled by logistics.

Coincidentally, shortly after this visit from Vocollect, the Supply Chain Execution provider RedPrairie came in to brief me.  RedPrairie is currently implementing a solution for a retailer that is doing something similar.  This retailer has stores in busy metropolitan areas.  These city stores don’t have sufficient storage, so there are warehouses in the city that serve as the stockrooms for the stores.  These city warehouses are not distribution centers; each store has its own allocated inventory that is kept separate from the other inventory in the warehouse.  The streets are too busy to make daytime deliveries, so they deliver the goods to the stores and stock the shelves at night.  Similar to Cabela’s, the personnel running these retail storerooms/warehouses are managed by the logistics function.    

Incidentally, a similar argument can be made for reverse logistics.  The primary focus of most warehouse managers is to get that day’s orders out.  Thus, if reverse logistics is co-located in the same warehouse, managers will likely pull people from the returns department to help with outbound execution if they fall behind schedule.  Because of this, I believe reverse logistics operations should be housed separately, or if co-located, it should have its own dedicated manager and workers.

Finally, I think one advantage of having logistics in charge of store inventory fulfillment is that you could fairly implement a Key Performance Indicator for logistics linked to the percentage of time a store shelf is in stock.   This is a key metric that drives store profitability.  Currently, if problems exist with store-shelf replenishment and out-of-stocks, logistics blames store operations and store employees blame logistics.