Our son had the same idea.  He came home from college a couple of weeks ago to trade us dirty laundry for home cooking and Christmas gifts. With his dirty laundry taken care of (and a host of good intentions), his goal was to become recharged, organized, and ready for 2011.

Isn’t that what most of us aimed for last week (as we hurriedly polished off the remaining Christmas cookies before any resolutions began)? Time to recharge and organize ourselves in anticipation for the yet unblemished year? Our son dumped out his dirty laundry, but what do we do with our “dirty data”?

Dirty data is that data which continues to infect your system. It renders your management reports useless. It is data incorrectly added or posted into your system and no one has brought it home for Mom to clean.

In the spirit of fresh starts, now is an excellent time to clean and standardize your data and processes. I am not talking about a full blown Jillian Michaels Biggest Loser cleanse but, rather, a much less painful way to ensure data is current, accurate, and organized in such a manner to allow for meaningful action and follow up.

Once your data is organized, you can enhance reports in such a way as to add true value to what you are reading. We regularly assist our clients with custom reporting designed to help them perform better.

Wouldn’t it be nice to have a process and reporting system which stays organized all year? Does your back office system need a cleanse? Give us a call.

Segment & Sort
Most back office providers will provide you with more reports than you could possibly ever read each day. And let’s face it; there is nothing more irrelevant to the day-to-day than stacks of monotonous reporting (unless, of course, you happen to be reading Going Rouge by Sarah Palin). When dealing with reports, it is imperative to remember that while each report is important for a given circumstance, by no means is every report critical for everyday function.

The trick is to determine segments for which to sort your data:

1. Day to day tactical operations
2. Long term strategic management
3. Accounting/tax purposes

Just Say No [To Unnecessary Information]
Think of reporting tools related to inventory management as your gateway to business intelligence. Much like how a cannabis cigarette in the 8^th grade can quickly lead to a crack pipe by the 9^th, inventory management reports put you on the fast track to eye-opening and hardcore facts about how your business is actually doing.

With so much information at your fingertips, it is easy to become overwhelmed. What do you do with all the information? Weed out the noise and process only what is needed.  Get with your back office provider and suppliers to review their standard report.  Most back office providers will have a custom report writing tool to provide the specific data needed to better run your business.  Ask them. They want to help you and will have great ideas to get you started.

Three Is The Magic Number
It is no secret that in 2010 we are drowning in a sea of reports.  Don’t let the riptide of information wash you out to sea. Find three reports or online queries in your system that will give you the information you need.  Each person in your organization should have three reports critical for their respective job duties.  Make your system’s Business Intelligence role based.   Also, be aware of how your employees respond to reporting and how it is delivered.  Why only three reports?  Because SchoolHouse Rock says “Three Is A Magic Number” (and, we say, you will not read four reports without drifting off into thoughts of that vacation you took last year…or, in my case, what I will have for tonight’s dinner).

Golden Girls vs Gossip Girl
Here is a bonus take away for you: generational factors regarding business intelligence. Watch any teenager or young adult and they are heads down texting their thoughts to their social network or shopping for the latest and greatest new product as they bounce around in cyber space.  The business community has now embraced this technology if, for no other reason, than to communicate their sales pitch to these new Millennials. As an employer, you should think about how you convey your message to your team who may be multi-generational. Do not think a 50yr old and a 25yr old send, receive, and/or analyze information in the same manner. Accept the differences as diversity at its very best and be sure to match the incoming and outgoing information to match the audience.  That will keep you one step ahead of the competition.

The following are 5 tips to consider when auditing invoices and vendor adjustments:

• Verify cost and retail extensions. When deliveries are made store personnel should have either a pre-printed invoice or, if checking by hand-held scanner, an invoice should be printed using the store’s pricebook cost. Instant verification while the delivery driver is still in the store will set the tone for your relations with the vendor in that you have a real time system in place to verify invoiced items. Remember in your 20s (or perhaps last week), when you were too busy boozing and schmoozing to check your bar tab at the end of the night…only to discover the next morning that all of those cocktails your friends kept pushing your way (and theirs!) were actually going on your tab?  Don’t be that guy. Check your receipts…before your friends and, in this case, your vendors leave the building.

• Verify cost and selling price. Whose cost and selling price is right? Yours or your vendor’s?  Make this all about you.  After all, it is your store.

• Rebates, Buy Downs, Allowances…Oh My! Rebates, Buy Downs, Allowances, Mark ups, Mark Downs…they all affect the inventory value. Don’t forget to account for any items affected. Cigarette rebates in our industry are critical to your bottom line, so be sure you have a policy in place to track your rebates.

• Stick to the plan. Most importantly, be sure to have a policy and procedure in place to account for any cost and selling price changes which will affect your inventory valuation. OK, so you find an error on an invoice…now what?  Be sure your store personnel know what the next steps are.  In Washington this pre-season, All Pro tackle, Albert Haynesworth, came into training camp out of shape and assumed, as in the past, no one would be checking up on him.  But with a new coach who is excellent at establishing and enforcing the rules, Haynesworth learned the hard way what it was like to play with the scrubs last weekend in an exhibition game.  He was not amused.  Likewise, when you set the rules and encourage your employees to follow through, your vendors will know you intend to be the head coach of your store. They must play by your rules or get out of the game.

• Post the items to inventory with all adjustments and corrections. You have worked hard to build a solid foundation with the previous four steps, so go ahead and post your items secure in the knowledge that you have an extremely accurate inventory valuation in place.

Next week, we will wrap up our 5-Steps to Successful Inventory Management series as we discuss reporting and the information you need to know in order to achieve success.

As a general rule, we are taught that it is always better to give than receive. Whoever said this (which, after a quick Google search, could be anyone from Jesus to Elton John’s boyfriend) clearly never had much experience in working retail. The goal for the items in your store should be like Tiger Woods in Vegas — get in, get out, leave the money on the table. While receiving items from vendors may seem fairly routine, common pit falls do abound. The following scenarios are what clients have told us is critical to their success (and is easily remembered by using the acronym GREAT):

1. GET What You Pay For. Did you get all the items you ordered? Do your store employees know what to do if an order is not fulfilled? Is there a substitute item? If it is a popular selling item, when will you receive the missing item? How is the home office notified? Remember…communication is key!
2. RELEASE Cupid’s Chokehold. Ah…the sweetheart deals. If you do not have a policy in place, then you leave the potential for a vendor to get too cozy with your store personnel. Before you know it, your store becomes a dumping ground for every new product to hit the market. These types of stores are easy to identify — product is stacked from floor to ceiling, inventory turn reports reveal numbers that would lead you to believe product delivery should be every 90 days instead of 7 days, and your inventory keeps growing while your cash keeps shrinking.
3. EYE the receipt. It is imperative that you verify your receipt process.  Most grocers provide an electronic invoice.  Hand-held scanners can be used to check vendors in and weed out any unauthorized items and invalid pricing immediately.  If the costs are not correct, you should have a policy in place for notification to the vendor and to the home office.
4. That’s AMORE. Don’t let a vendor show your store personnel all the love. Showing your store personnel that you care and that they are a valued member of your organization, gives them assurance and confidence in their job…at least until their daily prayer of “Lord, let me prove that winning the lottery won’t spoil me” gets answered.
5. TRIM the Fat. Did you get items you didn’t order? How do you handle unauthorized items coming into your store? Your store personnel know to contact you, right?

Each of these five elements is critical and should be checked and re-checked to be certain the processes you have in place are followed religiously by all parties. Be sure to join us next week as we discuss the thrilling topic of audit invoices. Have a GREAT day!

It is imperative that every employee in your organization understand their role and responsibility. In addition to your employees, the vendors you allow into your store should understand the same. Assuming you have one person (and a backup person) assigned from your organization to place orders, following are examples of what should be effectively communicated within your company:

• New products. The store supervisors, managers, and vendors all need to be notified of newly authorized products.   Not only should you let your store personnel know a new product is going to be delivered to their store, the also should know where that product will be placed for maximum selling exposure.   If you have a “Back-to-School” promotion of a new brand of energy drink you want the product placement prominently displayed.
• Price Changes. Communicate new price and cost changes. While price changes are done automatically within most systems for scanning purposes, it is always a sound practice to verbally review with store personnel to be sure display signs and shelf labels have been changed. We see exception reports with retail prices lower than costs every week. Don’t be that person.
• Discontinued Items. Is it time to mark down seasonal items or do you have items on your shelf that just aren’t moving?  What about that can of chocolate covered worms? After 4 years, it’s bound to become a collector’s item, right? Wrong! Let your store employees know when it is time to free up space for hotter selling items.
• Vendor relations. R-E-S-P-E-C-T. Do your vendors respect you or do they steamroll over you like Chris Brown on a bender? Vendors need to know YOUR policy for being able to do business in your store. If your policy is that no vendor is allowed to place a product, change prices at the time of delivery, or change quantity ordered, the vendor needs to know. If a product cost has been agreed upon, the vendor needs to know that is what you are paying and not a penny more. If you order 30 cases of Corona 12 pack bottles, then your store will ONLY accept 30 cases.  Why?  Because it is your store, not the supplier’s annex warehouse.  Vendor communication is absolutely critical.  Much like a toddler, vendors appreciate boundaries and will respect you for establishing the ground rules for doing business in your stores. Your stores are not their stores.  If you do not communicate the rules of doing business with your suppliers, you are placing your business jeopardy.  Vendors really do want you to be successful, so actively communicate with them to place product where it will sell and work with them to find the top selling and high grossing items.

As Saul Alinsky put it, “Without effective communication you cannot lead…you end up taking a walk on your own.” Everyone works best when they are all on the same page. Implementing the steps above puts your organization one step closer to perfect harmony…and that, friends, is a sweet, sweet sound. Ka-ching.

If you will recall, we listed the 5 steps in our previous posting: Ordering Process, Communication, Receiving Inventory, Invoice Audit, and Business Intelligence Reports. The first step to creating a successful inventory management program is to:

Evaluate Your Ordering Process

You should never ever treat the purchase of items for the store the way you would pick out a personal gift. While, yes, that leopard print Snuggie may very well be both fashionable and practical…it probably isn’t going to end up on Oprah’s Favorite Things list anytime soon (*cough cough* ever) and your shelf space could be put to better use.  Remember how you start to profusely sweat when you pick out a gift for your wife or girlfriend (or, in Tiger Woods’ case — both) because you know, whatever it is, has a 99% chance of being completely wrong? Luckily, ordering items for your store requires little speculation and far less antiperspirant. Let us introduce you to a more systematic approach:

• Delegate an Heir and a Spare. Determine who in your organization is authorized to place an order. Is it your pricebook guru, your store supervisor, your manager, or your cousin who is in a work release program? For a solid, centralized pricebook, and, most importantly, for accountability, select one person and one backup person. Do not let just anyone in the company stock your store.
• It’s Not Personal…It’s Business. So what should you order? Put aside your personal preferences and stick to your list — this is where a Top/Bottom Movement report is invaluable. Check your top 50-100 moving items and be sure to order the products that sell in your store.  Resist the urge to splurge on what you remember as a hot item last year or a cheap promo for some chatchke that no one wants.
• ‘Tis the Season. Depending on your store location, seasonal sales items may play a huge part in your success. Be prepared, but don’t be ridiculous. While getting my weekly shot of testosterone at Home Depot last weekend, the air conditioner displays were already being replaced with space heaters.
• Acclimate to Automate. Efficiency is key. Whether you are using a hand-held scanner or an electronic ordering system for your weekly order, reduce your dependency on manual ordering. Automating this step will allow you to verify proper costs and inventory levels assuring a higher degree of pricing accuracy. You will be amazed at how accurate your vendors will suddenly get when you automate.
• Have Control Issues. While this comes naturally to some, it is imperative to control the order. Have the process in place to order based on your replenishment needs, your negotiated prices of promotional items with your vendors — NOT what the store manager and vendor simply want to put on your shelves. The next 4 steps will bring this more into focus.

Next week we will discuss Step #2: Communication…a subject I’ve been told I know little about, but will share with you what others have told me should be done.     

The Retail Track seminar sessions are new for POC and include workshops presenting information regarding Security & Theft Protection, Credit Card Interchange industry updates, Petroleum Profit Margins, and Retail Inventory Management. Attendees will walk away with a wealth of information to help them maximize the bottom line. We were honored by the invitation to facilitate such a program…especially in its inaugural year.

As we prepared for the panel discussion, we solicited best practices from a group of our convenience store clients, petroleum distributors, grocers, and DSD suppliers.

Through our discussions, 5 key elements rose above all others in how to best manage inventory:

1. Ordering Process – how and what to order
2. Communication between home office, store, and vendor
3. Establishing receipt of inventory procedures – did you get the items you ordered?
4. Audit Invoices for accuracy – whose cost is right, yours or the vendors?
5. Analysis of reports – are you drowning in paperwork?

Over the next several weeks leading up to the POC convention, we will discuss these 5 Keys to Inventory Control for those of you unable to attend the POC. If you are attending POC, but have already signed up for the Golf Tournament or the Bowling Tournament, have no fear. Swing by booth #528 for your very own autographed copy of the presentation.

See you at POC!

While companies like CMI can save you the cost of paper (and for the planet – the cost of a tree), the big industry buzz is how energy efficiency (from energy efficient refrigeration and HVAC to energy efficient light bulbs) can save you significant long term dollars. In fact, according to EnergyStar.gov, 38% of energy use in grocery & convenience stores can be attributed to refrigeration.  The report goes on to list some practical, no-cost tips on how to save on your refrigeration energy use. Examples would be:

• Check temperature settings - If settings are lower than necessary, chances are you are wasting energy. The most common recommended settings are between -14 degrees and -8 degrees Fahrenheit for freezers and between 35 degrees and 38 degrees Fahrenheit for refrigerators.
• Clean cooling coils – Dirt accumulation impairs proper heat transfer and lowers the efficiency and capacity of refrigerators.
• Check door seals - Tight seals and properly closing doors prevent warm air from entering the unit, which reduces cooling energy and prevents frost buildup. Use this rule of thumb: If you can easily slide a dollar bill into the seal, have the seal adjusted.
• Keep doors shut - Repeated fluctuations in temperature will damage food quality and will cost money.
• Maintain equipment - Perform any scheduled maintenance on the units and keep evaporator coils clean and free of ice build-up.

Simple steps like these are easy ways to get your stores thinking (and saving) green.

Yes, by some, the green movement may be seen as threat as more energy efficiency cars may, in theory, decrease the volumes of gasoline sold at the pump. However, in the long run, our industry will adjust as we have proven to be nimble enough to take on any challenge.  Convenience stores will still be the place to go to fuel your vehicle…be it with gasoline, diesel,  E-85 fuel, electric, biodiesel, green beer or whatever else the future holds for powering our modes of transportation.

One thing, however, will never change.  Darlene, our Irish lass wannabe, will still wear green on St. Patrick’s Day and peddle her green beers.  Her customers will still shop in her store…if only to see that friendly smile and hear her latest words of wisdom. Rumor has it, today she will be blessing customers with this old Irish prayer as they stop in for their pre-package corned beef sandwiches:

May the wind be always at your back.
May the sun shine warm upon your face,
The rains fall soft upon your fields.
And until we meet again,
May God hold you in the palm of his hand.”

Have a great Patty’s Day!

The ad went on to point out the areas of businesses where you need to optimize your workforce to gain the most productivity.  The bullet points are: Staffing, Quality, Cost, Service, Performance, Sales and ROI.

Over the last several years, as c-store operators become more sophisticated, the survivors have been those companies who invested in the technology to most efficiently tie in the bullet items above.  They can operate quickly and more accurately than ever before, thus increasing their customer service levels since staff would be free to attentively serve customers instead of being bogged down with paperwork.

The best practice tools are available today, not just from CMIsolutions, but by an entire industry of POS vendors, grocery distributors and oil companies.  We work with thousands of stores each day to help our clients succeed. If you are on the sidelines, the urgency to get in the game has never been greater.

The c-store industry has been a cash cow for bankruptcy attorneys.  Ever wonder why?

Yes, our favorite supervisor, and self-diagnosed control freak, was planning on spending the next 12 hours at the store just to be sure all went well with the equipment jocks.

To prepare for the long night ahead, Darlene had reached for the new $3.99 twin pack of “Stacker2 6-HourPower” shots just before I had arrived. Anticipating the long 12 hours ahead, you guessed it, she downed both 6-hr shots at once. The tag line on the bottle says “Feel it Fast, Energy that Lasts, No Crash”. They aren’t lying. It’s true. Darlene was as jittery as Tiger Woods leaving a voice mail for his bimbo(s) while ducking his golf-club wielding wife.

What lessons did we learn this week, folks?

1. You don’t have to work 24/7 when you trust and surround yourself with reliable equipment vendors and sound software solution providers (like CMIsolutions…cough, cough.).

2. Sometimes a 5 hour energy boost just won’t cut it. However, don’t be gluttonous. One shot at a time, people. One shot at a time.

3. Keep your golf clubs locked up with your fire arms.