Just-in-Time Inventory Management

I think most good ideas are like cooking. Most of us want to be like Emeril, but few of us really have the knowledge to mix the right ingredients to make some new masterpiece. However, I think it?s easier in the business world. Take one cool technology, connect it to another and bam! you’ve got a new meal. So, a few nights ago I was laying down to go to bed and started thinking about Supply Chain Management and Just-in-Time inventory management. I have no idea why I started thinking about this as I?m not in either industry, but I know that since studying information systems in school I have always been impressed and annoyed by those companies that have what I want on the shelf when I want it. (I?m really tired of stores not stocking enough Mach3 razors) Yet it still amazes me that the connection to the consumer is not there. Now if you think about it, WalMart would really appreciate a phone call a few weeks prior to your shopping trip where you would let them know what you were going to shop for. Yet this doesn?t seem like a likely scenario. However, take those nasty little club cards from chains such as Safeway, add some fancy modeling and pattern identifying technology, and you?ve got the connection. Let?s take a specific product for example. Toothpaste is purchased by almost everyone and has a finite quantity that is most likely consumed in a linear fashion as you usually put the same amount of tooth paste on your brush each day. Take this average usage pattern and determine when that toothpaste is going to run out depending on the size of the container (you?ll know the size of the container purchased if you track it at the time of the sale). Now that you have this information, you can look at my individual buying habits. How often do I come back into a store, and which store, to buy toothpaste. Combine these two averages and you?ve got a pretty good bet as to when I?m going to need you to have my tooth paste stocked on your shelves. I imagine you could do this with most products from bread to toiletries. If you?re really on top of it, you?ll send me a coupon for the toothpaste just to make sure I come into your store.

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