Inventory's Everything, Everything Is InventoryBy Doug Cormany | Posted 2004-02-05 Email Print
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Inventory control isn't just for retailers. The chief information officer of staffing firm Spherion learned that everything's inventoryincluding you.
But I helped design Disney's first inventory system, which led to point-of-sale. In the end, I became responsible for all inventory and logistics systems worldwide.
To some people, Disney may not have seemed that willing to move into technology, but it was always willing. Sometimes we had to do some convincing as the technology changed: One of our justifications to replace mechanical registers with point-of-sale devices in the Disney World hotels was to stop hotel guests from checking out of their rooms without paying all of their room charges. With live transactions, when the guests bought something at a merchandise or food location and then went to check out at the reception counter, all the transactions were posted to their accounts. So upgrading our inventory of mechanical registers made sense.
After Disney, I was recruited to Fred Meyer, the grocery chain, to implement the same systems we had at Disneythe Peter R. Johnson & Associates (PRJ) inventory-control system. In seven years with Fred Meyer, the company more than quadrupled in growthfrom $2.7 billion to $13 billion in salesmuch of it through acquisitions. At another company I was with, we did 64 acquisitions in two years. That's two acquisitions a month. It was absolutely insane. And a lot of them were mom and pops. Some had systems, some didn't have systems. It was the ultimate in scalability issues. You can't stop to breathe. You can't stop to reassess. You're just constantly moving.
Acquisitions are corporate inventorybut they leave you with a technological form of inventory control: You've got more systems than you need. So what do you do? Move the acquired company over to your systems. Still, I took a lot of good ideas from acquisitions and grew their systems. Smith Food and Drug, for example, had a successful frequent-shopper program. We just had a small one at Fred Meyerand Smith's looked great. So after the acquisition, we took that over to the entire corporation. In expanding the system, we encountered a problem storing the amount of data collected. We had to increase our data storage capability to accommodate it.
In your career, skills and experiences are like your own personal inventory. After Meyer, my next goal was to be a CIO. I chose the Book-of-the-Month Club because it was a retailerbut still offered something new: an opportunity to learn more about direct marketing. I knew it was going to be temporary, because Time Warner was thinking of selling the unit, but in a short amount of time, we set up a complete data warehouse. The company had about 17 years worth of incredible customer data just sitting there. It was being used, but it wasn't being shared with the rest of Time, Inc. We used IBM 6000s and DB2hardware and software from the same vendor. That's a kind of streamlined inventory in itself: I don't like finger pointing. With a single supplier, you're able to pick up the phone and say: "I've got an issue."
Customer data, on the other hand, is inventory you have to maintain. One of the biggest failures of customer-relationship management is sales people refusing to input the information that's required to keep it accurate and up to speed. Technology can't address thatit's all management.
I used to pride myself on knowing all the details. But as you go up the ladder, you have to start relying more and more on your peopleyour human inventory. You can't do it all yourself. But you have to have people that you can trust. When we were implementing the PRJ system at Fred Meyer, I had seven project managers reporting to me. I couldn't be in every one of their project-management meetings. I had to step back.
In the end, of course, the business' most important inventory is the customer. We all know it's very expensive to lose a customer. To replace one is even more so.
Written with Joshua Weinberger
Doug Cormany, Senior vice president and chief information officer at staffing firm Spherion, was previously CIO at the Book of the Month Club, and a technology executive with the Walt Disney Co. and Fred Meyer.