Readers Respond to Kmart Woes
Baseline's coverage of Kmart's supply chain debacle provoked a welter of letters from readers eager to comment on the discount retailer's slide into Chapter 11 bankruptcy protection:
I saw this company in trouble years ago! Employed as a loss-prevention manager for a local store, I became aware of a "manager-laden" system, poor inventory procedures, a high rate of employee theft, and merchandising tactics that resulted in poor quality items at premium prices.
This does not even begin to touch the serious problems surrounding the "refund policy." I saw thousands of dollars fly out the front doors with that stupid "no receipt, no problem" policy. That single policy encouraged theft, waste, dishonesty, and no viable alternative available to recoup refunded monies. "We'll just have to eat it," stated a Kmart district manager. Well, I guess Kmart just ate too damn much. What a shame.
Fountain Inn, S.C.
As a former employee of this company, it is my opinion that poor customer service and lack of certain products has helped kill Kmart. When I worked there, I got four customer-service awards, and my experience in a store in Seattle was an excellent working experience. After I left, I saw the service level go down, and when I have gone in there to look for certain products I have been unable to find them. I have no grudge against this company and hated to see them file for bankruptcy.
I couldn't agree more with your assessment of Kmart's troubles. For years, we have all watched them acquire, retain and reorder merchandise that they couldn't possibly sell.
If it's true that they had not only the technology but the reporting capability to have avoided this problem, then, as you pointed out, management's inattention to the data was the problem.
The reason for this is simple. Our schools have only been teaching mathematics and science students how to interpret this kind of data for a very few years and then only to the best students. It's just been in the past three or four years that this instruction has found its way into the general population and then only in the best school systems.
It takes years to develop real expertise in this area and to accept it as a viable component of a management system. And to this day, many teachers haven't accepted responsibility for teaching these techniques. This isn't something that can be assimilated after attending a few workshops. If I were running Kmart, I would look to business majors from good colleges and universities and get rid of the 1970s high school mentality that seems to pervade their management chain.
Retired public school mathematics teacher
Retired professor of mathematics
You can't be successful in the retail market, especially in the high-volume retail market, if you're only turning your inventory 3.6 times a year. That is just pitiful, especially from a cash-flow standpoint. All of your money is sitting on the shelf. You can't afford to have even the slightest dip in gross sales. Maybe that's why there has been five CIOs in the past seven years. Do you think they saw the writing on the wall, and just didn't want to be a part of it?
Management also has to shoulder the blame for this. Being able to come up with a viable marketing and inventory strategy and having the stones to see it through is oh so important. Too many times someone comes up with a plan; it's implemented; and six months later, the whole thing's scrapped for something else.
This happens to some degree at a lot of U.S. corporations. At the retail store end, it's particularly frustrating. You have store managers who are trying to implement new upper-management policy; they're getting their store employees involved and active in the plan, only to come back and say, "We're not doing this plan anymore, undo what you did, we're now following this plan." It leads to frustrated store managers; disgruntled store employees who feel like they're chasing their tails; and show floors in disarray because employees don't know how long the new plan is going to last, so why try?
Fred Avery, Jr.
It is absolutely amazing to see how large corporations like that can be lacking experience in IT.
Most IT and software developers have conceptual ideas wrapped in beautiful paper and sell it to you as if it were gold. The reality is, however, that the implementation is usually very poor and that they learn the software themselves during its implementation. This jeopardizes the customer's business even more because of a total lack of business exposure of the implementation crew. In trouble, they will then force you to call for other consultants who will charge you exorbitant prices.
However, not everything can be blamed on those software companies. They do not necessarily receive all the information they need and because, to be honest, they did their selling job well enough to convince a customer who, on his side, should have been much more thorough in his decision.