When adidas Canada looked to improve the employee and customer experience, they entrusted the Inventory Lead, Sanjay Padhiar and his trusty analyst sidekick to do the job.

From the beginning, the process seemed very manual. When speaking to employees of the store, they would regularly blame the Distribution Centre (Warehouse) for forcing a very cumbersome process. The employees also mentioned regularly receiving the wrong inventory.

After a few store visits and informative discussions, Sanjay looked to confirm the store’s stories with data. The data confirmed a lot of what store operations had shared. There were tons of shipping files unreceived for months and some files were missing entirely. Data confirmation helped guide what was next to come.

A visit to a brand new 1,000,000 SF distribution centre in Brant, Ontario.

The visit started out as a tour of a beautiful, robust, and heavily automated warehouse facility. As soon as the tour ended, Sanjay asked the Warehouse Lead where in the process could there be an issue with shipping files. They gave a detailed answer as to how the process was meant to work: 

A shipping notice gets created anytime part of a purchase order gets shipped. Since the DC was very fast, they would ship partial PO’s with a shipping notice sent in the system. This should have been seen in the store’s receiving software.

Unfortunately, the way the system was supposed to work, wasn’t actually the way it was working. Only a final shipping notice would make the inventory show up in the store’s system.

Quite often when one item was missing from a purchase order, a final shipping notice would not be sent, therefore a store could not receive any of the product! 

It didn’t take long for the findings to be shared with the Senior Leadership Team and for the issue to get addressed. But there was still a big problem that wasn’t going to be solved so easily.

Misshipments and transfers were creating a huge challenge for adidas. Almost 250 adidas and Reebok stores were being supplied through one DC and store-to-store inventory transfers were common, leading to subpar inventory accuracy. 

The move to OMNI-Channel was on the horizon but it was going to be challenging.

Up until then, the retail giant did not have an online experience that could translate into retail stores. Simply put, you couldn’t buy something online and return it in-store. This was a huge gap in the customer’s ideal experience.

If adidas wanted to get this new capability, they had to improve their inventory accuracy by close to 15%.

Mandated by the Canadian leadership team, Sanjay and his trusty analyst sidekick set out to solve this problem. Having made a huge impact on warehouse data being sent to stores, now the focus was solely on stores. Specifically, store staff that was receiving the inventory.

They had for the most part identified the stakeholders that were responsible for receiving inventory. The employees were usually high school or college kids who needed part-time jobs. It was a little more difficult to convince them to follow a ticket logging process anytime there was inventory missing or inaccurate.

That’s when Sanjay and his team decided to make an impactful report that would motivate employees to log tickets!

It was the Inventory Receiving Scorecard which ranked stores by their inventory metrics. After having numerous conversations with store operations, the team understood what KPIs were important.  

Stores having unreceived shipping files on the store’s POS system meant they weren’t taking action. Either the product arrived and could be received, or there was an issue and the product had not arrived. Either way, the system should be cleared of any files that were older than 5 days or they can log a ticket. If stores had older shipping files, it would impact their score.

The team picked a few other metrics that indicated whether a store was proactive around its inventory or not. An easy way of telling was to see how many tickets a store had logged. If zero tickets were logged, either their inventory was perfect or they weren’t checking. It was always the latter half which was the issue.

By ranking stores based on their inventory, it became a game for the stores. Stores wanted to be in the top 10 best-ranked stores for inventory. While other stores did not want to be on the bottom 10 of that scorecard. Whenever stores did poorly, we used the data to identify them and the problem. Sometimes stores had a high turnover or a lack of leadership. 

What really helped the Inventory Scorecard process bring inventory accuracy to a higher level was the Standard Operating Procedures that the team had created.

The team created a detailed yet simple SoP for every person involved in the process at the store level. From receiving to logging tickets, everyone had a “One Pager” that aided them with the process.

No game was going to be complete without instructions on how to win it.

There was a process document with a calendar created for the Store Ops team to understand their roles and responsibilities. If they followed the timelines and suggestions on the document, they could score really well on the Inventory Scorecard.

By providing helpful guidelines for the process, the bar was set high. The average scores were unbelievably good for most stores. The process documents created efficiency and effectiveness around how inventory was received and recorded. The Inventory Scorecard created accountability for all the stakeholders.

Understanding data and operations is helpful, but add in accountability and visibility and you will have people working towards an organizational goal in no time!