Another Report?

By Lee Rychel 

In our enthusiasm for our clients’ success, we frequently point them to the 300+ reports available within RETAILvantage. These reports offer tremendous insight into areas such as payables, A/R, sales and inventory, yet I am still amazed at how many don’t take advantage of them.

RETAILvantage Report

Through my nine years spent consulting for PROFITsystems and in my last seven working in Customer Relations, I have worked with clients on a countless number of issues. I’ve often asked them questions like “do you know this information about that specific area?” and their answer would typically be “no, I don’t. How do I find that out?” The ‘how’ has always been through the reports, but for many retailers the idea of plowing through them doesn’t feel as ‘good’ as the ole’ gut feeling about inventory, sales and so many other areas of the business. Without running reports, however, critical information can and will go unnoticed. For example, I used to ask every retailer I spoke to if they carried any receivables, and nearly 100% would answer “no, we have third party financing.” I would then run one report and show them tens of thousands (in one case hundreds of thousands) of dollars that either hadn’t been collected or posted to the correct account. In doing this exercise alone, it would often trigger a ‘what else don’t I know?’ kind of Q&A – and the answer was a lot.

That’s when the real fun would begin.  With a few keystrokes we could sit together and determine the following without ever leaving the owner’s desk:

  • Who owes money
  • Who is selling what, by category
  • Age of inventory
  • Best-sellers
  • Which stores are performing poorly/outstanding
  • Which vendors are making money and which are not
  • How current is the delivery team in getting ‘in-stock’ goods out the door
  • What does the outstanding service backlog look like
  • How much money will be owed in 60, 90 and 120 days based on inbound orders
  • Who are the best customers needing to be kept in touch with
  • Which sales reps are skating the floor, wasting ‘ups’ and cheating the store out of a better result

The list goes on and on. With this information we could often take a store performing at the mediocre level and turn it into a local powerhouse – but not without good information.  Knowledge is power, and you can’t improve what you don’t measure. Through watching the firms that are coming out of the recession and growing versus the ones that are closing or struggling, I see one common denominator. The stores that are growing are doing something different than they were last year, last month: they’re measuring, planning and improving on every area of their business.

Taking the time to learn how to read the reports is one piece, but the other is time management. When I visit a store that’s struggling and see the owner out on the floor with a clipboard writing out price tags – I know we’re in trouble.  Owners and managers need to manage their time in a way that allows them to get in front of these reports and begin to understand where improvements are needed. Busy work, unpacking boxes and pricing the floor are not owner-level activities.  Sure, you may have a small team, but at some point the decision-makers in every company must invest the vast majority of their time in planning and implementation in order to make meaningful changes.

A favorite phrase I’ve used in working with owners and managers is “what are you doing today to grow your business tomorrow?” and it still applies.  It isn’t easy; it won’t happen until you do something different, and doing something different means change. If you have been using the software for any length of time, then you have everything you need at your fingertips. Focus on an area, learn how to read the reports related to that area, fix what isn’t working and lean on what is. Rinse and repeat.

Have a great fall selling season and we look forward to your support calls asking “how can I find out. . . .”

Tips from the Field: Critical Components of an Optimal Distribution Center

By David McMahon

Distribution

 

It is my goal to share with you observations, practices or thoughts that come from being out there on the road working with retailers to improve their organizations. Today, I’ll give you a few tidbits that are fresh in my mind after working with a five-store, one-warehouse operation that grew from five to 25 million in volume.

I was having a conversation with this particular store’s owner about what it really takes to operate a great distribution center (DC).  We agreed that a good operations manager was important, but both felt that something even more critical than that was running the proper physical facilities with the proper retail management systems and processes.

Many times over the years I’ve received complaints with regards to warehousing: too many customer service issues, slow picking, delayed delivery of merchandise, inaccurate inventory, too much returned merchandise, trouble finding stock, employee turnover, theft, too much movement between stores, not having space, ineffective management, exceptional expenses – you name it. From my experience, the majority of these problems come from the combination of having inadequate facilities for the sales volume and poor systems and processes.

My client and I both agreed that an average warehouse manager could outperform a top manager every time if equipped with a better stage to perform their daily acts.  Even if a top manager had top processes, they would lose to the average manager with a better facility because of something called “throughput”. To put it simply, “throughput” is the idea that a facility can get more merchandise in and out faster, and in better condition, if its resources can “flow” it better. Poor facilities and inefficient systems and processes are what cause the enemy of all production: Bottlenecking.

Imagine a DC as a funnel underneath a water tap.  If you have the tap on slow, the water gets through the funnel effectively and without issue. Once you increase the speed at which the tap releases water, however, the funnel can’t process it through quickly enough causing build-up and eventually overflow. Now imagine keeping the tap on the same high speed, but adjusting the funnel to be wider and with larger filtration holes. What happens? The water goes back to flowing through effectively and without issue. This is an analogy for what happens with warehousing and distribution. The back-end logistics are the funnel, determining how much top-end volume (or water from the tap) an organization can handle before diminishing returns.

With this in mind, I summarized seven critical factors that, together, can trump a top manager:

  • Having the proper dock height for receiving and delivery trucks
  • Having adequate space for holding merchandise upon receiving freight
  • Having proper storage/racking (a place to put merchandise without moving it again until delivery, pickup or transfer to the store)
  • Ensuring there is a “signal” for moving merchandise only once; aka Kanban approach
  • Having adequate space for staging merchandise for distribution
  • The ability to keep reverse logistics (merchandise coming back into facility other than new freight received) to a minimum
  • Ensuring everyone executes the right systems, processes and equipment for the individual business situation

Whatever your current situation, it’s worth it to consider where you’d like your volume to go in the future when looking at your facilities, and whether your current systems and processes enable you to operate as efficiently and effectively as possible.

David McMahon, CSCP, CMA, EA is VP of consulting and performance group at PROFITsystems, a HighJump Company.  He holds professional certifications as a Certified Supply Chain Professional and is a Certified Management Accountant. David directs four performance groups (the Kaizen, Visionary, Gladiator and TopLine groups) and multiple consulting projects.  He can be reached at david.mcmahon@highjump.com.  

Home Furnishings Retail: What Owners are Up Against and How to Overcome Key Challenges

This year at Las Vegas Market, industry expert and consultant David McMahon, held a seminar on retail challenges and solutions in the home furnishings industry. The goal was to conduct the seminar in an open-forum fashion, letting those in attendance share their biggest hurdles and discussing potential solutions for each with the group.

PROFITsystems performance groups meet to increase profitability

 

Below are the three issues cited most frequently by seminar attendees, followed by David’s response and proposed solution to each.

Warehouse management, inventory management and strategies to keep best-sellers in stock 

In response to this challenge, David began by explaining what he felt was the key to managing inventory as effectively as possible: the 80/20 rule. “In order to manage inventory more effectively, you really need to know which parts are producing for you so you know where you need to be spending your time,” David said. The 80/20 rule states that, typically, 80 percent of your profitability or margin comes from just 20 percent of your items. If retailers are able to determine this 20 percent portion of their inventory that’s contributing most to their bottom line, they’ll know which items need to be ordered often, displayed well and stocked appropriately to be as profitable as possible.

David highlighted the importance of also having a systematic routine for the way retailers dealt with the portion of their inventory that wasn’t producing – their dogs. “The only way to buy new inventory as fast as possible is by identifying your slow-moving items and getting rid of them so you can make better purchases at market,” he said. “With inventory management, the systems define the outcomes. If you want to manage your inventory more profitably, you need a good system to handle reporting for best-sellers, and an equally good system to handle the markdowns for your dogs,” David added.

Pricing

When asked about how to manage pricing, David said: “Pricing is tricky. You don’t want to be known as the guy with the highest prices and you don’t want to be known as the cheap, discount store either. I’m a believer that you should be pricing higher on what’s working and a believer in high-low pricing. When an item is working, you should test the ceiling on its price. When an item is not selling as well, that’s when you mark down.”

“Some things are more expensive, some are average and some are cheap. The issue is most every retailer uses the cost-up approach, where all of the margins are the same. Say everything in your store is marked at 50 percent margin or 100 percent markup; that doesn’t work because you have some things underpriced and some things overpriced. You need to take a detailed view and price high with some things and low with others,” David added.

David wrapped up the pricing discussion by reminding listeners that it’s not only about price and GMROI plays a very important role. “If you’re turning items really quickly you could be making more margin dollars or GMROI (Gross Margin Return on Investment). Therefore, that needs to be looked at too: not just how you price an item, but how many you carry and how quickly it turns,” he explained.

Managing store traffic and staffing appropriately

David responded to this ever-common issue in the industry without mincing word. “You have to know your traffic, period,” he said. He continued to explain retail traffic counting, and how investing in a traffic counting system is a great way to be sure of your traffic volume and determine things like when it peaks versus when it’s slow, as well as average weekend traffic.

“The number one issue of sales floors that underperform is not having enough people staffed at the right time, and the number one way to fix that problem is by figuring out your traffic patterns and getting enough people on the floor to match them,” David concluded.

While there are countless challenges in home goods retailing that could be picked a part and put back together again, inventory management, pricing, and store traffic topped the list for this particular set of retailers. Hopefully this shed some light on how to meet these specific issues head-on with advice from an expert consultant who’s successfully dealt with them before.

To learn about more top challenges in home goods retail and their potential solutions, read the results of David’s two-year study aimed at figuring them out here.  

Six New Home Goods Retailers Select RETAILvantage and Join the PROFITsystems Family!

PROFITsystems is so excited to announce six new additions to our family of home goods retailers! Read on to hear about their stores and why they selected RETAILvantage as their retail management system.

PROFITsystems new home goods retail client

McKay’s Furniture  

McKay’s Furniture of North Kingstown, Rhode Island came to PROFITsystems concerned with the accuracy of their inventory data and quality of their current CRM. In order togrow, they knew they needed a system that addressed these concerns and worked to facilitate their success rather than hinder it. Thanks to the robust suite of features provided by RETAILvantage in the areas of inventory management, reporting and CRM, McKay’s felt compelled to make the switch. We’re so excited to help them reach their goals and look forward to the many successful years to come!

PROFITsystems new home goods retail client

Furniture Palace

Furniture Palace, located on the island of Curaçao, was in need of a new retail management system to support their growing business needs. The owners were thorough in their search for a new solution and very selective as they narrowed down their options. They knew they would become stagnant without the features and capabilities required for continued growth and prosperity, and that’s why Furniture Palace chose RETAILvantage. We are so excited they put their trust in PROFITsystems, and can’t wait to show them why they made the right decision!

PROFITsystems new home goods retail client

Sleep Etc.

Sleep Etc. of Norwalk, CT took their time shopping for a new retail management system and looked at many different providers throughout the process. As a two-store mattress operation with a high volume of custom orders, the decision makers at Sleep Etc. quickly saw how equipped RETAILvantage was to handle their specific set of needs. Ultimately, the unparalleled features and capabilities of our software coupled with our quick response times and transparency throughout the decision making process resulted in Sleep Etc. choosing PROFITsystems as the best fit for their store. Welcome to the family!

PROFITsystems home goods retail client

DeMeyer Furniture

From facing constant errors in their accounting system to their increasingly strained ability to track inventory, the owners of DeMeyer Furniture were realizing their current system was no longer sufficient. Based in Meridian, Idaho, DeMeyer set out to look for a more robust solution able to keep pace with the company’s growth and handle their expanding needs. After looking at various systems, they determined the best partner for their continued success was PROFITsystems. We’re so excited to have added them to the PROFITsystems family and look forward to facilitating their growth for years to come!

PROFITsystems new home goods retail client

Jenner’s Home Furnishings

Jenner’s Home Furnishings of Fort Mohave, Arizona was working to quickly grow their company and looking for a solution that would allow them to seamlessly integrate additional store locations. They decided RETAILvantage fit the various needs of their expanding operation, and we couldn’t be more excited to have them.

PROFITsystems new home goods retail client

Furniture Superstore

Like many other retailers that switch to RETAILvantage, Furniture Superstore of Albuquerque, New Mexico, was growing at a faster rate than their current system could seemingly handle. At the recommendation of Virginia Home Furnishings, another PROFITsystems customer, they contacted us for assistance. The owners of Furniture Superstore fell in love with RETAILvantage after several extended demonstrations, and with ease of use and overall commitment of our company to their success, they were sold.

Cheers to our newest additions and the exciting years ahead! We look forward to working with these fantastic retailers to increase their profitability!

Solutions Sound-Off: Industry Peers Present Solutions for Dealing with the Challenge of Communication

On Day 2 of Elevate 2017, David and Wayne McMahon conducted an open forum session on “Challenges and Opportunities.” They kicked it off by asking attendees to sound off on the biggest challenges they faced within their retail operation. Once they selected a challenge, the entire audience worked together with David and Wayne to help provide a solution to that obstacle, often sharing their own best practices and tools on how they deal with things in their own store.

Of all the challenges discussed during this session, Darcy of Walker’s Furniture brought up an issue that much of the audience could relate to: communication. It’s a broad issue, one that runs deeper than the surface level, and it was covered in detail by David, Wayne and other members of the audience. Here’s a recap of the valuable discussion on how other retailers tackle communication in their stores:

Darcy, Walker’s Furniture: “I would say that one of our major challenges is the communication of procedures, ideas or concerns between 16 locations. I want to figure out what it is that we can do or say from the administrative side to help our sales people and managers understand that it’s OK to give us feedback and communicate openly; that we won’t use their feedback against them negatively.” 

David then asked the audience who else faced the same issue with communication in their own store. He then inquired who felt they had a positive culture of communication, and what systems they had in place to create that environment.

A representative from Weinberger’s Furniture was the first to respond.

Karly, Weinberger’s Furniture:We started doing a 30-to-45 minute call once a week between all of the managers and myself. We essentially spend the entire meeting touching base and talking about what’s happening at each store, if anyone has any major issues, what if any major sales are coming up, and just get everyone on the same page. It has helped a lot with streamlining communication and has also worked as an outlet for any questions needing immediate answers.”

Wayne: “I believe that communication and feedback is a multi-level issue. For example, if you have 15 locations, do each of your respective managers and leaders hold daily pre-shift meetings? If the answer is no, then that needs to be put into place, and your regional managers need to be the enforcers making sure these meetings are actually taking place. What about your general managers? Do they hold regular meetings with sales managers? Regular touchpoints between key players such as your managers, CEO, controllers and the like are crucial to ensuring that all important information is received by everyone, the necessary feedback is given and the lines of communication always remain open and fluid.”

David: “Not everyone is able to have that multi-level structure in their business, but I’ll tell you about a practice we’ve seen businesses of all sizes try out and succeed with, and that’s the practice of one-to-one. Whether you’re a $3 million operation or a $50 million operation, the practice of one-to-one works for businesses of all shapes and sizes. It was first tested out through one of our Kaizen Performance Groups, and we then brought it out to Sherman’s Furniture, where they’ve seen huge improvement since implementing it. The practice of one-to-one is essentially the practice of every person in your business meeting with their manager once per month to have a conversation about progress, obstacles and the general state of affairs. It’s a very simple, casual meeting, it’s documented and questions “How do you think we’re doing” or “Do you see anything we can do better?” if the employee is facing any issues that would also be documented during this meeting and then next steps would be discussed and outlined. Just a simple conversation like that to open up the lines of communication works wonders, and while it feels like a lot of people talking to each other at first, Paul of Sherman’s Furniture can’t say enough how transformative the one-to-one initiative has been for his business.”

As a few other audience members offered their own suggestions. One PROFITsystems customer suggested a podcast called Manager Tools, an educational series hosted by two men from West Point focusing solely on one-to-ones. She said the content shared has been extremely helpful for her business, and she recommends it to any manager looking for strategies to improve.

Another customer spoke about conducting a daily call with this entire operation. Every morning, everyone hops on at 9 a.m., kicking off the call with “good news” to acknowledge everything that’s going well. Following good news is challenges, when each person has the opportunity to voice not just the obstacles they’re facing that day, but what they need from management to overcome them. The call lasts no more than 15 minutes and has proven to be extremely effective in keeping the daily operations of his store running smoothly and efficiently.

David closed out this detailed discussion surrounding the challenge of communication by reinforcing how crucial it is to implement and adhere to a system that works for your store. It’s about constant contact, touchpoints and actually getting in front of employees and managers. Holding the necessary meetings between the necessary people often and in-person is the best way to communicate effectively, and that’s how you keep your operation, and everyone in it, organized, effective and profitable.

HighJump’s Elevate 2017: A Successful First Day at PROFITsystems’ Annual User Conference

Day one of HighJump’s Elevate 2017 is now in the rearview, and we hit the ground running with a larger turnout than ever before. Over 765 partners, customers and professionals met in Orlando, Florida to kick off four days of networking and informative sessions.

PROFITsystems General Manager, Joanne Gulnac, started off the day with a kick off session covering the products and services available to all of our customers to achieve efficiency and profitability.  Here’s a recap of the various tools she discussed, what they are and the many ways in which they benefit our valued customers:

  • Training opportunities

PROFITsystems offers customers various training opportunities to help them continuously improve how they run their businesses and leverage the features within RETAILvantage. From webinars to consulting services, customers have a world educational opportunities at their fingertips.  to learn about all of the training resources available click here.

  • Partners

Dispatch Track, DoorCounts, RuPractical.com, Furniture First and Nationwide are just a few of the businesses partnered with PROFITsystems. From discounts to exclusive benefits, every partner offers tools to help make our customers more efficient and profitable. Find out more about all of our partnerships.

  • Yammer

Yammer is PROFITsystemsprivate customer network where they’re able to sound off on current events in home goods retailing, discuss industry related topics, ask questions directly to the PROFITsystems team and stay on top of current news and announcements. Are you a client but not yet on the network? Request an invitation now!

  • AHA!

Our customer feedback portal, AHA!, allows clients to literally be a part of our software development process and have a hand in how RETAILvantage is updated and developed. Customers can submit suggestions and ideas through the portal, where our development team gets right to work on making them come to life. PROFITsystems clients can click here to request access and start submitting their ideas today.

Day one of Elevate 2017 set the precedent, and day two promises to raise the bar even higher with more best-practice and how-to sessions, open forum discussions and networking!

 

Backups Part II – by Lee Rychel

“No problem.  I have my data backed up in the cloud.  I’m good to go” . . .or are you?  As we discussed in part one of this series, there are two kinds of backups available to clients on local servers:

  • Local tapes
  • Offsite cloud based backup routine (which could include a local IT company backing up your data, or a commercial cloud backup program available on the internet).

Both of these techniques can work.  But be aware; in the case of interactive software such as RETAILvantage2.1, incremental backups are not an option.  Restoring from pieces parts of the total collection of files will only lead to corrupted data.  Only a full data backup will ensure you can restore everything to its original configuration, which is where the first challenge of the cloud comes into play.

Backing up huge amounts of data across an internet connection is time-consuming and gobbles up a ton of resources on both ends.  Most cloud-based backup systems will take one full backup, then only create incremental backups to reduce this load going forward.  Bottom line? This form of backup is not reliable when needing to restore entire sets of data

The next question is, of course, “are my files really being backed up?  How do I know?”  And the answer is test, test, test. Either with your IT team or with your backup provider, you need to perform periodic tests to ensure the files are both backed up successfully and restore-able should the need arise.  As with local backups, the only way to really know if you are getting a good copy is to go through the restore sequence up to the point of actually copying the file, and making sure there is something to restore from.

This is also another issue that has come to our attention from clients using on-line backup resources: billing. Remember those pesky bills from the Yellow Pages? The ones we all so quickly learned to toss out as they were nothing more than scams built to take our money and provide no benefit? We all got so used to them showing up in our mailboxes that we started throwing the envelopes away without even opening them. Well, old habits die hard, and we’re now seeing the same thing happen with online backup billing; for whatever reason, the bills aren’t getting paid.

We have had clients who were very excited that they were about to survive a server crash – “we have all of our data all backed up in the cloud! Yup we do!”  Except they didn’t.  Somewhere along the way the bill didn’t get paid, the backup routine was shut down on the cloud provider’s end, and because the account was never paid – the data was deleted.

Be smart about backups and you will sleep well knowing you are safe against any calamity. The other option, of course, is moving your entire data management software to the cloud. Cloud-based services such as our own PROFIT OnDemand, incorporates not only the latest version of our software (we only maintain one version in the cloud) but also ensures your data is not only safely backed up on a regular basis, but backed up using the proper rules to make it easy to restore from one PC to another.

A properly managed cloud is constantly backing up, upgrading and improving hardware resources, all while you sleep soundly each and every night knowing your data is safe.

Have a great rest of 2016, and remember, our goal is to make retailers more profitable.

RuPractical.com’s EMV Road Map

The EMV security standard for the credit card payment acceptance, put in place by EMVCois a game changer for the payments industry. During this time, RuPractical.com has been driving our product and technology development roadmaps to provide EMV solutions for PROFITsystems merchants. RuPractical.com continues to work with our US processing partners, First Data and Vantiv, to ensure EMV support for PROFITsystems’ integrated customers.

Part of this EMV roadmap includes PayGuardian, an exciting product suite that provides an all-in-one solution for point-of-sale merchants to solve their EMV end-to-end certification requirements. PayGuardian is a PA-DSS middleware product that will be available to our integrated partners.The EMV portion of PayGuardian is available on RuPractical.com’s EMV certified US-based processing platforms. PayGuardian offers solutions for Windows desktop, iOS, Android, and browser-based systems. Coming soon will be our Virtual Terminal with EMV capabilities!

As an early EMV adopter, RuPractical.com continues our development and certification work with PROFITsystems and will continue to communicate with our PROFITsystems integrated partners regarding our EMV roadmap.

Be sure to check back on a regular basis for the latest information on EMV developments and click here to learn more about credit card processing. To get all of the details about RuPractical.com’s partnership with PROFITsystems, read the press release!

So You Thought You Were Safe With Backups? Part 1 by Lee Rychel

backups

 

Happy New Year! With the new economy sorting itself out, it should be a great one as business is on the rise for many retailers. For others, this will be a year to remember with great sadness for a very long time. Those retailers will be spending hundreds of hours re-entering data and arguing with IT staff over who’s to blame, as they flush countless company dollars down the drain trying to get their business back on track.

You see, these retailers will fall victim to the “what, you have no backup copy???” elephant in the room. If you are running a local server – whether a small 2 user work group or a 100+ user network – it is imperative that you are getting daily backups of your data. Backups that can be removed from the premises each and every day in order to ensure your business can continue to function, no matter what calamity comes calling. Below, I’ve outlined some real world examples our support teams have worked on in recent years. Each of these situations was entirely preventable.

The store is on fire. Workers have inadvertently set some concealed roofing material aflame during repairs. After a period of working on the fire to prevent further spread, the staff is advised to leave the building. They take with them the box of backup tapes for their PROFITsystems software, leaving the server behind. The fire consumes the building, and only bed springs and hardware from their case goods remain. The server is melted to the size of a pack of cigarettes. It takes only a day to install new PSI software on their new server. The backup tapes are then loaded in to retrieve the company data – only to show they have not been updated for years. Apparently the program contained a fault, and while it was showing “Backup Complete” each morning, nothing was being written to the tapes.

In many instances this is the sad truth. Diligent staff is swapping tapes only to find that either the tapes have aged and are no longer readable, or the backup software itself is no longer functioning. There is only one way to make sure your backups are being done correctly, and that’s having a qualified person initiate a “restore” from those tapes, up to the point where they are assured there is truly current data available on the media. CAUTION: You need to make sure they do not run the restore program and overwrite data during this exercise, or you will end up with an older copy of your data on your server.

For many years I was a traveling consultant for both my own business and PROFITsystems, and during these years I would run that simple backup test for clients – just to see what they had backed up. After several years of doing this, I quit offering the test because I found that 3 out of 5 retailers did not have a good backup system. Many had nothing on their tapes period, and if they did, it was older and essentially useless data. It is pivotal that you make sure you are getting good backups on your removable media, and that you insist on a proper demonstration that backups are indeed being done locally.

Remember, backing up your local network is the responsibility of the retailer, or their network agent. If you are in our POD (PROFIT on-demand) cloud servers, we are doing the backups for you.

In the next installment, we will discuss other issues in backing up data that can create equally devastating results. Backup and confirm.

 

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