Q: What were the key challenges of managing supply chain before you embarked on journey of implementing TOC processes?
A: Books and music are unique in terms of demand pattern. A new launch can be a massive hit, then the demand could drop dramatically, and stay stable at very low levels, following an ‘L’ curve. Publishers launch 2,000 new titles every year; it is difficult to decide which ones and how much to buy. At the same time, we are up against the phenomenon of people buying books and CDs from e-portals. The combined effect of the two was huge. Non-moving inventory was only growing.
Q: What are the key paradigm changes that were implemented while implementing the TOC processes?
A:With help from Vector Consulting Group, besides the system of pull replenishment, we implemented a process of range control and dynamic churning of categories. We changed from being a destination store for books and music to becoming a family entertainment store by focusing on toys and gaming. These changes gave the business a new direction.
Q: What were the implementation challenges?
A:Setting up a DC was a big challenge. Later, the continuous churning of large number of SKUs increased the load on merchandisers and buyers responsible for maintaining availability with lower inventory. The warehouse also had to be geared up to handle many orders nearly every day from each store as against handling weekly orders from every store. The pick-and-pack processes at the warehouse had to be geared up for high volumes.