Inventory Management
Monitor sell-through, determine shrink and get real-time information about the cost of goods sold

"Although it appears to be a glorified cash register when you first begin using a POS system, almost immediately you’ll be able to move customers through your registers 30 to 40 percent more efficiently,” says Ken Lain from Watters Design & Garden Centers. It’s this realization of the time-saving benefits of the technology that is turning independents once skeptical of point-of-sale (POS) systems into enthusiastic converts.

Inventory is a big part of the sell to garden centers. Today’s POS systems don’t just save everyone time at the checkout, they can play a key role in helping IGCs take command of their inventory so they can make educated decisions for a more profitable bottom line.

Making the Most of It
Today’s time-crunched, competitive environment presents the need among garden centers for more practical ways of monitoring and, more importantly, managing inventory. These days, inventory shouldn’t be put off as a once- or twice-a-year task done primarily for accounting purposes.

At a minimum, POS systems can help by keeping a perpetual inventory of each item to help IGCs monitor sell-through, determine “shrink” and obtain up-to-date information about cost of goods sold.

With these efficiencies, however, POS systems require more energy in the back office for data entry of inventory items. Purchase orders must be created with item quantities and costs for incoming inventory.

The way the information is entered becomes important when searching the database for an item’s description. It can be difficult and frustrating to find what you are looking for if entries are not uniform. While some retailers have all of their buyers enter this information, others find it is easier to have only one person responsible for the data entry.

When more than one person on staff enters the data, there must be a specific formula for inputting descriptions and other item information. The computer only knows what they input. Human error is always going to be the biggest challenge.

Josh Bracken of Nicholson-Hardie Nursery & Garden Center in Dallas has one full-time data-entry person at each of his two locations. This provides him with a more accurate snapshot of his inventory, he says. While the IGC started out having multiple buyers input all of their orders, they quickly learned this did not work for them because data was being entered differently by each person, plus it took up too much of their time. By making the change to having one person on staff responsible for entering the data, the garden center’s buyers were freed up to do what they do best.

Bracken’s POS system, Activant, has a user-friendly, Windows-based overlay that allowed new hire Stephanie McDaniel to come in with no experience and learn the position with only two days of in-house training. A member of the Nicholson-Hardie team for two years, McDaniel is now experienced with the system and is able to glean a wide range of information about an item in “just one click.”

Activant’s system, she says, has quick recall and strong search capabilities. Her only concern: it allows you to enter the same manufacturer part number for different vendors. This can present problems when receiving an order. Barbara O’Connell, Office Manager of Feeney’s in the Philadelphia market, also encountered this problem and solved it by adding the first letter of the vendor name after the part number.

Handheld Convenience
To make things easier and assist with customer service, Troy’s Landscape Supply Company in Cohoes, NY, uses handheld, wireless devices provided by Small Business Innovations. The units can be used for receiving inventory, creating purchase orders and recording inventory cycle counts to maintain the most accurate inventory counts. The new technology can be used from an access point of 1,500 to 3,500 radius feet, unlike earlier models that weren’t reliable beyond 500 feet.

Another feature, “assisted sales,” allows orders to be pre-scanned while customers are waiting in line. Transactions can be completed on the handheld units if the customer pays with a credit card.

Troy’s now has 18 handheld units. Owner Troy Miller says with his growing business, the devices have sped up his cashier process. Sales personnel can ring up a customer and send them on their way anywhere in the store.

Customizable Options
Fundamental inventory basics are only a small segment of the benefits a POS system can offer retailers. Along with typical inventory level reports used for purchasing, Stephen Hicks from Hicks Nurseries on Long Island uses various inventory reports generated from his Radiant Systems’ (formerly Synchronics) CounterPoint V7 POS system. He also exports real-time data into Access for customizable options.

A few of the reports Stephen finds useful include current inventory versus planned inventory; under/over inventory levels (good for identifying what needs to be purchased on a daily basis); and top-selling items. He also says the “slow-movers” report recently became of interest to him, allowing his team to determine if a product needs to be remerchandised or reduced in price.

With the CounterPoint V7 system, Stephen can manipulate the data to find out what he wants to know. The challenge is to know what you want to do with the data and which information you need in order to obtain the right reports. After you’ve identified this information, you can then make intelligent decisions about how to operate your business.

One interesting application where a retailer is making the most of the inventory information can be found in use at Watters. With only 75,000 square feet (including 42 parking spaces), Lain is utilizing his inventory data to make intelligent store layout decisions. “You have to be smart about inventory when there is no room for fat,” he says. Inventory movement is vital when determining the square footage of each department for this space-challenged retailer. The information changes each of Lain’s four selling seasons, and he adjusts his layout plan accordingly.

Return On Investment
Although it is an undertaking initially to input your entire inventory and learn all that your POS has to offer, IGCs say they’re worth it, saving their operations time and money. Not only do the systems require less man hours in the big picture, they provide endless data to help users make the best management decisions that affect every aspect of their businesses.
“Look for a solid company to support your software ... a company that is going to be around,” Lain says.

Garden centers should also be sure the information captured by their system will integrate into other software they may use.

Most importantly, with any inventory tracking system, users should make sure they have the time to set it up properly. It is advantageous to network with other businesses using the same system to learn all of the ins and outs.