Automated Inventory

Thrift Industry Versus Retail Industry

Traditional retail solutions are designed for stores with uniform products. These products have a UPC attached and are ready to sell as soon as they are received. To make a uniform product available for sale, a retailer orders the product, receives the product, and puts the product on the shelf. Information about the product is entered into the computer system long before the product is received.

Here is a typical retail scenario:

  1. Retail Buyer reviews catalog from Supplier and negotiates the price.
  2. Retail Buyer enters product information (Part#, Description, Cost, Price) into computer.
  3. Retail Buyer generates a purchase order for products and sends it to the Supplier.
  4. Supplier fills the order and ships the products to the Retail Warehouse.
  5. Retail Warehouse receives the order and counts the items to match the purchase order.
  6. Retail Warehouse distributes items to the Retail Store.
  7. Retail Store receives the items and accepts them into inventory.
  8. Retail Store stocks the items on the shelf. Now, they’re available to sell.

In the retail industry, most of the work is done before an item is received. There’s only one (1) step to making an item available for sale after receiving it.

If these items don’t sell well, the retailer discounts them until they sell. Any leftover items beyond the sales are pulled, but the percentage is low (5-10%). The retailer must count up all the pulled items and remove them from the inventory.

Here’s a typical thrift scenario:

  1. Sorter receives a crate full of donations and sorts them into various bins.
  2. Pricer pick items from the bins and bring them to their work station.
  3. Pricer uses a computer to identify each item and a barcode printer to print the tags.
  4. Pricer attaches price tag to each item.
  5. Pricer stocks the items on the shelf. Now, they’re available to sell.

In the thrift industry, most of the work is done after an item is received. There are four (4) steps to making an item available for sale after receiving it.

In the thrift process, there is no step to enter the product information into the computer. That’s because the pricer does not look through a catalog to determine what he wants to put on the shelf. So, a thrift application must be able to create items on the fly and insert them into the inventory automatically.

If these items don’t sell well, the thrift store discounts them. However, since donations arrive every day, the sell time doesn’t last very long. A typical discount strategy is to sell an item at full price for 3 weeks, then discount it during the 4th week, and pull it after 4 weeks. There are many leftover items beyond the 4th week (about 60%), so a thrift application must be able to remove them from the inventory automatically.

The AMI Solution

AMI gives pricers an intuitive touch screen application to make price tags. Pricers select the department, category, and mandatory attributes. Then, they are given a list of available prices. Once a price is selected, the tag is printed. If none of the prices are acceptable, the pricer can create a custom price. All tagged items are immediately available for sale.

New SKU creation is unnecessary. A purchase order is not needed. Thus, no receiving processes is done. All inventory updates are handled by AMI automatically. Pricers just need to concentrate on pricing.

Each week, AMI finds all remaining donated items that are old. Usually, these physical items have been pulled from the shop floor. AMI automatically removes these items from inventory. Thus, pricers don’t need to tally up the pulled items and manually adjust the inventory.