Determining Operating Model for Inventory Visibility and Agility

This global retail company is a designer, developer, distributor, and seller of footwear and accessories. It boasts more than 1,600 retail stores in 80 countries, and has partnerships with major mass market merchants.

The company has a growing multichannel operation that supports retail, international, wholesale, and online ordering. With multi-business units planning and managing their own inventories, the substantial business growth in volumes was limiting adequate end-to-end inventory visibility. The separation of inventories was also limiting the ability to reposition stocks where demand was needed.

Tompkins needed to identify the best operating model that would provide inventory visibility and agility to support a true cross-channel business. Customers would be able to order product from any channel and be assured that the style and size they want would be available. The process involved an analysis of business strategy, operations, business processes, applied technologies, and benchmarking key processes with similar retailers. Acceptance was needed for the changes to achieve the cross-channel objectives. A consensus of the new operating model, as well as the roles and responsibilities for achieving its implementation, was also critical.

• A new operating model design that takes advantage of the competencies of the company’s product development, merchandising, and logistics processes. It aggregates demand plans by the different units, and procures and manages an integrated global inventory available on demand.
• Development and acceptance of action-oriented roadmap to achieve the new model with appropriate initiatives, including organizational development, processes, technologies, and change management.
• Validated that the new operating model involved operating cost reductions, less working capital requirements, and increased sales revenues, while also ensuring alignment of the business strategies for the units and overall corporation.