Inventory Management at Snow\'s Home and Garden

Inventory Management at Snow's Home And Garden

Firm incorporating inventory management: Snow's Home and Garden.

("Success Stores: Snow's Home and Gardens," Activant Website, 2005)

Hybrid -- fixed order period system on a seasonal basis, with some variance.

Type of inventory issues the firm has: As a seasonal business, which offers vastly different types of products at different times of the year, from Christmas trees to garden furniture, Snow's Home and Garden must stock a wide variety of products during a single season, before the season changes and creates a radically different consumer demand. One of the key reasons to stock inventories for businesses is to allow for consumer variance in demand over a period of time, and in the specific seasonal business of Snow's, the period-style system for many of its goods is necessary such Christmas trees, pumpkins, tomato plants. However, consumers expect certain non-perishable products regularly, thus some fixed orders are necessary with expected holiday favorites such as garden furniture and artificial trees. ("Operations Management: Inventory Management, Chapter 12, pp.12-2, 2005)

Snow's has attempted to create a niche market for itself against larger, cheaper competitor stores such as Wal-Mart by carrying unique products customers in its immediate inventory. Snow's must have a low enough inventory to give the customers what they want, yet not so much that the inventory grows outdated or obsolete, which can occur with even non-perishable goods. ("Obsolescence," Bridgefield Group/ERP Supply Chain Glossary, 2005) Thus order quantities are always an issue, and the stock out costs and carrying costs, on large pieces of merchandise are a factor as well. Snow's must keep a large enough amount of safety stock to account for perished produce or damaged vegetation, as well as consumer 'runs' on unusual planted goods. Yet, inventory order quantity cannot be so high as the goods will spoil if stored for too long. Thus, Snow's always uses a last our, first in system to guard against this, but most of its goods cannot be stored indefinitely. ("FIFO," Fidelity Glossary 2005)

Snow's attempts to combat such problems with the speed and accuracy of their inventory variance reports, to provide an accurate count of inventory, to ensure the maximum amount does not perish and makes it to the sales floor in time. The day after any order of physical inventory is delivered a variance report is printed after store is closed, and employees crosscheck large variances. Before finalizing the inventory count, errors are found and corrected in the listings. This is to ensure that no inventory orders are placed on goods that are already in stock, in as a result of an error rather than an actual shift in demand.

In your opinion, is their system appropriate for the firm's business?