Thursday, August 19, 2010

Logistically Speaking

The greatest problem retailers, especially convenience store retailers face today involves logistics.

You may have heard the idiom, "You can't manage what you can't see."

If you have from two to eight locations you may have a problem. If you have more than eight locations you're probably sitting on a powder keg. It's virtually impossible to effectively manage multiple retail locations from a central office if you are not connected.

There are various forms of connectivity that result in varying degrees of effectiveness:

  1. Assigning a supervisor to oversee a group of stores
  2. Retrieving and sending data to the stores electronically
  3. Creating a network which includes the office and the stores

For the most part, most independent retailers employ the first option, a few have adapted the second, but very few retailers have actually created a network consisting of headquarters, the back offices in the stores and the point-of-sales devices inside the stores.

If you are using option two, the receiving and sending of data to the stores electronically does not constitute having a 'network'.

The true definition of a 'network' is a seamless computerized environment where it is virtually impossible to draw a line between one node in a network and another.

The following are two examples of networks:

The Internet is the world's largest network. If you are connected to it, you have a kind of connectivity to the world. If you want to know what the weather is at this instant, you can go to a site like and check on the weather anywhere in the world. (You can use your back button to come back here). However, if you download and install the Weather Channel Desktop, you will find the current temperature is displayed in your task bar in the bottom right hand corner of you screen according to the zip code you entered during the install process, and as the temperature changes, so does the temperature on your desktop.

Now click on the following link:

Here you will be able to watch sales as they are occurring at one of our customers' stores. This page is set to refresh every five minutes, but can be updated in real time by refreshing your screen.

The important thing is, that in neither case, I am required to perform any manual operation to get the data onto my desktop.


By connecting the stores and the POS devices to our network over the Internet, we are able to record the sales in real-time, scan new items into our inventory in real-time, and audit the stores' inventories in real-time.

By tracking sales, purchases and audits in this way, we are able to automatically see the number of units of each item of inventory in our store within the past few minutes. By setting a re-order level for each item, a supplier is able to see what he needs to load in his truck, and we can track the incoming items from the supplier's warehouse to the store. This is possible only because we do not need to download the data. The status of the individual items is always available in our network for any authorized person or entity to see and use.

Price changes can be made for any item located in any store in the network. And since the retail price is network to the POS device, the next time an item is scanned, the POS will charge the customer the current price.

There are many other advantages associated with this type of network (cloud computing) that I will talk about later.

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