Quick Response lets stores give customers what they want

TAKING INVENTORY

July 15, 1991|By Susan Warner | Susan Warner,Knight-Ridder News Service

Philadelphia -- On a rack in the ladies' lingerie department at Strawbridge & Clothier's Center City department store hangs 0-83621-09998-1.

The store's computers know those numbers translate to: "Pink ladies nightgown, size extra large, manufactured by Vanity Fair."

But those digits also form the foundation of a new, computer-driven business strategy that retailers and manufacturers say will transform the delivery of consumer goods.

"There's no question that what we are doing is not just evolutionary, it's revolutionary," said Lynn Hazlett, vice president business systems for VF Corp., the Wyomissing, Pa., apparel manufacturer and parent of Vanity Fair.

The system, known as Quick Response, is modeled after the Japanese "just-in-time" inventory-management systems that have increased productivity in other American industries, particularly automaking.

For consumers, the new retail technology aims to keep stores fully stocked so a shopper can find not only the most popular styles or models of an item, but also the right size and color.

For retailers, the system potentially could boost sales by keeping shelves fully stocked, while cutting the cost of carrying excess inventory.

For U.S. manufacturers, and the suppliers who feed them, the system would speed delivery of goods to retailers. With the new technology, manufacturers could hasten the shipment of fast-selling merchandise to stores before they run out. And, domestic manufacturers might gain an edge against overseas manufacturers that often outbid them with lower labor rates but still face months-long delays in shipping to the United States.

In the future, instant computer data about what styles or colors are selling could help manufacturers break into production lines and custom-tailor merchandise to consumer demand.

"Quick Response allows retailers and manufacturers to highly target the real needs of consumers instead of just guessing, the way they have for milleniums. Right now is the first time that humankind has ventured to look at that process and make it a quantum leap better," said Mark Frantz, a spokesman for Kurt Salmon Associates, an Atlanta accounting firm that has studied Quick Response systems.

For generations, much of the retail delivery system centered on seasonal purchases in which store buyers would select merchandise as much as a year or 18 months before it was to be sold. If they guessed right, manufacturers often were not prepared to produce as much as consumers wanted, and stores lost potential sales. If the buyer made the wrong choice, the store could be stuck with out-of-date merchandise that it would try to sell at deep markdowns.

With the new computer systems, stores and manufacturers hope to remove a lot of the guesswork.

In short, Quick Response works like this:

If a customer buys that pink nightgown at Strawbridge & Clothier, a computer bar code on the tag is read by a scanner at the cash register indicating what exactly was sold. That information then flows into a database at the store, where buyers have preset with the manufacturer how much of that item they will buy.

From there, the computers at Vanity Fair can monitor how sales -- down to color and size -- are going. The manufacturer can then vTC speed shipments, or hold off, depending on how the nightgown is selling.

That can speed the replenishment of store shelves by days or weeks, saving retailers inventory-handling costs and allowing manufacturers to plan more efficient use of their factories. The manufacturer and the store can also adjust the preset inventory levels for customer demand.

Studies indicate that about 30 percent of the time that shoppers set out to buy an item, they leave a store empty-handed because the store did not have the right item, or the right color and size in stock, Mr. Frantz said.

For 100 large retailers and manufacturers using Quick Response systems, overall sales increased 15 percent last year, compared with general retail sales, which were flat, he said.

Elizabeth Roney, senior director of information services at K mart Corp.'s fashion division, said her company began introducing Quick Response systems in 1987 and now has computer partnerships with nearly all of its 500 vendors of basic merchandise, such as underwear and hosiery.

Sales increased 30 to 40 percent in the first year of the program, she said.

"Sales were up simply because the merchandise was in the stores," Ms. Roney said.

Mr. Hazlett envisions a still more-sophisticated use of Quick Response to improve sales. He said that with instant sales data, VF Corp. could quickly redesign clothing to follow consumer tastes.

For example, if VF noticed a certain color, or collar style, was selling, it could bring in its designers to alter the styles in production in a matter of weeks. Now, it takes several months to design, produce, and sell clothing.

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