Inventory Management Pace has trained buyers in apparel, footwear, accessories and home. The largest item on the balance sheet is inventory, the mismanagement of which most often forces a retailer into financial straights. There is technology available to even the smallest retailer that offers the potential for sound inventory management. Also, there are a number of companies other than Pace that can assist retailers in system selection. Training Optimizes Profits In most cases, what is missing is the training and implementation support that will leverage this technology to optimize profits. Retail performance data for many years supports this position. Consider the fact that retailers have spent billions of dollars over the last decades on retail inventory management technology, yet National Retail Federation's MOR (Merchandising Operating Results) have shown only incremental change in inventory performance and profitability. Since there is solid documentation that retail performance has not improved with the implementation of technology, perhaps an analogy might be helpful. Think if the transportation industry had invested for twenty years in Boeing 747s that moved about the same speed as a car. Not a great investment or track record. The pilots were automobile drivers who, at best, were only able to taxi these 747s. At worst, we have total crashers with implementation so poorly done and user mismanagement that inventory performance declines or crashes for lack of training. Pace has been retained to correct installations such as these that were absorbing an inordinate amount of management's time and causing a deteriorating financial picture. The worst of worlds: All the expense of technology and none of the benefits. The problem is that the drivers have never been trained to be pilots. The result is that we are "taxiing around" with technology and nobody has instructed users how to "take off." No reasonable driver would consider flying a plane unless they were trained. Technology is truly a 747. The fundamental problems are that software companies are not trained in retail processes and retailers are not trained in technology. Since education and training of users are seldom planned or budgeted for adequately, users do not have a full understanding of technology's potential and how to use it most effectively. Instead, they try to duplicate manual systems, paving over cow paths. Since technology (IT) people do not understand retail processes there is a wide gap that never is bridged. To overcome this hurtle, often IT provides a report writer so that buyers and merchandisers can experiment in an attempt to develop reports on their own. Few, if any, buyers have been trained in developing reports. In fact, most users are not familiar with all the data stored in their systems and what can be done with it. Solutions Are Readily Taught and Easy to Use There are a number of tools, algorithms and strategies that are readily taught and easy to use. These enable buyers to maintain a clearer view of trends and make improved buying decisions. Balance between the percentage gross profit dollars and inventory at cost can quickly be achieved at the classification, style, size and door levels. Without training, allocation , consolidation , appropriate mix by door and size balancing continue to be a major challenge for retailers. Opportunities for Large Retailers Large retailers have significant opportunities for improvement in ROI by implementing more precise buying processes. Less reliance on markdowns to correct inappropriate buying and allocation habits improves both margins and sales. Keep in mind that no retailer has data on lost sales opportunities. Improved buying and allocation will generate improved customer satisfaction and loyalty. Surveys reveal that each time you lose a sale for an out of stock condition, you lose more than the sale alone. In addition, you lose a part of your relationship with today's time-poor consumer who is forced to look elsewhere. Lose 3 sales with a customer and you will no longer be a destination store. You will be reduced to being a second choice if the new destination store cannot fulfill the customer's needs. Two critical areas represent opportunities for larger retailers: Inventory Management and Customer Service .