Inventory Management

Good inventory management is especially important in a retail store such as Radioshack because of the hundreds of different products they carry. It is important to keep inventory levels of the right product on point at all times. Radioshack has systems in place at corporate level that insure that all their 5,000 company stores are allocated the proper merchandise.

Each store is allowed to place 1 order per week no later then Monday for them to recieve the shipment by Thursday of that week.This order is in addition to the order corporate has placed. Based on the volume of the store there is a set cap to how much you can order...stores less then $500,000 in volume are allowed $2200, stores between $500,001 and $1 Million are allowed $3500, stores between $1 Million and $1.7 Million are allowed $4500 and all stores above $1.7 Million are allowed $5500.

There is an electronic program that allows all store managers to place orders, this program allows them to see new products that are coming out as well as giving them insight to how many of a specific product was sold within the past week, month, three months. They also have the ability to see the store cost and gross margin on all the items. There are two major provisions set in place to insure that "over-ordering" do not occur. First there is a preset number next to each product that is allowed to be ordered. Second if order quantities are maxed out for the week and the products are not sold within about 85% of the ordered amount the store is cut off for one month from being able to order themselves. Much of the inventory management is placed in the hands of the store manager with conditions.

Once the inventory is in the store it is equally important to make sure the it is not stolen or damaged so that it is able to be sold. Although theft is unavoidable steps can be taken to reduce it. Each store has two cages which are padlocked: one for cell phones and the other for "high" theft items over $50( store cost). Both of these cages are counted once per week to insure accuracy and check stock levels. To keep internal stealing to a low only the three people have keys to the cages, the store manager, assistant manager and assigned key holder. For either cage there is a check out list that must be completed by the keyholder removing the product. Cellular Phones are 65% of the store business and cost so there is special precautions taken to insure there are no incidents. Every cell phone is checked in by serial number, if there is ever a phone discrepency the manager can reference the serial number.

It is hard to find that perfect balance in on hand stock so RadioShack has a great program to insure that products are always in stock. This program is called Direct2U: Any product that the customer is looking for that is not in stock can be shipped directly to them free of charge ( 2-3 shipping time).