When hip-hop star Lauryn Hill won five Grammy awards earlier this year, music retailers were able to keep shelves stocked with her CD, "The Miseducation of Lauryn Hill," despite tremendous overnight demand. Relying on the solution for real-time inventory management, field reps from Handleman Company, the largest distributor of CDs in North America, automatically revised stock needs, processed and delivered the stock, and even went so far as to provide specific instructions on which CDs would get bumped to make room for Hill's.
Handleman automated its inventory planning and field sales processes for just such an event. When information on CD stock and returns is old or inaccurate, everybody loses: retailers, customers and Handleman. "As a distributor, our margins are thin," says Bill stapleton, vice president of IS and CIO at Handleman. "Therefore, it was imperative that our 500 managers and field reps get all information about restocking and returns for better deployment of shipment information."
Prior to automating, Handleman relied upon a paper-based inventory control system that operated at a snail's pace. Sales reps in the field who serviced the company's retail music client base collected what data they could on which CDs were selling and which were returned to the stores. "Return slips used to be made out manually, which meant extra work for our retail partners. They'd be looking at a handwritten document that might take them up to two hours to process," says stapleton.
To remedy this situation, the company implemented FastTrack, from Philadelphia-based sales force automation vendor FastTech. This system's client/server database integrates and analyzes information provided by Handleman's account managers, senior sales and marketing management. It consolidates field data and packages it for order systems, helping the company tighten inventories and collect market information for its seven district managers.
FastTrack's biggest benefit is to the company's field reps. Armed with portable printers, up-to-the-minute information and the FastTrack system, these reps now create a returned merchandise summary that calculates the total value of returned merchandise and prints a packing slip. Nightly, the system runs the inventory and returns data through numerous quality-control tests to ensure orders are accurate and that they conform to Handleman's business models. It also updates tables containing detailed store and product information.
Handleman then sends FastTech a master file containing realignment data for the entire sales force. FastTrack's automated protocols assign and route each store's realignment information to the correct field rep. Reps access this information online through FastTech's data center. "FastTrack leads our reps through their routes, giving information about each store, its demographics and inventories," says stapleton.
By The Numbers
Company: Handleman Company
Line of Business: Music CD supplier
Revenue: $1 billion in annual sales
Point of Pain: Inefficiencies in sales systems chipped away at profit margins
Solution: Automated sales force and established real-time inventory management