JIT

Our holiday sales period continues into January, as regular customers return to the store to redeem gift certificates and spend "grandma money." Regardless of how that turns out, I think we can safely call the season a wild success. Our sales were up nearly 20%, and we did it without a lot of the holiday risks associated with uncertain times.

Just in time inventory was key for us. The moment the store closed on Sunday the 14th, I was logged in from home putting an order together. This was to beat the inevitable Monday morning rush from other game stores, and thankfully I've got a sales rep at my primary distributor who thinks like me. While I logged in to my POS from home, he logged in to his ordering system from his house in Wisconsin. Together we hammered out an order, sucking out product from various warehouses. For the most part, our JIT inventory arrives the next day, as three of my major US distributors have warehouses in the Central Valley or closer. This late night login was repeated nearly every night until Christmas Eve.

As the season intensified beyond all previous measure, JIT became even more timely. One of the smaller, virtually unknown distributors is located a mere ten minutes from the store. We don't use them very often because timing is usually not that important. Last week we made several visits for items that we needed immediately. Next day delivery became same day delivery, something we'll take advantage of more often in the future. It also helped us locate stock that was out at all the major distributors, such as the last copies of Qwirkle. We'll be buying there regularly from now on.

Just in time is not suited well for the holidays, as it means spending a couple of hours each day receiving all this merchandise, rather than stocking up in advance. A stocked up store is serene during the holidays, while just in time can be a nightmare, especially Christmas Eve when ten boxes arrived, the label printer broke, the phone was ringing, and customers were lined up at the register. We handled it in stride, but it had the making of a nightmare scenario. JIT means staff is doing operations instead of sales, which is bad when it's busy.

On the positive side, we're sitting on a surplus of inventory dollars, rather than the usual surplus of inventory. I tended to order a day or maybe two in advance, which means even our current overstock consists of maybe half a dozen evergreen copies of a game. JIT also worked extremely well this season because of the lack of local competitors. For the first time, customers were willing to wait. They could take their chances and we would hold something for them, but just as often they would pay with credit card for a future copy of a game, usually planned for arrival the next day. Muggles tend to be the most mercenary of customers, and for the first time, they agreed to be patient. The alternative was a drive through the tunnel of hell to an Oakland/Berkeley store. We're thankful they waited. The JIT Wikipedia article rightly points out:

...since stock levels are determined by historical demand, any sudden demand rises above the historical average demand, the firm will deplete inventory faster than usual and cause customer service issues.

We didn't take advantage of lack of local competitors, but we certainly benefited from it. It also allowed us to be a bit mercenary right back at 'em. Secure it with a credit card or you could lose out. Pick up an unsecured item by 5pm, or it goes out on the floor. It also stretched our processes to the limit as we literally ran out of space to hold things. A crisis is when you learn if your procedures are worth anything, and although ours frayed at the edges, they rode out the storm.