Central replenishment helps managers thrive - store manager training program - K mart's Fresh New Face

Discount Store News, Dec 17, 1990 by Pete Hisey

Central Replenishment Helps Managers Thrive

The day starts early at this Burleson, Texas, Kmart store, located just outside Fort Worth.

Manager Jim Mesenbring meets his department managers at 7 a.m. to walk the store, looking over each department for merchandising improvements, cleanliness and areas for potential improvement. Then, at about 8:30, Mesenbring meets with the full labor contingent to pass along comments, information from headquarters and so on.

This is a training store, and Mesenbring and his department managers oversee a highly structured training program for future store managers.

"It's a lot different than in the old days," the 13-year Kmart veteran said. "Each trainee spends one week in each department, working directly with the department manager so they can learn the entire store. When I started out, if the manager needed floor help in sporting goods, that's where you spent most of your time.

"What we're experiencing here is a professionalization of the company," he continued. "There's a lot more guidance from headquarters than there used to be, in just about every facet of our business. Nearly all of our management trainees are college graduates, for starters. Merchandise decisions are carefully thought out, and are fairly uniform from store to store. It used to be `here's the merchandise, lay it out.' Now we get photos, detailed floor plans, in-depth management bulletins and other forms of help."

One such aid is Kmart's CMAR (central merchandise automatic replenishment) program. The computer-driven program tracks product sales in each hard lines department, and both automatically replenishes inventory and safeguards against duplicate inventory during sales.

"The program will look at your sales the last time an item went on sale, check your inventory, then automatically send an appropriate amount of back-up merchandise so we'll be in-stock during the sale." Previously, a buyer would automatically send each store a set number of pieces, no matter how many may have been in stock already.

Each store now gets deliveries five days a week, so out-of-stocks are declining rapidly, Mesenbring said. As encouragement to keep stockouts down, Kmart sponsors regular contests among managers, with prizes like the full use of a corporate jet for a weekend.

Most hard lines departments are on CMAR now, Mesenbring said, with automotives the last to receive the treatment. "We're receiving oil five days a week now, for instance," he said. "We receive 1,500 to 2,000 cases of merchandise every day of the week, giving us what we need just in time. With the exception of bulky products, we hardly store anything in the back of the store anymore."

Technology has helped in many other ways, Mesenbring said. The company's weekly news show, KTV, is received every Friday morning live, and Mesenbring tapes it so employees on other shifts can watch as well.

"Before KTV, I had no idea what was going on in my company," he said. "I knew my store and maybe a couple of nearby ones, but that's all. Now, we get a national scope; I can see what other managers are doing, what merchandising approaches are working, what products are in the pipeline, and a lot more."

The merchandise information is very valuable, he said. "On any given show, we get 15 or 20 merchandising tips, plus interviews with buyers and vendors about new products" as well as more general or personal-interest news.

The uniformity of merchandising has had several benefits, he added. Displays look better, shelves are easier to keep in stock, the store as a whole is cleaner and (of course) sales are maximized by a set of uniform standards.

A corporate merchandise trends book is sent out to managers on a regular basis to aid in spotting emerging trends. "Five years ago, managers decided what went where," Mesenbring said. "We still have latitude, but they send in suggestions, and if we carry the goods and they sell here, we generally follow them."

Headquarters is concerned that managers do retain a degree of independence, an ability to think as an entrepreneur. Mesenbring saw an opportunity through a local vendor to compete with a booming baseball card dealer. "We'd get new baseball sets in and they'd just blow out the door. So that started me thinking."

The result is a small department, one table actually, that merchandises older, more collectible baseball cards at hefty discounts compared to independent dealers.

The same philosophy holds forth in the Trim-a-Home department, where Kmart now offers fine ceramic tree ornaments and creche figurines. There the chain sees itself competing with Hallmark stores and other specialty outlets.

Mesenbring has also set aside upfront space for another merchandising idea, a display of fleece which is cross-merchandised with transfers, expandable paint, glitter and other craft products to produce an entire novelty shirt department. That idea was submitted to headquarters for possible inclusion on a later KTV broadcast.

As each department becomes more focused in its appeal, Mesenbring has seen corresponding increases in traffic and a spreading demographic base shopping his stores. The Martha Stewart program and Rachel McLish's bodywear department are two examples that do well.