Inventory Management: Real Operators in Real-Time
It’s no secret that keeping up with the ongoing duties of inventory management are some of the most time-consuming and tedious tasks for redemption centers. Since there are a million and one ways to manage inventory, we decided we would interview some of our partners within the industry to get their hot takes on how they handle inventory within their centers.
Spoiler alert: they all do it differently!
As part of our Redemption + You series, we connected with Abbey Brenneman the Owner & Fun Zone Manager at Pizza Ranch, Tyler Johnson the Operations Manager at Wild Island, and Chris Martin the Senior Amusement Manager at Andretti Indoor Karting & Games to pick their brains on their first-hand knowledge on how they deal with inventory management.
Q: How do you determine a target inventory value?
A: Chris Martin — “ I determine my inventory value based on six weeks of total game sales and I usually stick around between the five to seven percent mark to keep on hand to keep the wall full and the back stock available for the attendance to use… During [the] holiday season, I flex up just a little bit right around I’d say probably Max around 10% Of the total six-week revenue for the game sales…”
A: Abbey Brenneman — “I had to learn all this on my own and so I am very much a sight person. So I just make sure everything up front is full and then I have a good stock in the back. So I just know what our counter or what our container should look like in the back whether it’s the boxes or whatever and I just make sure I have that well stocked…”
A: Tyler Johnson — “So our Target inventory value is determined by a combination of our year-over-year sales and our cost of goods. So at the beginning of the year when I’m coming up with our budgeting goals, I’ll look at our previous years’ first second third, or fourth quarters. [I’ll] look at what our cost of goods was then and let’s say my goal for the New Year’s [is] to decrease our cost of goods by two percent. I would decrease those numbers by 2% and come up with the dollar value that way for my budget. Obviously, it’s not exactly accurate just because our revenues never gonna stay the same but it gives me a good idea of where I can start and depending on how our quarter is going.”
Q: How often do you conduct physical inventory + how do you prepare for it?
A: Tyler Johnson — “Yeah, so our goal is to do it quarterly. So to prepare for it, I go to the back end of our Redemption system and just find a stock summary report. I’ll export it to Excel and then divide each prize by section. Once that’s done, I’ll assign one section for one of my team members each week so that it’s not overwhelming and we’ll get through our inventory basically slowly, but surely. Week by week we do it.”
A: Chris Martin — “We do a physical inventory every two weeks. So we count back stock and the wall every two weeks. We prepare by doing the same type of thing — we go in the back end and we find negative numbers, sometimes there shows a negative number before you go to count. We put those to zero and then anything that is actually out of stock that shows zero, we do end up removing that from the list. Basically, we call it retiring that product. So that’ll shorten the list a little bit but mine’s actually set up where it goes by shelf in the back so it’ll be # 1–4 and it’s supposed to be shelf to sheet. So you look on the shelf and your product that’s on your shelf should match the sheet location. So it’s easier to not miss stuff. It still happens from time to time, but it’s a lot less frequent than when it’s just one big list. So I find that helpful.”
A: Abbey Brenneman — “…We do it monthly. However, we have done a little bit where it’s kind of like every two weeks. We’ve kind of broken up to where the bins are one week and then maybe the next week or depending on if it’s me or my daughter doing it what works for us, so we’re basically doing it two different weeks in the month, but doing the bins one week and the wall the next week…”
Q: How do you handle damaged items?
A: Tyler Johnson — “So we take care of those daily…We have a bin that we put aside where it’s full of broken prizes. So anytime something is broken, it goes into that bin and then that stock gets updated daily.”
A: Chris Martin — “I probably do that once a week, maybe every two weeks or so right before inventory.”
A: Abbey Brenneman — “We do it once a month right before inventory.”
Q: Do you count all items from a new order shipment?
A: Chris Martin — “Yes. We go based off the packing slip. If sometimes you can’t find the packing slip, you go based off of your order online because it’s obviously easier to find the online one sometimes. We do that and the team members are really good about letting us know if something is missing. And so we make those adjustments until we either receive it later on with FedEx or whatever delays and if we don’t, then it’s taking care of otherwise.”
A: Abbey Brenneman — “That’s my goal, it doesn’t happen every time but that is my goal to do it every time it comes in but I usually know what I ordered. So especially some things major missing, we know. I’m sure there’s something I’ve messed up at some point [in] time, but ideally, you do want to do it every single time because there are issues that things get lost or you don’t get so highly recommend it.”
A: Tyler Johnson — “Yeah, I agree with Abbey. It’s definitely ideal to be able to do it physically when it comes in and I’ve been doing that more recently, but typically in the past I just go off of the order and update the inventory that way.”
Q: What is your biggest struggle with inventory management?
A: Abbey Brenneman — “When there are sales that are happening and I might buy it a little bit too much and then you have to figure out where to store those things. Hence IAAPA, but I think making the time to actually focus on it and get it done. I think sometimes we just put [the inventory] in a spot and it’s like we’ll get to it when we get to it, maybe not that day but a couple days later so it’s not like we’re leaving it forever. But I think it’s making it a priority, checking the slips and making sure you got it and then getting it where it needs to be right away. So everybody has access to it. They’re not calling or saying “Hey, Where’s that?” it’s put [it] away, right away.”
A: Chris Martin — “It’s just making sure that everybody that’s involved in the inventory and the process knows what’s going on. That’s kind of the biggest struggle - just making sure that I dedicate the time to make sure that the correct people are in place for when I get my orders. It’s been really good for the last year and a half - two years, but it was a big struggle before that with no structure in place. It can be a very big struggle.”
A: Tyler Johnson — “Yeah, And I would say when it comes to our biggest struggle, It’s not necessarily when the shipments come in, but it was more really finding a system that works for us. For a while, we were trying to conduct a physical inventory more in a traditional sense when you think of inventory so your entire team coming in and counting every single item that you have and it just wasn’t working for us just because of the amount of back stock that we have. We’re very lucky to have such a large storage space but it comes with a lot of difficulties when you have so much backstalk, you end up with so many prizes and it’s hard to count for just one person. And on top of that, a lot of my team members are in college, one is in high school so it was really difficult to find a time where we could all be together and count the inventory together. It was just kind of finding a system that worked for us was a big struggle.”
Q: How many people do you have involved in inventory + about how many nam-hours does inventory take to complete?
A: Abbey Brenneman — “Myself and my daughter do inventory so we’re the only ones that take care of it and it takes us a total of 10 man-hours approximately to do that.”
A: Tyler Johnson — “I would say for me I’d have myself and two other people usually that help with inventory, maybe three if I ask nicely those three people will help with inventory. To do our section or our entire store, would probably be about 10 hours each. So maybe like 40 hours so it’s just a little bit less overwhelming when you break it up by section for us.”
A: Chris Martin — “We have three people when we count the counter. So one’s going to be entering [it] in the computer while the other two are counting each section and calling out the numbers. Then for the back stock, I usually have one or two people and the storage room is probably about a two to three-hour process depending on how much product is back there, and then a counter is probably about a two to three-hour process. And that’s done every two weeks.”
Q: What is your biggest piece of advice for other operators when it comes to inventory management?
A: Tyler Johnson — “…Finding something that works best for your store… I will say organization is gonna be key and I think that’s something that any store no matter your business or your team members or anything like that, you’re gonna [want to] be able to stay organized no matter your storage space. But other than that, finding what works best for you, just listing out the pros and cons of your store, looking at what you do well at and how you can capitalize on that as well as looking at the disadvantages that you have and how you can kind of work around those. But I think it’s hyperspecific to every store.”
A: Abbey Brenneman — “I think it’s having your designated team so if it’s one or one or two people that know a lot about it [inventory] and not getting too many hands in the pot because when you get too many people doing it [inventory] or trying to take control of it [inventory], then it’s hard to know what those discrepancies are because if people are in there and constantly changing it [inventory] in the system because they found something, then the next person may not understand why it’s [inventory’s] off or what’s going on. So, I think it’s kind of just keeping that one or two main people but yet, being able to pull in some other people at times to help do the actual counting and that kind of stuff.”
A: Chris Martin — “Take the time to count the inventory and do it correctly because it saves a huge headache in the long run. So yes, it takes a lot of man-hours, but at the end of the day, it’s going to save you in costs and everything else down the road… so definitely take the time.”
Watch the full interview to get even more tips on how these operators successfully manage inventory in their centers!
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