Promotions are critical to the sales performance in many retailers. My son delivers newspapers to our neighbours that are routinely packed with flyers from various retailers in the neighbourhood - the things weigh a ton! Sears Days! Bay Days! Warehouse Sale! Customer Appreciation Days! BOGO! But many retailers fail in the execution because of their simple inability to communicate the promotional plan to key stakeholders up and down the supply chain, assess potential constraints, and respect demonstrated lead times.
How often has the Marketing Manager walked down that hall to the Inventory Manager's office to ask, "How are things going for the big promotion that we are running next week?" Only to hear the Inventory Manager respond, "What promotion?". Oops! A quick root cause assessment finds that the promotional idea was only approved last week, with a pompous "Pull out all the stops! Let's make this happen!" comment from the VP, in the face of lead times of 4 to 6 weeks. The result? Lost sales, unnecessary expenses, disappointed customers, unfulfilled demand, poor sales, and the inevitable witch hunt for a culprit (or scapegoat).
All of this could be avoided by setting in place a well-articulated and precise promotional plan, discussed and endorsed with all relevant stakeholders, which respects time fences. Effective communication is key, and an inbox cluttered with 200 emails per day is not an example of effective communication - it's just noise.
Such a plan is not possible without a holistic approach to managing the business. While people within any given department might work superbly, this effort can quickly go to waste if the work is not done while respecting the needs and objectives of other departments. Marketing needs to appreciate that it takes time to transport goods across the country to various distribution points, and that expediting shipments involves excess cost. The Inventory Manager needs to understand that he or she has a responsibility to understand the promotional plan (upstream) and that the warehouse has finite capacity (downstream). Finance needs to understand that playing fast and loose with payment terms (e.g. extending actual supplier payments beyond agreed terms) might improve cash flow, but it ruins supplier partnerships. It's not "all about Me"....it's about the welfare of the entity as a whole.
JIT, for example, will not work in an environment punctuated by functional silos and turf wars. Teamwork is a prerequisite. It is not an easy task to introduce JIT philosophies into a business that has built such barriers. Dr. Deming had an interesting observation with respect to JIT:
"Many American manufacturers are trying to start with just-in-time, unaware that this process is years off. Just-in-time is focused downstream. It's a natural occurence. It is the end result of getting things right in the first place."