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Comment by adam | Hacker News Reader

I suspect this will smooth out as they collect more data about what's going empty, etc. If as the article states there was millions in inventory sitting in the stock rooms, each store probably wasn't doing very good inventory management and demand planning, so didn't have good data to begin with to inform a new system.

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Surely though there were human people in each store who could have helped them with this, you know the ones that have been ordering the stocks and fulling the shelves for years?

You might think that, but reality is more complicated, and unwinding from the new inventory management system could be no better than sticking out it. https://news.ycombinator.com/item?id=16189733

One might think that such a new process could have been rolled in gradually - i.e. start with 20% backroom overhead, and begin reducing a percent a week until there is indication of overreaction. Why jump into the deep end of the just-in-time logistics pool right away?

Because “transformation” like this only meets its ROI nut if you adopt the religion in full.

This is all about eliminating a few hundred man-hours a week. Instead of having 2-3 guys unloading trucks and staging inventory, the whole staff is engaged, and is wasting a lot of time unless the trucks are loaded perfectly.

It’s insane. Instead of the fish or cheese guy selling me high margin product, he’s hunting for cartons. When I worked at a computer store in college, they did something similar, and same store weekday sales of premium products (which drove profitabilty) dropped 25%. But they saved 160 man hours of labor, or about $1,600, which was much less than the lost sales.

I find it very hard to believe that a sane inventory management system can run out of popular items that spoil very slowly. Are they optimizing not only for minimum waste but also for minimum back stock, denying a store a few sacks of potatoes and onions?

Whole Foods had $471M in inventory on their most recent balance sheet, so millions in the stock rooms and distribution centers would be normal.

Edit: https://www.sec.gov/cgi-bin/viewer?action=view&cik=865436&ac...

I'm sure there will be a learning curve. Anybody who has been through a company switching to a complex new business system will not be in the least bit surprised that it has brought WF to a standstill.

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