Over at Fast Company they discussed a store that publicly destroys products that they were unable to sell in an attempt at maintaining brand exclusivity (Terminal Discounting). There are some serious flaws with their public display of destruction and I offered some better alternatives to the retail operators in the comments section of the article.

Many stores suffer from the same problem. The (unnamed) national store in the article should really investigate Six-Sigma techniques (otherwise known as a data driven root cause and decision process) in determining the product offering mis-cues that resulted in the need to discard merchandise. Insufficient pre-testing of new fashions (“we think the color this year is Yellow…Oops, it’s Green and we have a warehouse full of Yellow”) or mis-allocation (cowboy hats in Maine and snowblowers in Texas) or a supply-chain that is so long and convoluted it takes months for store signals (“we need Green”) to reach the manufacturing supplier (“ok we changed colors in the spray booth”) and then to clear out the in-process inventory scattered across the world in ships, warehouses, and retail stores.

Many retail stores find themselves in the awful quandary of shortages/stock-outs of key goods and stockpiles of unwanted merchandise. Which is, of course, the typical symptom of an ailing delivery system that can be improved with Lean/Agile production concepts. The simple solution is what one general from the ancient world told his lieutenants to “get ground truth”. Go to the individual stores and see what the customers are actually buying and demanding, then build a “production” process from raw materials through retail to the customer to deliver those products as fast as possible with minimal inventory along the way. Simple to say, complex in concept, but very possible to implement.

And it doesn’t matter if you’re selling cars, computers, clothes, or housewares. You’re providing a service in transforming raw materials into finished end-products that a consumer can take home and improve their lives. Do some serious thinking and avoid smashing the glassware.

Cheers!