- The implementation of a new WMS system led to strains in Finish Line's supply chain, as technology gaps and glitches impeded the retailers' inventory flow to both online and brick and mortar customers in January, RIS News reports.
- The effects were swift and devastating: Finish Line lost nearly $30 million and announced plans to close 150 stores over the next four years, even as it faced accumulated inventory and had already shuttered 65 locations in the previous year and a half, according to IBJ.
- Nine months later, the company appears to have fixed its supply chain problems. Comparable store sales increased 5.1% last quarter after the company enhanced its digital capabilities, marketed aggressive mark-downs and brought consultants to help correct operational flaws.
Finish Line's experience shows the importance of change management when dealing with technology changes. New systems can lead to great boosts in efficiency and facilitate procedures, but faulty implementation may lead to worse scenarios.
One issue when implementing new technology is the "way we've always done it" mentality that can cause blocks for new system operators. To address this, some recommend having a change-management SOP that will increase the rate of acceptance and system proficiency.
But in its reports regarding the January problems, the main problem was that the new WMS, which had been implemented in September, just could not process orders quickly enough for the peak holiday season — leading to the huge Q3 loss.
Enter the importance of forecasting, demand planning, and timing of new system implementation. New is not always better — particularly so close to the peak shopping season.