Executive Overview

The year was 1978. As political unrest overseas slowly inched the U.S. to the precipice of a second oil crisis, a fledgling family company was making its entry into the fuel industry with a single Arco convenience store. Since its days as a startup in Oakland, Calif., Vintners Distributors has thrived as both a jobber and retailer. These days, the company operates a fleet of 24 tankers and a chain of 124 c-stores throughout The Golden State.

Vinters Distributors

Despite its considerable success, Vintners isn’t resting on its laurels. Just recently, it began rolling out its Loop Neighborhood Markets featuring a daringly modern design, high-end food products, and the latest technology.

“In addition to providing great customer service and competitive pricing, as the market continues to move in the direction of fresh and organic foods, we want to be a leader,” says Raman Goyal, vice president of Vintners. “Although we still have the normal c-store products, we want to begin competing with businesses in the upscale foods market.”

Business Challenge

While some of the industry is only discovering the benefits of item-level inventory, Vintners has been doing it since 1991. In fact, by 1997 all of its stores were item-level. However, even with a progressive corporate vision, technological limitations presented considerable impediments to success. “The point of sale (POS) at some of our stores didn’t integrate with the backoffice as well as we would’ve liked,” says Goyal. “Consequently, among other things, the scan data was sometimes inaccurate, which made it difficult to calculate weighted average cost (WAC).”

In addition, Goyal says the reporting capabilities in Vintners’ previous software system left a lot to be desired. “It was quite difficult to examine long-term sales trends because the data would only go back so far. The reporting limitations also made it challenging to pinpoint out-of-stocks, overstocks, or vendor cost discrepancies.”

Vintners was also struggling with the lack of a centralized pricebook. “All the retails and costs were controlled at the site, not the home office. As one would expect, this created issues with accuracy and consistency,” Goyal states.

When it comes to item-level inventory, few things are more important than a reliable handheld solution. “We needed something that would simplify the receiving and auditing processes while making them more efficient and accurate,” says Goyal.

PDI Solution

One of the primary obstacles to the success of Vintners’ item-level inventory program was its pricebook. PDI Pricebook, a key component of the PDI Enterprise Retail Suite, was just what the company was looking for. Its centralized electronic control of site-level pricing and vendor costs allowed the retailer to ensure consistency at every site.

“PDI Pricebook is a huge part of our day-to-day operation,” says Goyal. “Aside from improving our process for updating retail prices and providing exception management for vendor costs, PDI designed the pricebook to integrate with practically any kind of POS device. With that type of data integrity, our WAC calculations are much easier and more reliable.”

Next, Vintners implemented PDI Store Assistant, a mobile handheld solution that improves store-level merchandising productivity and accuracy. “The handheld is great, especially for retailers trying to maximize the benefits of item-level inventory,” claims Goyal. “It easily handles merchandise receiving, transfers, suggested ordering, product verification, and, of course, audits.”

To help maintain that delicate balance between over- and under-stocking, Vintners relies on PDI Inventory. “The system seamlessly integrates with PDI Store Assistant, creating powerful inventory management that not only keeps the right products on our shelves, but also aids in identifying shrink,” Goyal explains.

Lastly, the web-based business intelligence tool, PDI FocalPoint, bolstered the retailer’s reporting capabilities. “With PDI, the reporting doesn’t have limitations,” Goyal says. “For example, we can take sales from 2010 and compare them to 2014 down to the sell unit. This kind of detailed reporting is really unique to PDI and has been a huge asset to our organization.”

Customer Results

The ability to effectively implement and manage item-level inventory at its stores improved efficiency across the company.

“The benefits we’re seeing are more than we anticipated,” Goyal says. “Accurate inventory tracking and audits have led to better reporting, which impacts multiple areas of business.”

Recently, Vintners has successfully reduced shrink in its stores and improved ordering. “In California, real estate is very expensive, so we don’t want to waste it,” Goyal explains. “PDI’s detailed product movement report and suggested ordering tools help us eliminate inventory waste and prevents out-of-stock occurrences on popular items.”

In addition, the company was able to enhance merchandising and marketing strategies with market basket data. “Like most retailers, we use this valuable data to develop in-store promotions, but we take it a step further,” says Goyal. “We also use it to negotiate with vendors. If certain products they want to promote aren’t moving in our stores, we make deals around products that do. It puts the negotiating power back in our hands because we have the information to back it up.”

Cost exception reports also proved to be particularly helpful in managing vendor relationships. “Let’s say you’ve made a deal with a vendor to give you a discount on a certain product,” Goyal states. “The system will generate an alert when the cost is outside of what was agreed to. It’s great for vendor accountability.”

In all, Goyal says item-level inventory is saving Vintners hundreds of thousands of dollars every year. “The benefits are tangible. [Recently] we saw a savings of nearly $400,000. It requires dedication to implement and maintain, but it’s worth it. Having PDI in our corner just makes it easier.”

Download a PDF version of this case study: Vinters Case Study