Case Study: Inventory Management & Merchandising Solutions

TESSCO’s Inventory Management & Merchandising Solutions Give Large Company a Leading Edge

TESSCO offers strategic, customized solutions that enhance operational efficiencies and customer satisfaction at Centennial Wireless.

Background

Nearly eighteen years ago, Centennial Communications (NASDAQ: CYCL), commenced business operations as one of the first independent wireless companies in the nation. Centennial Wireless employed 100 people and served approximately 20,000 customers in the Midwest region, primarily in Indiana and Michigan.

Today, Centennial Communications is a publicly-trade company and is a leading provider of regional wireless and integrated communications services in the United States and the Caribbean with more than 1.4 million wireless subscribers and 329,400 access line equivalents.

Challenge

As a new wireless company in the late-80s, Centennial Wireless initially grew by building a contiguous network and acquiring small, adjacent cellular companies. The Company now operates in two geographic regions: the Midwest cluster which includes parts of Indiana, Michigan, and Ohio; and the Southeast cluster, comprised of areas in Louisiana, Mississippi and Texas.

Expansion continued through the mid-90s when Centennial extended its wireless and wireline product offerings to regions in Puerto Rico. The introduction of better, smaller, lighter phones, such as the 3-ounce Motorola Star TAC, contributed to Centennial’s sustained growth and the Company subsequently continued to expand their reach and upgrade their technology – with the addition of all-digital TDMA in 1999 and transitioning the network to the Global Standard for Mobile Communications (GSM) in 2004.

To ensure that Centennial customers could purchase the appropriate ancillary products for their wireless equipment while efficiently managing the inventory and ordering process for their retail operations, Centennial partnered with TESSCO to maximize accessory sales.

Methodology

TESSCO provided Centennial Wireless with an overhaul of its existing accessory activity and developed a new program focused on in-store marketing and merchandising strategies, supported by an impressive inventory management system.

Chuck Hollis, Centennial’s senior vice president of operations, and his team, were eager to boost accessory sales by adopting various strategies established by the dedicated team from TESSCO. “Our initial efforts focused on the evident discrepancies between our mobile device offerings and the number of accessories that should have been in place to complement them,” explained Hollis. “To improve each customer’s experience, TESSCO initiated a system by which our inventory could be controlled and managed.”

The TESSCO inventory management system automatically determined the inventory needs in Centennial locations nationwide. Consequently, TESSCO helped Centennial eliminate the need for weekly ordering, reduce costs and obsolete inventory, organize store locations, and simplify the procurement process. Streamlining the inventory process resulted in immediate and measurable results for Centennial employees, such as an increase in efficiency across the business that enabled team members to spend more time consulting and selling, and less time on accessory management activity.

To complement the inventory management system, TESSCO utilized a value-added solution for safeguarding the Company’s inventory – the Accessory Sales System – designed to help Centennial easily determine when new product orders should be placed or when products are not selling as forecasted. With its strategic matrix selection design, TESSCO’s Accessory Sales System drives multiple and impulse purchases by enabling a consumer to easily identify various accessory products that support Centennial’s mobile devices.

“Prior to TESSCO Accessory Sales System implementation, our products and complementary service information were displayed on peg-holes on flat walls,” remarked Hollis. “Now, TESSCO’s extensive line of displays promote cross-selling and repeat-selling with alluring graphics and educational information on wall systems, floor stands, countertop spinners, among other methods.”

More recently, TESSCO has added custom-packaged, branded products that are immediately ready for display for the program at Centennial Wireless, which has also resulted in a boost in sales of accessories such as batteries, vehicle power adapters, hands-free components, carrying solutions, travel chargers, and other accessories unique to Centennial.

Results

TESSCO’s strategic, tailored inventory and merchandising solutions have contributed to the positive customer experience at Centennial Wireless, as well as enhanced employee performance, and reduced inventory management expenses. Results include:

• After TESSCO’s involvement, Centennial’s accessory sales increased by more than 65% while reducing their purchases, year-over-year, by more than $1.0 million
• Improved inventory management ensures that the products Centennial customers want to buy are available when and how they need them – thus providing excellent customer support and experience

• Value-added merchandising makes for a more enjoyable and organized shopping or browsing experience
• Streamlined ordering and delivery processes (including areas of scheduling, product placement, shelving, stocking, information access, etc.)
• Streamlined ordering and delivery processes (including areas of scheduling, product placement, shelving, stocking, information access, etc.)

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