New Tricks, Meet Old Dog

It has taken more than 80 years, but McLendon Hardware has become “inventory conscious.” A family-owned and operated specialty hardware retailer with six stores in the state of Washington, the company was founded by Mac McLendon, who rode through Seattle on a horse-drawn wagon to collect used tools and appliances for resale.

Its first stores had narrow aisles and musty dirt floors, but McLendon Hardware now has a commercial lumberyard, two distribution centers and an Internet sales operation.

Vice president Mike McLendon, grandson of Mac, says the company is insistent on remaining viable in an era when many family-owned firms have been forced to capitulate to larger, well-financed behemoths.

“Our key challenge in competing against them is to provide what they don’t,” McLendon says. “When a person goes to The Home Depot, sometimes he has a hard time finding someone to help him. You walk into our stores and there are plenty of people. We also really focus on trying to have the hard-to-find items.

“It’s one of those things that when your name is on the door you just feel like you need to do a little more for your customers,” he says.

For McLendon Hardware, being “inventory conscious” means ensuring the operation is run as efficiently as possible. To help achieve that, McLendon Hardware last year adopted the Latitude Warehouse Management System from PathGuide Technologies, a Seattle vendor that provides solutions for small to mid-sized wholesalers and industrial distributors.

Getting a handle on its inventory was key to continuing to provide quality service to its customers, McLendon admits, yet migrating to automated inventory was a leap of faith for a company that began using computers only 11 years earlier.

McLendon Hardware moves approximately 45 percent of inventory from its DCs to its stores. With its former, paper-based warehouse management protocol — owing as much to gut feelings for replenishment as anything — the chain would not be able to account for as many as three million items at any given time — items that “were just sitting around somewhere,” McLendon says.

The typical fear was that the company would run out of stock, so under the former system it would just order more product. That meant more inventory always was on hand than was needed, and turnover occurred too slowly. That led to space problems in the warehouse that made precise inventory counts impossible, distorting inventory value.

“Before the warehouse system, we didn’t worry about keeping accurate inventory,” McLendon says. “We’d have a list the store would generate and send to us via fax. We would take that order and we would split it up among all our guys and they would walk down the aisles looking for these things. The store would ask for four and we would give them six.”