data sharing, assortment planning

7/30/2019 Data Sharing, Assortment Planning

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Data sharing, Assortment planning

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Inventory management


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Retail Clothing Buying Process Model


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Planning Sales Goal

O In a global sense, your ultimate goal is most

likely to be a simple one: generate new business.

O But your specific goal for your sales plan could

be, for example, to increase sales by 25% by theend of the fiscal year.

O Your organizations size, resources, its position inthe market, and external factors such as the

overall health of the economy determine its

goals.


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CondO Write your plans down to achieve your

goals. Also, write down how you are goingto achieve them.

O Then write down all the points that you feel

might slow you down.

O The best plan to have is to try and solve all

the obstacles first, so as to reach your goals

faster.


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Cond.

O If your product or project requires marketing or

advertising, then go for it.

O Create a Pull for your product instead of tryingto Push it.


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ActivityO Average outbound calls per day/ week/ month to

engage in an initial sales interview.

O Average number of initial sales interviews or

demonstrations per day/ week/ month to find ahighly qualified prospect where a contract or

proposal will be developed and delivered.


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Development

O Targeted future position or professional status

O Targeted time frame

O Targeted number of professional development

classes or seminars to attend during month/

quarter/ year

O List specific titles or names for targets above

that are currently known


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The 10 Tips to Reach New Sales Goals

O Planning

O Preparing

O Paperwork

O Prospect

O Contact Customers

O Limit Time

O Meeting Agendas

O Work By Appointment

O Evaluate Every Activity

O Anticipate Objections
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In addition, Ricks T.L.S. program includes:

O targeting

O goal setting

O action planning

O Fair Share analysis

O the 10x10 MatrixO proactive outcall

O strategic assessment, along with personalized

coaching and mentoring using the T.O.A.D. process.


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Planning Stock

O Three main categories of stocks

Raw Materials Work in Progress Finished Goods


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Types of StockRaw Materials

O Substances in a natural state before they go through

manufacturing or other processing

O Components that require assembly

O Purchased from outside suppliers

Work in progress

O Items which, at a given time, are going through the

production process

O

Some products have a long production process so thevalue of work in progress is often substantial e.g.

construction projects


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Cond.

Finished goods

O Goods that are complete

O May be stocked awaiting delivery to customer

O May be produced some time in advance ahead ofseasonal increases in demand


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Why Hold Stocks?To meet demand

O Acts as a buffer in times of high demandO Encourage customers to buy

To lower production costsO Take advantage of quantity or bulk discounts

by ordering more at a time

O Reduce ordering costs

O Ensure continuity of production


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Role of the Purchasing Department

O An important service function in any business

that needs to acquire inputs (e.g. raw materials)

and transform them into outputs

O Objectives of the purchasing department


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Objectives of the purchasing department

O Stocks are sufficient for the business needs atany one time

O Avoid overstocking

O Obtain stocks of the right quality

O Obtain stocks at the best available price

O Develop strong working relationships with key

suppliers

O Operate the purchasing function effectively andefficiently


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Costs of Holding StocksO Purchase price

O Stock Holding Costs

O Opportunity cost of the cash tied up by buying

stocks

O Cost ofstoring and handling stocksO Cost ofinsurance

O Cost / risk ofdeterioration or obsolescence

O

Stock lossesO Stock Ordering Costs (administrative)

O Stock Ordering Costs


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Planning Inventory Control

O The answer of who decides what to move, howmany and when is explained in two different

well known types of stock management

systems. These are:

O Allocation, or push systems

O Requisition, or pull systems

O Inventory control involves the procurement,care and disposition of materials.


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Cond

O There are three kinds of inventory that

are of concern to managers:

O Raw materials,

O In-process or semi-finished goods,

O Finished goods.


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The reasons for inventory control are:

O Helps balance the stock as to value, size, colour,style, and price line in proportion to demand or

sales trends.

O Help plan the winners as well as move slow sellers.

O Helps secure the best rate of stock turnover for

each item.

O Helps reduce expenses and markdowns.

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Stock ControlO A stock control system should keep you aware of

the quantity of each kind of merchandise on hand.

Wide range of stock control systems available

O Reorder and maximum stock levels

OEconomic Order Quantity (EOQ)

O ABC system

O Just in time (JIT) systems

O Perpetual inventory methods

O Subcontracting production processing

O Obtaining progress payments from customers

O Reduce number of product lines


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Objectives of stock control

O Minimise the value of stocks held by the

business.

O Ensure the business has the right stock at the

right quantities to allow production to carried

out efficiently.

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Setting Stock LevelsMaximum stock

O

The most stock of a particular item that the business isable or willing to hold at any one time

O May reflect storage capacity

O May also reflect management controls over spending by

purchasing departmentO Re-order level

O When stocks held of an item fall to this level, a new

purchase order is made

O Needs to take account of the possible lead timebetween the order being placed and the stock being

delivered by the supplier


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Reorder Levels Illustration


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Minimum stock level

O Also known as the buffer stock

O Important to avoid stockouts (lost sales) and

disruption to production

ABC System

O Helps to identify which stock items should be

controlled

O Stocks are divided into three categories (A, B, C)

according to importance of sales valueO High value stocks get the most management

attention for stock control


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ABC System Example


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Inventory Control RecordsO Inventory control records are essential to

making buy-and-sell decisions.O Perpetual inventory control records

O Out-of-stock sheets

O

Open-to-buy recordsO Purchase order files

O Supplier files

O Returned goods files

O Price books


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C lli I


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Controlling Inventory

O Controlling inventory does not have to be an

onerous or complex proposition.O STEP 1: Inventory Planning

O STEP 2: Establish order cycles

O STEP 3: Balance Inventory Levels

O STEP 4: Review Stocks

O STEP 5: Follow-up and Control


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Review Stocks

A t t Pl i


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Assortment Planning


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Problem Recognition

O Problem recognition represents the first step of

a decision-making process.

O For assortment planning, this step occurs when

a retail buyer begins to move toward a purchasedecision.

O

The information for problem recognition comesfrom the previous steps of the buying process:

target market position, total stock plan, and

inventory control plans.


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Information-SearchO Decisions involving purchase of new goods are inherently

risky and challenging, even for experienced buyers.

O To reduce the uncertainty associated with such decisions,

retail buyers may search for information from a variety of

sources.

O The internal sources may be store records, merchandise

plan report, and sales peoples opinions.

O The external sources may include: (a) customer panel, (b)

consumer magazines and trade publications, (c) vendor

opinions,


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Product Evaluation

O Product evaluation is a process by which a

choice alternative is evaluated and

selected to meet retail buyers needs.

O Fashion Forecasting Involvement in Product

Evaluation

O Qualitative Evaluation

O Quantitative Evaluation


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Forecasting Product Selection and Sales

O In selecting a product line, a clothing retailbuyer is determining combinations of

styles, which can satisfy target consumers

O Selection of a product line involves

qualitative aspects of an assortment plan.

O Forecasting Style Selection

O Forecasting Colour Selection

O Forecasting Size Selection

O Rules for Product Selection


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Forecasting Short-Term SalesO For forecasting, clothing merchandise is grouped

into broad classifications, fashion or basic

merchandise.

O The forecasting technique of the two

merchandise groups is different.O Fashion goods must be monitored more

frequently than basic goods.

O Sales Forecasting Methods & Analysis

O Marketing and sales forecasting

O Forecasting Style Order Quantity


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BENIFITSO Higher proportion of new articles

O Short life cycle

O Generally cannot be replenished at short notice

O Push-oriented

O open-to-buy and markdowns are very important


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