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Data Sharing, Assortment Planning

This document discusses various aspects of retail clothing buying and inventory management processes. It covers planning sales goals, developing action plans, conducting market research, evaluating products, forecasting style and color selections, determining stock levels, using ABC inventory systems, and assortment planning. The key objectives are to meet customer demand, lower costs, develop supplier relationships, and optimize inventory turnover while reducing risks.

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61 views

Data Sharing, Assortment Planning

This document discusses various aspects of retail clothing buying and inventory management processes. It covers planning sales goals, developing action plans, conducting market research, evaluating products, forecasting style and color selections, determining stock levels, using ABC inventory systems, and assortment planning. The key objectives are to meet customer demand, lower costs, develop supplier relationships, and optimize inventory turnover while reducing risks.

Uploaded by

Bhuva_jana
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Data sharing, Assortment planning & Inventory management

Retail Clothing Buying Process Model

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 the end of the fiscal year.
O Your organizations size, resources, its position in

the market, and external factors such as the overall health of the economy determine its goals.

Cond
O Write your plans down to achieve your

goals. Also, write down how you are going to 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.

Cond.
O If your product or project requires marketing or

advertising, then go for it.


O Create a Pull for your product instead of trying

to Push it.

Activity
O 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 a highly qualified prospect where a contract or proposal will be developed and delivered.

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

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

In addition, Ricks T.L.S. program includes:


O targeting

O goal setting
O action planning O Fair Share analysis

O the 10x10 Matrix


O proactive outcall O strategic assessment, along with personalized

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

Planning Stock
O Three main categories of stocks

Raw Materials

Work in Progress

Finished Goods

Types of Stock
Raw 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 the value of work in progress is often substantial e.g. construction projects

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 of

seasonal increases in demand

Why Hold Stocks?


To meet demand O Acts as a buffer in times of high demand O Encourage customers to buy
To lower production costs O Take advantage of quantity or bulk discounts by ordering more at a time O Reduce ordering costs O Ensure continuity of production

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

Objectives of the purchasing department


O Stocks are sufficient for the business needs at

any 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 and efficiently

Costs of Holding Stocks


O Purchase price

O Stock Holding Costs


O Opportunity cost of the cash tied up by buying

stocks O Cost of storing and handling stocks O Cost of insurance O Cost / risk of deterioration or obsolescence O Stock losses O Stock Ordering Costs (administrative) O Stock Ordering Costs

Planning Inventory Control


O The answer of who decides what to move, how

many 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.

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.

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.

Stock Control
O 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 O Economic 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

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.

Setting Stock Levels


Maximum stock O The most stock of a particular item that the business is able or willing to hold at any one time O May reflect storage capacity O May also reflect management controls over spending by purchasing department O 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 time between the order being placed and the stock being delivered by the supplier

Reorder Levels Illustration

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 value O High value stocks get the most management attention for stock control

ABC System Example

Inventory Control Records


O 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 records O Purchase order files O Supplier files O Returned goods files O Price books

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

Review Stocks

Assortment Planning

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 purchase decision.


O The information for problem recognition comes

from the previous steps of the buying process: target market position, total stock plan, and inventory control plans.

O Decisions involving purchase of new goods are inherently

Information-Search

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,

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

Forecasting Product Selection and Sales


O In selecting a product line, a clothing retail

buyer 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

Forecasting Short-Term Sales


O 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

BENIFITS
O 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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