Retail Inventory Management

RETAIL INVENTORY MANAGEMENT PROCESS

YAVUZ ANIL TEMUÇİN

• Managing stock as a retailer is a vital task.

• Stock management grows more and more complicated with the increase of sales volume and diversification of product assortments.

• Effective and efficient stock management methods are critical to reach anoptimum level in terms of stock quantity.

STOCK MANAGEMENT

POINTS TO CONSIDER

CONTROL AND TRACK

SYSTEM AND DESIGN

DOCUMENTATION

REPORTING

COORDINATION

PRECAUTION

FLEXIBILITY

ANALYSIS AND METHODS

CONTROL AND TRACK

- Hold stocks.

- Hold products in the store for the customers. In this case the stock accuary isvery important.

- Decrease to the minimum all problems and inventorize periodically.

- Orders should be followed up and physical stocks should be confirmed.

SYSTEM AND DESIGN

- Stock layout can be changed for campaign and discount situations which gainquickness, that stock turnover raises.

- Active construction should be established and whole stores should takeaction. In this situation the optimum layout should be arranged.

- New technologies provides lots of new tools which are “RFID” can check yourstock accuary instantly.

- Shelf system for products should be arranged and whole users should use it.

- Product stocks can be constituted like locational which can be feeded.

- Stocktaking should be done with handled terminal.

- Overstock or under stock situations, automatical transfer system can beconstituted, in this way you can do delivery plan and stock feeding according tostore sales.

- Stock status and order situations should be defined transparently.

SYSTEM AND DESIGN

DOCUMENTATION

- Documentation must be very efficient. Goods entrance and issue must be controlled according to the procedures.

- Delete jobs which are based on experience only, and turned them into systematic tasks.

- Stock accuary must be synchronized with system. System mistakes should be detected, and resolved.

- Procedures for cancels and returns should be defined.

- Job descriptions should be fixed.

- Reports should be done for whole products category.

- The company should have efficient database and access to updated knowledge about products.

- Data should be valid, and the updates should be automatic

REPORTING

COORDINATION

- Products which are sold rapidly and slowly should be analysed very well.

- Stock and order management should coordinate together.

- Amount of stock in the sales field and in the warehouse should be balanced.

- Warehouse of store feeding place should be updated and should supportsales.

PRECAUTION

- Amount of safety stock should be arranged for the unexpected times.

- Seasonal products should be defined so precaution for the future will be more efficient.

- Supplier products should be counted and controlled for the compliance to the set specifications in order to prevent likely errors.

- New products should register immediately and without errors.

- Whole employees should enter same door and check their bags.

- Check garbages to prevent steal product from trash.

- Alarm system should be updated.

- Sample products should be registered.

- Prevent illegal sales.

PRECAUTION (THEFT)

FLEXIBILITY

- Stock control system can be different for each stores. So productPortfolio can be arranged for each stores too. The most important thing is stock accuary and respond in time.

- Hot sellers quantity should be raised. The layout should be arranged for outbound speed.

- Technology products should have life time.

- Company should give fast reaction when shock times come.

ANALYSIS AND METHODS

- Priorities should be chosen.

- You should find a solution for orders. When will you order or How much will you order?

- Stocks should be tracked all the time and these two construction should be synchronised.

- Stock management method should be optimum for the company.

PRE-ORDER LEVEL

- The amount of stock is known. When the stock comes some level companyshould give an order again.

- This pre-order level takes a value between a minimum and a maximumlimit. But this method can not be used for all products. Because in real lifethe demand is independent and is affected from lots of variables.

- Also campaigns and discounts can not give possibility to use this methodconstantly. Generally it can be useful, but for different situations can beimplementable various methods.

- This analysis, examine the past values and help predict the future .

- It is always useful to forecast stochastic process.

- Ultimately the real datas are used to help find value which is the nearest to future value.

- AR-MA, ARIMA, ARCH, VECM, GRANGER and GARCH these models can be used to predict the future.

TIME SERIES ANALYSIS

TIME SERIES ANALYSIS

Amount of Stock Demand Scope Volume (m3) Amount of Delivery Costs

These variables can predict the nearest value for future.

After results, future plans can be constituted.

ABC ANALYSIS

- ABC analysis is an inventory categorization technique which prioritiseproducts.

- Holding valuable products will raise stock costs.These products should be controlled frequently. If quantity raises, controlproducts will raise too.

- ABC analysis sorts and categorize products with sales values.In this way the control point will be arranged.

- ABC analysis can be used for delivery quantity and frequency.

REGRESSION ANALYSIS

- Regression analysis can be used to find a relationship.

- Regression model should be established with suitable variables.

- After analysis results which gives constants that willforecast future values.

• It can be used for annual stock raising.

• Stock costs ratio can be predicted.

• Factors which are affecting amount of stocks can be formulize with logical constants.

• After measured past values dimensions and delivery quantities that can help to create future plans.

REGRESSION ANALYSIS

YAVUZ ANIL TEMUÇİN

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