If anything changes, I'll send an update.
Jason
Posted by Steve Robinson at 09:52 AM in Operations | Permalink | Comments (0) | TrackBack (0)
Posted by Steve Robinson at 12:53 PM in Operations | Permalink | Comments (0) | TrackBack (0)
Posted by Steve Robinson at 01:13 PM in Operations | Permalink | Comments (0) | TrackBack (0)
Check out the latest addition to the Reno DC's productivity & Quality enhancers. This machine wraps a full skid, super tight and weighs at the same time. Check out this video that shows just how it works. Oh, and did we mention that it prevents accidents and injuries too?
Posted by Frank Stapleton at 04:52 PM in Operations | Permalink | Comments (0) | TrackBack (0)
Art Alternatives & Back to School Fill Rate Issues.
Our fill rate during Back to School Season on many
Art Alternatives items was less than stellar. Unfortunately buying
decisions made in February, March and April caused us to run short of critical
items in June, July and August due to the long lead times on imported
products. We are taking steps to improve our fill rate of these critical
items during the key back to school seasons. Among those steps are:
- A change in the way we calculate the amount of
product to purchase. Historically we have relied on the most recent 6
months of sales history to calculate what we refer to as the daily sales rate
or DSR. This number was then used to calculate our purchases. As an
example if the daily rate of sales (DSR) was 2 for an item and we needed a total
of 120 days worth of inventory we would place orders for 240 units (DSR=2 X 120
days)
We are changing this calculation on fast growing
items to use only the most recent 3 months to determine the DSR. This
will give us a better chance of beefing up our inventory on items with a fast
sales growth curve.
Here's an example of how this will help.
Assume an item has the following demand for the past 6 months.
Month 1 Month 2
Month 3 Month 4 Month
5 Month 6 TOTAL
3
4
2
5
16
23 = 53
Using the last 6 months demand history the DSR
would be 53 divided by 180 days = .29
Using the last 3 months demand history the DSR
would be 44 divided by 90 days = .49
If we determined we needed 90 days in stock using
the 6 month method we would have had 26 pieces (.29 X 90). Using
the 3 month method 90 days in stock would equal 44 (.49 X 90). If
the demand curve continues on it's upward path in Months 7 and 8 we would
probably stock out if we only had 26 pieces available. However using the
3 month method we would have 44 in stock and be in a much better position to
handle increasing demand or spikes.
The 6 month method works great for items with a
long sales history and fairly smooth demand, say a tube of 200 mil Titanium
White paint. However, when you apply the 6 month method to relatively new
items on which we are rapidly gaining market share it becomes an unreliable
forecaster of what's actually needed.
-We are planning farther in advance to make sure
that critical items are in our inventory at the beginning of the sales season
rather than arriving spread out over the course of the season. As an
example if we determine we need 300 of a given item for next summer's BTS in
the past we might have ordered 100 to arrive each month during June, July and
August. Now we are going to plan to have the bulk of the product arrive
at the start of the demand cycle so an item forecast requiring 300 units for
BTS will now have 200 arriving in May and 100 arriving in June so the entire
season's forecast would be available before the actual demand hits us.
-We have identified a list of 200+ never out BTS
items. We are also identifying the most popular kit items. Our plan
for next year is to increase our inventory on the 200+ never out items and the
most popular kit items by 50%. We experienced a growth factor of
65% this year in kit business which attributed to our poor fill rate on some
items.
Independent Fill Rate Issues
We are constantly searching for ways to improve
our fill rate to our independent customers. One measure we use is
something we call "stock outs." This refers to the number of
times customers ordered items which we were unable to fill or "stocked out
on". A recent analysis of our stock outs for a 45 day period
covering late August and all of September revealed that 70% of our outs with
independent customers were from "B" & "C"
items. We took immediate action by adding additional safety stock
to both B & C items that will add $750,000 to our inventory on hand.
This should help us recover from spikes on these items and improve our fill
rate for all independent customers. This extra inventory is arriving now and
should all be in stock by month enc
We will continue to review our buying methods,
inventory levels and fill rates to improve our performance. Our goal is
to raise our fill rate to 95% and we are committed to achieving this by year
end.
Thanks
Jim
Posted by Steve Robinson at 01:54 PM in Operations | Permalink | Comments (0) | TrackBack (0)
The buyers have taken the necessary steps to expand the availability of the centrally stocked items to Atlanta and Reno. Most should be available now or in the very near future.
Posted by Steve Robinson at 01:14 PM in Operations | Permalink | Comments (0) | TrackBack (0)
MacPherson’s Adds Value! New Invoice Feature At MacPherson’s we are constantly on the lookout for features to add that put you, the independent art material retailers, in control. You’ll find our latest idea in the Totals section on the last page of any invoice from us. It gives you the total retail value of the order, and the calculated discount from MSRP. What does it all mean? Now you can monitor your gross margin at a glance and make adjustments as needed.
Posted by Steve Robinson at 03:36 PM in Operations | Permalink | Comments (0) | TrackBack (0)
Retailers are starting to ask what MacPherson's is doing about the new Consumer Product Safety Improvement Act (CPSIA) standards that were announced in November and take effect in February. It's a complicated issue that impacts manufacturers & importers. A bunch of us, including Ryan, Jim, Kathy and the brand managers, are working to pull all the necessary forms and certificates together. If one of your customers asks, here's what you can tell them. We'll also put something similar in The Art Dog Blog.
Posted by Steve Robinson at 11:48 AM in Operations | Permalink | Comments (1) | TrackBack (0)
Recent Comments