SalesNotes

Weather Alert!

Due to weather conditions I-80 was closed Thur evening and is expected to open around 10am Friday.  With the exception of maybe some Ontrac deliveries late in the day, all orders going to California will be delayed until Monday. Shipments going to OR and WA are moving, but slowly. Customers should be prepared for delays in that region as well.  

If anything changes, I'll send an update.

Jason 

Reno Weather Update 12/7/2009

We are still receiving snow with mixed reports on how long it will last.  Carriers are operating at approx 50% and unsure what will be moving until tonight. We will be doing our best to get all priority 2 and 3 orders out that were in house at 6am this morning. All other orders you will need to check on and will be delayed a day. 

We will be monitoring the weather and giving the crew an option to leave early if conditions don't improve. We will work diligently to get all orders back to expected service levels as quickly as possible. 

Jason

Attention B2C Customers

MacPherson's was recently subjected to a sales tax audit by the State of California.   We have been notified that we are being held liable for sales tax on all shipments to end users residing in California if we do not hold a valid California resale certificate for the selling entity.   This means that shipments made under our B2C web fulfillment program on behalf of dealers outside of California  to end users residing in California will now be subject to California sales tax.   Dealers will either be asked to supply us a valid California resale certificate or pay the California sales tax on invoices for product shipped to end users in California. We will be sending all B2C customers a letter explaining this and their options.

Check Out Our Reno DC's Newest Toy!

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?

Fill Rate Update

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

Central Stocking of New Items Abandoned

We have decided to abandon our plan to centrally stock items at our Elgin DC.   We discovered that splitting orders was not compatible with some of our customers internal procedures and computer systems.  Other customers simply objected to receiving two shipments, the delay in receiving the centrally stocked items, etc. 

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.

MacPherson’s Adds Value! New Invoice FeatureThe Art Dog Blog from MacPherson's

» Blog Archive » MacPherson’s Adds Value! New Invoice FeatureThe Art Dog Blog from MacPherson's.

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.

Consumer Product Safety Improvment Act (CPSIA)

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. 

Thanks, Amy

We at MacPherson's have been very busy collecting all of the information required by the new CPSIA regulations. We are securing all the Product Safety Testing Certificates for all of our proprietary products (Art Alternatives, Okido, SOS, etc) and will build an online database where they can be accessed by retailers, end-users and US Customs. In the meantime, we will make all certificates in our archives available upon request. We are also relabeling any of the products requiring new safety warnings, though it may take awhile for our existing inventory to cycle through and for the new labels to arrive in your stores. (The new labels are required for products manufactured after Feb. 10th.) Additionally, we are conforming with the new Homeland Security measures put into place for 2009, too, to make sure our shipments reach us in their expected time-frame. We are contacting the vendors whose products we distribute, requesting GCCs (General Conformity Certifications) and access to their Product Safety Certifications. This is a huge project; we are aware of the timetable and we are working diligently to confirm their compliance by the Feb. 10th deadline. From what we are hearing, compliance to the CPSIA is still a moving target; our "go forward" plan may change in the coming weeks but that won't stop us from collecting as many vendors' GCCs as we can. You can be assured that MacPherson's is aware of the new regulations and is working hard to meet them. And you can contact us any time to ask about our progress or about specific certificates.