Every now and again, something new comes along that fundamentally changes the way we work: Excel, QuickBooks, tablets or smartphones. We have developed one of those fundamental work-flow changes and I’m very excited to be able to announce it today. I’m not suggesting this is as important as any of those mentioned above, but it will have a significant impact on the way you work nonetheless.
The most challenging step of the buying process is in the creation of a buying plan, meaning, planning your inventory by the number of items for each vendor, category and price point. As if the budgeting process isn’t difficult enough, once you have an idea of how much inventory you decide you need, the plan often falls apart when sitting in front of a vendor (or 30 vendors over a three-day trade show). The end results often don’t match the intended plan and we wind up being frustrated.
Creating a buying plan is extremely time consuming. Done right, it can take weeks to plan – and of course, it has always been a manual process. Yet, year after year, we find inventories are still not balanced properly, even for those who spend the time to plan. The reason we find ourselves in these unbalanced inventory positions is attributable to the inventory planning process, which is done only once or twice a year, if at all. Over a decade ago, I designed a model for addressing this problem called the Inventory Planning Model. It was a great step forward a decade ago, but it was an exercise in Excel and therefore a very time consuming, manual process. But now, this inventory planning process is no longer manual.
MERCHANDISE ANALYSIS AND PLANNING SYSTEM
BIG is introducing our new inventory planning program, MAPS, Merchandise Analysis and Planning System, this month! The MAPS program works in conjunction with real-time data from Balance to Buy™. It uses this data along with user-defined Turn, GP and Unit goals to create instant buying plans. You will be able to build your plans by any combination of Vendor and category, generic or branded. Each plan will have the price points, Gross Profit and quantities that you choose, which you can change on the fly, depending on the time of year or results of the most current sales trends.
MAPS is a radical improvement for those responsible for the budgeting and planning process and will change your (how-do-I-buy-at-a-trade-show) life! MAPS is being offered as a stand-alone product for retailers that are not currently Balance to Buy™ clients.
I’m very happy to report that our very own Denise Sober, along with her brother Michael Fleck, worked for more than two years to improve the planning process they were using in their family’s company. The result; a buying worksheet (Tick-Sheets) to be used at trade-shows or when working with sales reps. These Tick-Sheets are now part of MAPS!
Tick-Sheets get their name from the little “tick” a buyer will add to this worksheet at the time items are selected to fit the category and retail price point points in the plan. In the example below, the $300 retail price point for these Generic Diamond Bands has two framed boxes that correspond to the “2” listed in the OTB (Open to Buy) column. The Average Cost for this category and price point was determined to be $117, so as items are selected, the buyer would just check the box and move on to the next price point in this category. As a line is reviewed, items would be chosen, identified as fitting into one specific price point and ordered. The beauty of this process is the entire line can be reviewed much faster than without using a process this clearly defined.
You will also notice red boxes off to the left. These represent the number of aged items in that Category / Price Point that need to be stock-balanced with the vendors you are buying from, or moved into price points where you have holes, but cannot return.
In the $1,500 price point, the plan is to have 10 items in stock, but they have 7 as of today, so the Open-to-Buy is for 3 new items. Of the 7, however, 2 are aged and need to be dealt with by re-merchandising or stock-balancing. Either way, we need to deal with our aged inventory in an ongoing basis. While this looks simple, it took nearly a year of programming to make this work. The output is simple, but the project was not.
© 2019 BIG www.balancetobuy.com
Being able to announce MAPS, knowing what it will do for the industry, brings a tear to my eye. It is a remarkably simple solution to a very difficult problem. We are all looking forward to sharing it with you.