As an advocate for Space Management best practices, I help my clients understand the interconnectedness of Merchandising, Planograms, Supply Chain and Store Operations. Too often merchants are quick to complete a planogram update, consider the work “done” and then complain weeks later to find the stores have not executed their new planogram. Soon the finger pointing begins and I have rarely seen than end up with positive results – for the customer or the business.
Here then is ONE INVENTORY REPORT THAT EVERY SPACE MANAGEMENT TEAM SHOULD DEMAND and share with their merchant and store partners as part of their standard operating process.
Every planogram has a “Go Live” date. That is the date when the systems and the financial plan expects the new planogram to be set in the stores. Usually there is a window 0f 3-10 days for the store operators to actually execute the planogram. Nevertheless, the optimal situation is for every store to change shelf merchandising on the Go Live date and financial budgets are created as if that were true. It has been my experience, however, that we rarely set the stores up to be able to execute the new planogram on that date. Therefore, I highly recommend that retailers set up a KPI report (Key Performance Indicator Report) that takes a snapshot of the on-hand inventory on the Go Live date for all sku’s in the new planogram to see if the stores even had the product available in the stores to create the new planogram.
This report is an early indicator for merchants and financial planners to alert them to possible budget issues tied to the new planogram. As an early indicator, it helps alert the entire organization about problems in the supply chain, vendor issues or with store execution. The metric “planogram inventory availability” can be rolled up to department and total store levels for chief merchants, supply chain and store operations leaders to monitor. Some retailers make incremental improvements to this report by aligning the on-hand metric to the required shelf presentation minimums in the new planogram.
In any case, this simple report that triggers off the planogram Go Live date and utilizes inventory and allocation system data can identify the root cause of issues weeks before the problems would have previously been known.