Retail Inventory Management Processes And Methods

1. RETAIL INVENTORY
MANAGEMENT PROCESS
YAVUZ ANIL TEMUÇİN

2. • 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 an
optimum level in terms of stock quantity.
STOCK MANAGEMENT

3. POINTS TO CONSIDER
 CONTROL AND TRACK
 SYSTEM AND DESIGN
 DOCUMENTATION
 REPORTING
 COORDINATION
 PRECAUTION
 FLEXIBILITY
 ANALYSIS AND METHODS

4. CONTROL AND TRACK
- Hold stocks.
- Hold products in the store for the customers. In this case the stock accuary is
very important.
- Decrease to the minimum all problems and inventorize periodically.
- Orders should be followed up and physical stocks should be confirmed.

5. SYSTEM AND DESIGN
- Stock layout can be changed for campaign and discount situations which gain
quickness, that stock turnover raises.
- Active construction should be established and whole stores should take
action. In this situation the optimum layout should be arranged.
- New technologies provides lots of new tools which are “RFID” can check your
stock accuary instantly.

6. - 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 be
constituted, in this way you can do delivery plan and stock feeding according to
store sales.
- Stock status and order situations should be defined transparently.
SYSTEM AND DESIGN

7. 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.

8. - 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

9. 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 support
sales.

10. 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.

11. - 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)

12. FLEXIBILITY
- Stock control system can be different for each stores. So product
Portfolio 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.

13. 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.

14. PRE-ORDER LEVEL
- The amount of stock is known. When the stock comes some level company
should give an order again.
- This pre-order level takes a value between a minimum and a maximum
limit. But this method can not be used for all products. Because in real life
the demand is independent and is affected from lots of variables.
- Also campaigns and discounts can not give possibility to use this method
constantly. Generally it can be useful, but for different situations can be
implementable various methods.

15. - 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

16. 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.

17. ABC ANALYSIS
- ABC analysis is an inventory categorization technique which prioritise
products.
- Holding valuable products will raise stock costs.
These products should be controlled frequently. If quantity raises, control
products 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.

18. 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 will
forecast future values.

19. • 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

20. YAVUZ ANIL TEMUÇİN
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