Hot Topics - Forecasting & Inventory Management Benchmarking ShareGroup

September 17-18, 2007
Charlotte, NC
Omni Charlotte Hotel

These hot topics and talking points will be covered in whatever order the participants want to discuss them. We would like to start with The Business Climate and the Internet as these are high priority items in many companies. We will also discuss Vendor Score Cards on Monday.

The Business Climate

1. How has 2007 been in terms of actual to planned sales?  What strategies are you adopting? 
   
   
2. Gasoline prices have risen dramatically and are predicted to impact the overall economy.  How is it affecting your business?  Do you expect an increase in direct sales with customers shopping from home or will customers tighten their pocketbooks?
   
   
3. How have you planned Fall and Holiday Sales? 
   
   
4. Customers are ordering closer to Christmas than ever, how are you reacting to this?  What is the impact to your business?
   
   
5. Have gift cards impacted your business?  Mastercard, Visa and American Express to name a few, offer gift cards that are widely accepted.  You may have your own brand of gift card.  Did you see a lift in business after the holiday season?

Internet

6. How are businesses analyzing merchandise categories and item demand for Internet versus catalog?  Combined results?
   
   
7. How do categories, products and price points sell differently on-line versus catalog? 
   
   
8. How is merchandise being planned for Internet?  E-mail promotions?  Are you factoring availability into planning web promotions?  How integrated is the process of planning Internet with Marketing’s plans?
   
   
9. How do you measure profitability of Internet items?  What gets included in costs?
   
   
10. What forecasting techniques are you using for Internet and E-mail promotions?
    
    
11. Is anyone using the Internet to test new products before including them in other media?  How do you equate these results to potential catalog demand?
    
    
12. How are other catalogs dealing with back ordered and out of stock product on the Internet?  Is product pulled off the site when inventory is not available?  How do you track or adjust the response rate accordingly?  How is this impacting the data used in forecasting?
    
    
13. Do you use the Internet site for liquidation?  How successful has it been?  Are there concerns about the customers waiting for product to be reduced and appear on the site?  Does web liquidation cannibalize your regular price business?  Do you have more than one web site?  Is clearance on a separate site?  How does this affect demand between the sites?
    
    
14. Is Internet forecasting for you simply as percent of catalog forecast? Does this work?

Marketing Issues and Effects on Planning

15. Has Marketing developed a response formula for the Internet?  What are its components?
    
    
16. Is Internet incremental?  Or is Internet a channel shift in your business?  Is your Internet average order significantly different from catalog?
    
    
17. What success have you had with source coding Internet transactions?  Is Marketing using match back techniques to allocate or credit demand to catalogs being mailed?
    
    
18. Have you been able to reduce circulation and maintain the same level of Internet sales?
    
    
19. How do you factor in placement of items on the Internet site (e.g. landing pages, clearance section, sale section, products displayed, predictive selling, etc.)?
    
    
20. How are you viewing the creative aspects of the Internet and the effects on selling?

Improving Forecasting and Planning

21. How do you forecast new items?  Do you use category past history?
    
    
22. What factors are used to determine pickup items?  How do you plan pickup items?
    
    
23. How do you plan fatigue rate of repeat products?  Fatigue rate for repeat items
    
    
24. What techniques are you using to plan and forecast Internet and email promotions?
    
    
25. In a multi-channel company how are you tying all the channel forecasts together?
    
    
26. Discuss the product development, product planning life cycle, merchandising and creative process.  Can other companies share their production schedules?  Talk about the conflicts and solutions between long lead time products and accurate planning.  How have you accommodated this?   Who ultimately enforces the schedule?
    
    
27. With longer lead times for design, product development and transportation, how do other catalogs read and react to catalog results?  Examples: plan season rather than book for book; pre-season catalogs to house file; advance season mailings, etc.
    
    
28. Long lead times:  Do catalogers include available dates in catalog?  How are initial buys handled?  Fulfillment-do they carry large numbers of backorders for length of lead time on reorders?
    
    
29. How has your company improved its pre-season planning?  How does your company evaluate catalogs and seasons (what data and reports)?  What systems support do you have for assortment planning?  What is the best way to forecast demand – are you using history, item placement, recent couple months demand, etc.?
    
    
30. Regarding return rates, are those catalogs which feature women’s apparel willing to exchange return rates for various categories?  How are you forecasting returns for seasonal items (timing of returns to fill orders during the Christmas peak)?
    
    
31. How do you measure the initial season coverage for a catalog?
    
    
32. Where in the cycle or process do back orders occur?  Has any company market tested effects of back orders on customer future purchasing?  What is your back order rate during the peak?
    
    
33. How do companies set purchase order dates (e.g. requested dates, lead time dates built in, etc.)?  How well do the merchants keep PO dates updated?  How many changes to dates are experienced?
    
    
34. How do you find the optimal balance point between inventory levels and customer service?   What is your approach?
    
    
35. Do you measure forecast variance to improve your forecasting ability?
    
    
36. For those companies that have both retail and direct businesses:
• Do you share inventory across selling channels?
• Do you plan both direct and retail?
• Do you use the same systems?
  
  
37. Are you planning gross demand or net sales? Or both?
    
    
38. Do you capture and use phantom demand in merchandise planning? How do you make use of the additional demand without doubling up demand that customers substituted themselves for?
    
    
39. What is the number of weeks your catalog is typically active?
    
    
40. What weekly dash board metrics do you provide management? How are they displayed or reported? Daily, weekly and monthly?
    
    
41. What tools have you developed to forecast receipts and EOM stocks?
    
42. For companies with multiple distribution centers (DCs):
• Do you have the same product across DCs?
• How do you plan for this? POs/Receipts at all DCs or to one then reship to others?
• Do you transfer between DCs?
• If a customer order is partially backordered, from the closest shipping point to the customer, do you split customer shipment, back order, etc.?
  
  
43. Is there a benchmark for determining the gap between "initial item fill rate" and "initial order fill rate"?
    
    
44. Does anyone handle "As seen on TV" merchandise? How do you handle this merchandise product line?

Working With the Merchants

45. What category and item planning do your merchants pass to you as a starting point? What have you done about automating your assortment planning process? How do you accomplish it today?
    
    
46. How involved are the merchants in planning new items (i.e. determining “like item” history to use)? How involved are the merchants in estimating item demand?
    
    
47. What types of data do you provide to merchandising to help them determine pickups and opportunities for new products?

Working With Marketing

48. How accurate is your planning (i.e. order curve, revenue per catalog, etc.) and forecasting between Marketing and Inventory Control (pre-season and in-season forecasts)? What makes for success? What are the reasons for failure in the forecasts?
    
    
49. With all the changes in the Marketing numbers, how do you deal with this? Circulation planning changes, pre-merge/post merge counts, etc. As catalog projections and response rate changes, how are plans updated and agreed to?
    
    
50. What promotions have worked best (e.g. free shipping)?
    
    
51. How do you take into account for product sales unknown source codes?
    
    
52. How far ahead does Marketing lock down the plan?
    
    
53. How well do your forecasts and merchandise budgets tie to marketing’s forecasts?

Working With Vendors

54. Do you have a vendor compliance manual? What is included in your vendor compliance manual?
    
    
55. How have you been able to get vendors to be more agile and flexible? What processes for quick response have you implemented?
    
    
56. How have you increased accuracy from your vendor shipping under/over stocks? Is this part of your vendor compliance manual?
    
    
57. Are the plans and forecasts for each product and SKU shared with the vendor in order to improve lead time on future delivery?
    
    
58. What negotiation tactics have you found that work? What have they achieved (e.g. increased margin, services, advertising allowance, etc.)? How do you create the "win/win" scenario?
    
    
59. What is your company doing in terms of supply chain management? What documents are electronic between your company and vendors (purchase orders, ASNs, invoices, payments, etc.)?
    
    
60. What services and prep work do vendors provide (e.g. ticketing, barcode labeling, repackaging, etc.). How much source ticketing, bagging and preparation do your vendors do?
    
    
61. What charge backs do you enforce? How has it affected costs? How has it affected warehouse order processing times?
    
    
62. Vendor chargeback’s-(late deliveries, packaging, quality) Who determines them? How is a $ amount determined? What is expected of vendor for product to be mail order ready? Packaging? Drop tests? Picking labels? How is vendor compliance measured?
    
    
63. Do you have a Quality Assurance department? What are their responsibilities? What level of sampling and checking are accomplished? What vendor analysis and compliance manuals do you have in place? Are you considering shifting QA “up stream” to the vendor’s site?
    
    
64. Are you negotiating Return to Vendor on products?
    
    
65. Vendor analysis and scorecards:
• Tim Holody will present Seta Corporation’s systems.
• Do you use anecdotal summaries of best and worst at the end of the season?
• What other service measurement tools do you use?
• Which departments contribute?
• Do you use a vendor “report card”? How are you using your systems to provide quantitative data?

Overstock Liquidation

66. What are your liquidation strategies? How do you monitor liquidation results by method and media? How do you capture the amount of the “mark down”?
    
    
67. What percent cost recovery do you experience by liquidation media?
    
    
68. How do sale pages work in your catalog? Do they cannibalize the business? Has anyone done any A/B split testing?
    
    
69. How are liquidation promos affecting sales for full price books and web sites with full price merchandise?
    
    
70. Do you use outlet stores for liquidation?
    
    
71. Is the Internet really a clearance venue?
    
    
72. How do you calculate the reserve $$ needed for markdowns?
    
    
73. Excess Inventory – when do you re-list product in next catalog? $ amount? Number of units?

Company Systems

74. Has your company developed its own specialized systems for planning, forecasting and inventory? Or purchased commercial systems? Talk about the process of selecting and implementing systems in your company. How have you eliminated “information silos” between departments?
    
75. Attendees are asked to share experience with commercial systems for direct forecasting and inventory management:
• Connectrix
• Direct Tech Forecast *21
• Galvin
• ForeRunner Systems IF/SO
• Evant (acquired by Manhattan Associates this summer)
• Thrive Technologies
• Ecomentry IFM
• Just Enough
• Others?
  
  
76. What drop ship systems have companies installed? Investigating?
    
    
77. What IT projects have you got scheduled that you can share? Is IT spending in your company always tied to the bottom line? Are you required to do an ROI?
    
    
78. What works for you in terms of developing systems internally to get over problems of continual requirements, delays, etc.?
    
    
79. If you have retail stores can you share how your retail inventory systems differ from your direct forecasting and inventory systems? How are inventory requirements combined for purchasing, etc.? Are there separate merchants for retail? Do you do anything different in mailing to trading area names where stores are located (timing of catalog, etc.)?
    
    
80. Do any of the attendees manage and control fabric internally? What systems are used?

Physical Inventory

81. Who is performing a full physical inventory versus a cycle count inventory. What are the pros and cons to each?
    
    
82. What are acceptable inventory variances?

Imports

83. Whether direct import or through a distributor, much of direct merchandise is now imported. All this means less flexibility, higher minimums and longer lead times. How are you building this into your purchasing strategy for one shot buys, exclusives, etc.?
    
    
84. How are you dealing with the inflexibility and mail plans changing constantly?
    
    
85. If you’re in apparel, how are you dealing with trade quota?
    
    
86. Can companies share the successes and limitations they have had with their import programs?
    
    
87. Talk about assignment of trade quota for your products. How do you handle this?
    
    
88. Who handles the paperwork for imported merchandise for the company? Is there a specific individual that handles letters of credit ; wire transfers, emails, invoices, etc.?
    
    
89. Direct Imports: How are responsibilities split out? Separate department? Do Direct Import vendors require purchases to be container load quantities?

Transportation

90. Have you reduced your in-bound transportation costs? How did you achieve this?
    
    
91. Other than freight costs, how is cost of oil affecting other companies?

Organization

92. How is inventory control structured? Who does inventory control report to?
    
    
93. Department Structure: Are Forecasting, Merchandising and Inventory Management separate departments or do they work as teams?
    
    
94. How do inventory management areas at other catalog companies determine the correct staff size? Discuss workload in terms of number of SKUs, items, vendors, POs, etc.
    
    
95. Discuss compensation for various positions.
    
    
96. Inventory positions are often mid-tier management positions. How do you justify higher salaries, more staff and being allowed to recruit experience personnel?
    
    
97. How do you expand your Inventory Control staff (e.g. internal transfers or promotions, outside hires, “trainees”, etc.)? What management training programs do you have in place?
    
    
98. What performance objectives do you have for control buyers? For inventory managers? How do the objectives tie into the merchandise objectives?

< Back to Forecasting & Inventory Management Benchmarking ShareGroup 2007 Registration Page