IN STORE RETAIL SUPPORT

IN STORE EXECUTION EXAMPLE

Plus White History & Review :

• Plus White In Stock Rate: 74%
• Retail focus on Unit Integrity Checks has improved Out of Stock Rate by 16%
• Avg. 61% of Plus White Reorder Points are currently set at 1 unit

METHODOLOGY TO RESOLUTION

1. Track sales and inventory for a 4-week period
2. Determine the extent of the out of stock issue and calculate the percent out of stock rate for each store
3. Determine lost dollar sales opportunity
4. Create a list of stores that would best benefit from an increase in reorder points so that Kmart’s investment in inventory is minimal
5. Analyze the out of stock rate for each reorder point level
6. Provide a recommended list of stores that would benefit from an increase in reorder points and order up to levels.

KEY LEARNING & RECOMMENDATIONS

• 40% of the stores had Plus White out of stocks in a 4 week time period
• Overall Plus White OOS Rate: 25%
• The “Best 35%” of stores represents almost 50% of the sales volume
• Lost sales dollar opportunity for Plus White are in excess of $300,000 annually
• Stores with a reorder point of “1” have an average OOS rate of 32%

RECOMMENDATION:

• Increase reorder points by 2 on Plus White in stores recognized as “Best 35%”
• Continue focus on unit integrity checks at store level.

NEXT STEPS:

• Make recommended increases to reorder points/order up to levels
• Measure sales in the stores where the reorder point is changing, before, during, and after the change has been made
• Provide Kmart with the results

EXECUTION RESULTS SUMMARY:

• Average Sales Units per month were 6% higher
• Average Daily Out of stocks were 16% lower per month
• Improvement of current DC Service Levels drastically improved both in-stock status and unit sales.