A Pea in the Pod
Abercrombie & Fitch
activity-based pricing
adjusted inventory turns (AIT)
adverse selection
Amazon
American Pacific Enterprises (APE)
apparel industry
assortment planning strategies
challenge of buyers understanding customers
failure to use the data they have
incentives that inhibit profitability
lead time differences example
product assortment deliberations (see product launch decisions) reliance on trust with suppliers
Arrow Electronics
empowering a champion
empowering the shop floor
inventory issues at distribution centers
new focus on inventory accuracy metrics
senior management’s example setting
assortment planning
assortment allocation examples (see snack cake assortment planning; tire assortment planning)
complexities of SKU choices
conjoint analysis
data needed to forecast sales
estimation steps
forecasting assumptions
forecasting based on attributes
levels of
localizing assortments
logic behind carrying slow-moving SKUs
marginal return on incremental resources
modeling steps
operational level of planning
optimization steps
stockouts and
strategic level of planning
value in using a complex model
automotive industry. See also Toyota Production System
Ballmer, Steve
Barilla
Barnes & Noble
Bed Bath & Beyond
Berman, David
Best Buy
analysts’ focus on sales
assortment planning
causes of stockouts
inventory turns
partnering with suppliers
staffing levels setting practices
switch to sales-capture rate
Block, Greg
Bombay
Borders
assortment planning
late-adoption repercussions
localizing of assortments
metrics used to evaluate store performance
phantom products and stockouts problems
Brantano
Bryn Mawr Stereo
Campbell’s
capital intensity
Choi, Thomas
Chrysler
Circuit City
collaborative planning, forecasting, and replenishment (CPFR)
comparable store sales
Consumer Outlook Survey
contract-based solutions to incentive problems
Costco Wholesale Corporation
Cumberland Farms
decouple point
DeHoratius, Nicole
Dell
Deming, Edwards
Destination Maternity
Díaz, Miguel
DiRomualdo, Bob
discounted cash flow model
earns retailers
“Econometric Analysis of Inventory Turnover Performance in Retail Sales,”
“Effect of Product Variety and Inventory Levels on Retail Sales,”
electronic product code (EPC)
Electronic Product Code Information Services (EPCIS)
employee turnover and store performance
enforceability as a contractible element
fashion apparel. See apparel industry
Fisher, Jerome
Fisher, Marshall
Ford
Ford, Henry
forecasting sales
approaches used
assumptions
balancing forecasts, flexibility, and inventory
based on attributes
CPFR process
data needed
improving accuracy of (see launch forecast accuracy)
for a new product (see product launch decisions)
profits reclaimed by more accurate forecasts and better inventory
retailers’ unwillingness to invest in accurate forecasting
top-down versus bottom-up forecasting
at World
4R Systems
Freeland, Kevin
Gaffney, Paul
gamma distribution
Gap
Gaur, Vishal
General Motors
greedy rule
grocery industry
assortment planning
availability of data
buyers’ inability to be correct
CPFR process
labor expenses versus cost minimizers
logic behind carrying slow-moving SKUs
RFID applications
gross margin
Halpin, Jim
Harris Teeter
Heijn, Albert
Hewlett-Packard
Hitachi Global Storage Technologies
Home Depot
Honda
Huckman, Rob
I2 Technologies
Immelt, Jeffrey
implementing retail strategies
challenge of skepticism about promised improvements
cultural changes example (see Arrow Electronics)
failure to focus on changing people’s behavior when implementing new systems
failure to hire for analytical skill
failure to leverage the available information
getting over the tedium of analytics
hesitancy to use cross-functional collaboration
limits of tactical changes
possibility that broad organizational changes may be required
principles for tactical implementation (see tactical implementation of retail strategies)
structural changes that may be needed
top-down versus bottom-up forecasting
incentives for goal alignment
acknowledging existence of misaligned incentives
bad incentives’ impact on sales and profits
consequences of failure to recognize the value of reputation
contract-based solutions to incentive problems
distribution and supply chain incentives that inhibit profitability
hidden incentives in cost-plus contracts
identifying the root of a misalignment
information-based solutions to incentive problems
metrics use to reward desired behavior
misaligned incentives hurting business example
misalignment from unforeseen consequences of actions
overcoming goal incongruence
principal-agent theory (see principal-agent theory)
principles of
profit loss due to differing incentives
trust- or reputation-based solutions to incentive problems
Inditex
information-based solutions to incentive problems
information technology. See technology and retailing
inventory
information used to predict stock price
levels affect on retail valuation
relationship to a firm’s valuation
stock valuations based on inventory management
turns (see inventory turns)
understating of the relationship between inventory and sales
inventory control best practices
“Inventory Record Inaccuracy,”
inventory turns
analyst’s focus on
data analysis
defined
metrics for
pooled model results
time trends and benchmarks
Jansen, Frank
Jos. A. Bank
just-in-time (JIT) manufacturing
Kanthal
Kaufman, Steve
Kesavan, Saravanan
Kohl’s
Krishnan, Jayanth
Kroger Company
Kurt Salmon Associates (KSA)
launch forecast accuracy
problems from clustering based on attributes
problems with using “average” stores as a predictor
referencing products from prior seasons
test sales data use
updating forecasts based on early sales
law of large numbers (averages)
Li & Fung
Liker, Jeffrey
L.L.Bean
Louagie, Jan
MAD (mean absolute deviation)
marginal productivity
marginal profitability analysis
marginal return on incremental resources
markdowns
in calculation of cost of forecast errors
and consolidation used to clear out inventory
in determination of optimal buy quantity
inventory levels and
optimization
optimization using price testing
order point determination and
position in product lifecycle planning
rise in quantity of
taking into account to reduce forecast error
markup
Matthias, Dan and Rebecca
McDonald’s
mean absolute deviation (MAD)
Men’s Wearhouse
METRO Group
mystery shoppers
Nardelli, Bob
National Bicycle
accommodation of variation in demand
cost of customization
customization process
decouple point
lead time components
mass production supply chain
offering of product versions
process for setting the custom lead time
reductions in lead times
sales losses due to inventory management
small quantity production efficiencies
National Retail Federation
Nechleba, Jiri
Netessine, Serguei
Nike
Nine West
Norwalk Furniture
observability as a contractible element
Ohno, Taiichi
Old Navy
opportunity cost
optimization technology
order point
Ortega, Amancio
Owens and Minor (O&M)
personal shopping assistants
PetSmart
phantom products and stockouts
Poisson distribution
pooled model for inventory
price testing
principal-agent theory
enforceability as a contractible element
observability as a contractible element
principle that incentive design requires an understanding of operations
principle that incentives exist to influence behavior
principle that there are underlying causes for incentive misalignment
uncontractible defined
verifiability as a contractible element
Prius
product launch decisions
actual versus forecast demand calculations
cost of forecast errors
cutting the cost of errors
determining an initial buy amount
early sales used to improve accuracy
financial evaluation of different strategies
finding an optimal hedge
forecast deliberations
gamma distribution used to find optimal buy quantities
marginal profitability analysis to find optimal buy quantities
order lead time considerations
replenishment decisions (see stockouts)
revising data based on reduced lead time
summary
updated forecasts used for a second buy decision
product lifecycle planning
categories of
forecasting sales
launch forecast accuracy improvement (see launch forecast accuracy)
life stages of a product
markdown optimization
markdown optimization using price testing
markdowns and consolidation used to clear out inventory
new product launch decisions (see product launch decisions)
summary
Project Gemini (Best Buy)
radio frequency identification. See RFID
RadioShack Corporation
Raman, Ananth
relative sales per title (RST)
reputation-based solutions to incentive problems
retailing
adopting an investor’s perspective (see retail valuation)
aggregate demand uncertainty versus mix uncertainty
assessing inventory levels (see inventory turns)
buyers’ inability to be correct
complexities of buying decisions
current state of the sector
discrepancy between what retailers stock and what customers want
excess inventory problem for retailers
fixed costs issues
lifecycle of
operational execution improvement focus
predictions for in light of current economic crisis
product availability attention importance
profits reclaimed by more accurate forecasts and better inventory
strategies implementation (see implementing retail strategies)
technological risk in (see technology and retailing)
retail-ready packaging
retail valuation
inventory information used to predict stock price
inventory levels affect on
inventory levels’ relationship to a firm’s valuation
inventory turns (see inventory turns)
steps for managers to take
stock valuations based on inventory management
understating of the relationship between inventory and sales
RFID (radio frequency identification)
applications inside retailing
applications outside retailing
cost and frequency availability issues
current limits to compelling financial returns
indications of a decrease in stockouts with use
passive versus active tags
pilot studies in retailing
recommendations for
serial numbers and
viewed as an investment or as a call option
RST (relative sales per title)
Ruddick Corporation
sales-capture rate
sales surprise
Saucony
Scheihing, Betty Jane
Senk, Glen
service level
Sharma, Ken
shelf-ready packaging
shrink
Sidhu, Sanjiv
snack cake assortment planning
benefits of localization
computing estimates of demand
estimating demand for flavors not offered
estimating likelihood of substitution
finding an optimal assortment
sales data
Sport Obermeyer
staffing levels impact on sales
achieving balance between overand under-investment
cheapest ways to increase quantity of store labor
considerations for setting staffing levels
diminishing returns from increased staffing
example process at Best Buy
identifying metrics for
evaluating store performance
labor expenses versus cost minimizers
link between revenue results and staff quantity and quality
payroll and
providing training to improve the customers’ experience
sales increases per dollar of payroll
Staples
statistical process control charts
stockouts
applying Toyota Production System to a retail store (see Toyota Production System)
assortment planning and
best practices for inventory control
causes of at Best Buy
causes of inventory discrepancies
challenge of accurately tracking inventory
customers’ response to
determining an optimal order point
finding the trade-off between carrying costs and lost sales
phantom products and
reducing with the right assortment (see assortment planning)
stocking related to sales
system application results example
tracking with RFID
store-level execution
applying Toyota Production System to a retail store (see Toyota Production System)
associates’ knowledge related to customer satisfaction
best practices for inventory control
causes of inventory discrepancies
challenge of accurately tracking inventory
managerial metrics’ impact on sales
staffing levels and (see staffing levels impact on sales)
stocking’s relation to sales
survey questions asked of customers
sunk cost
suppliers
contractible elements of the relationship
goal alignment through incentives (see incentives for goal alignment)
partnering with for better inventory control
reliance on trust with
supply chain flexibility
balancing forecasts, flexibility, and inventory
company examples (see World; Zara)
cost of flexibility
CPFR
decouple point used to enable
Destination Maternity’s process
inflexible chain example (see National Bicycle)
lead time differences example
lead-time mapping
need for trust in the chain
partnering with suppliers
push and pull boundary
tendency to accept savings over flexibility
unwillingness to invest in accurate forecasting
tactical implementation of retail strategies
achieve buy-in from users at all levels
aim for quick wins
quantify the benefits
start with a mundane task
technology and retailing
factoring costs and benefits of implementation
importance of integrating technology with operations
late-adopter risks
optimization complications
recommendations
reliance on for inventory management
requirement to understand key details
retailers’ failure to use the data they have
RFID (see RFID)
stages of technology integration
treating adoption as an investment or as a call option
“10-foot rule” at Wal-Mart
Terai, Hidezo
Timken Company
tire assortment planning
benefits of localization
brand-warranty combinations
estimating substitution frequency
finding the optimal assortment
resulting revenue increase
Ton, Zeynep
Toyota
Toyota Production System
engagement of people in problem solving
managing inventory to reduce “phantom products,”
statistical process control charts used to track inventory
trust- or reputation-based solutions to incentive problems
turns retailers
Tweeter
Universal Product Code (UPC)
Urban Outfitters
Vaidyanathan, Ramnath
verifiability as a contractible element
video rental industry
Walker, Martin
Wal-Mart
customer service and
focus on inventory turns
pilot study of RFID technology use
Walton, Sam
wealth effect
Weiss, Michael
World
company background
empowerment through design teams
forecasting and inventory planning
integration of design, merchandising, and production
lead times
production steps allowing flexibility
program of having suppliers hold fabric
sales and nonsales data collection
success from flexibility
Zara
company background
customer engagement practices
empowerment through design teams
integration of design, merchandising, and production
lead times
production steps allowing flexibility
response to market signals
sales and nonsales data collection
success from flexibility
zero balance walk