Assortment Management Success Indicators
Posted: Sun Dec 22, 2024 10:53 am
To understand how successful the assortment management is, first of all, it is worth determining its marginal income (MI). Note that here it is not necessary to take into account the company's fixed costs and expenses that are necessary for the further sale of the goods. Another important indicator is profitability, which can be determined both for a specific product and for an entire category. Taking into account only tonnage or revenue is fundamentally wrong.
First of all, the top manager should be philippine country code motivated to increase marginal income throughout the company, and brand management, in turn, should strive to increase MD specifically for the categories that are in their area of ​​responsibility.
If the company's employees have changed their priorities, i.e. the incentive goal "for tonnage" has been replaced by "for profit", then the company is on the right track. But a number of problems may arise here:
Enterprises that are engaged in the production of products set a goal to produce a certain tonnage. The goal - revenue in rubles - is not relevant for them by default. Therefore, employees of such companies strive for weight, not profitable production. Of course, for them this is an important plus, because they have fulfilled the production plan. But for the owners of the company, this situation is not the most optimistic.
Another problem is that many companies do not know how to keep correct and prompt management accounting. When an assortment audit is conducted, it is necessary to obtain information on profit and its change. It happens that this takes at least several weeks. That is, the company's management either does not receive the report on time, or it does not reach them at all.
Mistakes in product range management
Mistakes in product range management
The structure of assortment management should be carefully thought out. This will help to avoid negative consequences of the work process. Here are typical mistakes that are relevant for many companies:
Lack of understanding why it is necessary to manage the assortment. Properly structured activities provide an opportunity to maximize profits. To solve this problem, you need to develop a strategy correctly.
Little information for analysis, shallow immersion of specialists in monitoring. When the catalog is not compiled in full, that is, not all items are taken into account, and goods that have not been in demand for a long time are still present in the nomenclature, the enterprise will most likely suffer losses.
Too much profile expansion. Some products do not carry any prospects, so it is not worth loading the nomenclature with them.
Too narrow a range, lack of thoughtful merchandising down to the smallest detail. Thus, purchasing goods will not be so attractive to consumers.
Incorrectly derived KPIs. Without correct coefficients, competent goal setting is impossible.
The decision-making process is too long, which slows down management.
The product range is formed based on the manager's interests. There are many other important factors here, such as the market situation and customer requests; if they are not taken into account, the demand will be low.
Strict framework for cooperation with suppliers. Sometimes the manufacturers themselves make very unfavorable demands on the store in the contract. For example, a ban on making changes to the product range.
It is important to remember that the most important aspect of assortment management is having a clear concept.
If a store is looking to increase efficiency, it is necessary to constantly monitor the market situation, analyze consumer demand and update the offer based on the data received. If you satisfy the demands of potential customers, you will significantly increase the marginal income and make the store work more efficient.
First of all, the top manager should be philippine country code motivated to increase marginal income throughout the company, and brand management, in turn, should strive to increase MD specifically for the categories that are in their area of ​​responsibility.
If the company's employees have changed their priorities, i.e. the incentive goal "for tonnage" has been replaced by "for profit", then the company is on the right track. But a number of problems may arise here:
Enterprises that are engaged in the production of products set a goal to produce a certain tonnage. The goal - revenue in rubles - is not relevant for them by default. Therefore, employees of such companies strive for weight, not profitable production. Of course, for them this is an important plus, because they have fulfilled the production plan. But for the owners of the company, this situation is not the most optimistic.
Another problem is that many companies do not know how to keep correct and prompt management accounting. When an assortment audit is conducted, it is necessary to obtain information on profit and its change. It happens that this takes at least several weeks. That is, the company's management either does not receive the report on time, or it does not reach them at all.
Mistakes in product range management
Mistakes in product range management
The structure of assortment management should be carefully thought out. This will help to avoid negative consequences of the work process. Here are typical mistakes that are relevant for many companies:
Lack of understanding why it is necessary to manage the assortment. Properly structured activities provide an opportunity to maximize profits. To solve this problem, you need to develop a strategy correctly.
Little information for analysis, shallow immersion of specialists in monitoring. When the catalog is not compiled in full, that is, not all items are taken into account, and goods that have not been in demand for a long time are still present in the nomenclature, the enterprise will most likely suffer losses.
Too much profile expansion. Some products do not carry any prospects, so it is not worth loading the nomenclature with them.
Too narrow a range, lack of thoughtful merchandising down to the smallest detail. Thus, purchasing goods will not be so attractive to consumers.
Incorrectly derived KPIs. Without correct coefficients, competent goal setting is impossible.
The decision-making process is too long, which slows down management.
The product range is formed based on the manager's interests. There are many other important factors here, such as the market situation and customer requests; if they are not taken into account, the demand will be low.
Strict framework for cooperation with suppliers. Sometimes the manufacturers themselves make very unfavorable demands on the store in the contract. For example, a ban on making changes to the product range.
It is important to remember that the most important aspect of assortment management is having a clear concept.
If a store is looking to increase efficiency, it is necessary to constantly monitor the market situation, analyze consumer demand and update the offer based on the data received. If you satisfy the demands of potential customers, you will significantly increase the marginal income and make the store work more efficient.