OPERATING OPPORTUNITIES

WALLY LYNCH Paid Associates P.O. Box 741623 Dallas, Tx.75243

f ff ene are ar least three college I level text books that make no mention of rr The first record of il in print may well have been in the 1950 publication by the University of Chicago Press entitled Catalogues And Counters by Boris Emmet and John E. Jeuck. Major chains and almost anyone using centralized buying employs 17 as a sort of preventive medicine and a planning tool.

It's a merchandise review or product line review. By any name, it's a serious introspective look into the status of the merchandise being offered to customers, past, present and future.

The idea is to divide the evaluation into equal homogeneous parts so that the review becomes routine done weekly, monthly, quarterly or whenever a company sees fit to cover their total product offering. Generally the buyer collects the necessary history and after analysis and evaluation and correlation with the market place makes this the basis for future implementation.

The information is then formally presented to management and key store personnel simultaneously. From this interfacing come change, correction and direction for the company's marketing effort for the reviewed item.

There are basically four parts in the review make up with information generally presented in written form by stock number. Part one is the performance side. How many were sold at regular price and how many at promotional price. The dollars involved are also shown.

Part two is the pricing, margin and GMROI side. What was the selling price, gross margin and GMROI? These last two are sometimes presented as averages.

The third part is the assortment and display side. Do the sales show that 200/o of the items are doing 800/o of the business? Do the sales warrant the real estate? What, where and how many to display is what is being determined.

Finally, the logistic side is scrutinized. This includes supplier, freight charges, minimum shipment, factory pack, etc.

There's no right or wrong way or sequence. It's like a physical exam. It doesn't matter what you look at first, only that you look effectively and in total.

There is more and more indication that independent dealers and home center single unit operators can and will benefit from the use of this planning and managing tool. Many operators are combining its use with cycle inventories to routinely and at least annually align computer data with actuality. But more important in this day of 15,000 and 20,000 SKU assortments is a program to manage providing to the customers what they say they want to buy.

If this management tool interests you, send us a self addressed, stamped envelope and we will send you a form you can use. It can be a help in making your next buying plan more successful.