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Table of Contents
1 2 Introduction to ARC 6.2 ..................................................................................... 5 KPI Library .......................................................................................................... 6
2.1 Sales ........................................................................................................................6 2.1.1 Sales Performance ...........................................................................................6 2.1.2 Sales Productivity Analysis ...............................................................................7 2.1.3 Growth Trend Analysis...................................................................................7 2.1.4 Operations ........................................................................................................8 2.2 Merchandising ........................................................................................................9 2.2.1 Plan Vs Performance ........................................................................................9 2.2.2 Category Analysis ...........................................................................................10 2.2.3 Growth Trend Analysis.................................................................................10 2.2.4 Item Basket .....................................................................................................11 2.2.5 New Item Analysis ..........................................................................................12 2.3 Buying ...................................................................................................................13 2.3.1 Purchase Analysis ..........................................................................................13 2.3.2 Open-to-Buy Analysis .....................................................................................13 2.3.3 Vendor Performance.......................................................................................14 2.3.4 Vendor Efficiency Analysis..............................................................................15 2.3.5 Rebate Analysis ..............................................................................................15 2.4 Assortment............................................................................................................16 2.4.1 Brand Style Size Color...........................................................................16 2.4.2 Pvt Label Vs Brand .........................................................................................17 2.4.3 Item Sales and Distribution .............................................................................17 2.4.4 Merchandise Range and Analysis ..................................................................18 2.4.5 Seasonal Analysis...........................................................................................18 2.4.6 Fabric, Fit and Finish Analysis ........................................................................18 2.5 Inventory ...............................................................................................................19 2.5.1 Inventory Analysis...........................................................................................19 2.5.2 Ageing Analysis ..............................................................................................20 2.5.3 Item Stock Analysis.........................................................................................20 2.5.4 Out of Stock Analysis......................................................................................20 2.5.5 Excess / Short Inventory Analysis...................................................................21 2.6 Pricing ...................................................................................................................22 2.6.1 Price Range Analysis......................................................................................22 2.6.2 Price Point Analysis ........................................................................................22 2.6.3 Markdown Analysis .........................................................................................23 2.6.4 Discount Analysis............................................................................................23 2.7 Promotion..............................................................................................................24 2.7.1 Promotion Performance ..................................................................................24 2.7.2 Promotion Lift Analysis ...................................................................................24 2.7.3 Promoted Item Analysis ..................................................................................25
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2.7.4 Running Promotion Analysis...........................................................................25 2.8 Placement..............................................................................................................26 2.8.1 Space Performance Analysis..........................................................................26 2.8.2 Space Performance Trend Analysis ...............................................................27 2.8.3 Planogram Performance Analysis...................................................................27 2.9 Loss Prevention....................................................................................................28 2.9.1 Shrinkage Analysis .........................................................................................28 2.9.2 Exception Reporting........................................................................................29 2.9.3 Loss Prevention Classification ........................................................................29 2.9.4 Refund and Void Analysis...............................................................................29 2.10 Mining ..................................................................................................................30 2.10.1 Sales Forecasting .........................................................................................33 2.10.2 Product Affinity..............................................................................................33 2.10.3 ABC Analysis ................................................................................................32 2.10.4 Product Rationalization .................................................................................32
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Disclaimers
Disclaimer
Manthan Software Services Private Limited makes no warranty of any kind with regard to this document, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose. Manthan Software Services Private Limited shall not be held liable for errors contained herein or direct, indirect, special, incidental or consequential damages in connection with the furnishing, performance, or use of this material. The information in this document is provided as is and no guarantee or warranty is given that the information is fit for any particular purpose. The user thereof uses the information at its sole risk and liability.
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2 KPI Library
The set of KPIs have been logically categorized into many major retail business domains such as sales, merchandizing and so on for quick access to relevant information.
2.1 Sales
The KPIs in this business domain help retailers understand how stores perform by providing analyses such as sales-trending, contribution-ranking, and year-on-year comparisons within the
store/merchandise hierarchies.
Sales Returns
This KPI also helps user in comparing ATV, ASP, ATV, and conversion rate over previous year. This will help them to find causes for store's poor performance and reward good performing stores. Sales by Tender Type This KPI helps Store managers identify favorite mode of payments for its stores customers. It also helps in launching promotional offers with credit card companies.
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ARC 6.2 KPI Library KPI Title Store Scorecard Business Value This KPI provides information which imparts a sense of the strategic direction to be taken in terms of allocating resources amongst stores, developing/discarding stores, store space planning, and so on.
Employee Productivity
GMROA
selling products at higher average selling price (ASP) It also compares ATV, ASP and ATS on month-on-month basis. This will help them to find causes for store's poor performance
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ARC 6.2 KPI Library KPI Title Period Analysis Business Value and reward good performing stores. This KPI helps Operation managers see the incremental growth or decline in performance of their regions and stores at various periods like Weekly, STD, YTD, MTD, WTD. This KPI helps users to get a quick access to the sales for a period of recent weeks in the Departments, Class, Sub class.
2.1.4 Operations
KPI Title Salesman Performance Business Value KPI helps the user to see Net Sales by Salesman and helps calculate Commission due to the salesman on the basis of Net Sales Achieved. This KPI helps the user to identify the cashier who is generating highest sales on an hourly basis. This KPI helps user in evaluating the productivity of a cashier in terms of Tickets and Line Items Per Hour. These can be benchmarked against agreed productivity measures and appropriate action can be taken for those of the cashiers who are not meeting the productivity benchmarks. This KPI gives the information on the sales discounts ratio. The discounts ratio is a good indicator of the profitability of the store, an increase in this ratio indicates that the store assortment is not quite right which may lead to more markdowns and discounts than the optimum. This KPI also provides check on cashiers giving discounts at point of sales. This KPI helps Store managers allocate cashiers on busy tills. This KPI helps the Store manager to allocate its staff according to peak and slow business hours. It also helps the Store manager to plan for stocking merchandise on the shelves and for promotions to generate maximum sales. Analysis by This KPI shows the % growth of the Sales, Transaction Count and the Average Ticket Value. User can analyze the customers' average basket size per location.
Cashier Performance
Cashier Productivity
Sales Discounts
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2.2 Merchandising
KPIs under this retail business group help retailers optimize the merchandise mix based on a composite index of margin and sales value. Retailers are able to identify product affinity patterns, assess markdown performance, and track & analyze item-wise sales.
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Breadth Analysis
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ARC 6.2 KPI Library KPI Title Stock Growth Trend YOY Growth Analysis Business Value This KPI provides a complete snapshot of opening stock in stores and product categories, drill down to subsequent levels. This KPI helps a user carry out year-on-year performance analysis of sales, margin, markdown, stocks and purchases.
Fast Movers
Slow Movers
Best Performer
Worst Performer
This KPI helps a user get complete analysis of least-selling SKUs. This helps:
Merchandising and Inventory managers decide on items to be de-listed and in evaluating vendor contribution by store. Store and Merchandise managers to focus on the best promotional strategy to clear existing stock.
This KPI helps merchandisers to figure out the reasons for selling items below cost. This could be due to stiff competition or in case of price-match scenario or wrong pricing. This KPI helps user to analyze the SKUs on the basis of brand, color, style and size on critical profit measures.
Item Scorecard
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ARC 6.2 KPI Library KPI Title Item Count Business Value This KPI provides information on the Total SKU count status in each department and indicates no of active SKUs and inactive SKUs. This KPI identifies Predicted Stock Qty on out date & Average selling price of Style/Color/Product. Based on Forecasted Sale Qty, Pending PO Qty and Stock on hand at various places the KPI will provide what will be the predicted Stock on the out of shelf date of a planned shelf life of a product
Sale
and
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2.3 Buying
This group signifies budget planning and calculating Open-to-Buy (OTB) value. It helps users arrive at the required monthly spending patterns to support sales and achieve turnover and GMROI. It indicates purchase pattern of merchandise and compares with last year It is created to meet sales and turn expectations. If an organization is under-bought, it risks losing sales. If over-bought, then there is a risk of missing out on developing trends. OTB helps in controlling the flow of product to support the sales plan.
Overdue Trend
Over Bought
Under Bought
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ARC 6.2 KPI Library KPI Title turnover and GMROI. MOM Rolling OTB This KPI helps users in identifying Open-to-Buy (OTB) value and inventory turns growth on monthly basis for each department drill down to sub-sequent levels. This will help them in planning their merchandise budgets. & Stock This KPI measures sales, intake and hence stock, comparing actual against a plan. It indicates what you need to do to buy the right amount of merchandise to have the correct stock to provide the optimum assortment to satisfy your customers, based on your sales plan. WSSI continuously measures actual performance against plan, and gives you the opportunity to change forecasts, and to change buying plans, if such an opportunity exits Business Value
Returns to Vendor
Customer Vendor
Returns
by
Vendor Scorecard
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ARC 6.2 KPI Library KPI Title Business Value performance of each vendor by looking at sell through month on month. Top SKUs By Vendor This KPI helps the Merchandisers in assortment planning and ordering quantities from vendor. This KPI helps the user check the performance of a vendor in terms of Inventory turns that the products supplied by a particular vendor achieve in the selected time period.
Vendors By Rebate
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2.4 Assortment
Assortment planning breaks the Merchandise Plan down into the components that enable the planner to address customer preference and need. These components are product attributes, styles, colors, and SKUs. By addressing these components, the assortment plan becomes the transition to the customer by way of the store
Brand Scorecard
Option Coverage
Size Effectiveness
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ARC 6.2 KPI Library KPI Title Hot Styles Performance Business Value It helps identify good sellers on the basis of Sell through%. It can be used to check good selling styles or colors or size. High Sell through% suggests that item has good sales potential and thus helps a buyer provide better assortments going forward.
Growth
Private Analysis
Label
Stock
Speed to Market
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Fast Movers 3 Fs
Slow Movers 3 Fs
Trend Analysis 3 Fs
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2.5 Inventory
The KPIs under this retail business domain give a complete picture of stock movement across the retail distribution network including returns and help retailers minimize inventory carrying costs, stock-outs and markdowns and maximize GMROI.
GMROI
Rolling Inventory
Inventory Quantity
Movement
Inventory Value
Movement
By
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ARC 6.2 KPI Library KPI Title Transfers In-Out Trend Business Value This KPI helps the user keep track of the inventory being transferred to and from a location. It can be used to regulate goods movement.
Stock Value
Ageing
Audit
By
Stock Ledger
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ARC 6.2 KPI Library KPI Title Potential Out of Stock Business Value getting stocked out on daily basis. This KPI helps the user to identify which SKUs are going to be OOS in near future. Based on the report, user can place immediate orders or take other corrective actions to prevent the stock out. This KPI helps the user to identify the SKUs that get stocked out most frequently. Base stock or replenishment cycle can by suitably altered for these SKUs. This KPI tells the user the value of sales which was lost due to non availability of stock This KPI helps the user to identify articles which are on promotion and became OOS during the selected period. This KPI also tells the user whether the exiting stock of promoted articles is sufficient to last till the end of promotion.
Items by Quantity
Excess
Inv
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2.6 Pricing
Organizations make pricing strategy to generate maximum sales and margin. A common strategy is to have price points higher and lower than the estimated volume point. This gives the classification a broader appeal, having something for customers wanting a perceived higher value product or conversely for customers on a tighter budget. This group helps an organization to identify the price-point at which stores makes highest sales. By doing so, it helps merchandisers to plan for assortment at various pricepoints for each store. Price-point trend (i.e. comparison with previous period) is required to track the pricepoint variation, so that right assortment mix can be planned when placing orders from the vendor.
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ARC 6.2 KPI Library KPI Title Business Value Sales price, and Margin. Item Price Variance This KPI helps the user understand at what price is item selling and how many stores are selling within 5% range of the Average Selling Price and how many stores are selling outside the price range.
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2.7 Promotion
The KPIs under this retail business domain help users evaluate the impact of promotions on sales performance and assess their overall effectiveness based on ROI. Users are able to maximize returns by managing the promotion lifecycle optimally.
Promo Sales
Contribution
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2.8 Placement
Space Planning enables retailers to determine the optimum space for fixtures, and merchandise based on the analysis of product placement, usage and performance. A well arranged store display attracts the shoppers, making them to check out the available merchandise, and influencing them to buy the products. Using the available space in a right manner will enable the retailer to accentuate his merchandise and arrange them in an optimum position. Adequate space planning techniques enable the retailer to have end-to-end control of merchandise. This display will attract more customers, minimizes stock outs and operating costs, enables inventory productivity, and increases the financial performance and ultimately more profits for the retail outlet. Retailers can drive top line sales, and achieve good overall returns on their invested amount of capital. Effective planning of the retail space and managing it in a right way is the key factor in the lifecycle of merchandise planning and execution
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ARC 6.2 KPI Library KPI Title New Product Performance Index Business Value This KPI evaluates the new products in a department or a store based on its sales and margin performance with respect to space. This KPI optimizes the space allocation to any new product which is introduced. This KPI is of particular use to the Buying & merchandising function along with the operations function. The KPI helps higher management to make performance reviews of well performing stores and departments. This also helps to create benchmark for other stores in the same cluster or region.
Space
Product
Facing Analysis
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ARC 6.2 KPI Library KPI Title Planogram Productivity Business Value This KPI helps merchandiser and operations team to identify planograms productivity through sales from allocated space. This KPI indicates the sales per unit space (Linear, Square & Cubic) across various granularities. This will help to make space allotment decisions during planogram reviews. This KPI helps to understand space productivity of a planogram through finding fair share of sales and space by various index calculations. This will help to make space allotment decisions during planogram reviews. A time bound KPI used by top management to have an overview of the planogram productivity through various space index. This helps to make required changes while planogram reviews. This KPI looks at the fixture productivity and helps to understand the productive & non-productive zones of a store.
Planogram Performance
Shrinkage by Type
Impact of Shrinkage
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Exception Returns
Exception Discounts
Exception Cancellation
Cash Imbalance
Hot Products
Void Analysis
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ARC 6.2 KPI Library KPI Title Void Vs Shortage Business Value This KPI helps LP department to easily identify stores with high number of No-Sales transactions and compare with cash shortages. This helps them in investigation and also during audit time. LP departments can take effective measures like high security authorization codes at their POS system for various levels of store staff. This KPI will help LP department to find the causes of high refunds. There may a need for more training to cashiers or there may be fraudulent cash returns performed by store staff. Adequate steps should be taken to control these losses. This KPI helps LP department to identify the stores closing after certain time and verify the transactions happening after closing hours. This KPI helps LP department to take action on store managers giving higher discounts to an employee than the company's policy. This will also help in increasing margins. This KPI helps the user to see the products where price override is taking place along with the transaction level details of the override.
2.10 Mining
2.10.1
Sales Forecasting
KPI Title Business Value This KPI tells us the magnitude of deficit of Projected OOS SKU. Helps user to determine which products might be OOS in the current forecast This KPI measures the forecasting performance by Department. User can check the forecast accuracy based on the merchandise range available in the department This KPI measures the accuracy of different forecasting algorithms. Determine how much the forecast differs from each algorithm on the same product
Department Analysis
wise
Error
Algorithm Accuracy
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ARC 6.2 KPI Library KPI Title Forecast Accuracy Trend Business Value This KPI measures the trend on accuracy of a particular algorithm. Analyzing the trend on a week on week based forecast. Understand the consistency of algorithm which are independent This KPI will identify, accuracy of algorithm by finding how many weeks the SKU was positive or negative bias. Use the right forecast algorithm by analyzing the forecast trend which has the higher positive bias The KPI analyzes the forecast error between actual sales and forecast quantity. Analyzes variation between actual sales and the forecast qty. Reasons for high variance or error can be further probed into This KPI Provides the Sales Forecast Output from the Forecasting Mining Model for the various Algorithms
Forecast Bias
2.10.2
Product Affinity
KPI Title Business Value This KPI helps the user identify the best product combination based on Support for that Product Combination This KPI helps the user identify the best product combination based on Lift for that Product Combination This KPI helps the user identify the best product combination based on Confidence for that Product Combination This KPI helps the user to identify the strongly associated products in terms of lift for a selected product. User can Promo Combos or plan product placement based on this This KPI helps the user to identify the strongly associated products in terms of Support for a selected product. User can Promo Combos or plan product placement based on this This KPI helps the user to identify the strongly associated products in terms of Confidence for a selected product. User can Promo Combos or plan product placement based on this
product
by
product
by
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ARC 6.2 KPI Library KPI Title Affinity Association Business Value This KPI helps the user to analyze the output of the Product Affinity Model and analyze the association between the Base and target products. Analyze the affinity association and provide promo combinations and better product placement based on Support, Confidence and Lift This KPI helps the user to analyze the output of the Cross shopping analysis Model and analyze the cross shopping behavior. Analyze the Cross shopping behaviour and propose the best promo bundling and better product placement
2.10.3
ABC Rank Codes
ABC Analysis
KPI Title for Vendor Business Value Provides Vendor wise Ranking in the order of A, B and C based on vendor performance metrics. Provides Vendor wise Ranking in the order of A, B and C based on vendor performance metrics This KPI helps user rank the item as A, B, C based inventory position. Helps to understand and analyze the overall inventory position of each item This KPI Helps understand the sales profile for different ranks assigned to the items. Analyzes the Sales profile of the item with different ranks assigned by department as well as Store This KPI checks Stock on hand and On ordered Qty levels for each rank of SKU. Analyze whether sufficient stock is available on hand for high ranked items and liquidate excess stock for low rank items This KPI analyzes which vendors produce SKUs with higher ranks and which provide lower rank SKUs. Vendor Evaluation based on ranking of SKU they supply This KPI shows the trend in movement of ranks for items between specific time periods. This KPI shows the trend in movement of ranks for items between specific time periods
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2.10.4
Product Rationalization
KPI Title Business Value This KPI helps the user analyze the Stock Position of Items which have been marked as Delete and analyze the impact of liquidating those stocks which will be pruned off from the Assortment This KPI is a validation point for deletion criteria of an item. This KPI helps user to analyze whether the article is flagged as "delete" in all versions or was it just an exceptional case This KPI indicates penetration of the delete article and its significance in different stores. This KPI indicates the significance of the delete article in different stores based on its coverage and sole purchase occurrence
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