Inventory Reduction Model
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Transcript of Inventory Reduction Model
Advanced Inventory Reduction Model
TODAY’S ISSUES Form factor changes Speed to market High load-in quantities at launch Competitive pressure on color & style Poor sell-through Speed out of market Green Initiative
PROFIT -vs- DISCOUNTS$29.99
EXISTING SUPPLY CHANNEL
iFROGZCHINA
D.C. 1
iFROGZUSA D.C. 2
BEST BUY STORES
NEW MODEL
iFROGZCHINA
BEST BUY STORES
STORE P.O. FLOW CONCEPT
• Reduce speed to market• Lower inventory in channel by 20%• Store ownership• Online order process• Regional allocation
REGIONALSTORE MODEL
STORE P.O.
AIR FREIGHT
AN ORDER IS PLACED FOR:6 Red Luxe Originals6 Aqua Luxe Originals
FULFILLMENT-A
Best Buy Packaged Standard Colors are selected (inners of 6)
Standard and Regional/Seasonal Colorsare shipped to distribution center
or direct to store
2-3 DAYS 3-4 DAYS
2-3 DAYS
Regional or Seasonal Bulk Colors
Distribution Center Best Buy Stores
Bulkpackaginginto retail
Labeled Boxed
Red/AquaBundled
FULFILLMENT-B
REGIONALALLOCATION
SWIMSUITSIN ALASKA
SNOWBOOTSIN FLORIDA
ONE SIZEFITS ALL–vs-
LOST REVENUE/GROSSPROFIT IN STORES
• Overstock• Discounted items• Lost margin by region• “Dog is born barking.”
REGIONAL SKUs
iFROGZ DC MODELOLD WAY
• 10k BLUE• 10k RED• 10K SILVER• 5K CLEAR• 5K TEAL• 5K PRINT
• 25k BLUE• 25k RED• 25k SILVER• 25k PINK
Cost of “old way” also includes duties and taxes and distribution center handling.
-vs-
KEY PERFORMANCE INDICATORS
• In Stock Levels• Fill Rates• Inventory Levels• Turns
GREEN INITIATIVE
PRODUCT COSTS, FUEL, DISPOSAL, PACKAGING, DECOMPOSE TIMESAVINGS =
iFROGZCHINA
D.C. 1
iFROGZUSA D.C. 2
BEST BUY STORES
HIGHER PERFORMING STORES
• Product to store quicker
• DSD Model
• New colors to high performing stores first
• Move proven model to lower performing stores