Typically, inventory management in retail is chaotic. A business starts with one or two stores; after a few years, the network already includes dozens of stores, branches, distribution warehouses, etc.

And the more actively the company grows, the easier it is to miss the moment when inventory management becomes ineffective:

• Sales points are opened in different regions, and stocks are distributed according to the old logic: “we deliver to any point from any warehouse”;
• Moving goods between warehouses and stores costs more and more, but there is no time to restore order.
• For some product items there is a constant shortage, for others there is a surplus.

The bad news is that chaos is typical for most retail companies. The good news is that this can be fixed.

Let's consider a client case.

HOW IT WAS WITH THE CLIENT

CLIENT'S BUSINESS REFERENCE

The Leto supermarket chain is part of the ProdKotlas Group of Companies, one of the largest retail chains in Kotlas and the Kotlas district of the Arkhangelsk region. In a short time, the Leto retail chain became one of the largest local retail chains in the city: the first Leto supermarket was opened on March 2, 2013 in Kotlas, and the second, the Leto supermarket, opened to customers on September 1, 2013 in the village of Vychegodsky . In mid-2014, the Leto retail chain expanded beyond the Arkhangelsk region: the Leto supermarket opened in Veliky Ustyug. Meanwhile, a third supermarket has been opened in Kotlas and a second in the village of Vychegodsky. The largest store in the chain with an area of ​​950 sq. meters in a short time became a favorite place for thrifty residents of Kotlas, and delicious and always fresh ready-made products from the Sunflower homemade food line are another good reason to look into Summer. The chain's youngest supermarket, which opened on October 15, 2015, attracts its customers not only with a large selection of goods at competitive prices. The highlight of the supermarket was the aromatic, crispy, well-baked and incredibly tasty baked goods from the tandoor oven.

BACKGROUND OF THE PROJECT

At the time of the company’s pre-project survey, all orders were generated by product distributors in the accounting system in a semi-automatic mode, which increased labor costs and reduced the quality of orders. There was no convenient tool to analyze the reasons for lost sales and surpluses.

TOP management decided to optimize and automate the inventory management system and introduce additional tools for monitoring inventory levels.

PROJECT DESCRIPTION

Before launching the project, the following goals were set:

• Optimization of balances
• Automation of orders
• Increasing customer loyalty due to a high level of product availability in stores.
• Opening new outlets by increasing profits

The implementation of the project involved 3 stages:

Stage 1. Preparing to launch the ABM Inventory system.

Stage 2. Training in working with the program, its algorithms and functionality. Connection of 7 stores.

Stage 3. Training to work with the reporting system. Connection of the Central warehouse.

At the first stage, a discussion was held of the company’s internal business processes to determine the tasks to prepare for the implementation of the program. The terms of reference for organizing automatic data exchange between the company's accounting system and the system were agreed upon and implemented. A training seminar on inventory management was conducted according to the Theory of Constraints (TOC) methodology.

At the second stage, the assortment of 7 stores was connected - buffers were calculated in ABM Inventory (target stock level at each storage point for each SKU), which are managed using the DBM algorithm (Dynamic Buffer Management) (Fig. 1). According to this algorithm, the system reviews buffers based on the supply margin and, if necessary, increases or decreases them (automatically or by issuing a recommendation to the user). The buffer is the main component of the order formula.

Data on the safety buffer was also updated (the beauty of the shelf is the black zone on the graph), which allows the ABM Inventory system to maintain the stock required for both sales and display.

In the process of connecting 7 stores, 2 cafes were added, for which orders to the supplier had to be made separately from the stores. And a little later, thanks to the high-quality work of the program, it was decided to connect another 12 grocery stores in the “close to home” format with an area of ​​up to 50 m 2, the connection of which was not previously envisaged. A large amount of work was carried out to enter data, review the assortment and enter the necessary positions into the store matrix, which made it possible to restore order in the accounting system.

To manage goods that have a short shelf life (perishability), the ABM Inventory system was configured (Fig. 2), based on statistical forecasting of sales. This forecasting algorithm uses modern methods of mathematical statistics. The basis for it is information obtained as a result of data exchange about sales of each SKU, sales at a loss and/or transfer of goods for processing, write-offs in case of spoilage and expiration, standard periods of residual shelf life of goods on the day of delivery. As a result of such statistical processing, the user receives the following information for each SKU: ADU (weighted average daily sales), sales ratios by day of the week; other necessary statistical data, which allows you to very effectively manage this group of products.

During the connection of goods using the Fresh algorithm, an organizational problem was identified, namely untimely write-off of goods and, as a consequence, untimely processing of documents. Identification of this problem enabled the company to take action and improve processes for working with perishable goods. This algorithm controls the following product groups: Fruits and vegetables; Greenery; Confectionery (cakes, pastries, bread).

After connecting all the stores, we moved on to the third stage - connecting the Central Warehouse. The CA management in the ABM Inventory system is carried out according to its own algorithm - DFO (demand focused order), which calculates the demand based on the demand of the entire network, and not the consumption of the replenishment link (Fig. 3). It should be noted that the network’s demand is assessed for the period of supply from the central warehouse, and for each store in the network this period may be different, based on the schedules of orders and deliveries from the central warehouse to the stores. The calculation takes into account network sales, balances, as well as excess goods if they are present in stores or warehouses.

To use the DFO algorithm, a connection procedure similar to that of stores was carried out at the CA: reconciliation of the assortment matrix, checking order parameters, and setting up the CA as a supplier.

For individual goods, the DFO-Fresh connection was configured: when perishable goods are transported through the CA (for example, vegetables).

During the project, it was revealed that some of the goods supplied by the Central Warehouse are not stored there, i.e. are supplied according to the cross-docking scheme. The ABM Inventory system easily copes with this task and solves it in the following way: orders are generated from each store according to demand, then they are consolidated at the CA and sent to the supplier - the completed consolidated order is immediately distributed to stores according to the original orders. In this case, order quantities, balances, etc. of both stores and the distribution center are taken into account.

Also at the third stage, Leto employees were trained to work with a powerful analytics unit, which made it possible to track the process of working with orders, evaluate work with suppliers, analyze the status of inventories and manage the assortment. Below are examples of reports that are used in the company:

(Fig. 4), is located on the start page of the system, where key indicators of inventory management are presented. Thanks to the color scheme and the fact that the company’s TOP products (products generating 80% of the company’s turnover), new products, and promotional products are fixed on the top, the category manager has the ability to quickly monitor the status of inventory in real time and make management decisions.

(Fig. 5). Using this report, category managers estimate exactly which product groups/items are in lost sales, how many days of lost sales there were, and how much money was potentially lost. In accordance with the information received, those responsible take measures to correct the situation. Also, using this report, the dynamics of changes in the situation over a 5-week period are assessed. In this way, individual aspects of the assortment are managed - for example, if a product is constantly in lost sales due to short deliveries, it makes sense to temporarily or permanently change the supplier or exclude this item from orders and assortment.

(Figure 6). By analogy with the previous one, category managers use this report to track the duration of surpluses and the dynamics of changes in the situation, assessing the amount of surpluses in quantitative and monetary terms. This report serves as the basis for taking measures to free up frozen funds for assortment management - for example, if a product has been in surplus for a long time and has weak sales, the category manager launches a promotion to sell off the product and then removes it from the assortment.

Supplier reliability(Fig. 7). Based on this report, employees whose responsibilities include negotiations with suppliers track the percentage of orders completed by the supplier, accurate to the quantity for a certain item in the order for a certain store. At the same time, the fulfillment of orders is monitored, and, if necessary, employees issue fines to the supplier for failure to comply with contractual terms. This way the relationship with the supplier is controlled.

EFFECTS AND RESULTS

The Leto company has implemented an ABM Inventory inventory management system, which is managed by near46 Tys. commodity items. On average, 250-350 orders are sent per day.

As a result of the implementation project the following were achieved quality results:

• By automating the order, it was possible to reduce the time for product distributors to process and send the order to the supplier
• The reliability of suppliers is assessed by tracking orders from the moment they are sent to the supplier until they are received;
• The focus is on working with problem areas through the analytics unit.

And significant quantitative results:

• Increase in sales by 8% for the primary group of connected stores.
• Improved turnover
• For the primary group of connected stores – for 10 days (30%).
• Throughout the network – for 8 days (25%). It should be especially noted that this parameter decreased even despite the addition of 12 retail outlets, the connection of which was not initially envisaged. Moreover, the trend towards improvement continues, as can be seen from the illustration - the green dotted line (Figure 8).

We thank the project teams for their professionalism and fruitful work towards achieving their goals. Special thanks to the company's TOP management for their active position in implementation issues, as well as for their openness to changes and revision of the principles of inventory management, making decisions aimed at increasing the efficiency of the company.

We wish the Leto company continuous improvement of performance indicators and new opportunities for business development and expansion!

Interested in implementing an ABM Inventory inventory management system?

How and why AVM Cloud manages inventory, watch the video

Introduction

Chapter 1. Theoretical aspects of the formation of inventory in a retail network

1.1 Characteristics and types of inventory

1.2 Structure, factors influencing the amount of inventory and types of inventory management systems

1.3 Structure of material resources and methods of analysis

1.4 Logistics regulation of warehouse activities

1.5 Inventory management models

Chapter 2. Assessing the effectiveness of inventory management at Tander CJSC

2.1 Company characteristics

2.2 Analysis of the financial condition of the enterprise

Conclusion

Key operational and financial indicators of the Company for August 2010:

Table No. 4. Number of open stores, NET

Table No. 5. Total number of stores

Table No. 6. Total retail area, sq. m.

Table No. 7. Net retail revenue, mln.ruR

Conclusions from the tables:

1. The number of new stores in the chain in 2010 decreased by 4 times compared to 2009, in which there were 67 stores. In 2008, 30 stores opened. Thus, in 2009 the largest number of stores in the chain was opened.

2. The total number of stores in 2010 was 3,614 (3,582 convenience stores and 32 hypermarkets), an increase of 1,237 stores compared to 2008.

3. The total retail area in 2010 increased by 263,869 sq. m. m. compared to 2009 and by 471,989 sq. m. m compared to 2008. The growth decreased by 0.3%.

4. The preliminary volume of consolidated net unaudited retail revenue (excluding VAT) since the beginning of the year amounted to 144,548.44 million rubles, which means an increase of 34.06% compared to the same reporting period last year. Net retail revenue for August 2010 increased by 40.59% compared to August 2009 and amounted to RUB 20,795.08 million.

2.3 Assessment of the organization of the trade and technological process at ZAO Tander

The logistics inventory management system is designed to continuously provide the consumer with some type of material resource. The implementation of this goal is achieved by solving the following tasks:

accounting for the current stock level in warehouses of various levels;

determining the size of the guarantee (insurance) stock;

order size calculation;

determining the time interval between orders.

For a situation where there are no deviations from planned indicators and inventories are consumed evenly, two main management systems have been developed in the theory of inventory management that solve the assigned tasks, meeting the goal of continuously providing the consumer with material resources. Such systems are:

1) inventory management system with a fixed order size;

2) an inventory management system with a fixed time interval between orders.

Accounting for the current stock level occurs differently in each system. A system with a fixed order quantity requires a continuous accounting of the current stock in the warehouse, and this can be considered as its main disadvantage. In contrast, a system with a fixed time interval between orders requires only periodic control of the stock quantity, and this is its main advantage over the first system.

Before we begin to determine the size of the guarantee (insurance) stock, we will give a definition of stock. Stocks of raw materials, materials, components and finished products represent material assets awaiting industrial or personal consumption. All production reserves are defined as total, which are divided into two types: production and commodity. According to the function performed, all total production reserves are divided into current, preparatory, warranty (or insurance), seasonal, and carryover.

We propose to form the data for each column as follows.

Column 1 "Item number" - indicates the item number of the enterprise software database.

Column 2 "Name"; column 3 "Unit of measurement"; Column 4 “Requirement for materials per month, units of measure,” hereinafter referred to as PM; Column 5 "Price per unit of measurement, rub." - transferred from the enterprise database based on the approved planned requirement.

Column 6 “Daily requirement, unit of measure,” hereinafter referred to as SP, is calculated by dividing PM (column 4) by the number of working days in the current month.

Column 7 “Current balance, units of measure,” hereinafter referred to as OTM, is formed from the turnover sheet as of the date the report is generated. This indicator will be correct only if the movement of materials is promptly recorded.

Column 8 “Number of days for which the safety stock is calculated, day”, hereinafter referred to as X, is determined based on the “assumptions” of the purchasing manager or management if the method of determining the volume of safety stock based on daily consumption is used. The value of X depends on factors such as the importance of the material to the manufacturing process and general availability. May vary for different materials from 0 to 15 days.

Column 9 “Time to complete an order, days”, hereinafter referred to as EO, is determined for each product item separately and can be calculated as the weighted average of several delivery periods from one supplier. Also, the EOI can be determined by the purchasing manager, but it should be remembered that the order fulfillment time in the database is described by one parameter, but in fact it consists of several components: the time required by the supplier to produce, package and ship the goods; transportation time from the supplier to the buyer’s warehouse; the time required to accept the goods, unpack and prepare for use.

The planned EOI is entered into the product card and is located in the database with the ability to adjust this indicator if necessary.

TZ = SP (X + VZ), or gr.10 = gr.6 (gr.8 + gr.9).

Column 11 “Number of days until the order point, days”, hereinafter referred to as Days. TK is calculated as follows:

Day TZ = (OTM - TZ) / SP, or gr.11 = (gr.7 - gr.10) / gr.6.

Column 12 “Quantity of materials required for purchase, units of measure”, hereinafter referred to as ZM, is calculated as follows:

ZM = PM - OTM + TM, or gr.12 = gr.4 - gr.7 + gr.10.

Column 13 “Conclusion”, compare column 11 and the sum (column 8 + column 9).

If SutVZ > (X + VZ), or gr.11 > (gr.8 + gr.9),

then on the date the report is generated, no order is placed with the supplier.

If SutVZ<= (X + ВЗ), или гр.11 >(gr.8 + gr.9),

then on the date of generation of the report, an order is placed with the supplier in a volume equal to ZM (column 12), rounded up to the volume of the container.

The result of the analysis is table No. 10:

Table No. 10. Table of the operational report of balances of materials (goods) [Dontsova, Nikiforova “Analysis of financial statements”: textbook / L.V. Dontsova, N.A. Nikiforova. - M.: Business and service, 2009.]

Table No. 11. An example of an operational report of the remaining materials of the enterprise JSC "Tander"

Using this operational report in the software of any production enterprise will allow you to:

ensure rhythmic deliveries, eliminating the human factor;

eliminate the possibility of equipment downtime;

minimize inventories;

optimize transport costs.

Conclusion

As a result, the following conclusions and proposals were obtained:

1. The work defines the main approaches to the maintenance of inventory, systematizes the factors influencing them, and clarifies the content of the basic processes and elements of the theory of inventory management.

2. During the study, approaches to the development of inventory management systems were analyzed.

3. Systematization and analysis of existing inventory management technologies was carried out, and areas of their application were identified.

4. To analyze the effectiveness of inventory management, existing indicators and evaluation methods were examined.

5. The effectiveness of the inventory management system at OJSC "Magnit" was analyzed.

6. To build an effective inventory management system, a generalized model of rational inventory management has been developed.

One of the important factors in increasing the efficiency of a retail chain is effective inventory management. Modern Russian enterprises have not yet included inventory management as part of the main directions of the actively implemented strategy of their behavior in the market environment and clearly do not make enough use of this factor as an increase in competitiveness.

The relevance of the problem of optimizing an enterprise's material reserves and effectively managing them is due to the fact that the state of inventories has a decisive influence on the competitiveness of the enterprise, its financial condition and financial results. It is impossible to ensure a high level of product quality and reliability of its supply to consumers without creating an optimal amount of stock of finished products, as well as stocks of raw materials, materials, semi-finished products, work-in-progress products and other resources necessary for the continuous and rhythmic functioning of the production process.

Underestimated inventories of material resources can lead to losses associated with downtime, unmet demand and, consequently, loss of profit, as well as the loss of potential buyers of products.

On the other hand, the accumulation of excess inventories ties up the working capital of the enterprise, reducing the possibility of its profitable alternative use and slowing down its turnover, which is reflected in the value of the total production costs on the financial results of the enterprise. Economic damage is caused by both the significant presence of reserves and their insufficient quantity.

The modern concept of logistics management of material flow from the point of view of consumer service can be briefly formulated as follows: “the right product of the required quality and quantity at a given time and at minimal cost.” In this case, the costs take into account both the cost of production of the product and the costs of logistics operations for its distribution in the distribution structures of manufacturers and resellers. The full potential of logistics can be realized with the appropriate development of organized commodity markets, in which enterprises will play an increasing role.

The most important element of the infrastructure of commodity markets and actively developing logistics systems is the warehouse. Along with transportation costs, storage, inventory management and warehouse handling costs make up the vast majority of total logistics costs.

Network retail trade today is at the stage of logistics consolidation, due to the following trends: consumer demand is approaching its limit; increasing customer requirements for their service; increased competition between retail chains; shortage of commercial space, etc. As a separate factor here, it is necessary to highlight the deployment of foreign retail trade networks in Russia, which are introducing new logistics technologies and standards.

Strategic prospects for the development of domestic retail chains today are associated with their consolidation, regional expansion and expansion based on franchising. The implementation of these areas involves a number of measures, which include: optimization of the assortment, promotion of goods under the chain’s trademark, concentration on costs, etc. All this makes it urgent to reorganize the logistics systems of these networks, as a result of which the role of distribution centers in them will strengthen.

Bibliography

1. Federal Law “On Accounting” No. 129-FZ dated January 21, 1.96.

2. Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 N 119 “On approval of the Guidelines for accounting of inventories”, March 26, 2007.

3. "Regulations on accounting and accounting reporting in the Russian Federation." Approved by Order of the Ministry of Finance of Russia dated July 29, 1998.

4. Bank [Management accounting of inventories]: textbook / S.V. Bank. - Economic analysis: theory and practice, 2007.

5. Bukhonova [Comprehensive methodology for analyzing the financial stability of an enterprise]: textbook / S.M. Bukhonova, Yu.A. Doroshenko, O.B. Bendery. - Economic analysis: theory and practice, 2008.

6. Gadzhinsky [Logistics]: textbook / A.M. Gadzhinsky. - M.: Information and implementation center "Marketing", 2009.

7. Grachev [Financial sustainability of an enterprise: analysis, assessment and management]: textbook / A.V. Grachev. - M.: Economics, 2007.

8. Denisova [Retail trade in non-food products]: textbook / I.N. Denisova. - M.: UNITY-DANA, 2009.

9. Dontsova, Nikiforova [Analysis of financial statements]: textbook / L.V. Dontsova, N.A. Nikiforova. - M.: Business and Service, 2009.

10. Solomentseva [Economics and enterprise management]: textbook / ed. Yu.M. Solomentseva. - M.: Higher School, 2007.

11. Pambukhchiyants, Dashkov [Commerce and trade technology]: textbook / O.V. Pambukhchiyants, L.P. Dashkov. - M.: Marketing, 2007.

12. Pankratov [Commerce and trade technology]: textbook / F.G. Pankratov. - M.: Marketing, 2008.

13. Bragina [Trading business: economics and organization]: textbook / ed. L.A. Bragina. - M.: Infra-M, 2008.

14. Baryshnikov [Accounting, reporting and taxation]: textbook / N.P. Baryshnikov. - M.: Information and Publishing House "Filin", 2005.

15. Nikolaeva [Accounting policy of an enterprise]: textbook / S.A. Nikolaev. - M.: INFRA-M., 2005.

16. Van Horn, James Wachovich [Fundamentals of Financial Management]: textbook / Van Horn, James Wachovich. - M.: Publishing house "William", 2003.

17. Basova [Fundamentals of Economics and Management]: textbook. / T.F. Basova, V.I. Ivanov et al. M.: Publishing Center "Academy". 2004.

18. Semenikhin [Wholesale and retail trade: organization of accounting and tax accounting]: textbook / under general. ed.V. V. Semenikhin. - M.: Eksmo Publishing House, 2005.

According to management accounting data.

Based on 2,449 convenience stores opened as of January 1, 2009 and 11 hypermarkets opened as of November 1, 2008. Thus, this indicator is calculated for convenience stores that have been open for at least six months and hypermarkets that have been open for at least 8 months, i.e. e. reaching the level of mature sales.

Based on 2,436 convenience stores opened as of February 1, 2009 and 12 hypermarkets opened as of December 1, 2008. Thus, this indicator is calculated for convenience stores that have been in operation for at least six months and hypermarkets that have been in operation for at least 8 months, t .e. reaching the level of mature sales.

Introduction

1.3 Structure of material resources and methods of analysis

1.4 Logistics regulation of warehouse activities

1.5 Inventory management models

Chapter 2. Assessing the effectiveness of inventory management at Tander CJSC

2.1 Company characteristics

2.2 Analysis of the financial condition of the enterprise

2.3 Assessment of the organization of the trade and technological process at ZAO Tander

Conclusion

Bibliography

Introduction

Currently, the world is undergoing constant changes in strategies and methods, and the problems of this research are still relevant. The relevance of the study is determined by the need to improve the efficiency of inventory management, as well as to increase competitiveness - the most important condition for the scientific and technical reform of the Russian economy.

It seems that the analysis of the topic - inventory management in a retail chain is quite relevant and is of scientific and practical interest.

This topic is currently very relevant for any enterprise, regardless of what goods (products or services) the enterprise produces and offers to its partners.

These circumstances predetermine my choice of the topic of my course work - inventory management in a retail chain and ways to improve it.

The degree of scientific development of the topic. The theoretical basis of the comparative study is the work of: S.V. Bank, S.M. Bukhonova, Yu.A. Doroshenko, O.B. Benderskaya, A.M. Gadzhinsky, A.V. Grachev, I.N. Denisova, L.V. Dontsova, O.V. Pambukhchiyants and others. At the same time, in the literature there is a clear lack of both general studies related to this topic and works devoted to the study directly of methods of inventory management in a retail chain.

When characterizing the degree of scientific development of the topic “Inventory management in a retail trading network and ways to improve it,” it should be taken into account that this topic has already been analyzed by various authors in various publications: textbooks, monographs, periodicals and on the Internet. However, when studying the literature and sources, there is an insufficient number of complete and explicit studies on the topic “Inventory management in a retail chain and ways to improve it.”

The object of study of this course work is a retail trade network, the subject is inventory management in a retail trade network.

To reveal the topic of the work, the goal was set to analyze inventory management in a retail chain and determine ways to improve it.

To achieve this goal, the following tasks have been identified:

· clarify the content, identify and summarize the features, structure and types of basic processes and categories of the theory of inventory management, determine the main approaches to their content, essence, compare them and systematize the factors influencing them;

· explore existing approaches to the development of inventory management systems and justify the need to integrate technological management processes in the form of an integrated management mechanism that integrates various types of inventories that are adequate to the stages of supply and their supply processes, which must be taken into account as important factors in optimizing the inventory management process in a retail network ;

· identify and evaluate existing inventory management technologies, conduct a comparative assessment of them to determine the scope and degree of effectiveness of decisions made on inventory management;

· explore indicators and methods for assessing the effectiveness of inventory management, identify requirements for ensuring the reliability and completeness of costs for rational inventory management and create a system of indicators for adequate cost analysis of management functions in an integrated supply chain;

· evaluate the parameters of the existing inventory management system at ZAO "Tander" store "Magnit".

The work consists of an introduction, two main chapters, a conclusion, and a list of references.

The introduction substantiates the relevance of the choice of topic, defines the subject, object, goal and corresponding tasks, and identifies the problem.

The first chapter discusses general theoretical issues. Basic concepts are defined, the relevance of inventory management in a retail network and ways to improve it are determined.

Chapter two is of a practical nature. The study was carried out using the example of the retail trade network ZAO "Tander" of the store "Magnit" and based on individual data an analysis of the current state is made.

The methodological and theoretical basis is the results of scientific research by domestic and foreign scientists in the field of economics and enterprise management, theory and practice of inventory management.

The study was conducted using existing inventory management systems and technologies, regulatory documents regulating the process of enterprise management in the field of inventory management.

Chapter 1. Theoretical aspects of the formation of inventory in a retail network

1.1 Characteristics and types of inventory

Features of the production and transportation of goods determine the nature of the process of replenishing stocks of goods, and features of consumption determine the nature of the process of spending stocks.

Inventories are distinguished by the method of formation and expenditure, and by location.

Goods stored in the store form the so-called stock of goods of regular circulation, i.e. such stocks of goods that are consumed on a daily basis and are constantly updated regularly.

Commodity inventories are part of the supply of goods, representing the totality of the commodity mass in the process of its movement from the sphere of production to the sphere of consumption.

Inventories represent the quantity in monetary or physical terms that are at the disposal of trading enterprises (in warehouses, in trading floors) or in transit on a certain date.

Inventory - stocks of finished products at manufacturing enterprises, as well as stocks along the route of the goods from the supplier to the consumer, i.e. at wholesale and small-scale retail trade enterprises, in procurement organizations and stocks in transit. Inventory includes, for example, stocks of manufactured shoes located in the finished goods warehouse of a shoe factory. [Pankratov F.G. "Commerce and trade technology": textbook / F.G. Pankratov. - M.: Marketing, 2008.]

An integral part of commodity supply is the formation of inventory in wholesale and retail trade enterprises. It is impossible to do without inventories, because the cycles of production and consumption of goods, as a rule, do not coincide, and in some cases there is a significant time gap between them. Agricultural products are characterized by seasonal production, and requests for them are received throughout the year. Often times for the movement of goods are long, and interruptions in their supplies cannot be ruled out. Therefore, trading enterprises are forced to create inventories of products by placing and storing them in warehouses.

Warehouses perform the following specific functions:

* placement and maintenance of inventories of goods for the smooth and rhythmic conduct of the trading process;

* ensuring a storage regime taking into account the characteristics and properties of goods;

* selection and assembly of the range of goods included in the sales range;

* performing various operations related to the preparation and release of goods from the warehouse.

The passage of goods through the warehouse predetermines the costs of living and material labor. Warehouses incur significant costs as a result of using capital to purchase and maintain inventory. [Pambukhchiyants O.V., Dashkov L.P. "Commerce and trade technology." - M.: Marketing, 2007.]

Signs of classification of inventory:

1. By location: wholesale trade enterprises; retail trade enterprises; industrial enterprises; ways.

2. By timing: reporting as of the date; input or initial; weekend or final.

3. By indicators: in physical terms; in terms of value; in days of turnover.

4. By purpose: current storage stock - to meet the daily needs of trade; seasonal reserve - to ensure uninterrupted trade during seasonal changes in demand or supply; stocks of early delivery - to ensure uninterrupted trade in remote areas during the period between the delivery dates of goods; target inventory - for the implementation of certain targeted activities.

1.2 Structure, factors influencing the amount of inventory and types of inventory management systems

Inventories created at trading enterprises are assessed by a number of indicators - the amount of inventories in value terms; the amount of reserves in physical terms; the amount of inventory in days of turnover.

The process of selling goods requires the constant availability of inventory at trading enterprises. The formation of the required size of inventory allows a trading enterprise to ensure the stability of the range of goods and meet customer demand.

Inventory is part of the supply of goods. Representing the totality of the commodity mass in the process of its movement from production to the consumer.

Inventories of trading enterprises are classified according to the following criteria:

1) by location:

a) inventories in trading enterprises;

b) industrial reserves;

c) supplies in transit.

2. By timing:

a) inventories at the beginning of the period;

b) ending inventory.

3. By units of measurement:

a) absolute (in value and physical terms);

b) relative (in days of turnover).

4. By purpose:

a) current storage (to meet the daily needs of trading enterprises);

b) seasonal purposes (to ensure uninterrupted trade during periods of seasonal changes in demand or supply);

c) early delivery (to ensure uninterrupted trade in remote areas during the period between the delivery of goods);

d) target inventory (for the implementation of certain targeted activities).

The bulk of all stocks of a trading enterprise are inventories of current storage. They are necessary to ensure the uninterrupted sale of goods in the current period. They need to be constantly replenished.

Commodity stocks for seasonal storage and early delivery are formed, first of all, for such goods that have a significant time gap between their production and consumption. In addition, they are created based on the characteristics of the geographical location of trading enterprises, as well as at enterprises located in populated areas to which, due to muddy roads or other reasons, regular delivery of goods cannot be ensured.

Commodity inventories created at trading enterprises can be assessed by the amount of inventories in value terms or the amount of inventories in days of turnover. They are in constant motion and updated. The final stage of their movement is consumption.

To maintain inventory at an optimal level, a well-established inventory management system is necessary.

Optimal inventory refers to the minimum quantity of goods that would ensure their uninterrupted supply to customers.

Inventory management involves their rationing, operational accounting and control, as well as regulation.

Rationing of inventory allows you to develop and establish their required sizes.

The required sizes of inventory for stores are established taking into account the volume of daily sales of goods, the optimal sizes of one-time deliveries and other factors. Store employees monitor the compliance of actual inventories of goods with the established required sizes and take measures to speed up the delivery of goods to the store or activate the sale of replacement goods.

If the actual inventory in the store exceeds the required size, then store employees must first determine the reasons for the excess, of which the most likely may be:

1) a decrease in consumer demand under the influence of changes in fashion, rising prices, the emergence of new, more advanced products, etc.;

2) miscalculations by store employees when determining the needs for goods;

3) low quality of supplied goods;

4) failure to meet deadlines for the delivery of goods to the store.

Regulation of inventories consists of maintaining them at a certain level and maneuvering them. It involves the adoption of various commercial decisions by sales staff in order to normalize inventory.

The size of inventory is largely determined by the volume and structure of trade turnover of a trading enterprise. Maintaining an optimal proportion between the amount of turnover and the size of inventory is one of the most important tasks of trading enterprises. If the amount of inventory is insufficient, difficulties arise with the supply of goods to the enterprise, excess inventories cause additional losses, an increase in the need for loans and an increase in the cost of paying interest on them, an increase in the cost of storing inventories, which together worsens the overall financial condition of the enterprise.

Since the bulk of goods are concentrated in retail trade enterprises, the supply of goods to the population largely depends on the level of their management in the store. Therefore, each store must constantly monitor the condition of inventory, which includes not only monitoring compliance with established sizes, but also daily monitoring of the storage conditions of goods.

Electronic equipment is becoming increasingly common for managing inventory in stores. First of all, these are cash terminals with a system for recording merchandise flow, scanners and barcode printers, etc. With the help of such technology, you can not only exercise effective control over inventory in a store or an entire company, but also manage other areas of commercial activity (pricing, work with suppliers, etc.

An integral part of product distribution is the formation of inventory in retail trade enterprises.

Properly organized inventory management plays a big role in improving the level of trade service.

Inventory management involves planning a certain volume and structure of inventory in accordance with the goals set for the trading organization, as well as monitoring that inventory constantly meets established criteria.

Inventory management must be carried out systematically.

Inventory management includes:

1) determining the size of the optimal inventory;

2) operational accounting of inventories and control over their condition;

3) regulation of inventory.

Inventory management solves a number of commercial problems related to the formation and maintenance of the range of goods at the required level in order to satisfy customer demand.

The need for commercial work on inventory management is due to the fact that the demand for specific goods is dynamic, subject to the influence of many factors, which makes it difficult to make the right decisions regarding relative purchases, therefore, miscalculations in this activity lead to the formation of inventories in volumes higher than requirements or lower, which leads to negative consequences.

Managing surplus goods involves reducing the volume of purchases of these goods, refusing to supply them in the next period, advertising and other methods of activating the sale of goods, including reducing prices. A shortage of inventory leads to dissatisfaction with customer demand, a decrease in sales volume, which leads to a deterioration in the economic and financial condition of the enterprise. The size of inventory and its turnover are influenced by various factors, primarily the consumer properties of the product, quality, and price.

One of the main tasks of inventory management is to ensure faster turnover of funds invested in inventory.

The turnover of goods characterizes the quality of management of commercial processes.

When managing inventory, it is necessary to take into account the reliability of fulfillment of supply contracts, data from an analysis of the volume and structure of sales, both current and statistical reporting, which should be studied over time.

When analyzing inventory, their compliance with standards is checked.

The inventory standard is the optimal size of inventory that ensures uninterrupted sale of goods at a minimum cost. Excessive inventory of goods is formed as a result of the import of goods in quantities exceeding effective demand, the receipt of goods of inadequate quality, violation of the storage conditions of goods, as a result of which their presentation is lost and their quality deteriorates.

Retail trade enterprises establish standards for inventory for a certain period (quarter, month) in the amount and days of turnover in general and for groups of goods.

The most common method of normalizing inventory is considered to be technical and economic, which consists in calculating the stock norms of goods by element in relation to the process of stock formation. The elements of inventory standards include the time for acceptance, inspection and preparation of goods for sale, the time the goods remain in the form of inventory, the safety stock used in conditions of uneven supply, changes in turnover and consumer demand.

Sub-commodity norms are calculated using formula (1.1).

Nzap.norm=Tpr+Nzap.r+Nzap.z+Nzap.g, (1.1)

where, Tpr - time for acceptance of goods and preparation for sale;

Nzap.r - working stock in the form of a display of goods, which must be constantly located on the sales floor;

Nzap.z - stock until the next delivery, involves replenishing retired goods on the sales floor in order to ensure uninterrupted sales for the period of the next delivery;

Nzap.g - insurance guarantee stock.

Inventory management is an important trade marketing tool. How can customer inventory management drive sales? Experience shows that it is naive to expect that the merchandiser himself will order the necessary supplies correctly and on time. After all, a large supermarket can offer up to 15,000 different items, each merchandiser is responsible for thousands of SKUs. In Russia, in addition to a large amount of information, buyers of retail outlets are faced with another problem - a shortage of money to pay suppliers. Every day they are forced to decide a difficult question: who to pay and who to put on the waiting list. Naturally, delivery is impossible with an overdue loan. Of course, financial issues are the responsibility of sales managers. However, a sales manager or merchandiser who facilitates the buyer’s work in placing an order for products also helps resolve financial issues.

In this case, the word “facilitating” is key. This is not about following the merchandiser and constantly begging “Auntie, order another box,” thereby complicating rather than making the buyer’s job easier. We are talking about a competent, scientifically based calculation of the stock of your products for a given retail outlet.
Why doesn't the principle of "more is better" apply to retail inventory? You will find a detailed answer to this question in the next section, which talks about the turnover ratio. And in a nutshell: money frozen in a product is dead money that does not bring profit to either the supplier or the retail outlet. And for a store, excess product stock not only reduces financial performance, but also takes up scarce trading and/or warehouse space.

On the other hand, under-ordering of products leads to out-of-stock (out-of-stock - temporary absence of some product items). The harm that out-of-stock products cause is another topic in the next section.

Having understood the turnover ratio, we will be able to calculate the size of optimal drains. But this is only half the way. After all, stocks (inventory) are not homogeneous; they are divided into several subgroups. And each of their types must also be optimal.

Inventory turnover

Any commercial structure (both supplier and retailer) strives to obtain the maximum possible profit. A retailer's profit depends on two factors:

• trade margins and
• turnover of goods.

Trade margin is the responsibility of the retailer. With increasing competition between retail chains, and as the shortage of stores in Russia becomes saturated, retail margins inevitably decline. In any case, the manufacturer or supplier in most cases cannot influence this component of the retail outlet's profit.

But the supplier’s employees can increase the turnover of their products not only through competent display, which increases sales, but also through managing the client’s stock.

One of the most important KPIs of a retailer is the concept of turnover ratio. It is calculated very easily: it is equal to the number of inventory turnovers per year. For example, if the drains are turned over once every two weeks, then the coefficient is 24, if once every two months - 6.

Let's compare the two products shown in the table:

Although the markup on product A is twice the markup on product B, the annual profit from selling both is the same. The reason for this is the twice higher turnover of product B.

Therefore, retailers try their best to minimize inventory and make minimal purchases in order to avoid possible stagnation of goods and freezing of working capital. When a store operates with 15,000 SKUs, the turnover ratio becomes a priority! But by acting this way, they can achieve the opposite effect. Trimming drains can result in out-of-sinks. It has been scientifically proven that out-of-stocks are one of the primary reasons for the loss of market share, falling sales and, as a consequence, product turnover.

At the same time, most often the most popular items are “washed” off the shelves first, which “kills” sales of the company’s best products. After all, the buyer, if he is not helped with placing an order, can take the path of least resistance and order “just a box”, without bothering to look at the sales dynamics of each SKU of a given supplier. As a result, product B from the table above will be sold in three days, and product A will be sold in a week. Consequently, three days before the next delivery, the store will not have the most popular item.

Who will suffer from this? Both supplier and retailer. The supplier's losses are obvious. But what are the retailer's losses? Buyers don't like to go to stores that are constantly out of stock of their favorite product. The retailer will not only lose revenue from missing SKUs, but also long-term store traffic.

Therefore, the role of representatives of the supplier or manufacturer in inventory management is so important, that is, finding the “golden mean” - the optimal inventory and order size for each retail outlet! The sales manager or merchandiser must remove the balances and show the merchandiser his calculations for each SKU, and convincingly prove the need for the order he proposes. In this case, he acts in the interests of not only his company, but also in the interests of the retailer.

Types of inventory

Stocks (stock of goods at a retail outlet) can be divided into constant and variable. Constant stock is a constant display of products at permanent points of sale and stock in the warehouse for the entire period until the next delivery, calculated based on average sales. The permanent flow must include an insurance flow for the time of delivery.

Variable or additional flow is necessary in case of seasonal fluctuations in sales or promotions.

The supplier's total stock of goods at a retail outlet is the sum of the following stocks:

• warehouse stock for the entire period until the next delivery (for example, equal to weekly sales, if the goods are delivered to the outlet once a week);
• insurance flow equal to at least 10% of the above volume;
• the volume of goods required for a full display on the sales floor (if there is none or has been damaged by out-of-stock);
• variable flow in case of high season or promotion, calculated specifically for each delivery.

The Store Card must contain the following table for each month, filled out by the sales representative or merchandiser on the day the products are delivered to the store:

Also, the Store Card should contain:

• section indicating planned promotions (for calculating variable stock and timely ordering of products) and
• table of the Seasonal Sales Ratio by month, which looks like this:

If goods are delivered more often than once a week, in addition to the Seasonal coefficient, the Weekend coefficient is also calculated. After all, sales from Friday evening to Sunday evening are significantly higher than on weekdays.

The order is calculated for each SKU according to the following scheme:

Do you think this is an overly complicated inventory management formula? It’s easier to take the average sales for the delivery period and order the corresponding quantity. But! Where does out-of-stock or overstocking come from? Their reason lies precisely in this simplified approach. On the one hand, excess balances of one of the SKUs are not adjusted and accumulate from delivery to delivery. On the other hand, every time before delivery, the most popular item is missing from the shelf for a couple of days because the stock required for display in the hall was not taken into account. The above table is a checklist that allows you to adjust your order based on average sales to avoid inventory management imbalances.

According to the retailer's merchandising rules, there should be no empty space on the shelves, even if the supplier swears that he will deliver the missing product within 24 hours. If in a supermarket during the day there are only 12 empty faces in all departments, such a store, according to standard calculations, loses about 1000 rubles per day (average price of goods 80рХ12=960р)! A small retail chain of 20 stores is already losing 20,000 rubles per day! Therefore, store management strictly punishes its employees for empty faces. The missing product is replaced by anything - a product from the same supplier, its competitor. Doesn't matter. The main thing is to close the hole.

Experience shows that a merchandiser, having double-checked the supplier’s representative’s calculations a couple of times and made sure they are correct, begins to trust these figures and delegates inventory management to him. Thus, the supplier's representative has the opportunity to control deliveries to a given retail outlet and manage inventory in a given store. It does not matter whether the goods are ordered directly from the supplier or from the centralized warehouse of the retail chain.

Here is what is written about this in the Merchandising Standards of the British company Continental Beverages: “The warehouse stock and order system (described above - I.T.) allows you to take the initiative during each visit to control the order. Your stock level records on your customer card will help you calculate your order. This way, you can guarantee uninterrupted availability of your product at the point of sale. The client card is compiled for this purpose.”

In the same merchandising standard, in order to convince the buyer to use the services of a supplier’s representative when ordering products, it is proposed to explain to the merchandiser the following advantages of free assistance in inventory management:

• The buyer has more time for other things.
• Out-of-stock is minimized, thereby reducing losses in store profits.
• The danger of overstocking individual items is minimized, since the sales representative, when calculating an order, looks at the sales history of each SKU, and not individual items, as a buyer usually does.