Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/114173
Inventory management PRIORITIZATION New product decisions for controlled growth of your future product plan SYSTEMIZATION A consistant code and recording procedure for classifying and entering products to your inventory management system COMMUNICATION Present a clear message to ALL departments Buyer/ Planner Forecasting Inventory/ Warehouse Finance/ Accounting Marketing Sales These three steps need to be taken before (or shortly after) the new product hits your shelves. Then you must offer everyone follow-up communication until the information is ingrained in your everyday business. sales staf about small changes can reveal important information about products that can inform future decisions, and make sure that the new products don't get lost in the bigger picture. It is important to note that the communication above is all meant to happen before (or very soon afer) the time when the new product hits your shelves. It is important to plan for follow-up communication until the new product is engrained in everyday business. For a summary and conclusion, let's recap the areas of preparation and communication with an example. Smart Tire Co. (STC) just hired you as product planning manager and your frst task is to decide between three new tire opportunities: a Crossover SUV tread, an "eco" tread or an ultra-high performance all-season tread. You prioritize the projects based on flling the biggest gap in STC's product screen and begin with the eco segment. Your research revealed that there was a 15% increase in the number of hybrid and alternative fuel vehicles in your distribution area in the last fve years. You may consider adding a "fuel-efcient" or "eco" tire line to your product screen. You also consider adding the original equipment tires of the most popular hybrids and alternative fuel vehicles in your area. Lastly, you consider employing both strategies to get the most coverage. Due to your comprehensive research methods, you realize that one of the eco tires you are considering has a size range that covers most of the key vehicles in the segment and also includes several original equipment ftments for hybrids and alternative fuel vehicles. Afer discussing your fndings with your management team, you learn from the supply chain that 54 the manufacturer has sufcient stock to cover your forecasted demand for one tread. You learn that the warehouse has space to stock but some of the retail stores are limited. You learn that the initial investment will not pressure your credit line with that manufacturer. You move forward by stocking a full line in the warehouse and stores without space constraints. Your priority in the space-constrained stores is to stock the OE ftments. Te new part numbers are set up in your inventory system, afer training your inventory staf on a new process and method of classifcation. Te SKUs for this tread will be classifed as "new" for the frst six months. Afer conferring with the marketing department, they will all have a promotion fag at launch, to be reviewed afer three months. Tere are no typographical errors. You schedule a meeting with the marketing department to discuss the new product. Afer researching the market, they set the price, update the website with new content and work with the stores to display new POP materials. Next you blast new product announcement emails to the stores with product details and ftments as well as scheduled training sessions for the staf at each store with the manufacturer rep. You prepare a one-page sell sheet that highlights the product benefts and compares against your main competitor. Finally, you set up your own report to view the performance of each new SKU during the three-month promotional period. You go home, take out the trash and brush your teeth. ■ Robert Abram has worked in the tire industry since 1992, most notably with Dealer Tire LLC and Yokohama Tire Corp. MTD March 2013