As we have seen in previous articles in this series, Merchandise Planning covers a wide area of applications.
When we come to think about implementing a system we have to remain mindful of the old analogy of eating the elephant. We will find it very difficult to implement a fully integrated planning system in one sitting. We must keep the implementation in digestible, bite sized chunks. Ideally we shall keep it simple and go for some quick wins.
Central to your approach should be the question “Where does it hurt?”, but whilst asking it you also need to maintain the helicopter view on the merchandising strategy as a whole. You are not simply asking “Where do you want to be tomorrow?” but also “Where does the business as a whole want to be in 2 or even 5 years time?”
Bearing all this in mind, is there an obvious starting point? Well, wherever you start you will need to create a business requirements document, which will act as a specification. You need to specify here not only the processes that you are going to create, but also to define how you will judge the success of the project.
But where should we start in terms of applications? Doubtless you will have a good idea where you pain lies. For some retailers a planning project may result from problems with relation to ranging. This type of retailer would perhaps start with implementing a range and store planning project. For another it may be a requirement for tighter control over buying quantities to reduce overstocks that prompts action. Typically these retailers would be looking to improve Open to Buy control. Another retailer may be going the whole hog and trying to superimpose a strategic vision onto the merchandise function. They may begin a four or five year long project to bring in a planning system that encompasses the entire merchandising chain.
It is important to realise that the planning process is essentially a continuum and that there is no single universally obvious starting point. Another important insight is that there are as many possible entry points to the process as there are products. This is not altogether co-incidental. Each of the available products has strengths and weaknesses. Some started life as “better spreadsheets” and are well suited to the strategic, numeric end of the process. Others are very strong in the graphical area and are best suited to the detailed store layout and range creation end.
So, do you go for the quick win or do you undertake a complete re-engineering of the planning process. I could argue for either way of approaching planning. The textbook says that planning is a strategic process and that a professionally run business would not adopt a tactical approach. Reality says that if you are suffering pain and there is a cost-effective solution, then it makes more sense to attack your problem tactically whilst keeping yourself aware of the broader strategic issues that lie around what you are doing. This is what one of our clients described as going for the “quick wins”
So where do most people start? It is dangerous to generalise, but in my experience the fastest win that most retailers get from planning is the creation of an effective Open To Buy system. Most of you already have some sort of Open to Buy running, often on spreadsheets. If you can automate this more effectively then there is an instant win that also creates the beginnings of a planning culture within the organisation.
At the end of the day though, it is your business requirements that dictate where you should start. By making sure that your efforts are targeted and attainable, you can be sure that your starting point is a good one.