Days at Zero on hand - Office Exceptions

 

One of our favorite reports showing SKUs that will likely experience increased sales if more inventory is invested.

Steps to process this Report:

1. Start at the top of the list and work to the bottom.
2. Make sure there is enough shelf space to accommodate additional inventory; if not then make more room (no back stock).
3. In Eagle Browser, launch Inventory Maintenance (IMU). 
4. Type in the SKU and click Display (F6).
5. Replace the Min OP to the number of units Mango suggests (the SUG MIN OP column in this report). You may also wish to bump up the SKU's Order Point to match the Min OP if the current OP is less than the new Min OP. 
6. Press Change (F5), move onto the next.

 

Report Column Definitions

SUG MIN OP - Mango's Suggested Minimum Order Point. CUR STO OP - what the current Order Point was when Mango pulled your data at month end. TMS OUT TTM - the number of times that item has sold to Zero QOH in the past trailing twelve months. DYS OUT TTM - the number of days in the past trailing twelve months that the QOH has been Zero. DYS OUT MON - the number of days in the past month that the QOH has been Zero. ANNUAL SALES OPP - shows the calculated annual sales opportunity if the SKU were to never sell out. It is calculated by taking the average daily sales for the SKU (averaging in some peer data too) and multiplying it by the number of days out. For stores newly on Mango, this is an annualized number and will become more accurate in time. INV ADDED - the incremental inventory investment based on carrying additional units suggested. ROI% - return on investment calculation ANNUAL GROSS PROFIT OPP / INVENTORY INCREASE. You can divide by 100 to determine GMROI.

Which SKUs are included and which ones are filtered out?

This is a highly filtered listing because each SKU should be considered for increased inventory in your store. Filters include: 1) Ace SKUs only. 2) Outs caused by warehouse out-of-stocks are excluded. 3) SKUs who's Order Point was increased during the month (to safeguard against multiple OP increases). 4) Highly seasonal, in/out promo and special orders are excluded. 5) Low ROI or infrequent outs (low D's) are excluded. 6) Other filters such as Store Closeout and Discontinued. Please let us know if you are experiencing noise or disagree with any of Mango's suggestions!

How is the list sorted and what do the bold and highlighted bars mean?
The list is sorted by taking the top ROI% (return on investment) SKUs multiplied by ANNUAL SALES OPP. This way your best return on investment with the most potential sales impact are sorted first. These are your most impactful SKUs to investment for business ROI. Highlighted rows show SKUs that sell out the most often but might not be the best ROI%; however these frequent outs could be frustrating to your customers.


Do I keep processing Ace's ADW (Ace Data Warehouse) In Stock Report?
Yes. Ace's report is generated weekly and contains Ace and Non-Ace SKUs as well as many seasonal SKUs.

Footer lines
Line 1: summarizes all reasonable days zero SKUs for the month (warehouse-caused outs excluded, low sales opportunity excluded, low ROI% excluded)
Line 2: summary for twelve trailing months (TTM), annualized for stores running Mango for less than 12 months.
Your MEGA Report shows the full SKU listing.

More info

In a lot of ways, this is Mango's most powerful exception report utilizing warehouse, store, and peer data to compile. No other report utilizes this much data and there is a lot of computing horsepower both at Ace and Mango applied to make this listing. Two fundamental assumptions are made to calculate lost sales, gross profit and return: 1) a quantity on hand of zero at the end of the day results in lost sales (average daily sales are calculated multiplied by days out TTM and annualized if your store has not been on Mango for 12 months). 2) increasing inventory by the units suggested is sufficient to cure all future zero on hands (this may be a stretch in some circumstances but we're working on making this better) We employ a lot of peer and seasonal analysis to determine our ROI metrics and for most stores, these will be conservative numbers. Highly seasonal items may require more peak inventory investment than what is suggested. Note: you can divide ROI% (which is Gross Profit Opportunity / Inventory Increase) by 100 to achieve a decimal value for ROI.  A decimal value for ROI is GMROI.  For example, an item with a Gross Profit opportunity of $100 per year with a $30 inventory increase (investment) will have an ROI% of ($100 / $30 * 100) 333%, which is a GMROI (333% / 100)  of 3.33.