Thursday, July 5, 2007
Retail Inventory Management
Inventory is more than a substantial investment; it is usually a company’s largest asset. Smart companies have found that the ability to manage this asset is a key factor in their ultimate success or failure. Companies manage inventory differently, according to their particular needs and focus.
Inventory is the company's merchandise, raw materials, and finished and unfinished products, which have not yet been sold. Inventory Management is the process of ensuring the availability of products through inventory administration such as planning, stock positioning, monitoring product age, and ensuring product availability. The Inventory Management System provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities, and communicate with customers.
Inventory Management does not make decisions or manage operations; it provides the information to managers who make more accurate and timely decisions to manage their operations. Inventory Management must be designed to meet the marketplace needs and support the company's strategic plan.
Most retailers utilize a computerize method of inventory tracking in combination with scanning at the point of sale (POS), which then transfers the information to a computer program. Even though this method is not 100 percent accurate, it is the most widely used. For manufacturers and distributors striving to compete in a fierce marketplace, effective Inventory Management helps them avoid stocking too much of the wrong products and not enough of what customers want. It allows them to meet and exceed customer expectations of product availability while maximizing profits.
Human interaction is necessary in order to maintain POS programs as accurate as possible. The various systems utilized by different retailers will lead to conclude the need for an Inventory Management System that performs automatic updates when the product is scanned or otherwise electronically altered and one that is closely monitored in order to account for non-electronically automatically commanded changes such as theft and misplacement of product.
There are various methods of managing inventory. Most of which, require tracking incoming, outgoing, and idle merchandise either by hand or computerized methods.
Since different retailers use different programs and even computer platforms, each company uses the information differently as well, due to the various strategic focuses. The end result is the same. Retailer utilize this system of scanning the product when it arrives in the store to add it to the inventory system and when sold it is scanned again at the register to indicate that it is not in inventory anymore. Depending on the setting of the program the item either, will automatically be re-ordered when sold, when reached a certain low point, or an order manually entered on the computer. As mentioned before, computer inventory is not accurate; it is a method used to assist in making inventory decisions, and controlling inventory. It cannot be stressed enough that computerized inventory systems require human attention to maintain its close accuracy.
Retailing is becoming more complex every day. Retailers have spent time, money and resources instituting fundamentals, establishing inventory controls and aligning their assortments. Retailers continue to search for the optimal blend of art and science to conduct their Inventory Management activities. This can become time consuming and costly. Solving the problems with the present POS systems problem requires new IT solutions and systematic changes that cut across functional boundaries within and between retailers, in the supply chain, and among suppliers.
One example of the computer program flaw is stock-outs. Retailers find stock-outs annoying, just like everybody else, but they live with gaps in their inventory because they figure the fix is more expensive than the problem. This particular problem requires extreme attention. Studies show that an average of 4% of annual sales is lost due to stock-outs.
There are many elements into play to account for the accuracy of the system: system connections such as the one between the POS and the office computer and that to the warehouse, service clerks scanning the correct item, weather itself can present a problem, etc. All of these factors must be taken under consideration when entrusting Inventory Management solely to a computer. A close watch should be kept on the system and up-to-date program updates as well. Inventory Management Systems are an excellent tool to assist in Inventory Management operations such as tracking, controlling, ordering, and others inventory related activities.
It has been found that inventory is a significant company asset and it should be managed as such. Close attention must be paid to this great company asset. It is recommended that the use of computerized systems be combined with regular checks and adjustments of its accuracy done manually. This can be done by either scanning the items that are out on the shelves, meaning there are not any there, to see what on-hand count the system is showing as well as by performing random periodic counts of items throughout the store to assure accuracy and effectiveness of the inventory system.
When new inventory is received, if it is too much to go on the shelf, counts should be fixed in the system. The program will keep track of items scanned at the register, items received or items otherwise scanned out of the system due to a return or damage. There are instances when inventory changes that are not scanned such as theft, mistakes in prior adjustments, and system errors. Because of these other instances, the Inventory Management System utilized by the company must be regularly updated.
The main message of Inventory Management is to be as accurate as possible using a blend of computerized and human help. This allows for a checks-and-balances situation where human and/or system errors can be caught and corrected as soon as possible as to not affect the entire inventory process.
Tuesday, June 5, 2007
Focusing on the Customer
A customer-centered business focuses all its insights, efforts, and talents on creating and maintaining value for its customers. This means ensuring that every single employee in the organization has a clear and intimate knowledge of what the customer wants, needs, and expects. This knowledge comes through the distribution of information.
Once the goals are clear, and there are plans and strategies, it is time to take action. This is the time to conduct fundamental changes, if necessary, that make a better effort to communicate to employees that in turn deal with the customers. With the importance of communicating with employees and other staff, we must take advantage of the technological advances in communications that companies spent so much time and money improving. These may involve but are not limited to video, email, conferences, blogging, podcasting, and text messaging.
Employees should be involved in the communication process as they are accountable for communication with the customer. Find creative ways to communicate the message. With proper communication methods within the company, the mission and vision of a customer-centered organization can be properly relayed.
As an organization, we should agree on what customer related information is important to the success of the company. A consensus from various stakeholders can come in handy to better understand the needs, wants, and expectations of the customers. It is also important to understand what the employees’ need and want to know about the customers. In addition, we can simply ask the customers directly what they expect, want, and need from us.
Customers should be involved in this process. Your customers are just as anxious to be served, as we are to serve them. I encourage customers to report both complements and complaints in order to better understand their position, thoughts, and feelings about the service. Review performance appraisal processes to include a section evaluating customer service. This will hold the employees accountable for serving that end user customer.
Having a customer-centered strategy is certainly a departure from the traditional approach of sales and marketing. It involves a new organizational mindset and focusing on the customers' wants, needs, and expectations. There is a huge difference between making promises and actually being a customer-centered organization.
Ten Key Components a Customer Centered organization focuses on:
1. Quality customers instead of markets
2. One on one relationships
3. Integrated and coordinated organization
4. Strategic planning and implementation
5. Customer-centered philosophy drive the business
6. Lifetime value instead of short-term sales
7. Information technology
8. New Business metrics and performance measures
9. Dynamic changes in world economy and global businesses
10. A win-win situation
These 10 items are just the start of the customer-centered. These approaches to having the customer in mind will allow the business to focus marketing efforts on the most valuable and most growable customers, build a learning relationship with those quality customers, as well as maximize customer loyalty and retention. The result of this new approach is up and cross selling opportunities and increasing customer lifetime value in profitability.
That's not all; focus on the customer also allows businesses to acquire new quality customers a lot easier than before because now it has been conducting business with its customers properly and effectively. This will also improve the value of delivery methods, achieve cost-savings to the focus of limited resources on quality customers, and establishes customer differentiation and obstacles to competitive entry.
The Golden Rule must apply in all of these situations. Treat customers as you would want to be treated in the same situation. Sometimes it is just that simple. A customer-centered approach does not to mean that the customer is always right. It simply emphasizes an overall company effort to better understand the customer's wants, needs, and expectations.
Wednesday, May 2, 2007
The Up’s and Down’s of a Family Owned Business
So you think you want to start your own business and have your family help you run it? Just think of the money you will save. You won’t have to pay so many employees, all of the profits will go to yourself and your family and you can set your own schedule. Sounds great doesn’t it? We’ll see.
This may sound like a great idea, but the picture isn’t always as pretty as it may seem. Take it from me, it isn’t always so easy. I work with my husband’s family (yes that includes my mother-in-law) in our family owned landscape business. My husband’s grandfather started the business over fifty years ago. From there my father-in-law took over and eventually his wife quit her job to help him run the business. They had three children and they made enough money with the business to get along just fine. Eventually those kids grew up, married, and stayed with the business. Now the business has to generate enough money to support four families plus pay the employees.
This is just one of the things that you don’t think about as you are starting your own business. You figure that all you need to do is make enough money to support yourself. To me this is sometimes very stressful. We have had to lay off employees, use disaster unemployment, and some of the family has had to get outside jobs at times just to make it. There are many sacrifices that come along with owning your own business. You may think that you will have the life of leisure and get to take off any time that you want ~ not true. You actually have to put in more or longer hours than if you were just an employee. I’ve personally had to stay and finish a landscape job with my husband until eleven at night because we had to meet a deadline and all of the employees wanted to go home.
Another thing that you have to think about is how much interaction is too much. I spend six days a week for nine months of the year with my in-laws. In the winter this is lessened to four days a week but there is still daily conversation. Now if your in-laws are people that irritate you or if you can not take the fact that they are going to pretty much know your every move and everything about you, this is not for you. My family and friends can’t believe that I can spend so much time with my in-laws. Let me just clarify that I work with my husband, my mother-in-law, father-in-law, my husband’s brother, and his sister and her husband. To top it all off we all live with-in a stone’s throw from each other. Talk about all in the family, but luckily we get along just great!
The biggest stress that comes with owning your own family business is that the success or failure rests on your shoulders. You are the boss. There is no one to blame if things go bad. If the interest rates at the bank go up, or if fuel prices exceed your estimated plans you have to figure out how to generate more money to cover the extra costs. You can’t just go home and not worry about how you’re going to make payroll, what prices to bid on a job and in our case, if it’s going to rain or be a drought. All of these things are on your mind constantly and can make or break your business.
On the up side, you ARE the boss. If your kids are sick, you can stay home and not worry about losing sick days or you can bring them with you to work. If you need to leave early for any reason, you can. You are the highest paid person on the payroll (if you make enough to pay payroll). You are in control. You get to decided what the best option is for the situation. You don’t have to go through a long line of people to approve or disapprove of what you want to do. If you think its right, you do it.
In my case, we are a seasonal business. Once the snow starts to fly, we start to slow down. This means that I get to spend more time with my kids and my husband. I get to catch up on all of those projects that I had put off all summer. It’s just a little time to refresh our minds and bodies until the next season begins. I know that if I worked for an outside company I would never have the flexibility that I have now.
So I guess what I’m trying to say is that if you are thinking about starting your own business with your family, be sure to consider the things I mentioned. Every day is not going to be easy and things will go wrong. There will be some stressful days and you will wonder “What in the world was I thinking?!”, but in the end you are working for yourself and the rewards and satisfaction you get from succeeding will out weigh the down’s any day!
Kristin lives in Medford, MN where she runs a landscaping business with her husband's family. She is currently working toward her BS in Business. In her spare time she enjoys camping with her husband and three kids, fishing and gardening.
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Thursday, April 5, 2007
Making the Boss Happy
What would make me the best? How can I proceed to the top? How do I make my boss happy? These are the questions that pass through most of the currently employed members of today’s society. The answer is only a few steps away. I will show you how to improve your boss’ outlook on you as an employee by taking a few steps in the right direction. The steps begin with learning to utilize punctuality, time management, prioritizing, organization, and displaying a willingness to learn.
Punctuality, be on time, be ready, set and go. Many employers enjoy when you come to work regularly and on time. If an employer has to be concerned with the thought of you might not coming or being late if you did show up, your employment becomes lower on the value scale. When you arrive a bit early, you not only give yourself the advantage of preparation but it shows your boss they can depend on you.
Time management is the key to doing your job effectively. Be prepared, don’t just punch in and then decide to collect all of the things necessary for you to complete your job! Time is a huge part of an effective business. As my current employer would say, “Time is money.” This quote is very true, when you are not ready, you are wasting their time, the consumer’s time and your manager’s time is costing the company money. You and I both know most companies do not have the luxury of throwing money out the door on each employee. So be considerate of that.
I can’t find anything! Do you even know where your desk is? How can you find it in this mess! Are these phrases you hear a lot? They shouldn’t be. In order to assist your boss in a productive and effective business you have to be organized. It allows you to find things at the drop of a hat. Think about it; what if you were at home and nothing was organized? You have to spend time looking for your keys, your wallet or even that movie you wanted to watch and all you want to do is relax and get your errands done. Your boss feels the same way. They want to come into work and know that everything is easily accessible to keep the business going. Do them a favor and be organized!
What comes first?? Well, you need to be able to determine this. If your boss is anything like mine, they will throw a laundry list of things that need to be done in your direction. You need to show that you can handle this. Assert yourself, delegate responsibilities and prioritize what you need to complete. Sometimes, there is not always the time to allow for the entire list to be completed. However, if you show your boss that you have completed what was of most importance, their satisfaction will be eminent.
Examples of things a boss never wants to hear include “I don’t know how to do that” and “that is not part of my job!” Always be willing to learn. You may have had years of training and education but there is always more to learn. Be open minded; when you are approaching a task don’t think of it as a chore look at it as an exciting experience. When your boss asks you to do something that you are unsure of how to complete say, “No but I am more than willing to learn!” It shows that you take a sincere approach to the job. Your boss will appreciate your enthusiasm and put other opportunities in front of you. By opening the door to learning and experience you become more valuable as an employee.
These few steps will make a great difference in your boss’ opinion instantly. You will also feel better about the effort you place in your work and feel great achievement because of this. Your boss will enjoy the changes and will admire your work ethic. It’s easy, so what are you waiting for?? Improve your boss’ outlook on you, today.
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Sunday, March 11, 2007
Welcome to the Business and Finance page of Hot Psychology Magazine
The Business and Finance team looks forward to engaging in conversation regarding the topics shared in the articles. We feel this will enhance the relationship we already have with you.
To all a great day and we will see you in the virtual world.
Tuesday, March 6, 2007
Should I Buy Term or Whole Life?
At some times in our life, we are faced with buying life insurance for ourselves and/or our family. There are so many types, and so many companies. What kind should we buy? What are the purposes? What are the differences?
Before telling you what the differences are between whole life and term life insurances, I will let you know a little about my background in this area. As a financial analyst, I was an independent distributor that issued term life insurance for over four years. I have sold, and am currently selling whole life insurance, with the availability to sell some term. I am a debit route insurance producer licensed to sell within the state of Louisiana. I provide home service to my clients. Most of my customers prefer me to collect their monthly premiums from their homes.
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Monday, February 19, 2007
Calling Into Work Made Easy, or The Ease of Technological White Lies
Many people have called in sick to work when they were actually just fine. Well, I have been reading many news reports lately about how technology is making it easier to lie to the boss. As the world becomes more technologically advanced with such mediums of communication as email and text messaging, it will become easier to call in sick and to distort the truth.
The majority of people admitted to feeling less guilty about lying when having the electronic device between them and the boss. Of course, the first thing that comes to mind is not having to pretend with voice adjustments or background noise changes.
Even calling in with cell phones makes it easier because the phone call can be made from anywhere. The caller can say that they are home sick or at the doctor’s office and actually be elsewhere. Take away the voice and now the text message comes in to say: “I’m sick not coming.”
Not only has the caller remove the voice factor, but also the response factor. The boss now can call or text back. At this point, the caller feels that they have accomplished their part of the deal by notifying the boss and feel that there is no further communication needed. This means that they will more than likely not answer the phone and attribute it to something else. The boss may be forced to text back. Now, the caller has time to think of a great answer / excuse to give the boss.
To read the rest of this article in Hot Psychology Magazine, click here.
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