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Effective stock control is essential in the retail industry. The more stock a store holds the greater the amount of money that is tied up and this can have a significant effect on company profits.
Different stores have different ways of controlling and ordering new stock.
The Games Workshop has a simple, paper based system. Each Monday staff check the list of products in stock and decide what they need to order. The order is sent to the Games Workshop Head Office in Nottingham. The stock ordered is then dispatched from Nottingham during the week using UPS, the world's largest package delivery company, along with any other items that Head Office want the store to sell.
The Games Workshop store in the White Rose Shopping Centre has one delivery per week but during the Christmas period this is increased to twice a week. The store does not have a store room so cannot hold any excess stock although they do have access to a storage room at either the Leeds City Centre or Wakefield stores.
Sherburn Village Co-op also has a manual system of ordering stock. The store did have an automated system at one time but it has now reverted to a manual system because it was found to be much quicker and the store manager feels that the manual system is better because he is in control. He can also quickly take account of promotions and changes in the weather when ordering.
The Sherburn Village Co-op store places an order every day for fresh goods, such as yoghurts, meat and cheese and these are delivered from ACC (formerly Associated Co-operative Creameries) depot in Ossett daily. Dried goods are delivered three times a week from the CRTG depot in Barnsley. The store orders goods on Tuesday, Thursday and Saturday and deliveries are made on Wednesday, Friday and Monday respectively. However, the local depot is due to close in the near future and then all goods will come from Coventry. Bread comes direct from suppliers, such as Warburtons Limited. In an emergency the store has a back up chiller to store fresh food.
At Sainsbury's ordering is done using the Sabre system (sales based replenishment), which produces a list of goods required. The store at the White Rose Shopping Centre receives orders daily of between 3500 - 5000 cases. There are regional depots at Haydock (which holds about 60% of the goods required by the White Rose Shopping Centre store), Stoke (health and beauty, alcohol) Rotherham and Hams Hall in the West Midlands.
The Body Shop has an automatic replenishment system. The tills are computerised and Head Office receives information about what stock has been sold directly from the stores. This information is used to order and deliver replenishment stock to the individual stores. Individual stores usually carry 6-8 weeks stock in store. The White Rose Shopping Centre store receives new stock once a week throughout the year but this increases to three or four times per week during the Christmas period.
PC World also uses automatic stock replenishment procedures. Sales information is automatically recorded and replacement stock is sent out during the following week. Much of the store's stock is imported from the Far East and there have been occasions when shipments have been delayed en route and this has caused delays in replenishing stock levels.
The majority of Harvey Nichols designer wear is imported from the Paris, Milan or New York. Buyers and occasionally department heads visit the fashion houses to decide which garments to buy. As these garments are all handmade the Leeds store does not always receive all items of one design in the same consignment. To enhance the idea of exclusivity, the store does not display all its goods at the same time. However the store tries not to hold large amounts stock for a long time because items are exclusive and high stock levels tie up large amounts of money.
Every night per una sends a list of what has been sold in each of the Marks and Spencer stores throughout the country to Elite Distribution. Elite then sends replacements to replenish stock levels to all stores. For example, if on Monday, Leeds Pudsey store sold one size 10 pink top, one size 14 pink top and two size 12 blue trousers, these four items will be sent to the store the following day to keep the stock topped up. per una will also regularly send orders for other items on special offer in stores.
Security is a very big issue in all stores and shoplifting can have a serious effect on company profits.
In 2002, retail crime cost the British retail industry £2bn. The Centre for Retail Research in Nottingham estimated that in 2005, during the six weeks from mid-November until Christmas, thieves would steal £447 million from retailers in Britain. Latest available figures show that Leeds is the second worst city in the country for retail crime and the number of shoplifting offences in the city rose from 4851 in 2001 to 5839 in 2003. To counter this increase the police have launched 'Raid-control' - a national crime reduction initiative that provides training and security measures to vulnerable shops.
To keep losses to a minimum many stores employ their own security staff or contract store security. Debenhams at the White Rose Shopping Centre is very keen to reduce shoplifting. The store does not suffer from organised crime but mainly from opportunist thieves. There have been a lot of arrests in the store and it is the store's policy to prosecute.
- Name two different stock ordering systems and explain them briefly.
- Design a stock-ordering programme for a fashion retailer and a food retailer. What will be the main differences?
- You are the director of a storage and distribution company. What sort of information do you think your customers (the retailers) would like you to supply for them?
