Assortment planning is a consolidated sales planning by product categories in accordance with store formats. Based on consolidated plans, detailed sales plans for product items are generated in accordance with specified allocation standards. Planning is based on assortment data.
Prerequisites for assortment planning:
- Goods change on the market ("model obsolescence") (out-of-date goods continue to be sold but new goods are purchased) – out-of-date goods are gradually removed from the assortment and new goods are included in the assortment. Sales by product categories also remain. Consolidated sales by product categories are allocated to plans by products using allocation standards. For example, the assortment contains 25 goods items. One of them is removed from the assortment (removed from production), and a new goods item is included in assortment. That way the assortment (product range) is continuously updated.
- Fast-changing assortment – goods collections are never repeated. For example, a dress collection was produced for fall 2015. Next year, a new dress collection will be produced for fall 2016. When planning, you can use the sales statistics for a previous period collection and allocate it to a future period collection.
Assortment planning allows you to accomplish the following tasks:
- Save sales statistics by product categories and goods collections when changing the assortment.
- Forecast new sales by product categories (goods groups).
- Forecast goods sales for which there are no statistics or no goods.
- Get detailed sales plans for new product items when changing the assortment (new product range, new color, etc.). These detailed sales plans are created based on sales statistics of previous collections. You can get a product sales plan from a product category sales plan.
Assortment planning method:
- Allocate goods by collections (seasons) as goods from different collections might be included in one product category.
- Receive reliable sales statistics by product categories. Required if:
- The store is closed for repair.
- There are issues with goods.
- There are other issues (for example, weather conditions).
- Get a sales forecast based on statistics by product categories.
- Manage the assortment by goods collections (seasons) (see chapter "Assortment management"):
- Get rid of a previous collection (remove from the assortment).
- Purchase a new collection (include in the assortment).
- Determine a calculation method (see chapter "Sales planning by categories"):
- By sales volume
- By sales speed
- Allocate forecasted sales by product categories to a new goods collection:
- Keep records of different goods properties correlations by proportions (allocation standards).
Assortment planning settings
Assortment planning procedure is displayed in the diagram.
To be able to plan the assortment, do the following:
- Allocate goods by product categories and goods collections (see chapter "Management of product categories, collections (seasons), and assortment quotas").
- Allocate warehouses (stores) by formats (see chapter "Management of product categories, collections (seasons), and assortment quotas").
- Plan quantity of assortment items and set assortment quotas (see chapter "Management of product categories, collections (seasons), and assortment quotas").
- Remove previous collection goods from the assortment and include new collection goods in the assortment (see chapter "Goods collection management").
- Generate generalized sales plans by product categories.
- Determine allocation standards within product categories (see chapter "Determining allocation standards within product categories").
- Generate detailed sales plans by products in terms of assortment.
Transferring sales statistics between collections
An example of an assortment planning scenario including product range update (inclusion of new goods in assortment) is displayed in the diagram below (it shows "By volume" sales planning by product categories).
Imagine, you have a sales plan by product categories for the previous period, September 2015, and you have to plan sales for the new period, September 2016, based on sales statistics of previous periods. You can use the information on goods sales quantity for the previous period grouped by product categories to fill in quantity for new goods collections.
By doing so, you can process or change the quantity of sold goods for the previous period grouped by product categories (for example, increase the quantity by a sales growth percent or a seasonal index) and use this processed data in a new period plan.
Sales statistics for new goods is missing in a new period. The application tools allow you to get statistics for planned sales of new goods. For this purpose, transfer goods sales statistics for the previous period grouped by product categories to a new goods group based on allocation standards.
You can generate generalized sales plans by product categories in Budgeting and planning – Inventory planning – Sales plans by categories.
Planned demands can be recorded for a specific warehouse or store (warehouse) format. One document can contain the information on demands of several warehouses. Sales plan by product categories is generated for a certain period with a set plan frequency: week, ten-day period, month, etc.
The Sales plan by categories document is filled in with sales statistics of previous periods broken down by product categories and not with specific goods. This is the statistics transfer from one goods to another one within a product category.
The tabular section of the document can be filled in according to data sources or using a simplified formula. The information on how the plan should be filled in is defined in the plan profile. You can fill in the plan based on volume of sold goods within one product category for previous periods (for more information, see chapter "Sales planning by categories").
Enter allocation standards "in shares" (by a brand/product category) to allocate consolidated sales plans by product categories to plans by products. Using this data, you can generate the assortment showing the quantity of product items in the planned collection.
Use the Assortment change document to develop a collection and change the assortment (include new goods in the assortment and remove out-of-date goods from it). Then, generate an assortment plan, which is calculated based on the assortment using a bottom-up approach. An assortment plan defines a volume demand for each developed collection based on individual characteristics of assortment groups.
The Sales plan by products document serves as an assortment plan. When you fill in a sales plan, use the [Sales plan by categories] formula or Sales plan by categories source as a data source for quantity. The plan is filled in according to the assortment (the Assortment change document data).
In a sales plan by products, the quantity of product items is filled in automatically – the total quantity within a product category will be allocated by product items according to set allocation standards.
Goods included in the assortment (for example, included in a new collection) will be used in allocation. If allocation standards are not specified, all product items that are included in product category and match set filter parameters will be allocated evenly.
Assortment plan results:
- Total sales volume in product item unit of measure
- Collection plan for a future period
After assortment planning, a purchase plan is generated. A purchase plan is calculated only based on an assortment plan.
Based on a purchase plan, purchase orders are generated. This completes the collection planning.