cash flow and inventory management - namm：现金流和库存管理-纳姆

How to Manage Inventory For Maximum Profit By George Hines President of Georges Music,“No Retailer ever filed bankruptcy because their turns were too high”-Michael GouldChairman of Bloomingdales,Question,Is Inventory: an Asset a Liability,Problem: Too Much Inventory,Reduces Available CashIncreased Freight Increased Handling and StorageIncreased ShrinkageIncreased Costs in ObsolescenceIncreased Markdowns to Reduce levelsIncreased Costs to Promote and Sell,Inventory Management,PROFITS,Diamond of DOOM,We need to turn the,DOOM & GLOOM,into,Solution:,Step One: Understand GMROIStep Two: Invest Wisely Focus on Profits Step Three: Measure with Key Indicators,Inventory Management,Universal Laws:“Law of Expectation”Make a decision,$10,000,Step 1 Understanding GMROI,Gross Margin Return on Investment,Formula:(Annual GM$) (Avg. Annual BOH$)= GMROI,Example 1Store Sales for the year are 1 millionGross margin % is 30%Gross Margin $ for the year is $300,000Avg. Annual BOH Inventory is $300,000$300,000 (GM$) $300,000 (Avg. BOH$)= 1 (GMROI),Gross Margin Return on Investment,Two Ways to Increase GMROI:,Increase GM$Increase Turn,1% increase in Gross Margin on 1 million dollars in sales =,$10,000 extra profit,Example 2 Increase MarginStore Sales for the year are 1 millionGross margin % is 40%Gross Margin $ for the year is $400,000Avg. Annual BOH Inventory is $300,000$400,000 (GM$) $300,000 (Avg. BOH$)= 1.33 (GMROI),Gross Margin Return on Investment,The NEW Norm: More from LessEmbrace the 80/20 Rule,Example 3 Increase TurnStore Sales for the year are 1 millionGross margin % is 40% - Increase TurnGross Margin $ for the year is $400,000Avg. Annual BOH Inventory is $200,000$400,000 (GM$) $200,000 (Avg. BOH$)= 2 (GMROI),Gross Margin Return on Investment,REVIEWExample 1:GMROI is: $300,000 (GM$) $300,000 (Avg. BOH$) = 1Example 2: Increase Gross Margin $GMROI is: $400,000 (GM$) $300,000 (Avg. BOH$) = 1.33Example 3: Increase Gross Margin and TurnGMROI is: $400,000 (GM$) $200,000 (Avg. BOH$) = 2.0,Gross Margin Return on Investment,Step 2: Invest Wisely Focus On Profits,Cleansing the InventoryThe 80/20 RuleBudget and Purchasing Worksheet3. Purchase Inventory by GMROI,Cleansing the Inventory,1. Ranking Inventory 80/20 RuleA ListYTD Gross Margin Dollars (Descending)YTD Units Sold (Descending)Eliminate Old and Bad Stock,Budgeting,Purchase Inventory by GMROI,1. MIX Large vs. Small Goods by GMROIRank Vendors by GMROIRank Departments by GMROIRank Items by GMROI,Its all about the,MIX,Funnel Down,What is your Mix of Goods?,GM$ and TurnLarge Goods,GM$ and TurnSmall Goods,Large Goods vs Small Goods,The Power of GMROI,35% Margin3 Turns,Vendor,30% Margin2 Turns,WINNER!,A,B,Vendor,What is your Vendor Mix?,Vendor vs Vendor,The Power of GMROI,Guitars Dept A,Keyboards Dept. B,What is your Dept Mix?,Department vs Department,The Power of GMROI,What is your Item Mix?,25 XLR Cable,Studio Mic Pack,Cost $5 estimateSell $15 estimateInvest $65 (13 units)Profit : $195 estimate,Cost $65 estimateSell $99 estimateInvest $65Profit : $34 estimate,Item vs Item,The Power of GMROI,Measure: Key Indicators Chart,The Power of GMROI,Review,ACTION PLAN,Make a Decision on how much you want to earn$_ Invest Wisely Focus on ProfitChoose your method Measure Progress with Key Indicator Worksheets,Make Inventory an ASSETNot a Liability,Retail Owners Institute/,Look a