Supply Chain Use Case: End of Life Impact Mitigation
Use Case Objective:
Evaluate and monitor the amount of product in the entire supply chain network to determine if there is an unsaleables risk at end of life. If a risk is found, the next step would be to determine how to mitigate the risk.
Use Case Benefits: Additional attention to ensure excess inventory risks are mitigated can increase sale of full priced product by limiting the amount of product needed in the supply chain during the run- down period and reduce the need for discounted sales. This, in turn, can help mitigate the amount of unsaleable product remaining at the end of a reset. Involving the vendor throughout the process can help identify ways that they can mitigate the risk, either through picking up product, reducing future POs, or through providing additional funding.
Process/Analytical Steps:
Metrics to Review:
1. Know what items are being discontinued when - Discontinued items are available at least ten weeks prior to the cycle start. Review the cycle information and review any discrepancies with the Category. 2. DC Inventory On Hand and On Order - Utilize IRI to understand current on hand and on order to evaluate how many weeks of supply remain and compare to how many weeks are left before the reset. • Mitigation Point - If there are more weeks on hand at the DC than needed, the vendor may be willing to pick up the product 3. Total Inventory on Hand - Combine what is on hand and on order at the DC with what is on hand at the store. Review total weeks of supply in the total chain. Will there be excess at the time of reset? • Mitigation Point - Some vendors, especially reclaim vendors, will provide funding for Temporary Price Reduction which can be used to quickly sell through product if there will be excess inventory at the time of reset. It’s better to sell product at a discount than to lose it to swell/reclaim. 4. Verify future promotional calendar - There may be promotions scheduled to occur during the run- down period which can help sell through product, as well. 5. Monitor and Evaluate the success of your efforts to determine the reduction in waste and increase in sales your efforts caused. Repeat or adjust your actions for future resets.
• Future Discontinue Indicator (SS/GC/GF) • Run Down Days Remaining • Target Exit Date • Store on Hand Volume Units • Store Days of Supply
• Store Shelf Capacity Volume Units • Sales Volume Units • DC inventory on hand (FL/HRD in IRi, get from C&S for AUSA)
Teams to Involve/Collaborate:
• Category Management - to validate any discrepancies and inform on any supply chain mitigations that may take place • In-Stock - make any necessary mitigation suggestions to In-Stock for execution (e.g., vendor pick-ups, cutting off PO’s early, etc..)
• Vendor - to verify if they have any policies around markdown funding • CAO Team - in the event any changes to CAO ordering are recommended • Unsaleables Team - to collaborate on priority vendors
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