WHAT ANALYSTS CAN LEARN FROM CHILLING BEER BOTTLES ?

As retailers we come across multiple issues in our day to day operations that cannot wait for an analysed corrective actions, so an immediate solution is needed that too a wise one. But we end up giving the same fix over and over again.
What we need to understand is that most of us keep doing repetitive spot fixes for the same problem over and over again without actually resolving the underlying cause to an issue. The solution can be explained with a simple example and I am sure this will change your perception and plan of action towards your day to day issues.
The answer is: How an out door caterer chills the beers in the Ice box for an event in less than 10 minutes and ensures that the chillness is retained throughout the event for the beers placed in the ice box. How does he do it? Its simple, he puts a layer of solid Ice at the bottom of the ice box and places the beer bottles above it. This will keep the beer bottles chilled for longer and to get that instant chillness, he fills with another layer above the beer bottles with crushed ice. That's the trick and yes some of you will be aware of this process.
We need to apply the same principle vice versa for our retail problems. Crushed Ice is a spot fix to an issue but it will not keep out the problem for long and it will repeat. The bottom layer of solid ice is the permanent fix to the problem which will keep out the issue for ever just like it does for the beer bottles throughout the outdoor event.
When you face a problem on the shop floor, it requires a spot fix and you have to give one before it escalates further and leaves the customer unhappy. But you should not forget the solid ice. Now you have to invest time and efforts to find the actual root cause to this recurring issue and provide the permanent fix to avoid a fire fighting situation again.
This will ensure that the issue doesn't resurface and also increase your management efficiency and customer satisfaction. A simple perspective that can give an effective solution to your day to day operational issues. CHEERS ! 

Customer Relationship Management : RFM Analysis and RFMV Analysis

What is RFM analysis ?

RFM analysis is done in order to understand the health of a customer's relationship with a retailer and the value of a customer to a retailer by analyzing the historical sales data for the respective customers. The outcome of this analysis is used in direct marketing, customer centric promotions and loyalty programs.

The modules used in the analysis are :

RECENCY :
How recent did a customer purchase ?
This explains when was the last purchase made by the customer, by this we can select the list of customers who has purchased from the retailer in the last 90 days or 180 days or 365 days.

FREQUENCY :
How frequently a customer purchases ?
This explains what is the frequency of purchases the customer makes with a retailer. This is calculated based on number of purchases made by a customer in the last 90 days or 180 days or 365 days.

MONETARY VALUE :
How much does a customer spend ?
This explains how much does a customer spend for a stipulated time period similar to the previous two scales. This also provides information on customer spend per purchase and over a period of time i.e. a customer might not make big shopping per visit but totaling their purchase over the same period of time will project a bigger purchase value compared to a customer who has done a single big purchase.

VOLUME :
How many products a customer has purchased ?
This is an add on to the RFM analysis which indicates how many products a customer has purchased or volume quotient of a customer's purchase pattern over a period of time. This in combination with Monetary value of the customer shows whether the customer purchases high value products or a general shopper buying small value products for regular use


SCALE OF MEASUREMENT
Recency, frequency and monetary bench mark scales may vary from retailer to retailer based on their product assortment and the lifespan of the product sold. Based on a retailer's product portfolio they can choose a scale based on a benchmark set for each of the module. We can look at how this can be done through a simple example :

A is a supermarket store having products in convenience, home appliances and grocery categories.

Sameer had purchased at A 5 times in the last 30 days as on 30-Nov-15, his last purchase was on 27-Nov-15. He has purchased for 1000 Rs., 2500 Rs., 1500 Rs., 1500 Rs. and 2200 Rs. respectively. Total quantity of products purchased by him is 20

Rachel had purchased at A only once in the last 30 days as on 30-Nov-15, her last purchase was on 2-Nov-15. She has purchased for 10500 Rs. Total quantity of products purchased by her is 1

Based on the above purchase data we can easily arrive at the below observation through data analysis:

Sameer and Rachel are both high value shoppers but there Is a lot in difference between the two which this analysis throws light on, that can help the retailer can use to arrive at customer centric promotion to increase sales and frequency of customer visits.

SAMEER'S PURCHASE ANALYSIS :
- He is a recent shopper who has visited the supermarket in less than 15 days
- He has purchased 5 times in the last 30 days so he is a frequent shopper
- He is a high value shopper as per the retailer's bench mark. His total purchases are worth 8700 Rs.
- He is a high volume shopper as well and based on his value and volume of purchase we can see that he buys less expensive products that are more of a necessity than luxury

RACHEL'S PURCHASE ANALYSIS :
- She is an old shopper who has not visited the supermarket in the past 15 days
- She has purchased only once in the last 30 days so she is a occasional shopper
- She is a high value shopper as per the retailer's bench mark. Her total purchase is worth 8700 Rs.
- She is a low volume shopper as well and based on her value and volume of purchase we can see that she buys expensive products that are more of a luxury than a necessity

Customers who have not purchased in the stipulated time period can be contacted by customer service manager or marketing team can mail the customer attractive promotions based on their historical purchases to resume trade.

NOTE : RFMV analysis is not a standardized analysis matrix in CRM. This is a customized version used by me in analyzing customer value. I feel this provides better depth into customer purchase pattern there by helping a retailer analyse his customer' value better

Porter's Five Forces - simplified !

This was originally formulated by Mr. Michael Porter, professor at Harward Business school in the late 1970s to analyse an industry based on five forces that influence an industry and its players. Porter's five forces have five forces or market elements that needs to be analysed to arrive at a successful business strategy. The derived business strategy can be implemented to achieve a clear and distinct position in the market and in the customers' minds. The outcome which also gives a clear picture of the current market situation which will help the organisation decide how they can use the market situation to their advantage or position themselves in the market where by increasing profitability and brand image.
To hear the original one from Mr. Porter himself, follow the below link :
https://www.youtube.com/watch?v=mYF2_FBCvXw

The below is my view of Porters's five forces and how they can be applied to analyse an industry and how well we can position our organisation.

MY VIEW OF APPLYING PORTER'S FIVE FORCES :

1. Competitors Rivalry
This gives insight into the rivalry that exists in the industry i.e. how competitive the players in the industry are and what are their strengths and weaknesses. It also answers the questions to how can a new entrant cope up with this competitive market and turn their business into a success model. A few of the questions that can help us draw a picture of competitors rivalry are as below :
- How competitive the industry in terms of margins and profitability ?
- How is the competitive intensity ?
- Who is the biggest player in the industry and what is the market share held by them ?
- What is the industry experience of each player in the industry and their strength ?
- What is the industry Growth in the near future ?
- Does it demand for capacity addition in large scale ?
- Brand value of competitors
- Is there a monopoly or hurdles put in place by big players to indirectly control small players' market share?
- Is it a high stakes industry where organisational structure requires highly skilled and efficient human resource ?

2. Threat of New Entrants
This gives insight into how easy it is to enter an industry or exit an industry and also how easy it is for a new entrant in the market to replace an experienced strong player in the industry. A few of the questions that can help us draw a picture or gain insight of this force are as below :
- How easy is it to enter the new market or the industry ?
- What is the economies of scale to be profitable ?
- How big and specialised capital investment needed for setup and distribution ?
- How brand conscious or brand loyal is the industry and its customers ?
- What is the increase in the inflow of supply with new entrants ?
- What are the legal complications for new entrants ?

3. Threat of Substitute Products
This gives insight into how the available substitutes for the original affects the latter's market share and sales. A few of the questions that can help us draw a picture or gain insight of this force are as below :
- How many products or service providers are available in the market catering to the same customer's need ?
- How loyal are the customers to brand ?
-  Can customer's need be satisfied by products from other industries serving the same purpose ?

- How easy is it for competitors to develop a new substitute or a clone ?

- What is the price and quality difference between the available substitutes ?

- How regulated is the market with respect to patent rights ?

- What is the switching cost for consumers ?

4. Bargaining Power of Consumers
This gives insight into whether the market favours the buyers or the sellers or a win win for both. This also explains the demand and supply quotient of the industry. A few of the questions that can help us draw a picture or gain insight of this force are as below :
-  What is the percentage of population dependent on the products supplied by the industry
-  What is the cost of switching between services or product to fulfil customer's need ?
-  What is the demand and supply, is there a surplus in supply or a shortage in supply to demand ?
-  Customer's price sensitivity, what is the elasticity of demand ?
-  What is the cost of backward integration for the customer ?
-  What is the frequency and volume of purchase ?
-  Are the products supplied by the industry come under luxury products or a necessity ?

5. Bargaining Power of Suppliers
This gives insight into whether the market favours the supplier or the organisation or a win win for both. This also provides insight into availability of capital goods and input costs. A few of the questions that can help us draw a picture or gain insight of this force are as below :
- How easily are the raw materials/capital goods available ?
- How many suppliers are available and how easy it is to find an alternative ?
- What is the possibility of backward integration  in order to negate the supplier in the process ?
- How easy is it to acquire skilled manpower in the respective field ?
- What is cost of switching between suppliers ?
- Are we to deal with government organisations in a industry involving consumption of natural resources ?
- What is your economies of scale ?
- What is the possibility of forward integration  by the supplier there by directly catering to the customers' needs ?

Once the five forces are analysed, a chart can be prepared in the below format to assess the opportunities and threats for our products/services in the industry. This will help us to define a robust business strategy to negate competition and make profits or to decide whether to enter a new industry or to exit a matured industry.

FORCES	OBERSVATIONS	OPPORTUNITIES	THREATS
FORCE - 1	Observation 1	How ?	How ?
	Observation 2
	Observation 3
FORCE - 2	Observation 1	How ?	How ?
	Observation 2
	Observation 3

WHAT IS SOP IN RETAIL ?

Standard Operating Procedures are documents explaining the steps to be followed in various operating areas within an organisation such as Operations, Environment, Service, Inventory management, Visual Merchandising, etc. This is done in order to maintain discipline uniformity and quality standards within the organisation.
Most effective SOP gives specific directions to users on how to work more efficiently in their area of responsibility. It is very important for an organisation to train its users on the SOPs of respective area of work in order to maintain uniformity at work place. Areas usually covered in an SOP are explained below :
1. Operations
2. Environment
3. Customer Service
4. Sales
5. Vendor Management
6. Staff Management

OPERATIONS

The SOP should cover critical areas of retail operations such as stock audits, cycle counts, cash management, handling returns from customers, damage and expiry control, inventory gate pass procedures, security measures, staff registers, log books, etc. This is very vast area and the SOP document should cover all the activity areas so that respective people have the needed guidelines to be followed in performing their day to day activities. The SOP should be updated on regular basis based on industry best practices.

ENVIRONMENT

This should all the activities related to store up keep such as house keeping, maintenance, dusting, visual merchandise of window displays and shop floor. It should have guidelines of how to put the signage and display units within the shop floor to project a unhindered customer movement within the shop floor. This also covers the up keep activities need at warehouse and back warehouse at stores to ensure merchandises are not damaged due to mishandling. The goal is to maintain a healthy working environment for employees and a pleasant shopping environment for the customers.

CUSTOMER SERVICE

This is a very important area and it has to be covered in depth the way a customer has to be handled in the supply chain. Supply chain here meaning sales, returns, post sale servicing, reverse logistics, explaining product usage and Customer Service Desk. This includes the loyalty program terms and conditions. All points of customer contact should be explained in depth with plan of action as this involves brand image and customer satisfaction. This area needs regular updates based on changes brought about in company policies and processes.

SALES

This area covers the various procedures at Point Of Service (POS) such as sales, returns, float cash management, daily sales reports, credit notes, cash back, corporate sales and other services offered by retailer.

VENDOR MANAGEMENT

This covers the processes involved in vendor relationship management and third party logistics such as how to list a new vendor, multi tier purchasing model, payments terms negotiation and other policies related to vendor management.

STAFF MANAGEMENT

This includes processes related to direct payroll staffs, outsourced and brand staff, such as HR Policies, grooming standards, induction procedures, training, appraisal and sales incentives. This area is more intermingled with the Human Resource Department than operations.

RETAIL GLOSSARY

This is a glossary on retail terms that are used in Retail IT and Operations. The list will be updated on periodic basis :

SL NO	KEY WORD	EXPLANATION
1	Area	It represents each geographic area that belongs to a chain within the organizational hierarchy. It could be states or countries based on the geographical. Each area can belong to only one chain.
2	ARS	Auto Replenishment System is the functionality in RMS which calculates the ROQ based on the replenishment settings done by the PM in RMS
3	ASPD	Average Sales Per Day is the average of the quantity sold in a day during the stipulated time period. It is calculated as (qty_sold / number of days)
4	ATS	Available To Sell means a product is in good condition meeting all the necessary standards for sale of it to a consumer
5	Average Cost	This is the moving weighted average of unit cost captured at SKU location level. Used in margin calculations and General Ledger for stock ledger maintenance. It is calculated as ((SOH x average cost) + (Incoming qty x unit cost))/(SOH + incoming qty)
6	Average Holding Inventory	It is the average stock value held for particular times. It is used for inventory turnover and return on investment calculation. It is calculated in general as (opening Book qty + closing Book quantity)/2 or as (opening Book qty + closing Book quantity) / (number of months+1) based on the application of the formula
7	Banner	Channels are further divided into banners for better understanding of the different categories in the respective business channel
8	Barcode	Barcode is a scanner readable code in the form of a pattern of lines with varying width that is printed on a product. This displays the UPC of the product at the POS upon scanning to register the sales against the respective product
9	BI	Business Intelligence is an approach to analyse data to extract facts and relations that can be presented to the executives of an organisation to make more informed business decisions and define best practices in different areas of operations
10	Book Stock	This is the stock on hand held in the system at a given point in time. Book stock is use in inventory analysis and variance calculations
11	Branch / Store	A Location where products are sold i.e. a place where sales and returns take place for the product sold or service rendered. In general branches/stores are treated as profit centre in a retail organisation
12	Case Pack Size	It is the quantity of a single SKU that can be accommodated in one case that is supplied by the supplier. Purchase Orders are by default placed in case pack size. This is also known as supplier pack size
13	Cash Float	A float is a small amount given by the head cashier to a cashier while allocating the POS Till during the opening of the shift. This is given in multiples of smaller currency in order to return change to customers at the time purchase. The amount it returned to the head cashier during end of shift
14	Chain	It is the first level of the organization hierarchy below company in Oracle Retail. Can be used to group by store formats, concepts, geographical groups, etc. Operating currency code can be defined for the Chain.
15	Channel	This defines the different types of business models the retailer is involved in such as Catalogues store, Brick and Mortar, Ecommerce, etc. Profit centres or stores can have designated channels incorporated in the ERP for reporting purpose and drafting business plans
16	Class	Class is the second lower level in the merchandise hierarchy. This is the further subdivision of department to identify further levels of classification in a product line. Vat setting is also done at this level
17	Company	This is the highest of merchandise and organizational hierarchy in Oracle Retail. This is the level at which financial accounting is summarised in Oracle Financial system
18	CRM	Customer Relationship Management deals with the policies defined by an organisation to communicate with its existing customers and future potential customers. It covers areas of ERP, Customer Service Desk, POS, loyalty programme, marketing, data integration, customer data analysis, analytics and digitalisation
19	Customer Conversion Rate	It is the percentage of customers who have actually bought a retailer’s product or service when compared to the total footfall/Walk-in for the stipulated time period. It is calculated as (Number of Bills/Footfall) x 100
20	Customer Return /       Sales Return	This is the process wherein a customer returns the purchased product to the retailer due to dissatisfaction, damages or product quality. The product is accepted by the branch if it falls under the Returns Policy of Nakumatt Holdings and a Credit Note is given as a token of acceptance which can be used by the customer to purchase another product of their choice at Nakumatt branches
21	Cycle Count	These are short span perpetual inventory checks done at store and warehouse locations for high value shrinkage SKUs, in order to identify the root cause for loss of inventory. Cycle counts are also done at warehouse on regular basis to do health check for internal storage locations to avoid hurdles caused while picking due to incorrect inventory
22	Data Cleansing	Data cleansing is an activity done at short term intervals by technical support team to comb the data in the database by validating table relations and accuracy of the data present
23	Department	Department is also called as Category is a key level in the merchandise hierarchy where a cluster of Classes with similar product line is listed under one group for higher level reporting and classification. Budgeting, markups, intake margins, tax settings and purchase type of a category is defined at this level
24	District	Groups Stores within a Region (generally geographically) Each District can belong to only one Region
25	Division	It is the highest level in merchandise hierarchy below Company. A cluster of groups with similar product line is listed under one division for higher level reporting and classification
26	DSR	Daily Sales Report is generated as part of EOD activity at stores. It is generated in order to reconcile tenders and cash collected during the day and compared it against the system generated report. Short in cash collected or card swipes are identified.
27	End User	End users are people to use the application to execute their day to day activities. Any technical change or process change brought in will impact the end user, hence proper user training is needed before deploying any  change
28	EOD	End of Day is the process which involves closure of POS tills and generation of sales report along with sales log file for the day from back office system. This marks the end of all the transaction at store for the day. Post this activity completion, any new transaction can be done in the next business date only
29	ERP	Enterprise Resource Planning is a suite of integrated applications that we use to collect, store, manage and interpret data from our day to day business activities, including: Product planning, costing, Pricing, stock ledger maintenance, supply chain management, Marketing, sales, etc.
30	GMROI	Gross Margin Return on Investment ratio helps retailer to know what level of returns can be obtained upon the investment made for a stipulated time period. In simple terms it helps us understand the performance of a category/ item with respect to gross sales margins. This is calculated as (Gross Margin value / Average Inventory Cost)  where Gross Margin value is (Gross Sales - COGS)/Gross Sales
31	GMROS	Gross Margin Return on Selling Area ratio explains the gross margin made by the product upon the selling area allocated for the product. This is used by retailers to find the gross margin per square feet in the selling area and take decision on expansion of selling area or reduce the selling area or discontinue the product all together. This is calculated as (gross margin value/selling area in sq ft)
32	GRN	Goods Received Note is the document created when a Purchase Order is received at the branch or warehouse
33	Gross Sale	This is sum of the total amount paid by a customer to a retailer for the service enjoyed or a product purchased. This is used for reconciliation of tenders in Daily Sales Report during End Of Day Process
34	Group	This is the second highest level in merchandise hierarchy below division. A cluster of department with similar product line is listed under one group for higher level reporting and classification
35	Help Desk	A system (application, people and process) put in to place to provide support and resolve issues and concerns raised by IT and Business users within an organisation. This acts both as a bridge and a repository for communications between Business, IT Department and support team
36	Inner Pack Size	It is the break pack size of a supplier case i.e. how many quantities of an SKU are present within the break pack of a supplier case
37	Intercompany Transfer	It is the transfer of goods between two different transfer entities. Such transfers are treated as Sale of Goods from one transfer entity to another in financials, hence the name Inter-company
38	Inventory Turnover	It represents the number of times a retailer rotates his inventory during the considered time period. This is used to know how efficiently inventory is handled within the organisation. It is calculated as (COGS/Average Inventory Held)x100
39	IPO	Import Purchase Orders is the document released to a supplier from another country for supply of goods for a requested quantity within the stipulated time period
40	KPI	Key Performance Indicators are metrics used by a retail organisation to evaluate the performance in respective area of interest. KPI differ from organisation to organisation. A few examples are Sales metrics, Customer loyalty metrics, Vendor Performance Metrics, Inventory Metrics
41	KRA	Key Responsibility Areas are general outputs or responsibilities that are given to a particular team or role. The performance of the team member or head is measured based on the fulfillment of his KRAs
42	LPO	Local Purchase Order is the document released to a supplier for supply of goods for a requested quantity within the stipulated time period
43	Master Data Management	It is the approach taken by the retailer to manage the masters related to SKUs, Barcodes, Suppliers, taxations, locations, SKU – supplier and SKU – Location mapping, etc. As a best practice retailers form a Central Data Management team to centrally control all data related to master data changes to ensure better control and reduce human error
44	Maximum Book Quantity	This is the maximum stock expected to be maintained an SKU at a location at any given point in time to meet the projected demand. This is used as a check for over ordering; thereby ensuring LPO is not be raised for quantity beyond this point. In general referred to as MBQ along on with minimum book quantity
45	Minimum Book Quantity	This is the minimum stock expected to be maintained for a SKU at a location at any given point in time to meet the projected demand. This is usually set as the reorder point for the SKU and when the stock levels hit this point, new LPO is raised to meet the maximum book quantity. In general referred to as MBQ along on with maximum book quantity
46	Net Sale	This is the sales made by a retailer excluding the VAT amount. Scan margin is calculated from Net Sales and not from Gross sales. It is calculated as Gross Sale/(1+(VAT/100))
47	Non-Trading Item	These are inventory SKUs for which stock in maintained but are not sellable at POS. These include stationary, packing material, carry bags, etc. that are bought for internal use and packaging purpose. There is no direct revenue generated from these SKUs
48	Pallet Size	It is the quantity of SKUs that can be stacked in a pallet. This is calculated by as (TI X HI) where in TI is the number of cases that make up one tier of a pallet and HI is the number of tiers that make up one pallet vertically
49	Perpetual Inventory	This is a method of tracking sales and purchases of an SKU in the system in near real time. This is achieved by implementation of a robust inventory management ERP
50	Petty Cash	An easily accessible amount of cash given on regular intervals to the profit centres in a retail organisation for purchase of low value non trading items and to accommodate small expenses related to repair and maintenance. A report on usage of the fund it given by the profit centre to the head office based on which funds are reimbursed.
51	Pickup Lead Time	Time taken for transfer of goods from the supplier’s dispatch location to the retailer’s warehouse or store. This is added to the supplier lead time to arrive at the total time taken for supply of goods from the date of order approval
52	PM	Procurement manager or head who handles the buying and allocation of goods for his/her respective category
53	POQ	Prescaled Order Quantity is the final order quantity that is requested from the supplier based on the supplier pack size. This is the nearest rounding off of the ROQ based on supplier pack size and rounding off threshold set in the system
54	POS	Point of Sales is a till at the branch where payment transactions related to sale or return of Goods. It is the place when the customer pays the retailer for the product or service offered
55	Rate of Sale	This is the rate at which sale has increased or decreased in the current period compared to a similar period in the past. It is calculated as {(Current Period sale – Past Period sale)/Past Period Sale}x100
56	Region	Groups Districts within an Area, such as North, South, etc. Each Region can belong to only one Area
57	ReIM	Retail Invoice Matching is the ERP module that facilitates users to reconcile vendor invoices with GRN and raise Credit Note Request, Debit Memos, Credit Memos and release advisory to OFIN-AP for vendor payments
58	RFM	Recency Frequency Monetory Value' is a term used to measure the customer value in retail. It is commonly used in database marketing and direct marketing and has received particular attention in retail and professional services industries Recency : How recently the customer has purchased from the retailer Frequency : How often does the customer buy Monetory Value : How much does the customer spend on an average per purchase
59	RMS	Retail Merchandising System is the ERP module that facilitates users to manage the master data and inventory at Nakumatt
60	ROI	It is the percentage to measure the performance of gains obtained from the total investment made in a product or total capital invested in a business. It will give clarity on how soon we can recover our investment cost or what percentage of profit we can expect from our investment. It is calculated as (Net Profit/Total Investment) x 100
61	ROQ	Recommended Order Quantity is the requirement for goods placed by the branch or warehouse to the procurement team. This can be system generated through ARS based on SOH and MBQ set or manually calculated
62	RPM	Retail Price Management is an ERP module used to manage pricing for products sold by a retailer. Promotions, clearance and regular price changes at product level are done through this module. This publishes the information of price changes made to POS through interface and batch programs
63	RTV	Return to Vendor is the document created to assist to return of goods back to supplier due to various reasons such as damaged, non-selling, etc. A credit note is given by the supplier as a receipt of acceptance of the document
64	SBU	Strategic Business Unit is a group of profit centres management discretely due to their distinct catchment attributes though they are all held by a single retail organisation. Each unit will have a discrete marketing plan, business plan, competitive analysis done to improve efficiency and sales
65	Scan Margin	It is the margin made by a retailer by selling a product or service to a customer. This is arrived from Net Sale i.e. Sales value after Tax inorder to eliminate the VAT or other tax factor which are to be paid to the government. It is calculated as {(Net Sale – COGS)/ Net Sale}x100 or as {{Gross Sale – (COGS x (1+vat/100))}/Gross Sale}x100
66	Selling Unit Retail	It is the price at which a retailer sells a product or service to a customer
67	SIM	Store Inventory Management is the ERP module that facilitates users to manage store inventory and reordering
68	SKU	Stock Keeping Unit is the level of the SKU at which stock in maintained in the system. SKU is also called as Item in retail
69	SME	Subject Matter Expert is a person who has high level of expertise in his domain who can guide and bring in change based on best practices. They are consulted for all changes and development in their respective domain, both operational and technical
70	SOD	Start of Day involves the process of download of master data and price change data into store Back Office and Point of Sale. This also involves the process of float cash distribution and opening of POS tills for business transactions
71	SOH	This stands for Stock On Hand. In retail operations this refers to the physical stock for an SKU at a particular location. In RMS this also refers to the book quantity for an SKU at the respective location
72	SOP	Standard Operating Procedures are documents explaining the steps to be followed in various operating areas within an organisation such as Operations, Environment, Service, Inventory management, Visual Merchandising, etc. This is done in order to maintain discipline uniformity and quality standards within the organisation
73	SPF	Sales Per Square Foot/ Sales Per Footage is a retail calculation made to calculate the sales made per square feet sales area. This will give us the efficiency of the store sales team. It is calculated as (Total Sale)/(Total Sales Area (sq ft))
74	Stock Audit	These are periodic perpetual inventory checks done at a branch or warehouse location to reconcile the physical inventory with book stock and arrive at the shrinkage/variance. The variance is taken against the sales for the time period to arrive at the variance percentage. This will give a good picture on loss in margin to the retailer due to variance/shrinkage. It is calculated as (Variance Cost Value/Total Sales for the period)*100
75	Stock Holding Days	Based on the current SOH and the ASPD, a merchandiser can determine the number of days it would take for the existing inventory to be exhausted. This is used as an input parameter to arrive at the recommended order quantity in manual calculations and also in pricing strategy to liquidate non selling SKUs through discounts
76	Store Order Multiple	It defines the multiples of quantity that the store can request from the warehouses. It can be set as Each, Inner or Cases, so the store’s ROQ and transfer requests are placed as per inner size and case size defined
77	Subclass	Subclass is the lowest level of merchandise hierarchy. This is the further subdivision of class. Subclass is not unique and can repeat i.e. same subclass featuring in different class unlike other levels which are unique. Retailers can use Subclass to define brands
78	Supplier Lead Time	Time taken from the date an order is released to the supplier to the date when the supplier readies the stock for dispatch. This is added to the pickup lead time to arrive at the total time taken for supply of goods from the date of order approval
79	Tare weight	Tare weight or Tare in the weight of the empty container that holds the products. By subtracting the tare weight from the gross weight, we can obtain the net weight of the goods carried in the container
80	Transfer Entity	Transfer entity is a group of locations that share legal requirements around product management. An inter-company transfer occurs when product is transferred between locations with different transfer entities. Inter company is handled as sale of goods from one entity to another in financials
81	Transfer Zone	Clusters of profit centres or stores defined in the system to allow transfer of goods. Goods can be transferred only in between stores falling under the same transfer zone
82	UDA	User Defined Attributes are characteristics that can defined for an SKU to identify or group them for reporting purpose such as Brands, Product type, etc. Other user attributes that can be defined in RMS as ‘free from text’ UDA used for defining legacy item code against oracle code for reference purpose and ‘Date’ UDA used for defining expiry date or manufacturing, etc.,
83	Unit Cost	This is the cost price at which a product is purchased by the retailer from a supplier. This is always excluding the vat rate. This can also be expressed as the net selling retail (net sale) the supplier charges for sale of goods to the retailer
84	UPC	Unique Product Code is the unique number given to a product, usually by the manufacturer which is embedded into a Barcode or a QR code on the product for scanning purpose
85	UTS	Unavailable To Sell means a product is not in a good condition or does not meet the necessary standards for sale to a consumer. Such products are returned back to the supplier or written off from the book quantity and scrapped
86	Variance / Shrinkage	These are quantities identified as Loss in book quantity while doing a cycle count or a stock audit. It is a direct loss to the organisation. It is calculated as (Physical Count – Book Stock)
87	VAT	Value Added Tax is the charge levied on a product or service based on the selling retail. This is paid to the government at regular time intervals by the retailer. Selling price - (selling price/(1+(vat/100)))
88	Warehouse	A location where products are stored and distributed centrally for a particular catchment area serviced by the warehouse. In general warehouses are treated as cost centre in a retail organisation
89	WMS	Warehouse Management System is the ERP module that facilitates users to manage Warehouse inventory, perform complicated warehouse tasks with ease and receiving/shipping of goods based on requests created in RMS and SIM
90	Omni Channel	Omni Channel is a means of providing the customer with a seamless shopping experience whether they shop online or through mobile app or telephone or brick and mortar. Omni channel presence is a big advantage to a retailer because it increase market reach and sustaining customer base by giving them convenient modes of shopping