What is Allocation Optimization?
The Uniquely Retail Solution – Allocation Optimization™
The major paradigm shift for leading retailers is the potential to develop and implement increasingly faster and more responsive business operations. This responsiveness enables retailers to efficiently identify what their customers want, and then deliver those products quickly to satisfy customer expectations.
Columbus Consulting introduces Allocation Optimization™, which is a rapidly implemented process of improving inventory productivity through better utilization of existing systems. By employing more sophisticated mathematical techniques, improved need calculations can be derived and implemented with existing allocation systems, resulting in a better distribution of inventory across a retailer’s entire chain.
The Allocation Optimization process analyzes significant operating and merchandising factors including:
- Need calculations
- Industry practices and benchmarking methods
- Science in place for existing allocations
- Calculation of need as plan driven and sales driven
- Combining trend and plan
- Refreshing volume grades
- Event needs (promos, etc.)
- Merchandise exit strategy
- Varying store capacities
- Use of a defined process vs. arbitrary decisions
To leverage and maximize existing technology investments, retailers must go the extra mile by following these Allocation Optimization steps:
- Assess the Opportunity Review current allocation variables and methods, outline improvements, identify the timeline and resource requirements, and review with management.
- Develop and Test Create new variables and methods, add other data as needed, test
- Document and Train Provide instructions, train the power users, launch the Allocation Optimization solution
What are the Benefits?
- Increase inventory productivity
- Optimize current allocation investments
- Improve need calculations
- Improve distribution of inventory across your entire chain
- Synchronize inventory with demand
- Delight customers
