The WOS report can be a great help for DM’s who want to be on top of their inventory picture, district wide.
For a District Manager who regularly travels between different stores (and for Store Managers) the Weeks of Stock report can be a very useful tool.
Weeks of Stock is calculated as follows:
$ inventory divided by average weekly sales for that category/department, etc.
We’re going to tell you a little bit about how a District or Region Manager can make very good use of the Weeks of Stock report and, also, what to beware of.
For instance, beware:
• The period of time used to get the average may include (or leave out) some significant business period which may distort the average weekly sales
• The report, itself, may not be accurate, depending on input to the POS, shipping delays or various other reasons
As a District Manager, you can use the Weeks of Stock report to see which store may need more inventory and which store may be able to afford to give some up.
We say “may” because that will have to be investigated before action is taken.
If every store legitimately needs inventory in a certain category, then it is time to contact buying, or merchandising or allocation – whichever one is relevant in your organization.
The same goes if every store is loaded with certain items that have, possibly, missed a markdown.
If a ‘season’ or defined selling period is ending then you may not need inventory and the number of WOS should be low or zero, depending on the plan of the Inventory/Category Manager.
The Weeks of Stock report can show you where there are glaring stock deficiencies and glaring overstocks.
The knowledge gained from this report is of paramount importance if you want to have your inventory in the right place for maximum impact on sales.
BUT…Even when the discrepancy is glaring, you need to speak with the Store Manager and get their opinion on your findings.
You are cautioned not to move merchandise or make a big scene with your Allocation department based on differences in the numbers between one store and another because, as mentioned above, there certainly could be some errors in the data and/or some good reasons for what’s happened.
Over time, with experience using the WOS report, DM’s figure these things out and the report becomes a very useful tool.
As for the period covered by the Weeks of Stock report, it can go wrong if it’s impacted by a particularly strong sales period, or if it is the very beginning or very end of a season or shipping period.
Obviously, if you are looking at a report showing high weeks of stock on products that have just arrived in the stores, then that would be reasonable. Expected, in fact.
What would warrant further attention, though, is if 12 out of 14 stores have a high number of weeks of stock in a particular category/department or even a single product and 2 stores do not.
Perhaps there is a good reason for this and, if so, you would likely know what that reason is – but perhaps there isn’t a good reason. If the latter is true, something needs to be done, and quickly.
What the Weeks of Stock number does is alert you that something may be going wrong. Perhaps two stores were inadvertently missed during allocation.
So, we are not looking at this report to ascertain an exact, correct number of weeks of stock in a store or district or across the chain.
That’s somebody else’s job.
As DM’s we are interested to see if anything jumps out as a problem – or possible problem so that we can be proactive to ensure our results don’t suffer.
We said the Weeks of Stock report can be very valuable, but it must be used in conjunction with what you see with your own eyes, your experience and your understanding of what is going on with regard to inventory in your stores.
It can help you solve stock over/short problems in general and, when necessary, it will alert you to move inventory to a store where it is needed more urgently to produce better sales results.