Of Gigabyte Spreadsheets and More - I

I had a great opportunity to watch(and listen) to a webinar given by Marianne Gregory, President of Retail Benchmarks and Dean Tarpley, Sr. VP of Palladium Group as part of the Stores Knowledge Series organized by Stores magazine. The webinar was titled "Fortifying the Three Pillars of Successful Store Operations". I went into the webinar expecting for the presenters to talk on store level details but it turned out to have a very strategic angle to it. We all know how People, Processes and Systems(or Enabling Technology) - PPS or PPT are crucial to running a retail organization. Mr. Tarpley gave a very interesting perspective on the PPS alignment from a Store Ops perspective. He mentioned that with the exception of Merchandising and Store Operations there is not much difference between a retail organization and any other organization (e.g. manufacturing). But its the planning and execution of precisely these two functions that differentiates one retailer from the other. Now the 3 pillars of Store Ops Planning are

1. Sales and Margin Planning
2. Payroll Planning
3. Other Expense Planning

Lets look at the first one - Sales and Margin Planning which is basically allocation of what target revenue and margins are expected from what stores. Mr. Tarpley shared from his experience with several retail clients that this aspect of planning in a retail org is essentially carried out in a silo-ed fashion. So you will have the financial organization doing their annual planning using a certain idea and then you have your merchandizers who plan differently and then at the store level its planned differently. All this happens mainly through spreadsheets where layers and layers of planning logic has been built and in some orgs these sheets almost measure a gig in size!!!! So essentially there is no alignment in information and process and ofcourse the people involved (financial analysts, merchants, store managers) arent communicating on a common platform. The impact of this fragmentation of process and information is that each of people involved in planning spend most of their time preparing the data that they are going to use to draft their plans and communicating the new plans to the other groups. This leaves them with barely anytime to actually measure and update their plans for meeting the strategic goals. Mr Tarpley suggests that the retailers who follow best practices(and not common practices) in retail planning have a common information platform like a common datawarehouse with BI that gives each function specific view on data and helps them build their plans collaboratively with the other functions. A change in the plan by corporate will be trickled down to a correponding change in the merchandiser's plan. Similarly an updated promotional event at the store level is aggregated back up to reflect on the margin for a specific category.

The seminar also had some insights on Payroll Planning (2nd Pillar) best practices. I will discuss that in my next post.