Champion Role - Tasks

AWR Buyer Tasks

DAILY - From the TODO Menu

Uninitialized Items - Review and set appropriate Buyer Class Code; borrow a
profile if seasonal and enter a manual forecast. If the item is a Replacement,
use E3’s Supercession function.

Order Review - (where appropriate, run down the left hand side of the menu)
• Short Ships
• Overdues
• All Due Orders
• All Forward Buy Orders
• Planned Orders
• Transfer Orders
• Order Point categories - analyze OP checks and determine if an order should

be placed today. Can be accepting some but not all orders in this category.

WEEKLY

Mondays - Review Lead Time reports (Lead Time updates based on last weeks
receipts) - Vendor Summary and Item Lead Time exceptions.

PERIOD END

History Exceptions
Review the SIX Key Categories within the first 2 days of the new forecasting
period. They are Demand Filter High, Demand Filter Low, Tracking Signal
High, Tracking Signal Low, Service Level Check and Infinity Checks.
Remember that you also review Watch Items and New Items in this section.

Project Manager Tasks

Daily (Essential)

• Check for any unaddressed History Exceptions and Uninitialized Items. Also
review the Catchall Vendors for items that are missing vendors.

• Run SOQ vs. Actual Report by Buyer. This will give you any changes being
made to the recommended orders.

• Track ToDo Menu totals by Buyer. This will give you a snapshot to see who’s
placing their orders and if they’re not, the ability to research why (usually a
training or set-up issue) .

• Review Purged Orders. From ‘M’ - All Orders, chose F4 then ‘M’. Look at the
orders with Delays greater than 0 to see why the buyer is buying early. Also
check for changes between the Auto Adjust and Final Adjust columns on the
Order Detail Screen.

• Track Daily Edit Reports error messages.

Weekly (Optional)

• Service Accuracy Report, Current Period By Buyer (Summary Mode). Omit
M, D Items.

• Lost Sales Analysis Prior/Current Period By Buyer. Omit M, D Items.

2 Weeks (Optional)

• On Hand Overstock Report by Buyer.
• Balance Overstock Report by Buyer. Run for the top 20%, use these as

action reports along with tracking.
• Lost Sales Analysis Report, Current Period by Buyer. Omit M, D Items.

Period End (Essential)

• Forecasting Accuracy Report by Buyer. Run for prior period in summary.
• Service Accuracy Report by Buyer. Run for prior period in summary.
• Inventory Accuracy Report by Buyer (Summary Mode).
• History Exceptions. Track number of exceptions in each category by buyer.

Make sure exceptions are done the first two days of the new period. Rank
this as a percent (%) to the number of SKU’s per buyer.

Period End (Essential) - continued

• Check the number of forecast changes being done on exceptions by buyer,
using a ZAPPO. IF VWHSE EQ ‘101’

AND VBUYR EQ ‘071’

(julian date of manual forecast override) AND IACSLS EQ ‘date of manual forecast override’

THEN IDEM13 PRINT (or IDEM12)

It is also possible to also analyze the accuracy of these manual forecasts with
the Forecast Accuracy Report. To accomplish this, substitute the line “THEN
IDEM13 PRINT” with “THEN IGRP3 MOVE ‘FCAST’” and use this code in the
Report Selector Options when running the Forecast Accuracy Report.

Project Manager Tasks

1. Approximately every six months, reset Item Service Levels using the
Inventory Accuracy Report, various ranking reports and Zappo’s. Or use the
Service Level Analysis Module.

2. Have buyers begin refreshing vendor/item set-up on a scheduled basis. Some
companies review 1/12th of their vendors every month. Use the Vendor Set-Up
Guide as a reference. Set realistic goals to have this complete. Use Vendor
Rankings Report and work on the top 20% first.

Set - up check includes: Service Level Default

Vendor Level Lead Time Quoted
Lead Time Forecast
Lead Time Variance
Brackets (get updated info from

Vendors).

Item Forecasting Check buyer class

Check forecast
Check for seasonality

Item Components Buying multiples

Convenience packs and convenience
pack break point percentage
Units per ? (where needed)
Item handling cost adjustments (only as
needed)

Order Policy Analysis Set Order Cycle and current
bracket

3. Work Overstock using both the on-hand and balance overstock reports.

4. Take advantage of the Planning System. Since E3 considers all on order
quantities as coming in within a lead time, when multiple orders are pending
for the same item E3 will hold the quantities based on the hold out feature.
The on-line hold out is only for one future order.

5. Use E3 Tracking Forms (or your own) to begin tracking all above data.

Leading Your Team

10 Leadership Characteristics/Habits

1. Buy some lines, and be the best buyer on the system. Lead by example & guarantee
respect.

2. Attack management, merchandising and other departments with ideas and profit
opportunities.

3. Stay in constant contact with E3 Associates. Educate us on your challenges and
goals. Emulate the consultants.

4. Never stop learning. You think you know the system very well. You can learn it
better.

5. Set reachable goals. If needed, make changes to achieve them. When you achieve
them, set new goals.

6. Sit with each buyer and perform Daily Buying, Vendor Set-Up and History
Exceptions. This time spent guiding them will be the most valuable time you will
spend.

7. Hold group meetings. Perform Daily Buying, Set-Up and Exceptions together.
Encourage interactive discussion. Misconceptions will surface.

8. Allow ownership of areas of the system to those who are eager. Everyone likes to be
the best at one area. Encourage creativity.

9. Only after your group has mastered the basics, search for profit opportunities. It only
takes about 30% of the system to realize basic replenishment benefits. Don’t be
content with 30%.

10. Find ways of empowering the buyers, i.e. bonuses, rewards and awards, new titles.
The buyers need to feel important, and the rest of the organization needs to have the
proper respect for their important role.

You have the tools to make it happen.

Leading Your Team

Setting Goals

In the early stages of implementation...
Personally involve all buyers by setting standards & quantifiable goals in the following
areas:

♦ Vendor Set-Up
Timely & accurate completion. Make sure it is realistic.

♦ Due Orders
Daily acceptance with a minimum of SOQ changes

♦ History Exceptions
Timely completion of key categories. (Demand Filter Checks, Tracking Signal
Checks and Service Level Checks)

Sometime after Advanced Training...
Make them responsible for their own success and give them the tools to help achieve it.
Establish higher goals in the following areas:

♦ Forecast Accuracy within desirable range
♦ Service Level Goal Attainment for their categories
♦ Inventory Dollar Levels within acceptable limits (should be achievable and

compatible with company goals)
♦ Depletion of Overstock Inventory

Note: At this stage buyers should be running their own reports and be able to monitor
their own progress toward goals.

Leading Your Team

Reward their Success

Think of ways to keep the buyers motivated. If they are responsible for their success,
think of ways to reward it.
♦ Public recognition of progress and achievement
♦ Incentives for future raises and promotions
♦ Build leaders in key areas. Notice who is good at what and develop area experts (deal

system / planning / one-on-one training for new buyers to sit with etc.)
♦ Challenge your management for financial reward of project areas, i.e. a lump sum

dollar amount by reducing overstock or dead stock by a set dollar amount.

Regular E3 Meetings

♦ Each week initially, monthly later on
♦ Build enthusiasm and maintain focus
♦ Discuss progress
♦ Share tips & ideas
♦ Address problems & questions
♦ Group discussion of History Exceptions
♦ Periodically involve different members of management

E3 System Reports

Forecasting Accuracy
How good was last period’s forecast?
Guideline for buyers - actual accuracy will vary depending on promotions and business
Use ‘Promotional Dates’ to filter out excess promotional movement
Accuracy should be in the range of 90% to 110% unless unusual movement in period

If outside of range, run Zappo to review manual forecasts
Are history exceptions being reviewed and updated if necessary?
Compare seasonal versus non-seasonal items

Service Level Accuracy (Current or Prior Period)
Summary report for overview of Service Level
Displays Service Level Goal and Achieved in Dollars and Units
Focus in by buyer/vendor to get more detail
Use selection criteria for specific product categories or vendors

Inventory Accuracy Report
Ratio of Actual to Theoretical Inventory
Use Summary Reports to develop a base-line of inventory by buyer
Review at vendor level if major shift in inventory differential occurs
Snapshot view of today’s actual inventory
If used for one vendor, find out where you are in the order cycle:

Shipment arrived yesterday - HIGH actual inventory and differential
Shipment due tomorrow - LOW actual inventory and differential
Theoretical is based on what is needed to achieve service only (Safety Stock + 1/2 Order
Cycle)
Actual is based on current on-hand, including any forward buy merchandise, dead stock,
etc.

Audit Procedures:
Compare seasonal and non-seasonal items
Run both with and without ‘D’ and ‘M’ items
How are ‘N’ items performing?
Include and exclude Uninitialized items
Group top 20 vendors together, then run detail report for them
Use Item Group Codes for Report Creativity:

Profiled items with forecast less than 10
Run by commodity groups (Item Group Codes)

E3 System Reports

Lost Sales Analysis (Current or Prior Period)
Item with highest Dollar Lost Sales listed first
Use in conjunction with Service Level Analysis to review problem vendors
Use selection criteria to narrow view if necessary

Overstock Analysis
Reflects true overstocks worthwhile of review
Understands the “real world” of the buyer:

Movement variability
Lead-time variability
Safety Stock
Buying constraints (minimums and multiples)
Adjustments to available balance
Item with highest carrying cost listed first
“80/20 Rule”...top 20% of the items usually constitute 80% of total carrying costs
Use selection criteria to review Manual & Discontinued items
Truly an action report

SOQ Change Report
Review changes to suggested orders
Why are orders being changed?
Particularly useful if service level and/or inventory is unacceptable
Highlights deal and promotional items

Items Out of Stock
Ranked by potential dollar lost sales in next 7 days
Displays PTD shipped and lost as well as expected demand and potential lost sales in
next 7 days
Shows if item has an outstanding order
Can be used for expediting and notifying warehouse of critical orders

Management (Ranking) Reports
Useful for categorizing items
Group items and/or vendors using Group Codes:
1. Use the Item Sales Ranking Reports in conjunction with Zappo to set Service Level

objectives at the item level.
2. Use the Vendor Sales Ranking Reports to key in on the vendors contributing the top

80% of sales. Be certain that these vendors are set-up and purchased correctly.
3. Use the Vendor Profit Contribution Report to key in on the vendors contributing the

top 80% of the profits.

The Seven Steps of Buying

1. Demand Forecasting
2. Lead Time Forecasting
3. Order Policy Analysis
4. Service Level Analysis
5. Replenishment
6. Special Order Analysis
7. Order Validity

Live it . . .
Teach it . . .
Profit by it!