store management march 2008 2 advance auto parts aftermarket
TRANSCRIPT
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Store Management
March 2008
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Advance Auto Parts• Aftermarket Automotive Parts and Accessories
Retailer • 3200+ Stores in 40 States and Puerto Rico• Projected over $5 Billion in Sales for Fiscal 2008
– Approx $3.9 Billion Retail– Approx $1.1 Billion Commercial Sales
• Over 45,000 Team Members• 7 Distribution Centers
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Store Management Key Area’s of Concentration
• People• Process• Product • Promotion/Presentation• P&L Statement (Operating Statement)
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People
• Selection• Onboarding• Communication/Engagement• Training/Development
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Making The “Right” People DecisionsSelection• Needs Assessment
– Determine Position or Positions needed– Identify Specific Skill Set Required– Assess Internal Candidates– Identify Recruiting Support for External Candidates
• Interviewing– What you can or can not say– Federal Guidelines to be aware of:
• HIPPA• ADA• EEOC
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Making the “Right” People DecisionOnboarding:• Most companies put the new employee through a
process that resembles “drinking water from a fire hose”.
• Every person will assimilate information at their own rate
• The first week is one of the most critical times for all new employees– Set Expectations of Employee– Communicate what they should expect of the Company– Create a warm welcoming environment
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Time
High
Low
Levels ofPerformance
New Team Member with TrainingNew Team Member without Training
Standard of Performance
$$
NHOST New Hire Onboard Store Training
Validation Project
$$
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At Nine Weeks….Sales per labor hour• NHOST Team Members averaged $100 sales per labor hour• Non-NHOST Team Members averaged only $80 sales per labor
hourCustomer Average• NHOST Team Members had an $18 Customer Average • Non-NHOST Team Members had a $16 Customer AverageCustomer Count• NHOST Team Members averaged 200 transactions• Non-NHOST Team Members averaged 100 transactions
NHOST Validation Project
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Communication
“Good Communication leads to better understanding and mutual confidence”
Six Steps of Effective Communication1. Plan it2. Keep it simple3. Be Consistent4. Communicate with urgency5. Remember WIIFM6. Be supportive, encourage, thank
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Communication/Engagement• Store/Department Team Meetings• Management Staff Meetings• Communication Centers (Bulletin Boards)• Email blast updates• 1:1 Meetings
– Informational Meetings– Coaching Sessions– Counseling/Disciplinary Meeting
• 1st sessions should always be corrective & developmental• Correct/instruct on process• Validate understanding • Behavior Change
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Importance of Monthly Store Sales Meetings
• Sales• Profits• Opportunities• Upcoming Promotions/Events• Team Recognition • SPIFs – Team Sales Incentives• Show Appreciation - Thank Them!• Listen and Ask Questions!• An Informed Team is an Engaged
Team
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Communications Timeline
Day Week Month
Complete MPT To Do List Update Communications CenterWeekly Store Staff Meetings Sales Goals
Hot Topics Game Plan Planning Calendar Team Member Schedule Sales Goals Store Team Sales Meeting
Campaigns / Contests FrontRunner-Quarterly Publication Sales Goals
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Benefits of TrainingWIIFM• Better performing Team Members• Better Customer Service• Better Team Retention• Better Sales
Training Creates Leverage!You should considerTraining an investment,
your return is improved effectiveness, efficiencies and performance!
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How to Train.....
Formula to presenting Training Content:1. Tell them2. Show them3. Watch them do it 4. Let them do it on their own5. Follow through days later
• If they did it right---give them praise and recognition• If they did it wrong---repeat steps 3-5
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Training Resources• Retail Academy
– Product Information• Product Features and Benefits
– On Line Learning Center• New E Learning System in 2008• Interactive format
– In Store Training Programs• Ops Training Class• Leadership Training
– Tech Trainers• Automotive Systems Technical Skills Training• Automotive Systems Sales Training
– Project Selling (the complete job)– Attachment (related item) Selling) “Would you like fries with your order”?
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StoreNet Site Map / SOP Site
Or use the SOP Hot Key
Click here to access the SOP Site
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Management Planning and Training (MPT)
Process Management
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Store Process Management• Planning• Forecasting• Work Flow Management• Scheduling
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Mission of MPT
To provide Store Management with the proper tools and reporting to manage labor to its maximum yield, not its lowest cost while driving sales.
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Sweep The Floor
Clean the Bathrooms
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MPT….Driving Sales
Drive sales by planning to…..• Have the Right Person
– In the Right Place– At the Right Time– Doing the Right Things
• You will serve your customers better!• You will increase your sales!
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Seven Steps to MPT Plan
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Scheduling to SellWork Flow Management• Forecast Sales Expectation• Forecast of Payroll Dollars/Percent• Project Peak Selling Periods• Schedule to support Peak Sales Periods• Schedule to complete non-selling task
– Planogram updates– Stock Put away– Maintenance
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Store Manager “What Matters Most”
Daily To Do’s – Meeting Week
Sunday Monday Tuesday Wednesday Thursday Friday Saturday Review prior day’s
sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Complete price changes before 9:00AM and verify execution using Storenet Price Change List
Finalize and transmit payroll
Prepare weekly mail/Send Blue Bags
Conduct Store Meeting following Store Meeting Calendar (New Flexie)
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Review planning calendar on Storenet (Print/Post)
Complete/submit MPT Forecast and schedule by COB
Review prior week’s results and prepare for DM call
Review StoreNet Reports;
1. HR Exceptions
2. Reviews Due
3. OLC % Complete
4. Negative On Hands
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Print , deliver and collect weekly account statements
Management Staff Meeting once a week, preferably at the beginning of the week to review previous week’s results.
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Process Negative On Hands from Store Net
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Print and post Gameplan/“Hot Issues”
Ensure all Cycle Counts, the 5 Walk Outage Process and Planograms for the week are completed
Store Manager Attends DM/SM Meeting
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Review prior day’s sales, payroll and shrink results, complete paperwork and Refund Shelf Audit/Reverse Logistic Process
Review/Adjust MPT Plan Actual
Complete/review MPT To Do List
Update communication board and post productivity report
Price Changes take place after 6:00PM
Ad Prep / POP signs every 4th or 5th week per calendar
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Store Manager “What Matters Most”
Variable Truck Delivery Day Overlay with MPT Workload Forecast Planning Monday Delivery Day
Sunday Monday Tuesday Wednesday Thursday Friday Saturday Work Daily Back
Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Review return batteries
Prepare Truck Returns and confirm ATIs
TRUCK DAY Work Daily Back
Stock Report
Review PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Process Store Use/Known Theft Items
Confirm Truck ASN when truck is unloaded
Put away truck (24 Hours)
Work Daily Back Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Process Store Use/Known Theft Items
Enter Back Stock Quantities From Truck into scan gun
Complete The 5 Walk Outage Process and Perform Maxi Requests as Needed
Work Daily Back Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Process Store Use/Known Theft Items
Complete This Weeks Cycle Counts
Work Daily Back Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Process Store Use/Known Theft Items
Complete Call Backs & Overstock Directives
Supply / Add Order (Check Store Net for specific time)
Complete This Weeks POG’s
Complete a Positive Shrink Hunt as Needed
Work Daily Back Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
Process Store Use/Known Theft Items
* Note All Tasks should be completed by 5 p.m
Work Daily Back Stock Report
Receive PDQ/MST/Store to Store ASN’s
Review SOLO Viewer and Organize PDQ Section
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Daily To-Do List
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6. Team Member Scheduling
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Product Management Basics• Inventory Basics • Maxi Adjustments• Cycle Counts• Reverse Logistics• Planograms• Back Stock (overstock)• PDQ Program • Daily / Weekly Duties
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Inventory BasicsManaging your store’s inventory is really about managing different
facets of the inventory process• Proper Stock Levels and Variety
– Too little merchandise means we miss sales– Too much merchandise means we waste inventory dollars on product we
don’t need• Every Store has a different “selling mix”• Generally speaking 20% of your inventory produces 80% of your
sales.• Stock levels are driven by On Hand quantity and a Maxi quantity
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On Hand IntegrityWays On Hand integrity is compromised:• Cycle Count inaccuracy• Refunds processed incorrectly• Ringing multiple quantities incorrectly• Overring (Post Voids not processed)• POS Exchanges / Defect Exchanges processed incorrectly• Theft • Shipping errors
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Maxi Adjustments• Maxi is the amount of inventory needed to support sales
until the next DC shipment arrives– A Maxi that is too low will not support sales – A Maxi that is too high will lead to excessive backstock
• Request a new maxi through the Inventory Adjustment menu, or by using the RF Scanner
• Maxis are calculated based on last 4 weeks sales except for bulk chemicals & batteries which use a 2-3 week supply– If lost sales are recorded properly using F10 "Lost Sale"
function, Inventory Management will adjust maxis accordingly
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Cycle Counts• Cycle Count Basics:• Cycle counts are mini inventories, and if done properly, are the
best way to maintain on hand integrity• Before cycle counting, make sure merchandise is fronted, faced
and in proper location• Complete by the weekly due date
– We schedule approximately 1200 – 2000 pieces per week• Count items in multiple locations
– back room, endcaps, wing panels, and backstock• Confirming a cycle count without actually counting the
merchandise (F8’ing) is considered fraud
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Reverse Logistics(Distribution Center Returns)
The process of returning cores, defects and new saleable merchandise to the DC, PDQ, or Master PDQ to ensure proper credit.
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Reverse Logistics(Distribution Center Returns)
The process of returning cores, defects and new saleable merchandise to the DC, PDQ, or Master PDQ to ensure proper credit.
You should think of Reverse Logistics as the Register at your
backdoor!
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Planogram Management
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PlanogramsThe planogram includes the following: • A Cover Sheet:
― Provides the purpose of the planogram― Provides notes on how to set the planogram― Provides what you need to do to complete it
• A Contact Sheet:― Provides the person and phone numbers to call
• Planogram:― Visual presentation of where and how to place the merchandise
― Line Listing of the items, description, facings, and the minimum amount of merchandise
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Back Stock (Overstock)
• Back Stock Worked Daily– Run Back Stock Move Report– Work Backstock on Sales Floor
• Back Stock Worked Weekly– Use Back Stock cart on Truck Day– Scan in Back Stock after stocking is complete– Organize Back Stock area with new items
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PDQ Program(Special Order Program)
• PDQ Program Maintained 100% Daily• All items awaiting pick up have slips attached• All items Paid (including Team Member purchases)
unless for Commercial Account or for Warranty Replacement
• PDQ Defective Item for Replacement use POS/Def Exchange Hot Key
• PDQ Returns Sent Back Weekly• Returns assigned to Totes Daily using the Parts Not in
Totes Report
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Inventory Daily / Weekly DutiesDay
Week Store Recovery Review / assign totes Receive ASNs Review ATIs Review Order Viewer /
PDQ shelf Process Store Use items Complete Cycle Counts Return to stock Cycle
Count Work Backstock
Review “Planning Calendar” on Store Net Review “Game Plan” Print manifests for weekly returns Complete Planograms Process outages / variances Complete callbacks and overstock returns Scan in new Backstock Complete Cycle Counts (No F8’ing) Confirm DC Truck ASN Complete Maxi adjustments Complete Price Change Front Tags Place Store Supply Order (One order per week) Place Add Order
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The Advance Way to Manage Inventory
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Store Presentation/PromotionDaily Store Inspection
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Store Presentation/PromotionDaily Store Inspection
Daily Outside “Store Inspection”• Use this process daily when walking the exterior of your
store!– Green Areas and Landscaping– Parking Lot and Striping– Dumpster Area– Lighting– Sidewalks– Windows and Doors– Window Signage
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Store Presentation/PromotionDaily Store Inspection
Daily Inside “Store Inspection”• Use this process daily when walking the exterior of your store!• Consistency is the key!• 4 ft X 4 ft Section
– Start with the Interior Walls– Then Sales Floor Aisles– Then Sales Floor End Caps and Wing Panels– Then Sales Floor Stack Out Displays– Then Parts Counter including the Register Displays– Then Parts Department End Caps– Finish with the Parts Department Aisles
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4-3-0 Parallel Merchandising
4 Feet minimum between displays
0 Feet (if there is not 4’ between stackouts)
3 Feet (to fixture)
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Customer Convenience• Place where
customers will need them:– Front Ad Display– Oil Rack– Chemical Wall
• The more customers can carry, the more they buy!
• EZ Cart customers spend about $40 on average
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Store Display & Signage(Daily, Weekly, Monthly)
• Ending promotional signs removed• New Monthly Ad Signs Displayed• POP (Point of Purchase) Signage updated• OSP (Off Shelf Display) Rotated• Stack-outs faced and filled• End Cap Displays faced and filled or Updated
(Seasonal)• BOGO (Buy-one Get-one Free) Merchandise
Displayed
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Operating Statement
Four Key Result Areas• Sales• Gross Margin• Expenses• Profits
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Operating Statement Basics
Budgets/Goals• Performance is measured as a % of Sales and
% of Profits– Sales % to Budget– Comp Sales %– Profit % to Budget– Comp Profits %– Bonuses are often tied to Sales Performance
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Operating Statement Basics
Basis Point• A basis point is a financial term used to describe One
one-hundredth of a percent• If a store’s payroll budget is 12.45% and the operating
statement shows they ran a 12.25% they were 20 basis points under their budget
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Operating Statement Basics
Flow Through• Flow through is a term used to describe the
profit you earn on the bottom line from incremental top line sales
• For every dollar over budget in sales, 30% should drop directly to the bottom line
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Operating Statement Basics
Top Line – Combined Retail and Commercial Sales
• Retail Sales are sales from walk-in DIY customers
• Commercial Sales are sales from DIFM customers– Delivery– Walk-In
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Operating Statement Basics
Bottom Line Total Gross Profit - Total Operating Costs= Operating Income/(Loss)
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Operating Statement Basics
Controllable Expenses• Utilities• Maintenance and
Repairs• Telephone• Trash Removal• Payroll
• Supplies• Bad Checks• Cash Variance
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Operating Statement Basics
“High Exposure” Controllable Expenses• Worker’s Comp• Liability Claims• Vehicle Accidents
Safety is important both your Team, Customers and shareholders!
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Where Does All The Money Go?
Total Store Sales―Cost of Goods Sold (COGS)―Shrink, Allocated Warehouse and Other―Payroll, Taxes & Benefits―Net Advertising Expenses―Expenses / Other Operating Costs__________________________= Operating Income / (Loss)
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Store Management Conclusion• The Best Business Plan• The Best Processes• The Most Efficient Operation• The Best Pricing• The Most InventoryWon’t Guarantee Success!
All things being equal............
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The Store With The Best People Wins!!