Retail Management and Marketing | Isn’t It Obvious?

Notes from the book Isn’t It Obvious, by Eli Goldratt

Sales vs surplus was a dilemma that only a crystal ball could solve.

Purchasing. Inventory Turns. Stock aggregation. Replenishment.

• Under what conditions should we or shouldn’t we purchase the production company
• When should we provide only the design and subcontract the production,
• When should we contract for exclusive products that carry our brand name?

And no less important, we have to decide on the rate of implementation, including a detailed investment plan.

I’ve learned the hard way that I’m not John Wayne. When I shoot from the hip, I usually hit my own foot.

You must learn to control your instincts. Don’t be distracted by golden opportunities; too often they turn out to be gilded traps.

“Paul, take my word for it that at corporate, return on investment is even more important than profit.”

Adjusting target inventories to be more sensible can give us the inventory reduction that we need.

“The solution that they have is to hold a lot of inventory. In order to persuade them to adopt your solution, you’d better start by getting agreement on the problem,“ Caroline said categorically. ”And for that, you must dig deeper. You have to start with the reasons to hold inventory, the needs that inventory satisfies. And once you’ve reached an agreement on the needs, explain why, in spite of holding so much inventory, the needs are still not satisfied. Only then show them that you have a way to better satisfy these needs. Can you do all of that?

You have to speculate what their ‘yes, buts’ will be and have a good answer for each one of those reservations.

“We need inventory for one, and only one, purpose: to support sales,” Paul said confidently. “The real question is, considering the uncertainty in which we operate, how much inventory do we really need to hold in the store?”

“The inventory that you really need to hold is the inventory that you expect to sell until you’re resupplied”, Roger reasoned.

If you can’t use the stick. Use the carrot.

“I divide people into two camps. Those who measure themselves by how they do relative to some references, and those who couldn’t care less about what others have achieved. These individuals measure themselves according to the inherent potential of the situation they are in.“

Why compare yourselves to the competitors? Why not concentrate on what makes sense for us to do?

”One of Dad’s rules: what you have is what you have,” Caroline quoted.

“I had a revelation” Darren reported. “You open many stores at once within a small area, and presto, you have a brand name without spending a dime on advertising. It’s brilliant!”

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