Candela, available from Naxtor Technologies , is a software product for managing the operations of small to mid-sized retail chains. Candela software product can improve the sales to stock ratio. This means a retail business can achieve existing sales levels with less stocks thereby increasing profitability. Naxtor Technologies conducted research regarding the issues and problems of retail chain operations and solutions have been designed.
Mismanaged and un-optimised inventories is a crucial issue in managing retail chains. This issue is faced by all organisations. Some of the symptoms, which indicate that the organisation needs inventory optimisation, are listed below:
- Large quantities of finished goods are sold through clearance sales and thus profits are reduced.
- Sales-to-stock ratio is less and more investment is stuck-up in finished goods inventories.
- Business is profitable but cash flow issues are dominant. Suppliers are continuously pushing for payments.
- Excess inventories are occupying warehouse space and also shop storages.
- There is mismatch between actual inventories in stores and system records. Discrepancies are found during stock takings and physical audits.
- Customer required items are missing in shops but are available in warehouses or other retail outlets.
Inefficient point of sale operations is one of the reasons for customer dissatisfaction and lost sales. Some of the symptoms, which indicate that point of sale operation is inefficient and can further be improved, are listed below:
- Overcrowding on cash counters, especially on events such as Eid and New Year.
- Invoice preparation takes time and customers wait for their turn.
- Inaccuracies in invoice data, such as wrong entry of size and colour of the product.
Leakage and pilferage at retail outlets cause revenue loss to the organisation and reduction in profitability. Some of the symptoms, which can lead to the loss of revenue to the organisation, are listed below:
- Physical audit and stock taking is a difficult and time consuming task.
- Mismatch between actual inventories in stores and system records.
- Reconciling shop and head office figures is difficult. If there are differences, then it takes time to figure out the exact reasons.
- The shop sales and stocks data are not available to the head office on time.
Due to the nature of the business and decentralised operation, the required information for effective operational decisions is not available. Stocks and inventories are always in-transit. Either these are being sent from head office to shops, or vice versa. This information cannot be used while making stock transfer decisions.
True comparison of product sales across different retail outlets is not readily available. This information is essential for making effective stock shuffling decisions. More time is consumed in deciding about the distribution of available stocks to retail outlets. Therefore, stock transfers to retail outlets are often delayed.
Due to lack of required tools and information availability, most of the retail chains use reverse business model. In such a scenario, the head office is not in a position to prioritise and decide about the stock requirements of retail outlets. Only head office can have total business picture regarding its operations across multiple retail outlets. Head office should make decision about stock transfers based on retail outlet relative performance, its available stocks, and the stocks which are in-transit for a particular retail outlet. However, this cannot be done effectively through manual or semi automated ways of working. The symptoms which indicate the use of reverse business model, are given below:
- Retail outlets send their stock requirements to the head office.
- Head office sends the stocks as per requirements of the retail outlets.
- Head office not able to calculate stock requirements of the retail outlets due to incomplete and delayed information.