LECTURE TWO

STORES PLANNING AND STRATEGY

Stores Planning and Strategy is a critical component of supply chain management and retail
operations. It involves the planning, implementation, and evaluation of strategies aimed at
optimizing the storage, distribution, and availability of products in a retail organization. The
objective of stores planning and strategy is to ensure that the right products are available to
customers at the right time and place, while minimizing inventory carrying costs, stock
shortages, and stock-outs.

The stores planning and strategy process involves the development of policies, procedures, and
processes that govern the management of inventory, physical store layout and design, customer
service, logistics and supply chain management, and technology integration. The role of stores
management in the overall business strategy is also considered, as well as the trade-offs
between centralized and decentralized store keeping, and the organization of store space,
personnel, and merchandise.

In today's rapidly changing retail environment, effective stores planning and strategy is more
important than ever, as retailers must meet the demands of customers who expect seamless,
convenient, and reliable access to products and services.

Developing a stores management strategy

Developing a stores management strategy involves creating a plan that outlines the policies,
procedures, and processes needed to achieve the goals and objectives of the retail organization.
The following steps can be taken to develop a stores management strategy:

1. Align with the overall business strategy: The stores management strategy should be
aligned with the overall business strategy and support the overall goals and objectives
of the organization.
2. Identify goals and objectives: Identify specific, measurable, achievable, relevant, and
time-bound (SMART) goals and objectives for stores management. These may include
reducing inventory carrying costs, improving customer satisfaction, and enhancing
supply chain efficiency.
3. Conduct a situation analysis: Analyze the current state of stores management, including
inventory management policies, physical store layout and design, customer service
policies, technology integration, and performance measurement and evaluation.
 4. Develop policies and procedures: Based on the situation analysis, develop policies and
procedures to support the goals and objectives of stores management. These may
include inventory management policies, logistics and supply chain management
processes, physical store layout and design, and customer service policies.
5. Consider technology integration: Evaluate the role of technology in supporting stores
management, including the use of inventory management software, point-of-sale
systems, and customer relationship management tools.
6. Implement and monitor: Implement the stores management strategy and monitor
progress towards achieving the goals and objectives. Evaluate and adjust the strategy
as needed to ensure ongoing success.
7. Communication and training: Ensure that all stakeholders are aware of the stores
management strategy and have the knowledge and skills needed to implement it
effectively. Provide training and support as needed.

In conclusion, a well-designed stores management strategy can help to improve the efficiency
and effectiveness of stores operations, reducing costs and enhancing customer satisfaction. It
is an ongoing process that requires regular review and adjustment to ensure that it continues to
meet the evolving needs of the retail organization.

Identifying and analyzing stores management goals and objectives

Identifying and analyzing stores management goals and objectives is a crucial step in the
development of a stores management strategy. The following steps can be taken to identify and
analyze stores management goals and objectives:

1. Define the scope: Determine the scope of stores management, including the products
and services that will be managed, the geographic locations, and the target customer
base.
2. Conduct a stakeholder analysis: Identify key stakeholders, including customers,
employees, suppliers, and other partners, and assess their needs and expectations.
3. Review business strategy: Review the overall business strategy to determine the goals
and objectives of the organization and how stores management can support these goals.
4. Identify specific goals: Based on the stakeholder analysis and review of the business
strategy, identify specific, measurable, achievable, relevant, and time-bound (SMART)
goals and objectives for stores management.
 5. Prioritize goals: Prioritize the goals and objectives based on their importance and
impact on the organization.
6. Develop performance metrics: Develop performance metrics to measure progress
towards achieving the goals and objectives, including inventory carrying costs,
customer satisfaction, and supply chain efficiency.
7. Conduct a gap analysis: Analyze the current state of stores management to identify gaps
between the current state and the desired state, and to determine the steps needed to
close these gaps.

In conclusion, identifying and analyzing stores management goals and objectives is a critical
step in the development of a stores management strategy. The results of this analysis will
inform the development of policies, procedures, and processes that support the goals and
objectives of the organization. It will also provide a framework for monitoring and evaluating
the performance of stores management over time.

Understanding the role of stores management in overall business strategy

Stores management plays a critical role in the overall business strategy of a retail organization.
The following are some of the ways that stores management can support the overall business
strategy:

1. Supporting customer experience: Stores management is responsible for ensuring that

customers have a positive shopping experience, including access to the products and
services they need, a convenient and attractive store environment, and helpful and
knowledgeable sales associates.
2. Optimizing inventory: Stores management must balance the need to have the right
products available to customers with the need to minimize inventory carrying costs.
This requires effective inventory management policies, processes, and technology, as
well as regular review and adjustment of inventory levels.
3. Enhancing supply chain efficiency: Stores management must work closely with
suppliers and logistics partners to ensure that products are available to customers in a
timely and cost-effective manner. This requires effective supply chain management
processes and technology, as well as collaboration with suppliers and logistics partners.
4. Controlling costs: Stores management must work to minimize costs, including
inventory carrying costs, labor costs, and other operational costs. This requires effective
 cost management policies and processes, as well as regular review and adjustment of
costs.
5. Supporting brand strategy: Stores management must support the brand strategy of the
retail organization by creating an attractive and consistent store environment that
reinforces the brand and enhances customer loyalty.

In conclusion, stores management plays a critical role in the overall business strategy of a retail
organization. Effective stores management can enhance customer satisfaction, minimize costs,
and support the brand strategy of the organization. It requires a well-designed stores
management strategy, supported by effective policies, procedures, and processes, and regular
review and adjustment to ensure ongoing success.

Centralized Vs decentralized store keeping

Centralized storekeeping and decentralized storekeeping are two different approaches to

managing store inventory.

Centralized storekeeping involves having a single, centralized location where all inventory
is stored and managed. This approach can result in economies of scale, as the organization can
leverage its purchasing power to negotiate better prices and terms with suppliers. Centralized
storekeeping also enables the organization to manage inventory more effectively, as it has a
single, consolidated view of inventory levels and can make more informed decisions about
inventory management.

Decentralized storekeeping, on the other hand, involves having inventory stored at multiple
locations, such as individual stores, regional distribution centers, or warehouses. This approach
can result in better responsiveness to local market needs, as stores can carry a wider range of
products tailored to local customer demand. Decentralized storekeeping also enables stores to
manage inventory more effectively, as they have a local view of inventory levels and can make
more informed decisions about inventory management.

The choice between centralized and decentralized storekeeping will depend on the specific
needs of the organization, including its size, geography, and product mix. For example, a large
retailer with a wide geographic footprint may choose to implement a decentralized
storekeeping approach, while a smaller retailer with a more limited geographic footprint may
choose to implement a centralized storekeeping approach.
In conclusion, both centralized and decentralized storekeeping have their advantages and
disadvantages, and the choice between the two will depend on the specific needs of the
organization. Effective inventory management requires a well-designed strategy, supported by
effective policies, procedures, and processes, and regular review and adjustment to ensure
ongoing success.
 MUFIREI SUPERSTORES LIMITED CASE STUDY
Mufirei Superstores Limited is a manufacturing company that produces
a variety of products, including household appliances and electronics.
The company operates in a highly competitive market and strives to
maintain high standards of production and customer service. In order
to achieve this, it is essential that the stores management system is
efficient and effective. This case study will analyze the stores
management practices of Mufirei Superstores Limited and suggest
recommendations for improvement.
Background
Mufirei Superstores Limited has been in business for over 50 years and
has a reputation for producing high-quality products. The company has
a large workforce of over 500 employees, with a significant proportion
working in the stores department. The stores department is responsible
for managing the inventory of raw materials, components, and finished
products.
The current stores management system at Mufirei Superstores Limited
is based on manual procedures, including manual stocktaking and
record-keeping. The stores manager has expressed concerns about the
accuracy of the inventory records and the time taken to complete
stocktaking. Additionally, the manual system has resulted in delays in
the supply of raw materials, which has a negative impact on production
schedules.
Issues with the Current System
Inaccurate Inventory Records: The manual system used by the stores
department has resulted in inaccurate inventory records. This is due to
human error and the difficulty in recording large amounts of data
accurately.
Delays in Stocktaking: The manual stocktaking process is time-
consuming, and delays in the supply of raw materials have had a
negative impact on production schedules.
Lack of Real-Time Information: The manual system does not provide
real-time information on the availability of raw materials and
components. This can result in delays in the production process and the
delivery of products to customers.
Limited Visibility of Stock Levels: The manual system does not
provide a clear picture of the current stock levels of raw materials,
components, and finished products. This can lead to overstocking or
stock shortages, resulting in increased costs and reduced customer
satisfaction.
Increased Costs: The manual system is resource-intensive and requires
a significant amount of time and effort from employees. This has
resulted in increased costs for the company.
Recommendations for Improvement
Implementation of an Automated System: To improve the accuracy of
inventory records and the speed of stocktaking, Mufirei Superstores
Limited should implement an automated system for stores
management. This will provide real-time information on the
availability of raw materials, components, and finished products,
reducing the risk of delays in the production process.
Improved Stock Management: The company should implement a
system that provides clear visibility of stock levels, reducing the risk of
overstocking or stock shortages. This will help to optimize inventory
levels and reduce costs.
Increased Employee Training: The employees of the stores department
should be provided with training on the use of the automated system.
This will help to ensure that the system is used effectively and
efficiently, and will reduce the risk of human error.
Regular Review and Assessment: Mufirei Superstores Limited should
conduct regular reviews and assessments of the stores management
system, in order to identify areas for improvement and to ensure that
the system continues to meet the needs of the business.
Questions
1. Discuss the background of Mufirei Superstores Limited and the
role of the stores department. (7 marks)
2. Analyze the issues with the current stores management system at
Mufirei Superstores Limited. (7 marks)
3. Evaluate the recommendations for improvement and discuss their
potential impact on the stores management system. (7 marks)
4. Suggest additional measures that Mufirei Superstores Limited
could take to improve its stores management system. (7 marks)