Setting of Replenishment Criteria
Quant optimizes the planogram according to the set replenishment criteria. The replenishment criteria are set separately for each template. In this manual we will describe the criteria in detail.
You can set the criteria for completion in the Template - Replenishment section. In order for a given planogram template to be optimized according to sales, you need to check the box Optimize by Sales.
What you will find in this manual:
- A description of each replenishment criteria
- Examples of how to set the replenishment criteria:
- Replenishment information in the Planogram Overview table
Replenishment criteria
Sales Type Used for Product Priority
Here you select from the types of sales values available in Quant: e.g. Units Sold or GP1. Select according to which type of sales you want the planograms to be optimized in the project. If you select e.g. Profit, this means that products with higher profit will have a higher priority placement in the final planogram.
Min Days Reserve
This is the minimum number of days that the stock of products placed in the planogram must last. If the Min Days Reserve is set to 7, this means that the planogram should have products for one week. The quantity of BU corresponding to the Min Days Reserve in Quant is denoted by MIN. If the average daily movement of a product is 2 BU, in our example MIN = 7*2 = 14 BU.
Max Days Reserve
Indicates the maximum number of days for which we can have enough product stock corresponding to the location of all packages in the planogram. The amount of BU corresponding to the Max Days Reserve in Quant is called MAX. If the Max Days Reserve is set to 21 and the average daily product movement is 2 BU, we calculate MAX = 21*2 = 42 BU.
Phase Out Prevention Stock
This option applies to products with an optional priority level that would not appear in the planogram at all in the case of low sales, since the MAX value for them would be less than 1. Sometimes it is necessary to hold such products in the planogram in stores where they are in stock in such large quantities that it is not possible to allow the product to be absent from the planogram. So if you set the value to 5 for example, optional products that have at least 5 BU in stock in that store will be placed, no matter how well they sell.
Best brand products have priority of whole brand
If this attribute is active, Quant will rank the best product of the brand and behave as if the product had the sales of the entire brand combined.
The values for the Min and Max Days Reserve must be converted to the number of BU (basic unit of measure). This is done by calculating the average daily sales. The daily movement, min and max BU data can be found in the product table in the Project Editor.
The product with Id 107960 has sold a total of 112 units in the selected period, the daily movement of the product is 0.31 BU. One whole product is thus sold in 4 days (4 × 0.31 = 1.24 → 1.24 is greater than 1). For a product with an optional priority level to be placed in the planogram, the Max Days Reserve must be set to 4 days or more in the replenishment criteria.
Examples of replenishment criteria settings
The following three examples will explain 3 different situations of setting the replenishment criteria.
Situation 1: Not placed product
- Basic data: daily product movement = 0.31, Min Days Reserve = 1, Max Days Reserve = 2.
- Calculation: 0.31 x 2 = 0.61 → 0.61 < 1
- Conclusion: the max days reserve is too low, therefore the product will not be placed in the planogram.
If you hover the mouse over the product, a tooltip will be displayed stating the reason why the product was not placed. In this case, it is too low sales.
You can view all not placed and placed products of the selected planogram via the Planogram Overview tool. This function can be found in the menu: Tools → Planogram Overview. The table lists all products that Quant has not placed in the planogram.
Quant may only remove products with optional priority levels from the planogram due to low sales.
Priority levels are described in more detail in the Setting of Priority Levels manual.
Situation 2: Placed product
- Basic data: daily product movement = 0.31, Min Days Reserve = 1, Max Days Reserve = 4.
- Calculation: 0.31 x 4 = 0.61 → 1.23 > 1
- Conclusion: the Max Days Reserve is sufficient, therefore the product will be placed in the planogram.
In the Planogram Overview, the product will not be in the Not Placed Products tab, but will be in the Replenishment tab, where all relevant replenishment data will be displayed for it.
- The Planned Base Units column shows the number of BUs that actually occur in all planograms in that store. In our case, this product is located on only one planogram, so all BU count data is for that planogram.
- In the Daily Movement column, the average daily sales of the product is calculated.
- The Min column is the calculated minimum number of products that should be placed (1 × 0.31 = 0.31).
- In the Max column, the maximum number of products that should be placed is calculated (4 × 0.31 = 1.23).
According to the values calculated in the Min and Max columns, an interval (0,31; 1,23) is created. Quant recommends placing the number of products that falls within this interval. There is only one option here - one placed product.
Quant recommends to place the number of BUs according to the calculated interval, but the number of actual placed BUs must always respect the user setting of the number of BUs on the block (number of pcs. in width, height and depth in the Block tab).
You can read more about setting the number of BUs for products in the manual Setting and respecting of the number of BUs in width.
Products in the Planogram Overview table are highlighted in blue (understock) or red (overstock) in the Color column, or not highlighted (optimal) as in the case of the example product:
Overstock
Products are marked in red in the planogram overview if Quant recommends placing fewer pieces than are placed in existing planograms. According to the figure, an example of this would be a product with Id 108602 whose number of BUs should fall in the interval (0.65; 2.60), but there are 3 BUs placed in the planograms. Quant recommends placing only 1 or 2 BUs depending on the sales of this product. For this product, the Overstock box is also checked.
Understock
Products are marked in blue in the planogram overview if Quant recommends placing more pieces than are placed in existing planograms. In such a situation, there is a product with Id N0100185, whose number of placed BUs should be in the interval (1.67; 6.66), but only 1 BU is placed in the planograms. Quant recommends increasing this quantity to 2, 3, 4, 5 or 6 BUs. The product has the Understock box checked.
You can also see the color highlighting of "Overstock" and "Understock" directly in the planogram by turning on the refill highlighting via the menu: View → Highlight → Replenishment.
Situation 3: Comparison of planograms in Harfa and Fenix
We share the same planogram template for the Harfa and Fenix stores. The following completion criteria are set on this template:
- Min Days Reserve = 6
- Max Days Reserve = 100
Harfa
- Basic data: Average daily product movement in Harfa store = 0.0055
- Calculation: Min = 6 * 0.0055 = 0.033, Max = 100 * 0.0055 = 0.55
- Max Days Reserve is too low (0.55 < 1).
Fenix
- Average daily product movement in the Fenix store = 0.0448
- Calculation: Min = 6 * 0.0438 = 0.2628, Max = 100 * 0.0438 = 4.38
- The Max Daily Reserve is sufficient (4.38 > 1).
Conclusion: The same product will be placed in the planogram in the Fenix store, but not in the Harfa store.
The situation in the Harfa store is identical to Situation 1 explained above, where the product is not placed in the planogram due to low sales. Other stores, however, have different sales and it may happen that the product is placed in one store and not in the other.
In the Fenix store, you can see that with the same replenishment criteria set, the product was placed because the number of units sold there was higher than in the Harfa store over the period under review.
For an overview of other settings for optimized planograms, see the Optimized Planograms manual.