mecc final presentation - literati
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Team LiteratiProject Manager
Ishaan Goel
ConsultantsJineet Gandhi
Jenna LochricchioAndrew Murtland
Project ChampionAtakan Tin
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Overview
Literati Bookstore
Problem Statement
Returns Process
Recommendations
Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Literati Bookstore
Literati Problem Returns Recommendation Conclusion
Business Independent bookstore in downtown Ann Arbor Hosts author readings, book clubs, poetry nights,
open mic nights, etc.
Mission To enhance the vibrant downtown culture and arts
scene To be a place where book lovers can go, talk, and
interact with each other Be a great and welcoming bookstore
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Problem Statement
Inventory Management: Literati is running out of room to store books. There are more orders coming during the holiday season with no space to store them.
Initial Scope: Increase space within store
Inve
ntor
y M
anag
emen
t
Internal Space Management
Reorganization
Space Utilization
Infrastructure Installation
Inventory Turnover
Inventory Procurement
Inventory Returns
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Problem StatementCustomer
Price Insensitive Browsing & looking for new
books Desires Ambiance Middle-age Ann Arborite
Inventory Costs Can return books to
publishers for full-value Incentive: Keep as many
book as possible
Key Revenue Drivers
Book Selection
Customer Service
Inve
ntor
y M
anag
emen
t
Internal Space Management
Reorganization
Space Utilization
Infrastructure Installation
Inventory Turnover
Inventory Procurement
Inventory Returns
Types of Inventory Live: inventory on shelves Dead: inventory that no
longer sells
Employee Pain Points Storing dead inventory in
stair case is inconvenient
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Problem Statement
Inventory Management: Literati is running out of room to store books. There are more orders coming during the holiday season with no space to store them.
New Scope: Improve inventory return process
Inve
ntor
y M
anag
emen
t
Internal Space Management
Reorganization
Space Utilization
Infrastructure Installation
Inventory Turnover
Inventory Procurement
Inventory Returns
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Returns Process
Identify Dead
Inventory
Store Dead Inventory
Review Dead
Inventory for Shipping
Ship Dead Inventory
Current Process• Use intuition to
schedule pulls• Software to check
unsold books
Weaknesses• Time• Inconvenient
Opportunities• Automation
Current Process• Stored in stair case
Weaknesses• Fire Hazard• Unorganized• Inconvenient
Opportunities• More organized &
convenient storage structures
Current Process• Return during store
hours• Go to stairs & look
for publisher
Weaknesses• Hard to search• Unorganized• Inconvenient
Opportunities• More organized &
convenient storage structures
Current Process• UPS
Weaknesses• Lack of knowledge
on shipping cost structure
Opportunities• Reviewing shipping
cost structure• Assessing
competitors
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Identification
•Historical purchasing, sales, receiving data•Search by attributes for reporting•Preferred stock levels and electronic orderingBooklog•Customizable reporting using search tools•Connect with vendors - stocking availabilities•Ability to connect away from storeAnthology•Barcoded system by various categories•Price comparison tools when buying books from customers•Reporting by condition, section, locationBasil•Search by attributes•Simple inventory management - received, sold, etc.UBIC System•Alert system for inventory levels and competitive pricing•Automatic purchasing for to maintain inventoryMonsoon
Booklog: Continue using because switching costs > benefitsAutomation: optimize settings to show real-time inventory updates
Literati Problem Returns Recommendation Conclusion
Overview
Background
Diagnosis
Recommendations
Implementation
Challenges
Conclusion
Dead Inventory Storage Current Solution: Stair CaseNew Solution: Bookshelf
Stairs Capacity: 250-500 books
Bookshelf Capacity: 400 books
Penguin Random House32%
MPS15%Persesus
12%
Harper 11%
Simon & Schuster
8%
Hachette6%
Ingram4%
Houghton Mifflin
Harcourt3%
Other/Small Presses9%
Publisher Segmentation
Literati
Problem
Return
s
Recommendation
Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Dead Inventory Storage
Benefits Better Organization More Convenient Avoids Fire Hazard
Risks Book shelf capacity < stairs Space for book shelf currently utilized
Mitigation Quicker inventory turnover Overflow carts Hybrid solutions
Arrivals
Arrivals
Arrivals
MPS,Houghton Mifflin Harcourt
Simon and Schuster,Other
Perseus,Ingram
Penguin Random House
Harper
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Review Process
Current Solution: Employees return books during store hoursNew Solution: Schedule employees to complete returns before store opensBenefits
Better customer experience More efficient returns
Risks Labor costs Employees don’t want to come early
Mitigation Use salaried employees (labor hour reallocation) Motivate employees with opportunity to leave early
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Shipping Costs
Current Solution: UPS ~$26.95 / box
New Solution: USPS Commercial Base Pricing
~$24.07 / boxSavings: 12% Shipment Costs in 2015: $7050
Total Savings: $846 / yearVendor: ShippingEasy
ShippingEasy (starter plan)
Endicia (standard plan)
Stamps.com (pro pan)
Monthly Flat Rate
$0 (for < 50 shipments / month)
$9.95 $15.99
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Impact
Quicker Dead Inventory Turnover
Increases Space for Books
New Book Selection (Revenue Driver)
Generates Cash Flow for Book Purchases
New Book Selection (Revenue Driver)
Clears Stair Space Decreases Fire Code Liability Cost Reduction ($1,600)
Employee Improvements
Improves Employee Satisfaction
Better Customer Service (Revenue Driver)
Saves Employee Time Better Customer Service (Revenue Driver
New Shipping Process Cost Reduction ($846)
Literati Problem Returns Recommendation Conclusion
Overview Background Diagnosis Recommendations Implementation Challenges Conclusion
Conclusion
Problem: Inventory Management
Scope: Improve returns process
Recommendations1. Optimize identification software2. Add book case to re-organize returns infrastructure3. Shift employee return process to before store hours4. USPS Commercial Base Pricing
Impact5. Increased revenue from customer service & book selection6. Decreased costs from fire code penalties & shipping fees
Literati Problem Returns Recommendation Conclusion
Questions?
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