mecc final presentation - literati

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


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


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

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Internal Space Management

Reorganization

Space Utilization

Infrastructure Installation

Inventory Turnover

Inventory Procurement

Inventory Returns



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

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Reorganization

Space Utilization


Inventory Turnover


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



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

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Reorganization

Space Utilization


Inventory Turnover


Inventory Returns



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



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


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


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



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



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



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)



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


Questions?

mecc final presentation - literati

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