To OTB or to MBR? That is the Question!
Once again, hello from Olson-Ng Retail Consulting Group! We hope that this finds all well in these difficult times. The holiday period is upon us and as retailers, we are about to begin an interesting ride. Right now we feel as if we are approaching the apex of the first extreme hill of a wild roller coaster, anticipating, excited, but very anxious about the speed and the unknown of the downhill ride.
Every Merchant, Buyer, Planner and Allocator in retail knows about OTB – Open to Buy. If you don’t, you have been living in a bubble or are a start up with no experienced retailers on your team. OTB is one of those legacy processes that has been around forever in retail. And we use the term “process” because that is what it is. It is not a report!
But, is an OTB relevant any longer? How should you, as a retailer, effectively manage and forecast your largest investment – the inventory – in this evolving world of technology and E-commerce with an ever increasing reliance on and need for expanding data? This is a question we’ve heard repeatedly from presidents and CEOs. Over the years, we’ve been engaged to implement and train on a better process in over 60% of our client work. The process we’ve implemented is what we’ve named, The Monthly Business Review. This paper explores its benefits and contrasts to an Open to Buy. We thought in this roller coaster environment in which we are working, that now would be a good time to share this process with you.
The link to this article follows: To OTB or to MBR? That is the Question!
We hope that you find value and benefit in this article. And, as always, we look forward to hearing from you! Hope to see you too, on Linked In!
Be well. Stay well. Stay safe.
Rod Olson – Kim Ng
Olson-Ng Retail Consulting Group
330 East 38th Street, Suite 42b
New York, New York 10016
212-679-6552
Retired
4 年Hi Rod, Enjoyed your article immensely. CFO is often the driver of this process, MBR is an integral part of Cash Flow planning and reporting especially in todays world of ABL financing and tough markets. Total team ownership equals success!
Senior Planning and Inventory Management Executive
4 年Great to see a name change, OTB is more than just old and has a negative, fearful connotation with many team members. After skimming the 23 pages I am not sure the ideas are that novel or new but fairly certain the process and name change would be celebrated. It should help ensure active, engaged acceptance and participation by the "total team". Make sure the CFO/finance is on board and understands the expectations and results!
Strategic and Consumer Focused Retail Executive
4 年MBR!
Merchandise Planning I Business Analytics l Inventory Optimization l Omni-Channel I Retail l E-Commerce l Wholesale l Apparel
4 年Excellent article which clearly articulates the methodology and collaborative approach that is required to drive bottom line performance and improve working capital management by optimizing inventory especially in the current economic environment. The OTB and BI should be developed, implemented and utilized concurrently to surface opportunities and proactively identify issues for impactful action discussed at the monthly review meeting. There is a closed loop between OTB and BI with BI seeding the weekly actuals to update the plans and the revised plans exported back to BI for comparative reviews. A 3rd party BI tool should be considered to provide visibility and transparency to facilitate information that leads to informed decision making. This includes business, merchandise and digital analytics.