Planning, Forecasting and Replenishment Professionals

As apparel firms hone their supply chain strategies to help ensure the right goods are in the right place at the right time ? and to avoid costly retail chargebacks and markdowns ? they are taking on more responsibility for planning, forecasting and replenishment.

>Indeed, these areas are essential elements of doing business by the collaborative commerce model that is being promoted and embraced by many leading industry players. To be competitive, apparel firms must employ professionals who excel in these areas of expertise.

Retailers have been planning, forecasting and replenishing for a long time, but only recently has the wholesaler been brought into the loop in a proactive capacity. A tremendous amount of data is generated by retailers in terms of what is selling, what isn't, who is buying and who isn't. Wholesalers can tap into this information and use it to better control their own destinies. Acronyms such as CPFR® (collaborative planning, forecasting and replenishment), VMI (vendor-managed inventory) and RFSM (retail floor space management) increasingly are being used to describe ways wholesalers can partner with retailers to more accurately and efficiently meet consumer demand.

Advances in data processing have opened new opportunities for apparel wholesalers to be successful in planning and forecasting. Professionals with responsibilities in planning and forecasting definitely need strong IT skills. Such professionals also must have a well-rounded knowledge of apparel manufacturing. As one of Seitchik Corwin and Seitchik's clients put it: A director of planning, forecasting and replenishment is the glue between merchandising, sales and sourcing. Someone in this position must have outstanding communication skills, not only internally but externally as well. He or she will be a liaison with retailers and needs to be able to sell them on the concept of partnering in this manner.

Based on our research, following are descriptions of 10 positions in this field, including the backgrounds of the individuals employed in these positions and their compensation.



Title: Director of Replenishment and Retail Floor Space Planning

Company: Women's sportswear firm; sales volume $500 million-plus

Job Description: In this company, retail floor space planning (RFSP) consists of replenishment, sales planning, programming floor space (determining what goes where) and data warehousing. This person controls the information flow between planners, account executives and retail buyers. She supervises approximately 50 people, including planners, demographic analysts, software specialists, store merchandise analysts and in-store floor space managers. This company uses JDA's Arthur sales planning and tactics planogramming software. The RFSM staff handles data analysis, in-store merchandising analysis and productivity management; and the sales planning staff handles financial planning of retail inventory levels to coincide with assortment plans and the day-in and day-out generation of orders for VMI or replenishment programs.

Background: Similar to most people in this field, this person got her start in retailing. She started in buying, moved into planning and eventually went into replenishment with a large regional retail chain before moving to the wholesale side of the fence in 1995.

Compensation: $130,000 plus bonus potential up to 50 percent of base salary based on the achievement of departmental goods and corporate profits; medical insurance; 401(k); and stock options.



Title: Director of Vendor Managed Inventory

Company: Women's hosiery firm; sales volume $100 million

Job Description: This person reports to a director of forecasting, and oversees three senior systems analysts with whom he has developed tools and reports to measure the business on an ongoing basis. He provides assortment recommendations, category management suggestions and SKU productivity results. He works closely with sales executives and retail buyers to plan objectives and meet in-stock goals. He manages allocation for fashion goods as well as basics through forecasting programs. The company uses an E3 replenishment program to develop weekly reports in conjunction with new product rollouts. This individual is responsible for specific reports that must be generated related to category management, SKU productivity, size analysis and sell-through trends, among others.

Background: This person got his start with Macy's in buying but quickly moved into information systems. He moved to a wholesale company in 1999.

Compensation: $100,000 plus 20 percent of salary bonus potential (discretionary); health insurance; 401(k); and profit sharing.



Title: Senior Vice President of Planning

Company: Men's, women's and children's underwear company; sales volume $1 billion-plus

Job Description: This person's time is spent working with and coordinating between senior corporate management and marketing groups to accomplish objectives from a demand forecasting standpoint. In this role, he is charged with determining when and how the firm will support forecasts for goods; helping to decide where goods will be made; and planning distribution strategies. He manages automatic replenishment programs with certain accounts such as Wal-Mart, and VMI programs on basic goods with others. He oversees a staff of approximately 100 in planning, forecasting, purchasing and production control. This person managed the incorporation of retail POS data into the company's forecasting systems while developing and implementing an in-house forecasting system. This company uses J.D. Edwards' replenishment system.

Background: This executive got his start with a large U.S. fabric mill, where he was exposed to data processing, costing and inventory management. He joined his current employer in 1979 in production control. As this company grew, his responsibilities expanded and evolved into planning, forecasting and replenishment.

Compensation: $150,000 plus bonus based on achieving corporate and personal goals (37 percent of salary in 2001); 401(k); and stock options.



Title: Director of Merchandise Planning and Replenishment

Company: Men's sportswear firm; sales volume $150 million

Job Description: This person currently only supervises one assistant, but he is in the process of developing a team of people who will conduct account analyses and monitor SKUs. He has established seasonal merchandise plans and production schedules and does product reviews with sales and design teams. He manages a system of dynamic model stocks for basic replenishment, and travels frequently to work with key accounts. Utilizing sales reports, his objective is to work with retailers to seek out opportunities and capitalize on trends at the individual store door level.

Background: As is typical, this individual got his start in retail buying and merchandise planning. He jumped to the wholesale side of the fence in 1995.

Compensation: $130,000 plus discretionary bonus potential; medical, dental and vision insurance; and 401(k).



Title: Vice President, Planning

Company: Women's career/casual sportswear firm; sales volume $450 million

Job Description: This person oversees four people in production control, four in forecasting and eight in purchasing. The VMI concept is new to this company and is currently implemented only with Sears, Kohl's and the military. She utilizes Demand Solutions' DS Stores software for forecasting, planning, inventory management and sales planning. The company has well-established automatic replenishment programs for basics. She also works closely with the merchandising team to provide a "reality check" regarding the feasibility of line plans. This person's primary function is to serve as a liaison between merchandising, sales and production. She has implemented fundamental strategies to interpret numbers to tie these functions together. She also travels overseas occasionally to enlist the support of suppliers and to link them into the firm's systems.

Background: This person grew up in a U.S. manufacturing environment, starting out in engineering and then moving into production planning and control.

Compensation: $150,000 plus bonus potential up to 50 percent of salary based on corporate earnings and individual goals; medical and dental insurance; and 401(k).



Title: Senior Vice President of Strategic Business Planning

Company: Men's, women's and children's branded sportswear; sales volume $1 billion-plus

Job Description: This person developed growth strategies and plans to manage retail businesses across all product categories utilizing a market planning system to plan by style, color, size and door. She managed production forecasts while making sure the merchandising team was buying at appropriate levels and determining the number of units that would go to each store. All department store accounts (1,500-plus doors) are on automatic replenishment programs, and her staff numbers approximately 20. She works with divisional presidents to understand and challenge their growth strategies. Each division has its own planning team, and she works hand-in-hand with these teams to ensure forecasts and plans are accurate. She communicates with merchandising and production departments to facilitate purchases and delivery of merchandise from suppliers.

Background: She spent five years in retailing as an executive trainee and buyer before moving to her current employer in 1995. She started as manager of retail analysis and, essentially, built the planning function at this company.

Compensation: $375,000 plus bonus ranging from 33 percent to 66 percent of salary based on corporate profits and departmental goals; stock options; 401(k); and medical/dental insurance.



Title: Director of Planning, Forecasting and Replenishment

Company: Men's, women's and children's activewear and outdoor apparel firm; sales volume $700 million-plus

Job Description: This person supervises managers of planning, forecasting and replenishment, each of whom has a staff of 10 to 15 people. This is a strategic job rather than a hands-on position. This person's role is to work across all product categories to orchestrate planning corporation- wide. Currently, only 10 percent of this company's sales are handled through automatic replenishment or VMI programs. It is the director's goal to double and, eventually, triple that amount. To do that, he is expected to revamp the department, starting with new software systems. He will work closely with merchants, the sourcing department, sales management and financial planners to develop and implement new plans and procedures. He will also spend a significant amount of time with customers, selling his vision for collaborative commerce.

Background: This person has been with his current employer for only about six months as of this writing. Previously, he spent about 10 years with a vertical retailer, starting as a trainee and moving into merchandise planning. His last position was director of planning and allocation for a specialty store division of the retail firm.

Compensation: $200,000 plus a targeted 35 percent bonus based on achieving individual and corporate goals; health/dental/optical insurance; health club membership; 401(k) and stock options.



Title: Director of Forecasting and Planning

Company: Men's, women's and children's footwear company; sales volume approximately $400 million

Job Description: This person reports to the CFO and oversees 10 "buyers," who are generally called "merchandisers" in the footwear industry. He set up the firm's forecasting process with cross-functional policies and procedures that include finance, sales, customer service and manufacturing. He and his staff develop forecasts using demand planning and Manugistics' software, taking into account sales histories and current inventories. From the forecast, a merchandise plan (12 months out) is developed, and then this person and the buyers place monthly actual buys with the factories. He also works with the vice president of sales to develop objectives by account based on the company's inventory position and store sales data. He interfaces closely with manufacturing so that if a new product is taking off, production can respond accordingly. He also visits retailers frequently to create partnerships with the stores.

Background: This person has an MBA degree and worked for the U.S. Bureau of Economics for seven years before joining Kodak in a sales forecasting capacity for three years. He has been with his current employer for four years.

Compensation: $175,000 plus targeted 35 percent of salary bonus based on achieving profit goals; medical, dental and life insurance; 401(k); and automobile allowance.



Title: Manager of Replenishment

Company: Men's, women's and children's jeans company; sales volume $500 million-plus

Job Description: This person reports to the vice president of planning, and she is "in the trenches" so to speak. She manages a staff of 14 and is responsible for replenishment of all VMI accounts, which make up approximately one-third of total sales. The firm utilizes the INFOREM replenishment program, and six of this person's staff are INFOREM administrators/analysts. Their duties include sales forecasting, receipt planning, POS data analysis and dynamic modeling to achieve desired in-stock levels and inventory turnover goals. The other eight are involved in data processing and record maintenance. Her responsibilities include identification of retail trends, retail and production forecasting and retail floor space productivity analysis. She meets with prospective VMI customers to present her firm's capabilities. She also visits current VMI customers to foster communication and build partnerships. The firm's VMI programs service more than 2,000 store doors nationwide.

Background: After graduating from college, she worked for three years in an unrelated industry before joining her current employer as a production supervisor. She then became an INFOREM administrator/analyst and now has managed replenishment for five years.

Compensation: $100,000 plus bonus targeted at 30 percent of salary based on company performance; 401(k); and medical/dental insurance.



Title: Replenishment Manager, Department Stores

Company: Women's hosiery firm; sales volume $700 million

Job Description: Of this wholesaler's $700 million in annual sales, approximately $150 million is sold to department stores. As one of three replenishment managers, this person is responsible for replenishment related to $50 million in sales to Mervyn's, JCPenney, Belk and Kohl's. She manages more than 1,000 retail doors with roughly 300,000 store/SKU combinations. She has a staff of four replenishment analysts. They utilize a system called Spectra, a lifestyle, life stages program, which analyzes demographics, income, ethnicity and age to categorize consumers. The analysts function as category managers for these accounts, making assortment recommendations to achieve profit, inventory and turn goals. This person manages the analysts and works directly with the accounts to make sure the replenishment efforts meet the retailers' needs. She also spends a significant amount of time making presentations to prospective new replenishment customers.

Background: This individual started her career at Wal-Mart in various training positions, moved into planning and, eventually, became the implementation coordinator for a new replenishment program. She then joined her current employer as a replenishment analyst in 1997.

Compensation: $120,000 (no bonus); 401(k); profit sharing; stock options; and medical/dental insurance.

In conclusion, if manufacturers are to develop more fruitful partnerships with their retail customers, they need to think more like vertical retailers. A vertical retailer ideally has continuity in the flow from product concept to placement on the retail floor. In the traditional manufacturer/retailer relationship, there are many interchanges in this flow at which errors can occur. That is not to say that a vertical retailer cannot make mistakes in terms of having the right goods in the right store at the right time, but these errors shouldn't be caused by the left hand not knowing what the right is doing.

With skilled planning, forecasting and replenishment professionals on their teams, apparel wholesalers can forge stronger partnerships with retailers, share more responsibility for managing inventory and floor space and, as a result, control their destinies to a greater degree.



J. Blade Corwin is a partner and co-founder of Seitchik Corwin and Seitchik, a retained executive search firm that specializes in apparel, textiles, home fashions and footwear, both wholesale and retail, with offices in San Francisco, CA, and New York, NY. He may be reached at tel.: 800-438-0279 or e-mail: blade@seitchikcorwin.com.



Editor's Note: Part 1 of this special report appeared in the May 2002 issue of Bobbin.