Isn't It Obvious Reading Report?

                         Isn’t It Obvious?

                            ----reading report

Part 1. Summary of the book

   Paul White was running the Boca Raton branch of Hannah’s Shop, but the store’s profit kept dropped down. When his store’s warehouse suffered from a water leak, Paul asked his friend, Roger, who is also the warehouse manager in the area to help. They came to the plan that Paul will sent one combined list at the end of the day. Paul decided the amount to hold from each SKU is equal to twenty times the daily average sales. By the time, Paul’s wife, Caroline, failed to persuade her father to buy the Leon’s. Four weeks after the accident in the warehouse, the finance people told Paul that his store made it to the first place in the month. But Paul thought it was just the readjustment people in finance make a change to the worth of parts of the company, without buying or selling anything. Caroline discussed the great change happened in Paul’s store, she believed fewer shortages was the driving force behind the increased sales, but Paul hold the idea that it only did a little for the increasing sales. Paul also wondered why did the number of shortage take a nosedive, and all Paul had done was to transfer stock from one place to another. The next day, after checking on the system, Paul realized that more of these items were available in the store accounted for the large increase in sales. And the shipment with specifically the items he was missing were arrived from leftovers and residuals in Roger’s warehouse. With no other cost, the shop came to a 17.4 percentage profitability, not only the first place in the region, but in the whole chain. As Paul said, with his sales increase, profitability should have reached five percent, tops. And the other twelve percent came from adding no overhead expense. Paul then tried to persuade Roger to keep using the deliver method they launched during the accident period, to his surprise, Roger already found out that stores hold months and months of inventory, yet so many individual SKUs are missing, the idea of shipping to the store only what it really needs sounds like the kind of solution he had been looking for. The fact that it has such an impact on sales only supports this. But for the system to be truly efficient, it should be implemented for the whole region, not just in Boca. Paul then got the approval from the regional manager, Martin, to given all his own inventory to the general pile. Paul and Roger also came to the conclusion that when Paul ask for an SKU, and all Roger had were residuals, that means it’s a high runner and Roger should cross ship as much of it as he can. Meanwhile, Caroline cornered her supplier and asked him to deal with the mistakes they made. She also went to the trade fair to find new product and vendor. Three weeks later ,Paul got information from Bob that his store’s profitability was about three times that of an average store, and the inventories are about a quarter of what they were. It brings the store’s ROI to more than ten times what it was before. Which is more clearly when using the equivalent measurement— inventory turns. Paul separate SKU in green, yellow, red to reduce the SKU. To make all the work fit for the whole company, Roger learned from the GSP’s warehouse about mini-warehouse. Though they had hard time to persuade their colleagues, they started testing the process in an area. Caroline had a new deal with their supplier and it is a win-win situation. Finally, they planned to build a central warehouse so the potential problem that will caused by the cross-shipment will be avoid.