Researching Issues of Product Range and Stock Management in Trade Chains

Abstract

The article studies key problems of Russian trade chains. Foreign publications dealing with product range and stock management in retail trade were analyzed. As a result of the researching the logistic and marketing work of chain trade operators of FMCG sector in Russia certain trends were found, which determine the vector of their development for the next 5-10 years and at the same time act as the catalyst of their current problems. To investigate the key problems in detail the results of projects on business process re-engineering and optimization of product stock carried out within 15 years were used. As a result two principle problems were found typical of the majority of retailers: the low turnover of stocks leading to overstock and out-of-stock of the most popular and profitable products in outlets, i.e. trade branches or affiliates (regional storehouses). It should be mentioned that these problems arise in trade chains together, thus the global problem can be formulated in the following way: continuous out-of-stock with overstock. It means that today trade chains are facing the target objective - to shape a unique product rage for each outlet or even for a concrete customer and to meet the arising demand with the optimum level of stock and costs. In the process of practical realization of projects on stock optimization in trade chains the authors developed a certain algorithm of solving the project problems and it was found out that external conditions that were not investigated could cause negative results of project implementation.

Keywords

• trade chains' problems, projecting the product life cycle, product rage management, category management, interaction of logistics and marketing, possibility of project implementation