Spreading & Locking – What these terms mean in retail
Most OLAP engines can only accept data entry at the lowest level of hierarchies. Merchandise planning depends on being able to plan top-down as well as bottom up.
- Spreading. The ability to enter a top-down target and ‘spread’ that number across an existing historical curve. So, last year’s sales history would be copied into the plan, and a new sales target would be entered at the top of the product dimension. If the new plan demanded sales growth, all the products in the range would show an increased sales figure. However, proportional spreading means that the ratio of sales one product to another will remain the same.
- Locking. Furthermore, it is important for the user to change the proportionality of the spread while planning. A new sales target may be spread down to products A. B and C, but the planner knows that product C is already saturating the market and will not grow any more. The planner needs to be able to lock the sales figure for product C and have products A and B take up the slack.
Merchandise planners also need to work with Units, Revenue or Price, and have the system flex the appropriate number. For example, in a stock intake plan, I may want to change the number of stock units to the number a manufacturer say they can actually produce. If the price does not change, then the revenue figure should flex because we have a different number of units to sell. Alternatively, I may be spreading a top down sales target down the plan. Working with a fixed price, I want the system to reflect that revenue figure as a whole number of units, then recalculate the revenue figure with some correction. Finally, I may want to adjust the price of an item. Given a new price, I will want the system to lock the Units figure and generate a new Revenue figure.
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