Westan Stock Holding Review and Write Down Policy
Effective: 1 April 2023
Level of Application: All new stock received as of Effective Date
Actioned by: Procurement
Review Cycle: Every 90 days
Green Flag (continue)
Flag Condition: sell rate for the last 30 days ≥ 33% of current stock holding in item [sell through in less than 90 days].
Ordering: Reordering as per usual.
Impairment: No impairment.
Sales Strategy: Sales and inventory management strategy unaffected.
Orange Flag (pause)
Flag Condition: sell rate for the last 30 days < 33% of current stock holding in item [sell through in more than 90 days].
Escalation Point: Product Manager. Head of Product Commercial / Consumer.
Ordering: On pause or reduced effective immediately.
Impairment: No impairment.
Sales Strategy: Product Manager to implement sales strategy to clear stock.
Orange Flag Items Review Timing: Every 30 days
Reviewers: Supply Chain Manager + Product Manager
Review Action:
- Revert to Green Flag: Last month's sales ≥ 33% of current stock holding [sell through in less than 90 days].
- Remain Orange Flag: Last month's sales < 33% of current stock holding [sell through in more than 90 days].
Red Flag (stop)
Flag Condition: items currently on Orange Flag; AND sell rate for the last month < 17% of current stock holding of current stock holding [sell through in more than 180 days].
Escalation Point: Management. Head of Product Commercial / Consumer. Product Manager.
Ordering: No reordering effective immediately. Possible vendor obligations will need to be managed on a case-by-case basis.
Impairment: Stock may be impaired by Management. Decision to take impairment to be made on a case-by-case basis by Management.
Sales Strategy: Product Manager to implement aggressive sales strategy to clear stock.
Reviewers: Supply Chain Manager. Product Manager. Head of Product Commercial / Consumer.
Review timeline: Every 30 days
Review action:
- Revert to Green Flag: Last month's sales ≥ 33% of current stock holding [sell through in less than 90 days].
- Revert to Orange Flag: Last month's sales is 17 - 33% of current stock holding [sell through in 90 - 180 days].
- Remain Red Flag: Last month's sales < 17% of current stock holding [sell through in more than 180 days]. Possible further impairment / continued write down in line with item's agreed impairment plan.
270 Day Assessment
Impairment: Product Manager request for impairment must be backed by market intelligence and analysis of competition, particularly in regard to write downs to match pricing.
Stock Purchase Policy
Effective: 1 April 2023
Level of Application: Purchase orders received as of Effective Date
Review Cycle: Every Purchase Order
Supply Chain Manager to review purchase order quantities based on below sell through, taking into account vendor and/or logistics requirements:
- Sonos: 45 days
- Epson: 30 days / special order items on occasion
- Samsung: 30 days
- Whatmough: 45 days (?)
- Plinius: special order only - purchase order required
- TCL: indent only - purchase order required
- InFocus: indent only - purchase order required
- Aurora: special order only - purchase order required
- Kandao: 60 days (?)
- Philips BDL: 60 days (?)
- Philips HFL: 60 days (?) / special order items on occasion
- Sound United (Polk, Definitive Technology, Denon, Marantz): 60 days (?)
- Kramer: 60 days (?)
Project Non-refundable Deposit Policy
- 30% deposits required on special orders for:
- Aurora projects
- Unique products (e.g. Epson made-to-order, large Philips projects of indent-only items, substantial InFocus projects, etc.)
- 10-15% non-refundable deposit where there exists a possibility of clearing product elsewhere (case-by-case review by Product Manager at point of order).
- SCM Stock Holding Report