Merchandising · All retail

Assortment Rationalization

Long-tail SKUs tying up capital. Ranks by GMROI, proposes cuts and adds.

Target KPI GMROI
Executes in ≤ 48 hours
System of record Blue Yonder · SAP · Relex
Trigger condition

Bottom-quartile GMROI SKUs hold more than 15% of category inventory value across two consecutive review cycles.

Write-back

Delist flags set in SAP article master; assortment plan updated in Blue Yonder; Relex forecast scope adjusted.

Every write is gated on an approver role you name. Nothing runs unattended.

Procedure
  1. Rank every SKU in the category by GMROI, adjusted for seasonality and days on shelf.
  2. Separate genuine long tail from destination items that carry basket value they do not capture themselves.
  3. Model the space release: what the freed facings and capital would earn reallocated to the top quartile.
  4. Open a case to the category merchant with a cut list and an add list, gated on approval.
  5. Close when category GMROI improves against the pre-change baseline and no protected item lost distribution.
Outcome metric

Category GMROI over 90 days vs. baseline, net of the basket effect on delisted destination items. Positive at a full point of GMROI.

The case closes on this number, not on the action being taken. A playbook without a close condition is a dashboard.

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