PARETO

POLICY OBJECTIVE (S)

THE HIGH LEVEL DESIRED OUTCOME (S) RESULTING FROM THE IMPLEMENTATION OF THE POLICY AND / OR THE REASONS WHY THIS OUTCOME (S) IS NECESSARY.

The Pareto methodology must be used to ensure that sales data is used to discontinue selling poor performing products and to continue selling good performing products.

POLICY

THE ACTION (S) THAT NEEDS TO TAKE PLACE AND / OR THE STANDARD THAT NEEDS TO BE ACHIEVED IN ORDER TO ACHIEVE THE POLICY OBJECTIVES.

A Pareto should be performed every 6 months to ensure that poor sellers are discontinued from being sold in the outlet.

PERSON RESPONSIBLE (ACCOUNTABILITY)

Bold = Responsible Person (s)

Store Manager	Supervisor	Cashier
Forecourt Attendant	Shop Assistant	Kitchen Assistant
Site Administration	Site Finance	Product Administrator (MSO)
Dealer / Franchisee	Regional Business Manager (MSO)	Country Manager (MSO)

FREQUENCY OF POLICY IMPLEMENTATION

Bold = Frequency (s)

Daily	Weekly	Monthly
Start Up / Once Off	Ad Hoc	Recurring

ABBREVIATIONS & DEFINITIONS

PARETO ANALYSIS

A data-based approach to understanding sales and how to optimise the sales mix of products in an outlet.

POLICY IMPLEMENTATION

PROCEDURES / ACTIVITIES / STEPS THAT NEED TO BE COMPLETED SEQUENTIALLY TO ACHIEVE THE POLICY OBJECTIVES.
THE POLICY IMPLEMENTATION FORMS THE BASIS FOR BUSINESS REVIEWS.

1. Every 6 months a Pareto Analysis must be run in the outlet
2. When doing a Pareto Analysis ensure that the following are considered:
   1. The outlet has clean data to use
   2. Use a period of sales that represent at least a months worth of data
   3. All remaining products must be part of a range.  ie:  Don’t eradicate all muffins except the Choc Chip Muffin
   4. Pareto is a science but you have to also apply a bit of the art of retail to your thinking.  eg:  Poor sellers might not bring in a lot of income but might be companions to some of your good selling products.
3. When products are discontinued:
   1. First confirm that the product is not a core product.  Core products may not be discontinued.
   2. Remember that you might have to ‘sell out’ discontinued products first before you can stop selling them in your outlet
   3. Inform the ordering clerk to stop ordering ingredients associated with discontinued products
   4. Remove signage that might relate to the discontinued products
   5. Remove the discontinued product from your point of sale.  Mark as ‘inactive’.

TOOLS

JOB AIDS / CHECKLISTS / USER GUIDES / DEVICES / SIGNAGE THAT ARE NEEDED TO IMPLEMENT THE POLICY.

Pareto Template

TRAINING

Management Training