OPINION Lock, stock and barrel Does your ‘garage’ need emptying of junk ahead of the next selling cycle, asks Steve Reece
RECENTLY I’VE noticed my garage getting more and more full.
Upon closer analysis, it seems everything has a reason of some kind for being there. There are tools which need to be there, car related stuff e.g. oil, screen wash, etc, and an ever increasing mound of junk heading for charity/schools/the dump, or to be used for some mystical future purpose that most likely will never come to fruition. The reality is I need to
be more ruthless clearing out the old crap. It seems like the situation in my garage has something in common with the warehouses of some toy companies.
Of late we have been
asked to help a number of clients to add new, reliable factories to their supplier base. Yet in a couple of cases, when we have done this the client has
one hugely critical truth – excess inventory literally kills toy companies, because it clogs up warehouse space, racks up storage costs and ties up cash.
As a rough rule of thumb, if your
year-end stock holding is below ten per cent of your annual sales, you are doing well.
been reticent to actually place orders. When we looked at
reasons for this, in several cases it was due to full warehouses, over budget storage costs or too much money already tied up in inventory. Let’s be clear on
Moreover clearing it under pressure at the last minute destroys margin/profit.
A number of times we
have performed due diligence for clients looking to buy struggling toy companies, and in
many cases those toy companies have inventory issues which have directly contributed to their demise. If you look at the
companies with the most robust risk management procedures i.e. the major corporate companies, they have ratios and measurable metrics for everything. When it comes to
inventory, these companies have stock holding targets for each month of the year, allowing for peak trading spikes, but creating rigid operating parameters for inventory. In practical terms, and
as a very rough rule of thumb, if your year-end stock holding is below ten
per cent of your annual sales you are doing well, 15 per cent is par for most non corporate companies, and anything over 20 per cent is a problem which should be addressed. These objective measurements are in place to overcome all the lightweight reasons we have for keeping the ‘junk in the garage’ that loiters for spurious reasons. There is no place for sentiment or dithering, clearing stock is critical to ensure the health and onward prosperity of your company. So take a good look,
does your ‘garage’ need emptying of junk ahead of the next selling cycle?
Steve Reece is a leading Consultant in the Toy & Games industry. Contact him via
steve.reece@
vicientertainment.co.uk, or see his blog at
www.stevenreece.com Indian toy industry on the up
As more toy companies export their products into India, the territory’s steady growth is set to continue. Pritam Sarkar from Bureau Veritas Consumer Products Services gives his view
THE INDIAN toy industry is definitely growing and we are witnessing this phenomenon every day in our testing laboratory in Noida. The toy industry has
experienced steady growth in the last decade and this is reflected in the number of samples received for testing. Last year alone we have seen a 20 per cent growth in the number of samples submitted.
Indian manufacturers are becoming increasingly more quality conscious and are heavily focused on meeting the safety requirements of their international buyers. On the domestic market, Indian manufacturers are fighting back imports of cheaper Chinese toys.
Indian manufacturers are fighting back imports of cheaper Chinese toys on the domestic market.
We are undeniably seeing
more and more manufacturers exporting. It is acknowledged that the Indian toy industry presents many competitive advantages including its skilled and educated workforce, its focus on design and innovation, its production adaptability and the variety of the products on offer.
The main export markets
are currently the United States, the UK and Germany. This is reflected in the samples we test in our laboratory.
The main sourcing hubs in
India are Mumbai, Noida, Ahmedabad, Bangalore, Hyderabad and Pune. In our laboratory, we
receive a large volume of plastic, paper-based, wooden and soft toys. There are great things happening in the Indian toy industry at the moment and a real buzz was felt at the Toy Biz Fair at the end of July, at which we exhibited. This year, the event
showcased the latest innovations in toys, from infant products to children’s books through to stationery
Pritam Sarkar is marketing communications manager at Bureau Veritas Consumer Products Services. He can be contacted on
pritam.sarkar@
in.bureauveritas.com. 24 October
www.toynews-online.biz
and arts and crafts products. There was great interest around toy safety and many visitors were asking about compliance strategies for the Indian Standards (IS) and, of course, for the new
chemical requirements of the EU Toy Safety Directive (that came into application on July 20th 2013) which are proving to be challenging for the global toy industry as a whole.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100