When to Do SSOs (Store-Specific Orders)
What Is an SSO?
A Store-Specific Order (SSO) is needed to combat unexpected store out-of-stocks. It can also be used to stock stores in anticipation of promotional or seasonal events. An SSO is usually requested by the buyer or replenishment manager, but the analysis of which stores need inventory and how much is often left up to the supplier. Most requests for SSOs will be either type 03 or type 07 orders. The key difference here is the method of processing orders. Type 03 orders go to the distribution center (DC) as opposed to type 07 orders which go to the store directly. Walmart will let you know which one you need when they request an SSO or approve an SSO recommendation.
What Needs to Go on a Walmart SSO?
Walmart provides a spreadsheet in Retail Link under Retail Link Documents ► Supplier Replenishment Information ► SSO Form. The template has different fields required for different circumstances, and you must enable macros for the spreadsheet to function. In addition to the store/quantity order combinations and standard item information (i.e. Department, Vendor Number, Vendor Name, etc.), for Domestic SSOs, you will need the correct PO type, event code, event week, and whether the order is prepaid or collect. Additionally, your SSO can be rejected if the form doesn’t contain the must arrive by date (MABD), the ship date, and the cancel date. You must also complete the SSO Summary table for final approval.
So When Should I Do an SSO?
There are many reasons for creating a store-specific order, but the main idea is that they are entered when a store needs more product than is currently in the pipeline. Here are some reasons for creating an SSO:
Short Supply SSO
The most common reason is you simply ran out of product. When this happens, you’ll likely need to check your replenishment strategy and stay on top of out-of-stock root causes. However, this can also happen for a number of reasons out of your control, such as a temporary lack of competition (e.g. your competition was out of stock). So, if Fizzy Lifting Drink soda runs out because of markdowns on that product, then your product, Bubbly Delight soda, maybe someone’s next choice.
Committed Buy SSO
A “committed buy” SSO occurs when Walmart guarantees to buy a certain number of units. For example, Walmart may want to buy your soda cans with post-season team logos printed on them, during the playoffs. They may want to put this additional product on an end cap or in action alley, so as to not take up space from other year-round soda.
Typically, Walmart will provide a quantity that they are committing to buy for a set period of time. You are then responsible for submitting multiple SSOs throughout that period of time to exhaust the inventory. For example, if Walmart commits to purchasing 10,000 units of your soda over three months, you may be expected to submit three SSOs (once per month) with the “correct” store/order quantity combinations. You have to be careful calculating these SSOs, however. You don’t want to script too little at the start of the program and then run out prematurely, causing poor instocks early on. You may also be stuck with too many products at the end of the program. At the same time, you don’t want to script too much in the beginning and causing overstocks in the stores and possible markdowns later on.
Seasonal SSOs happen when you know demand will increase more than what is represented in your forecast. For example, your sales analysis shows that your brand is expected to be especially popular (more than usual) next month due to a recent viral video of a Heisman trophy winner drinking your soda on social media. Because this unexpected spike is likely unaccounted for in your demand forecast, you could recommend an SSO to Walmart for a number of units you believe you will sell in excess of the current forecast. The difference between a committed SSO and a seasonal SSO is that a seasonal SSO is a recommendation to Walmart showing the number of units you expect to sell in addition to the forecast. Head’s up – Walmart may prefer to work with you to adjust their seasonal forecast, rather than accept an SSO. It is always best to work directly with your replenishment team to develop a strategy that works for everyone!
A promotional SSO is slightly different from seasonal SSOs in that it comes at a time when you want to encourage sales of a particular product. For example, selling a promotional product in Walmart stores. In this case, you may have a soda can with the championship winner’s logo, that Walmart has committed to placing in-store immediately after the game. Typically, you will work with the Walmart buying team before creating a promotional SSO on expected quantities, the number of stores, etc.
With this SSO, you may want to implement an order when your product has become damaged or otherwise unsellable, and you need to replace the damaged inventory quickly. An example would be that all of your cans of soda exploded due to weather changes. As before, your demand forecast likely does not take unexpected damages into account; thus, you will need to recommend orders to refill the pipeline and ensure your stores do not suffer from out-of-stocks.
Why Are SSOs So Hard?
SSOs are definitely a pain! You need to work diligently in Retail Link to pull relevant DSS reports. Next, you’ll need to manually combine them in Excel. There are a number of factors that will go into prioritizing inventory that gets sent to stores; for example:
- Inventory in pipe
- Historical sales velocity
- Next four weeks’ average forecast
- Inventory available at your warehouse
Additionally, you will need to do conversions for units to warehouse packs to vendor packs to ensure all stores in need get at least one warehouse-pack and all distribution centers receive orders that are incremented by vendor pack.
Finally, you have to “translate” all your work into the Walmart template noted above (filling in 3 tabs at the minimum), ensuring everything is input correctly and accurately. And if you have multiple items that need SSOs, you have to repeat the entire process again and again!
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Written by The SupplyPike Team
About The SupplyPike Team
SupplyPike builds software to help retail suppliers fight deductions, meet compliance standards, and dig down to root cause issues in their supply chain.Read More