The Future of Suters Ltd - Presentation by David Suter, Managing Director in 1968
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I have recently been talking to senior staff about the activities, structure of management, and future of the Company, and am now taking the opportunity of putting, briefly, the content of these talks to you.
The Executive & The Board of Directors
In February this year the four senior Directors (Arthur, Clarence, Frank and John) passed the reins of management to four junior Directors, (David, Tom, Anthony [Tony] and Ian) who were instructed to act as the executive of the business. The duties of those four Directors were to be decided upon by a Managing Director (David) who reports monthly on their activities to the full Board of Directors.
The Executive is reponsible for short and long term policy, and for the day to day management of the Company so long as certain financial arrangements are not exceeded.
The Management Plan
The first job to be done on the 1st February 1968 was to decide the responsibilities of the members of the Executive. This meant that a new management structure had to be considered so that our activities could become more efficient. I felt there was a need to strengthen the purchasing power of the buyers and that costs were being duplicated because our two stores were being run as separate units, with different public images.
The conclusion I reached was that the higher levels of management should be directly concerned with the activities at both branches and that that the same policies should be followed throughout the Company.
The job that each member of the Executive was given was one which could be applied to one major activity of the Company as distinct from the previous arrangement where one branch and its activities tended to be the responsibility of one person.
The functions of the Executive are shown on the flow chart, which shows the areas of responsibilty for each sector of the business.
Management Flow Chart
This chart is intended to be an aid to understanding the processes by which decisions are made and communicated throughout the business. Even in its present state it has not been fully achieved but with passage of time I would expect one buyer to be responsible for his/her departments at both branches.
Also, in time many other activities, for example, deliveries, display, and marking-off, will be centralised which should result in some substantial savings.
At present our staff costs are high compared with other similar stores and it is only by increasing the effectiveness of our work that we can expect to increase our earnings.
It is intended to have a definite personnel and salary plan for deciding the type of staff required for each section of the business and it will be the responsibility of the manager in charge of each section to keep his complement of staff within the agreed limit and to make his section as effective as possible.
The store management function will be resonsible for providing suitable personnel within the limits agreed with the section managers and this, with the responsibility of organising an efficient and happy store, will be store managent's main concern. They will handle such things as customer complaints, deliveries, goods inwards, maintenance and security.
Their activities are diverse and at all time must expect due consideration for their views from those whose main interests lie in the other functions, i.e. merchandising, sales promotion and finance and control.
In the merchandising function there are five merchandise controllers under the direction of the Merchandise Director. (Tom) Their areas of responsibility are sfown on the second chart.
The objective of merchandising is to provide an ideal assortment which will mean the anticipation of customers needs by accurate forecasts of how much will be required in kinds of goods, qualities, styles and prices. To do this we shall require much fuller information and we shall set up systems for making assortment and unit sales plans, for planning purchases by price lines within classifications, for ordereing merchandise in the right quantities for delivery at the right time, for selecting suitable items for sales promotions and, of course, getting rid of the slow moving lines.
Without the interest and involvement of all sales staff nothing can be achieved and controllers, buyers and department managers should ensure that all their staff understand what they are doing. This can be done by talks, general discussions and reading.
It is not sufficiently appreciated that with customers is nearly always on the sales floor and that the opinion and comments of the sales staff can form an important part of decisions made at higher levels. This is particularly true in the merchandising section where full details of customers requirements, especially of items not in stock, are essential for good buying. It is for this reason that we have introduced the system for recording customer 'wants' of merchandise not in stock simply by entering the item in the Special Order Book, writing 'Stock' beside it.
Sales Promotion has the function of providing the initial contacts with all consumers. Its aim is to attract attention and arouse interestin the store, its merchandise and services.
Customers are to be given the impression that they will be welcomed and that they will receive better attention at Suters than at any other store. We must let them see that our standard of integrity is high and that Suters give real value.
Sales Promotion is not merely putting the Company's name in the newspaper each week but is a combination of advertising, window displays, internal and counter displays, public relations and an attitude of mind for every employee to promote the products sold by the Company.
It requires the effort of everyone to carry this out by suggesting suitable items for special promotions and by being prepared to suggest new ideas.
At present our interior displays need improving - a good display can sell more merchandise with less stock. From time to time store themes, either of colour or subject, will be introduced.
We have also a lot of work to do to improve the information shown on showcards and tickets throughout both stores.
Staff training is also the responsibility of Sales Promotion because it is mainly concerned with our sales activities. However, every member of the service sections must be prepared to improve their knowledge of their own activities and should be prepared to go on suitable courses.
Finance & Control
The Finance and Control function has to supply the services that handle the money side of the business, such as wages, change, internal checks, accounting and, of course, information.
At present there are deficiencies in the amount of information provided and it is our intention to produce more detailed figures and to produce them promptly.
As in the case of the functions of all the other sections, it will be essential that full co-operation is carried out with all sections, especially when the analysis of costs is more fully examined.
Future Trends & Management Principles
Retailing is in era of great change. The mass merchandisers such as Marks & Spencer and Tesco, have the benefit of mass production methods, and the big store groups have the purchasing power to buy in bulk and to have bulk deliveries. These adantages enable them to buy cheaper.
We are small compared with the big groups, but large compared with other independent traders so that we can often get a better price because of the size of business we do with the supplier.
Department stores do a relatively small amount, about 5%, of total retail sales compared to the multiples 30%. Mail order business has increased over 80% in the five years between 1961-66.
We cannot therefore expect to compete in price with the bulk purchasers and we must direct our efforts to fill the gaps they leave.
Not everyone wants to look alike - as our prosperity increases people want to be known as individuals and want to express their individuality in the goods they buy - the dresses they wear, in house furnishing and in the gifts they give.
Our job is to supply the 'fashion' conscious (not only in the apparel field) with the non-standard attractive merchandise that they want and to supply the services that make shopping easier - one stop shopping, accounts, deliveries, 'service' selling departments such as Restaurant, Hairdessing, Flowers and Shoe Repairing.
To do this we must seek out the right merchandise and let the staff who are to sell it know what is special about it. We must all understand that economy is not the only buying motive but that comfort, convenience, security, prestige and health can be more or as important to a customer.
We should make full use of these other buying motives because it is to the individualist that they will matter most.
This does not mean, of course that we avoid selling the bread and butter lines but does mean we look for the caviare as well. Nor does it mean that our prices will be higher when compaqred with other shops.
To make a worthwhile profit, however, we must also be an efficient organisation. This means that we must be continually asking ourselves if we could do better - the answer must always be 'YES'.
We can improve our internal organisation, the way we handle our customers, salesmanship, displays, mailing lists, pilferage, pricing policies, expenses, showard and sign writing, buying sources and stock shortgages, to mention but a few.
It will be necessary for us to acquire the knowledge to make these improvements and having made a decision, we must pass it on directly to those whose responsibility it is to make it work, i.e. the staff.
We must plan for the future and detail our proposals for new activities, and find out how much it will cost and what benefits, in terms of £.s.d. there will be.
Panning should be done at least once a year and should be ready at least four months before the start of another year.
It is now widely accepted that all management has to become more scientific. Information is collated in a regular and pre-determined manner. This in its turn leads to less intuitive management, fewer errors and more constructive ideas for improvements.
An Ideal Management Policy
If there can be said to be one, then that known as management by objectives and self-control could well be it.
This means setting up tangible objectives, the attainment of which is measured by the results achieved.
For instance, one objective for store management could be that labour turnover is not more than 30% each year; or for display that four windows are created by each member of staff each week.
When the objective has been set, each manager is given almost complete responsibility to attain his objective and is given a free hand to do this, subject only to general company policy and the measurement of results.
It will take a long time to put such a policy into effect, but it is time to start setting objectives for ourselves. When proper objectives have been found, everyone will have an incentive to achieve the objective without the need for continual supervision.
Source of images, unless otherwise stated - Suter family archives