MIS in Organized Retail Industry

Group 8
Rahul Pahwa 435
Ravi Kr. Ravi 438
Sameer Singh 446
Sushithal Mummadi 447
Amit Kr. Bhatia 457
Arpit Garg 458
Akshit Amla 464
 I bought pair
of Golden What will I
Shoes last do? Shall I
month and they go to the
are worn out store?
already!
 I bought this
pair last month No Worries sir!
and they are We will try to
worn out help you.
already!

STORE
 Jim ,there is a
complaint for one
product of last
month’s shipment.
Can you check? Ron, Let me
check with
warehouse.

STORE

LOGISTICS
 Martha, there
has been some
defects in last
shipment.

Yes I have
received
concerns
from other
centers.

LOGISTICS

WAREHOUSE
 We accept The problem
it. We will was with the
bear the supplies.
costs.

SUPPLIER
MANUFACTURER
We will
notify the
customer
WAREHOUSE
I am glad as I I will continue
have been to be a
provided a customer of
replacement Golden
pair. Shoes.
Agenda

Use of Information System

• Supply Chain Management
• Inventory Management
• Demand Forecasting
• Purchasing management

Cases in Focus
• Pantaloon
• Wal-Mart
 Organized Retail Industry: An
Introduction
 Retail is an act of selling of goods and merchandise from a
fixed location

 Organised retail sector is driven by the practices of the United

States

 Retail industry as it is considered to be most evolved

[Link]-Mart Stores Inc.
Home Depot
Kroger
Costco
Target
Stages of Retailing
Challenges of Retail
maintaining
cost
the level of
optimization
service
 Indian Retail Industry
Fifth largest in the world.

Comprises of organized and unorganized sectors

One of the fastest growing industries in India.

With growing market demand, the industry is expected

to grow at a pace of 25-30% annually.  

The India retail industry is expected to grow from

Rs. 35,000 crores in 2004-05 to Rs. 109,000 crores
by the year 2010.
IT IN SCM
 SUPPLY CHAIN
SUPPLY CHAIN may be defined as the series of companies
that eventually make products and services available to
consumers, including all of the functions enabling the
production, delivery, and recycling of materials, components,
end products and services

SCM-Process flows
OPERATIONS TECHNOLOGY

Material
Supplies I Production Distribution
storage

MATERIALS FLOW

CASH
Suppliers II Customers

INFORMATION FLOW

Supply Production Production Sales

Planning scheduling planning forecasting
INFORMATION TECHNOLOGY
Supply Chain Management

Efficient integration of suppliers,

factories, warehouses and stores

Minimization of total system cost

Satisfaction of customer service

requirements

Value-enhancing and long-term

benefit for the organisation
SUPPLY CHAIN MANAGEMENT
Role of SCM
Trends in Supply Chain Management
 IT used in various areas of SCM

Purchasing Demand Performance

Department Forecasting Evaluation

Inventory Implementation
Management of JIT
 IT in Forecasting Demand
 Goal is to minimize the error in forecasting

 All the factors effecting demand are taken

 Some of the forecasting software's used are

Forecast Pro Software
Smart Software

 Some of the software's vendors are

Business Forecast Sys. (Forecast System Pro)
Smart Software Inc
 Various Forecasting
Techniques

Weighted
Exponential
Delphi method moving
smoothening
average

Jury of Simple
Regression
executive average
analysis
method forecasting

Sales force Consumer

opinion survey
IT in Purchasing Department
 IT in Purchasing Department
Electronic Data Interchange

Buyer can get in contact to number of suppliers

Material User initiates the purchase

Connected suppliers get the order to bid upon

This leads to better track ability

IT in Performance Evaluation
 Performance Evaluation

It is the use of statistical evidence to

determine progress toward specific defined
organizational objectives.

Data from Supply Chain Operations

Reference
Performance Measurement
Guidelines

Total SCM cost

Supply Chain production flexibility

Supply chain delivery performance

Supply chain e-business
performance
Supply chain perfect order fulfillment
Inventory Management
 IT in Inventory Management
 Inventory is the raw materials, work-in-process
goods and completely finished goods that are
considered to be the portion of a business's assets
that are ready or will be ready for sale

 IT allows suppliers and buyers to share information

 Some of the Inventory forecasting software:

 Cases in Focus
• Pantaloon

• Wal-mart
 Pantaloon Retail

Part of the Future Group

Over 1,000 stores across 71 cities in India

and employs over 30,000 people

As of 2010, it is India’s largest listed retailer

by market capitalization and revenue
 Pantaloon
Pantaloon
Retail

Lifestyle Entertainme
Retailing Value nt, Leisure
Retailing

Big Food
Pantaloon Central MeLA e-Zone Bazaar Bazaar
 AS-IS TO-BE Analysis

-I s To-B
A s e
• Earlier PRIL had used IT • In 2005, PRIL entered into
solutions like Virtual Private an alliance with SAP to
Network (VPN) to handled implement my SAP business
heavy traffic of data, voice suite
and video • SAP Advanced Planning
• Most of these IT solutions Tools (for merchandise
were developed in-house planning) and SAP Apparel
and were not enough to and Footwear
support the company’s
changing requirements
 Pantaloon Retail

Challenges
• Need of a Robust transaction
management system and an enterprise
wide platform to run the operations.
• Bring all of its businesses and
processes together.
Solutions Adopted
• SAP
 Three Phases of
SAP implementation

• The first phase involved blueprinting existing processes and mapping them to
the desired state.

In this phase, the entire project team worked on current processes within the
structure of the organization, analyzed and drafted them. This blueprint was
later used in the formation of new states of the solution.

• In the second phase, the SAP platform was developed with the help of
Novasoft’s template which was predefined by SAP after evaluation of
Pantaloon’s needs and expertise in retail solutions.

• The last phase in this project was for stores to switch over to the new system
and for current data to be ported.
Before the SAP implementation, all the data was unorganized. This data had
to be migrated to the new SAP application.
 Vendors and Cost for
SAP system in Pantaloon
SAP team with the help of Nova soft , a
Singapore company in 2005

Number of users : Around 1,200

employees

Time for Implementation : About six

months

Cost of implementation : About $10

million
 Pantaloon Retail
Challenges
 Data migration & managing the interim period when
the project was underway

Benefits
 Lower costs via convergence of financial accounting
and controlling
 ROI-Too early to calculate
 Pantaloon Retail

Challenges
• Differentiate themselves in the
marketplace
• Automate the entire supply chain from
suppliers to warehouse to stores, and
make it transparent.
Solutions Adopted
• RFID
The retail 40%.

New Innovations in Retail

 RFID (Radio Frequency Identification)
RFID Technology
Radio frequency identification (RFID) is a
technology through which stored data can be
remotely retrieved.

RFID technology uses a small device called a

tag which contains a microchip and an
antenna.

The commonly used identification method is to

store a serial number that identifies a person
or object, and perhaps other information, on a
microchip that is attached to an antenna

Proactively detects when an order is over,

short, damaged, or incorrect
 Applications of RFID
 Asset management
 Production Tracking
 Inventory Control
 Shipping & Receiving
 Regulatory Compliance
 Returns & Recall Management
 Service and Warranty Authorizations
 Transportation
Applications of RFID in
Retail
 Vendors
Check point systems

Texas Instruments (chips)

SAP (software)

Sun Microsystems (software)

TrenStar (software, asset management),

Philips Semiconductor (chips)

SAMSys (readers)

Applied Wireless Identification (handheld scanners and readers)

Cost of RFID tag = $0.20 to $0.25 each

 Vendor and Cost for RFID
Technology
The RFID application was developed by Wipro InfoTech and
was first implement at PRIL’s central warehouse and
manufacturing facility at Tarapur.

Project cost was around Rs. 3 million.

Four months to implement the pilot project.

Each RFID tag could hold 5 KB of memory.

 Pantaloon Retail
Benefits of Using RFID

 Smoothness at the inward and outward terminals, which

helped save time and gain accuracy

 The time saved is about 80 percent in inward warehouse

processing and 12 percent in outward

 Real-time visibility of items during all stages of the supply

chain improved to 98 percent.
 Pantaloon Retail

Challenges
• Coordinate manager workloads,
communication and inventory
information
• Encourage in-store compliance with
corporate marketing strategies.
Solutions Adopted
• Reflexis’ retail execution management
system
 Pantaloon Retail

Benefits

[Link] in customer service and

employee productivity through increased visibility
into store-level completion and compliance status

[Link] productivity of merchandising, field, and

store management; and increased sales and
profitability.
 Wal-Mart
 American public corporation that runs a chain of large,
discount department stores

 Largest public corporation by revenue, according to the

2008 Fortune Global 500

 The largest grocery retailer in the United States

 Wal-Mart

Challenges
• Offering best price to its customer
due to price war
• Need to increase inventory
turnover rate
Solutions Adopted
• RFID
 Wal-Mart

Benefits
It enabled the packaging department to get accurate information such as
storage, packaging & shipping, thus saving time in unnecessary
paperwork.

It enabled supervisors to monitor their employees closely in order to

guide them & give directions.

It enabled Wal-Mart to satisfy customer needs quickly & improve level of

efficiency of distribution center management operations.

Usage of RFID has reduced out-of-stock merchandise by 16%

 Wal-Mart

Challenges

●
Huge inventory due to delayed sharing of information with suppliers
●
High carrying cost for both retailer and supplier

Solutions Adopted

●
CPFR
 Wal-Mart

Benefits of CPFR

Reduction in inventory(bullwhip effect)

Real-time sharing of information

Implementation of JIT
Information System Vendors in
Asia
The vendors with in depth knowledge of the local retail
environment are:

●
Polaris Retail Infotech Ltd
●
Quadrant Infotech India Pvt. Ltd.
●
Trident Information Systems Pvt. Ltd
●
Trisoft Systems

Some of the local Chinese vendors are:

●
E-Future
●
Chyangyi
●
Ufsoft
●
Royalstone
 CPFR Technology

Collaborative planning, forecasting and replenishment

Developed by the Voluntary Inter-industry Commerce Standards

Organization (VICS)

CPFR is the sharing of business information such as promotional

planning and merchandising planning among the business chain
partners for errorless forecasting and automatic replenishment of
goods.
CPFR Model
Future of Retail Industry in India
Expected to go up to US$ 833 billion by the year 2013. It is further
expected to reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%.

In the last four year, the consumer spending in India climbed up to 75%.
As a result, the India retail industry is expected to grow further in the future
days.

By the year 2013, the organized sector is also expected to grow at a

CAGR of 40%
Future of Retail Industry(Global)

Online shopping will be a key component of business such that it

will contribute around 11% of total revenue when considered on
industry wide level.

Need of the hour is to have that the visibility of this convergence by

retailers and before treading on the path of any technology
upgrades, they foresee the integration challenges.