MIS in Organized Retail IndustryGroup 8 Rahul Pahwa Ravi Kr. Ravi Sameer Singh Sushithal Mummadi Amit Kr. Bhatia Arpit Garg Akshit Amla 435 438 446 447 457 458 464 STORE STORE LOGISTICS LOGISTICS WAREHOUSE SUPPLIER MANUFACTURER WAREHOUSE 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 e.g. Wal-Mart Stores Inc. Home Depot Kroger Costco Target Stages of Retailing Challenges of Retail cost optimization maintaining the level of service Indian Retail Industry Fift l r st i t w rld. C mpris s s ct rs f r iz d d u r iz d O ft f st st r wi i dustri s i I di . Wit r wi xp ct d t u lly. m rk t d m d, t r w t p c i dustry is f 25-30% 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. 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 Supplies I Material storage Production Distribution MATERIALS FLOW CASH Suppliers II Customers INFORMATION FLOW Supply Planning Production scheduling Production planning Sales forecasting INFORMATION TECHNOLOGY Supply Chain Management Efficient integration of suppliers, factories, arehouses an stores Minimization of total system cost Satisfaction of customer service requirements Value-enhancing an long-term benefit for the organisation SUPPLY CHAIN MANAGEMENT Role of SCM Trends in Supply Chain Management Deman Forecasting Purchasing Department Performance Evaluation Inventory Management Implementation of JIT 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 Delphi method Weighted moving average Exponential smoothening Jury of executive method Simple average forecasting Regression analysis Sales force opinion Consumer survey 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 Performance Evaluation It is the use of statistical evi ence to etermine progress to ar specific efine organizational objectives. Data from Supply Chain Operations Reference Performance Measurement Guidelines Total SCM cost Supply Chain pro uction flexibility Supply chain elivery performance Supply chain e-business performance Supply chain perfect or er fulfillment 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 In ia an employs over 30,000 people As of 2010, it is In ia¶s largest liste retailer by market capitalization an revenue Pantaloon Pantaloon Retail Lifestyle Retailing Value Retailing Entertainme nt, Leisure Pantaloon Central MeLA e-Zone Big Bazaar Foo Bazaar AS-IS TO-BE Analysis Earlier PRIL ha use IT solutions like Virtual Private Net ork (VPN) to han le heavy traffic of ata, voice an vi eo Most of these IT solutions ere evelope in-house ere not enough to an support the company¶s changing requirements In 2005, PRIL entere into an alliance ith SAP to implement my SAP business suite SAP A vance Planning Tools (for merchan ise planning) an SAP Apparel an Foot ear Pantaloon Retail Challenges Nee of a Robust transaction management system an an enterprise i e platform to run the operations. Bring all of its businesses an processes together. Solutions A opte SAP Three Phases of SAP implementation The first phase involve blueprinting existing processes an mapping them to the esire state. In this phase, the entire project team orke on current processes ithin the structure of the organization, analyze an rafte them. This blueprint as later use in the formation of ne states of the solution. In the secon phase, the SAP platform as evelope ith the help of Novasoft¶s template hich as pre efine by SAP after evaluation of Pantaloon¶s nee s an expertise in retail solutions. The last phase in this project as for stores to s itch over to the ne system an for current ata to be porte . Before the SAP implementation, all the ata as unorganize . This ata ha to be migrate to the ne SAP application. Vendors and Cost for SAP system in Pantaloon SAP team ith the help of Nova soft , a Singapore company in 2005 Number of users : Aroun 1,200 employees Time for Implementation : About six months Cost of implementation : About $10 million Pantaloon Retail Challenges Data migration & managing the interim perio the project as un er ay hen Benefits Lo er costs via convergence of financial accounting an controlling ROI-Too early to calculate Pantaloon Retail Challenges Differentiate themselves in the marketplace Automate the entire supply chain from suppliers to arehouse to stores, an make it transparent. Solutions A opte RFID The retail 40%. RFID (Radio Frequency Identification) RFID Technology Ra io frequency i entification (RFID) is a technology through hich store ata can be remotely retrieve . RFID technology uses a small evice calle a tag hich contains a microchip an an antenna. The commonly use i entification metho is to store a serial number that i entifies a person or object, an perhaps other information, on a microchip that is attache to an antenna Proactively etects hen an or er is over, short, amage , 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 (soft are) Sun Microsystems (soft are) TrenStar (soft are, asset management), Philips Semicon uctor (chips) SAMSys (rea ers) Applie Wireless I entification (han hel scanners an rea ers) Cost of RFID tag = $0.20 to $0.25 each Vendor and Cost for RFID Technology The RFID application as evelope by Wipro InfoTech an as first implement at PRIL¶s central arehouse an manufacturing facility at Tarapur. Project cost as aroun Rs. 3 million. Four months to implement the pilot project. Each RFID tag coul hol 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 Coor inate manager orkloa s, communication an inventory information Encourage in-store compliance ith corporate marketing strategies. Solutions Adopted Reflexis¶ retail execution management system Pantaloon Retail Benefits 1.Improvements in customer service an employee pro uctivity through increase visibility into storelevel completion an compliance status 2.Higher pro uctivity of merchan ising, fiel , an store management; an increase sales an 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 ue to price ar Nee to increase inventory turnover rate Solutions A opte RFID Wal-Mart Benefits It enable the packaging epartment to get accurate information such as storage, packaging & shipping, thus saving time in unnecessary paper ork. It enable supervisors to monitor their employees closely in or er to gui e them & give irections. It enable Wal-Mart to satisfy customer nee s quickly & improve level of efficiency of istribution center management operations. Usage of RFID has re uce out-of-stock merchan ise by 16% Wal-Mart Challenges Huge inventory ue to elaye sharing of information ith suppliers High carrying cost for both retailer an supplier Solutions A opte CPFR Wal-Mart Benefits of CPFR Re uction in inventory(bull hip effect) Real-time sharing of information Implementation of JIT Information System Vendors in Asia The ven ors ith in epth kno le ge 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 ven ors are: E-Future Chyangyi Ufsoft Royalstone CPFR Technology Collaborative planning, forecasting an replenishment Develope by the Voluntary Inter-in ustry Commerce Stan ar s Organization (VICS) CPFR is the sharing of business information such as promotional planning an merchan ising planning among the business chain partners for errorless forecasting an automatic replenishment of goo s. CPFR Model Future of Retail Industry in India Expecte to go up to US$ 833 billion by the year 2013. It is further expecte to reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%. In the last four year, the consumer spen ing in In ia climbe up to 75%. As a result, the In ia retail in ustry is expecte to gro further in the future ays. By the year 2013, the organize sector is also expecte to gro at a CAGR of 40% Future of Retail Industry(Global) The key challenge ill be to source, evelop or eploy Basic operational information systems like Computerize Inventory Management . back ar an for ar integration capabilities. More an more retailers ill look to iverge to all the ifferent formats an likely to create synergy bet een these ifferent formats so as to reach to the same customer at all times .. Online shopping ill be a key component of business such that it ill contribute aroun 11% of total revenue hen consi ere on in ustry i e level. Nee of the hour is to have that the visibility of this convergence by retailers an before trea ing on the path of any technology upgra es, they foresee the integration challenges.