Impact of Supply Chain Management on Consumer Loyalty in ABRL More

 Executive Summary

As a part of my MBA curriculum I have done Dissertation report on Aditya Birla Retail Ltd More. In this dissertation report I have identified some problems and provided some recommendations to the company to boost the sales of company products and how to tap new competitor.

Retailing is emerging as a sunrise industry in India and is presently the largest employer after agriculture. In the year 2004, the size of Indian organized retail industry was Rs 28,000 Crore, which was only 3% of the total retailing market. Retailing in its present form started in the latter half of 20th Century in USA and Europe and today constitutes 20% of US GDP. It is the 3rd largest employer segment in USA. Organized retailing in India is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1, 00,000 Crore by 2010. The contribution of organized retail is expected to rise from 3% to 9% by the end of the decade.

Despite of these estimation and growth factors Indian retail industry is facing very different type of problem like Lack of Infrastructure, Transportation, Supply chain management, Electricity and trained staff for customer services and Immense completion for world leading retailers.

 Objectives:

The use of research is reasonably widespread. The implications may be listed and the study has the following objectives:

To investigate the impact of supply chain management on customer loyalty To investigate the impact of various other variable in association with supply Chain

management variable on customer loyalty

Recommendations:

Recent study on FMCG retail revealed that retailer are able to deliver basic food item like vegetables and fruits at price less than 30% of the price offered by kirana stores or street vendors. Such benefits can be passed on to customer only if when organized retailers buy in bulk at low cost, process & sell it low margin. Stock piling and urge for more sales for survival and growth call for adopting innovative sales practices for driving customers to have more sales. Big retails like Big Bazaar and Vishal have squeezed their margin on essential food and commodities and practicing frequent promotional program like as Big Bazaar “Maha Kumbh on Occasion of 15th August.

Applications to increase operational efficiency- as a retailer business organization focus on loss prevention, decreases theft, reduce shrinkage or handle customer returns, it is important to divert the IT budget towards implementing/enhancing the systems which increases the operational efficiency. Like as we have observed that the more IT applications are not enough good to survive in this stiff competition market. It usually hangs when too much rush of the customer in the evening.

Need to improve Supply Chain Management and Inventory handling system. The focus should be also on inventory optimization as inventory in cash. Having a real time demand driven supply chain and storage application will go long way in delivering better and faster turnovers by which operational efficiency can be increased. It is good thing that ABRL has a good SCM but need to improve in inventory management system. Example:-  In July month there was a good scheme “July mein Dhulai Offer scheme includes Combo packs but there was not enough stock of Soya Oil, Flour, Amira Rice etc. which is not Fault of Operation level staff but need to improve the inventory handling system.

ABRL is also facing the problem of effective supply chain management and logistics problem. They are not able to predict the customer demand over a period of time so they are not able to supply that much to meet the customer demand.

They are also facing the problem in different area like quality of fruits and vegetable at their store. Generally customers find rotten or very low quality products, so it cause problem in customer loyalty. They should also focus on this department to improve the quality of the products.

1. Supply chain management of ABRL MORE is not so much good, which is needed for a effective retailer in current time to match the demand and supply of the market. So the customers are facing the problem of availability of products at store. It should be maintained properly to deliver value to the customer.

2. Inventory management of ABRL MORE is also not so much good. During the study we have found the store level management sends or updates the information of available products and needed products not on time. So they are not forecasting the demand that’s why are not able to meet the supply.

3. Need to hire trained employees for floor level (CSA) Staff; because during data analysis we have observed that the CSAs are not performing their job very well. They are just doing their work; they are not dedicated to their work. Sometimes when customer asks to do home delivery than began to conflicting with each other that he would be go it is not his duty. So if they are not able to do home delivery than it should be removed from services and should focus on our core competencies which are winning age over the competitors.

4. Time should be reduced in delivering the gifts and other products in a particular scheme, because it irritates the customer because they have to come again and again for getting the gifts.

5. ABRL should follow some particular strategy like as EDLP, not for every day but may follow on particular scheme time instead of giving assured gifts. It increase the variable cost of the company  like as Cost of Gifts, Cost of Paper for records and receipts, cost of employee for maintain the records, huge amount of Advertisements etc. It wastes lot of time and engage some staff also.

6. Availability of fruit and vegetables item should be increased. We observed at different store that the amount of fruits are not enough and variety is also very less. It means fewer choices for customer to select and divert towards to our competitors. Directly affects our footfall and customer low loyalty.

Limitations:

Like all research works this study or report has some limitations

1. The data which have collected during from stores and concluded that loyalty of customer is affected by supply chain management and others variables. But it may be also that the customer has not given the right feedback which needed to make this study much accurate and reliable. In recent study on Extra Future store by renowned consulting company showed that the new technology increases customer loyalty. The share of new customer in this supermarket stands at over 30 percent. It’s a very good sign to retailers in this uncertain time.

2. Few data and examples are taken from internet or from secondary resources, it is not necessary that they are true in real life scenario. This data is used to correlate the impact of actual data to collected data from retail stores.

 

Conclusion:

We have analyzing the data and information we came to know that the hypothesis which we created and checking was significantly impact on the customer loyalty. But the other variable like environment of the store, friendliness of the staff with customer, price, quality of the products etc. The main hypothesis which have selected is H1 which predicts that the there is a significant or positive relation between two variable. The dependant variable (Customer Loyalty) is significantly impacted by the Independent variable (Supply Chain Management). So the retailer should focus on their supply chain management to meet the customer demand or fluctuation in the demand.

By analyzing all the data and information we have came to know that there is a significant impact of Supply chain management on customer loyalty. If customer don’t find the goods and services which is promised by MORE to be provided at their store and they don’t find, then obliviously customer will got frustrated and they take the action which they find which is suitable for them.

Customer may switch to another retailer or may take from outside. It significantly impact of the sales and revenue of a retailer. When the retailer acquire a new customer it cost very much high rather than keeping the existing one satisfied.

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The above article was extracted from dissertations in Marketing, Finance, Human Resources, Strategy, Information Systems by the students from Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).

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