mcs presentation retail chain

7/28/2019 MCS Presentation Retail Chain

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CONTROL SYSTEM

FOR A RETAIL CHAIN

Department of Management Sciences (PUMBA)Executive MBA 2010-12

Presented by -Divakar Joshi (524)Anil Kumar (533)Sandip Patil(0540)

Walmik Shelke (0555)


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Retailing is defined as a conclusive set ofactivities or steps used to sell product orservice to consumer for their personal orfamily use.

A retailer is a person, agency, agent,company or organization which isinstrumental in reaching the goods,

merchandise or services to the ultimateconsumer.

RETAILING


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RETAILING FUNCTIONS

SORTING FUNCTION

Marketersrequirements

Large ordersMinimum

customersFew varietiesCash payment

Customers

requirements

Small quantityInformationguidance

large varietiescredit payment

Retailer

Small quantities,

variety andcustomer serviceand education

Bulk buying fromdifferent sources


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RETAILING

Types Of Retail Goods & Services

Durable Goods

Non-Durable Goods Personal Services

Repair services

Hotel Services

Professional Services


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RETAIL MANAGEMENT CONTROL OBJECTIVES

Sales Growth, Market Share

Profit Level, ROI, Efficiency

CUSTOMER satisfaction Total Retail Experience

Store Positioning Up-market, Mid-Priced, DiscountOriented, Mass Market, Niche

Store Value Scale-Quality, price

Store Fashion Scale-Fashion, Style, Assortment Target Market Customer Group To Be Attracted and

Satisfied


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OERVIEW OF RETAIL CHAIN MODEL

CD

ITTS

RSSSTC

SOR

SI

ITTDCRSSRSDC

DCORSTSDCI

PSRSS

RSFPITIIT

RSDCOF

TOFFOF

STDCFI

RSS RMRSDC

RMORMCRRSF

RMIT

CUSTOMER

STOREDISTRIBUTIONCENTER

FACTORY

PROCUREMENT


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CDconsumer demand ,STCsold to consumers

RMITraw material in transit , RSDCrequisition smoothed atdistribution centre

RMraw material (inventory), RMOraw material ordered,

FOFfrom over flow, RMCRraw material consumption rate

OFover flow ,TOFto over flow,IITimport in transit FIfactoryinventory

PITproduct in transit, RSFrequisition smoothed at factory

PSproduction schedule, STDCshipped to distribution centre

SIstore inventory, DCIdistribution centre inventory

STSshipped to store ,ITTDCin transit to distribution centre

SORstore order rate DCORdistribution centre order rate

ITTSin transit to store, RSSrequisition smoothed at store


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Holding Costs Processing costs Cost of products write offs and price reduction Stock out frequency

Delivery reliability Cycle Time Penalty costs Set Up costs

Transportation costs

PERFORMANCE INDICATORS


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Temporary promotion policy Expensive Surplus of stocks Falling retail sales Information Delays

Long lead items planning

COMMON SCENARIO AND PROBLEMS


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10

MCS Tools for Retail

TQM

ERP

JIT


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11

Minimum amount of information

Monitor meaningful activities

Reward meeting or exceedingstandards

Long-term and short-term

Pinpointing exceptions

Timely

EVALUATION AND CONTROL

GUIDELINES FOR PROPER CONTROL:


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ERPERP (Enterprise Resource Planning) systemstypically include the following characteristics:

Finance/AccountingGeneral ledger, payables, cash management,fixed assets, budgeting, consolidation

Human resourcespayroll, training, benefits, 401K, recruiting,diversity managementreceivables

ManufacturingEngineering, bill of materials, work orders,scheduling, capacity, workflow management,quality control, cost management, manufacturingprocess, manufacturing projects, manufacturingflow, activity based costing,product lifecycle management
http://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/General_ledgerhttp://en.wikipedia.org/wiki/Accounts_payablehttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Budgetinghttp://en.wikipedia.org/wiki/Consolidationhttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Employee_benefithttp://en.wikipedia.org/wiki/401Khttp://en.wikipedia.org/wiki/Recruitinghttp://en.wikipedia.org/wiki/Diversity_(business)http://en.wikipedia.org/wiki/Accounts_receivablehttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Bill_of_materialshttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Activity_based_costinghttp://en.wikipedia.org/wiki/Product_lifecycle_managementhttp://en.wikipedia.org/wiki/Product_lifecycle_managementhttp://en.wikipedia.org/wiki/Activity_based_costinghttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Bill_of_materialshttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Accounts_receivablehttp://en.wikipedia.org/wiki/Diversity_(business)http://en.wikipedia.org/wiki/Recruitinghttp://en.wikipedia.org/wiki/401Khttp://en.wikipedia.org/wiki/Employee_benefithttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Consolidationhttp://en.wikipedia.org/wiki/Budgetinghttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Accounts_payablehttp://en.wikipedia.org/wiki/General_ledgerhttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Finance


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ERP

ERP (Enterprise Resource Planning) systems typicallyinclude the following characteristics:

Supply chain managementOrder to cash, inventory, order entry, purchasing,product configurator, supply chain planning, supplierscheduling, inspection of goods, claim processing,commissions

Project management

Costing, billing, time and expense, performance units,activity management

Customer relationship management

Sales and marketing, commissions, service, customer

contact, call center support
http://en.wikipedia.org/wiki/Supply_chain_managementhttp://en.wikipedia.org/wiki/Order_to_cashhttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Purchasinghttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Billinghttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Billinghttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Purchasinghttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Order_to_cashhttp://en.wikipedia.org/wiki/Supply_chain_management


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ERP

ERP (Enterprise Resource Planning) systems typicallyinclude the following characteristics:

Data servicesVarious "selfservice" interfaces for customers,suppliers and/or employees

Access controlManagement of user privileges for various processes
http://en.wikipedia.org/wiki/Access_controlhttp://en.wikipedia.org/wiki/Access_control


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RETAIL LOSS PREVENTION CONTROL

Retail loss prevention (in some retailers known asasset protection) is a form of private investigationinto larceny or theft. The focus of such investigationsgenerally includes shoplifting, package pilferage,embezzlement, credit fraud, and check fraud. "Lossprevention" or "LP" is used to describe a number ofmethods used to reduce the amount of all losses andshrinkage often related to retail trade.

Store personnel that are hired for this task are knownas: loss prevention agents, loss prevention officers,asset protection agents, store detectives, storesecurity etc.
http://en.wikipedia.org/wiki/Larcenyhttp://en.wikipedia.org/wiki/Thefthttp://en.wikipedia.org/wiki/Shopliftinghttp://en.wikipedia.org/wiki/Package_pilferagehttp://en.wikipedia.org/wiki/Embezzlementhttp://en.wikipedia.org/wiki/Credit_card_fraudhttp://en.wikipedia.org/wiki/Check_fraudhttp://en.wikipedia.org/wiki/Shrinkage_(accounting)http://en.wikipedia.org/wiki/Store_detectivehttp://en.wikipedia.org/wiki/Store_detectivehttp://en.wikipedia.org/wiki/Shrinkage_(accounting)http://en.wikipedia.org/wiki/Check_fraudhttp://en.wikipedia.org/wiki/Credit_card_fraudhttp://en.wikipedia.org/wiki/Embezzlementhttp://en.wikipedia.org/wiki/Package_pilferagehttp://en.wikipedia.org/wiki/Shopliftinghttp://en.wikipedia.org/wiki/Thefthttp://en.wikipedia.org/wiki/Larceny


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RETAIL LOSS PREVENTION CONTROL

The objective is to maximize profits through reducinginventory shrinkage, essentially the value of missing

inventory. According to the 2006 National RetailSecurity Survey, retail operations suffered an averageannual inventory shrinkage percentage of 1.57% in2006.1

Although most retailers experience a shrink

percentage of less than 2%, some smaller retailersoften experience monthly and annual averageshrinkage percentages as high as 20%.


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RETAIL INVENTORY CONTROL

Stock management in the retail supply chainfollows the following sequence:

Request for new stock from stores to head office Head office issues purchase orders to the vendor

Vendor ships the goods Warehouse receives the goods Warehouse stocks and distributes to the stores Stores receive the goods

Goods are sold to customers at the stores The management of the inventory in the supplychain involves managing the physical quantitiesas well as the costing of the goods as it flowsthrough the supply chain.


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RETAIL INVENTORY CONTROL

In managing the cost prices of the goodsthroughout the supply chain, several costingmethods are employed:

Retail method Weighted Average Price method FIFO (First In First Out) method chillin LIFO (Last In First Out) method LPP (Last Purchase Price) method BNM (Bottle neck method)


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MONITORING SYSTEM

Daily Income Report Daily Expenditure Report Monthly Income Report Monthly Expenditure Report

Sales Payment Due Report Purchase Payment Due Report Sales Report Purchase Report

Stock Report Foot fall report Fast moving goods Slow moving goods Space utilization Report Counter utilization report


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MCS USED BY ZARA.

MANAGEMENTDECISION

PRODUCTION,INVENTORYCONTROL

DISTRIBUTIONS


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CASE STUDY ,INDITEX SA ZARA ,

FLAGSHIP OF SPANISHRETAIL

MARKET RESEARCH:Close Watch on trends andbuying behavior,Market Research on Univ. Campuses,Discos and organisations.Feedback from the stores,

Sales Report and quantitative comments. Significantinvestment in information technology andcommunication infrastructure for making product andbusiness decisions.

MANAGEMENT DECISION :At HO Regional Manageranalyses the feedback and takes decision regardingfabric cuts ,design, price etc.


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PRODUCTION,INVENTORY CONTROL:Owning capitalintensive manufacturing facilities,sourcing fabrics fromSpain,morocco,India Controls stitching through a

network of sub-contracted workshop.

DISTRIBUTION :State of art distribution facility with200 kms. of underground tracks.


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USE OF IT FOR MCS:Collecting information daily on consumer needstrends and is fed into a database

Designer use this information and sales number tomodify existing designsStandardization of product informationInventory management enables Zara design team to

design fabrics based on available stockFully automated distribution line distributing morethan 60000 products per hour.


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Zara which contributes 80% of the group salesconcentrates on three winning formulae:

1.Short lead time-More fashionable clothes.

2.Lower Quantity- Scarce supply

3.More styles= More choices and more


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PHARMACEUTICAL RETAIL CHAIN

Factory/production unit

Warehouse

Carrying and forwarding agents

Stockist/Distributor

Retailer

Consumer


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CONTROL PARAMETERS

Inventory LevelSales turnoverClosing Stock

PurchaseExpiry Date


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THANK YOU.....

mcs presentation retail chain

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