PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

A PROJECT REPORT ON SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

PRESENTED BY

Annus Zafar BM-25892 Danyal Khan BM-25895

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

INDEX
S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Description Page 3 4 5 5 6 7 8 9 9 9 10 10 10 11 12 12

Introduction to supply chain management Levels of supply chain management History-Imtiaz super store Imtiaz super store introduction & business process Ensuring low prices Developing Systems and Structures Growth and Diversification Organogram of Supply Chain Department Supply Chain Management at Imtiaz super store Procurement and Distribution Logistics Management Inventory Management Information Management Issues in Supply Chain Management Conclusion List of references

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

Introduction to Supply Chain Management Supply Chain Management is the discipline which encompasses the end to end business activities carried out in any business, independent of the manufacturing or service sectors. It is the synchronization of a network of facilities and distribution options that performs procurement of materials, processing the materials into finished products, and distribution of the products to customers. SCM is seen as involving five fundamental processes. These include planning, sourcing, making, delivering, and returning.

This is a typical supply chain showing interrelations between all involved parties. [Source: Auto-ID: Managing Anything, Anywhere, Anytime in the Supply Chain, Bose and Pal, ACM August 2005] SCM subsists in both service and manufacturing environments. A typical supply chain consists of many interactions between suppliers, manufacturers, distributors, retailers, with the vital goal of providing either a service or a product to customers. This also works in reverse with the customer at the head of the process when returning a product. SCM is used as a means to assimilate planning, purchasing, manufacturing, distribution, and marketing organizations that normally do not work together to achieve a common goal. Each works toward goals specific to their own organization that accomplish narrow objectives. SCM is a way of integrating these varying functions so that they work together to make best use of the benefits for all involved.

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

There are three levels of SCM: strategic, tactical, and operational

Three Levels of SCM [Source: Auto-ID: Managing Anything, Anywhere, Anytime in the Supply Chain, Bose and Pal, ACM August 2005] Strategic SCM covenants with future planning than looking at market evaluation, capacity issues, new products, and technology changes. This planning is addressing issues that may be factors several years out. This is accomplished at the executive management level. Tactical SCM involves a shorter planning cycle. It is more concerned demand planning, inventory planning, and supply planning. This is determined at a less senior level than Strategic SCM. Operational SCM is current planning activities measured in at most weeks. Operational SCM involves the mainstream of the operations. It includes demand fulfillment, scheduling, production, transport, and monitoring. There are many decisions that are made while looking at SCM. They follow the categories as discussed above. Strategic decisions are made over longer periods of time and linked to a corporations strategy. Operational decisions are more or less short term in nature and look after day to day activities. Mainly Four major decisions are considered. They include decisions on location, production, inventory, and transportation. A geographically strategic placement of the production facilities is the key to creating a successful supply chain. Decisions on what products to be produced have to be made wisely and strategically. Inventory decisions and management is critical. Some inventories are necessary to hedge against uncertainty, but this comes with a cost. Managing these inventories proficiently will be of benefit to the corporation. Transportation decisions include cost versus benefit. Air transportation is costly, but fast and reliable. Other modes of transportation may be cheaper, but the sacrifice has

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

to hold inventories due to delays that may occur. If the above decisions are made with careful and strategic thought as well as with concern for integration, the supply chain should be efficient and successful. The complete goal of SCM is to optimize supply chains in an endeavor to provide more accurate and time sensitive information that can be used to improve process times and cut costs. Supply chains have been around for decades and a constantly being improved. The newest opportunity for improvement is the introduction of Radio frequency identification (RFID) tags. RFID technology will provide real-time information that will allow manufacturers to get better readings of customers and markets thus further improving supply chains. RFID will help retailers provide the right products at the right places at the right times.

History-Imtiaz Super Store 1955: Formed as a small grocer's outlet in Bahadurabad by Mr. Hakim Khan Abbasi 2003: Imtiaz II came into being in 2003 located in Main Shah rah-e-Faisal. 2011: Imtiaz III came into being in 2011 located in Nazimabad 2013: The fourth Imtiaz Super Market has opened on 22nd February 2013 at the confluence of KPT Interchange and Khayaban-e-Ittehad.

Imtiaz Super Store Introduction and its Business Processes Back in the early 1960s, Hakim Khan Abbasi opened up a general store in Karachi's Bahadurabad neighborhood. He named the shop after his son, Imtiaz and always focused on establishing strong relationships with customers. Since that time, the neighborhood store has been expanding into a retail chain that operates multiple outlets throughout the port city. Imtiaz Abbasi, the son after whom the store has been named and who took the reins of the Company from his father after completing his higher education, met with BR Research. The following transcript is based on key takeaways from that exchange.

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

Given its persevering business success and rapid expansion, Imtiaz Super Stores have been the focus of many a case study by students of business administration. Successive reports on the Company have attempted to identify the unique selling proposition that has led to the success of this retail chain. But, Imtiaz Abbasi, the owner of the Company, contends that the strategy is simple: "Since the first day that I started working with my father, we have always laid the most stress on inculcating and developing strong relationships with our customers. If you respect your patrons, consider their needs and priorities as sacrosanct and always persevere to surpass their expectations; your business will grow leaps and bounds," he explained. Abbasi said that it is this consideration that led the neighborhood store to introduce its first innovation back in 1971. At that time, the Imtiaz Store became the first retail outlet to process and package rice, wheat flour, pulses, spices and grains for its customers. "All others were selling straight out of gunny bags by the kilogram and customers had to take the products home and clean each of these themselves. So, we brought convenience to grocery shopping by cleaning the products for them and also by packaging them in manageable quantities. A few years later, the store innovated again, this time offering home delivery to customers. "At first there was one employee who went around to the houses of customers in the neighboring area. They would send over a shopping list and he would load the stuff on a truck and deliver it to their homes and offices," explained Abbasi. By now that truck has been replaced by a number of delivery vans that collectively deliver to locations all over Karachi. Ensuring low prices As the customer base for the retail store expanded, the senior management realised that backward integration would be vital to maintain the Company's competitive edge in terms of prices and quality of products. Over the years, a rice mill and a flour mill have been added to the Company.

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

"We also purchase the wheat, rice and all other fresh produce that is sold in our stores directly from farmers," explained Abbasi. He added that this allows the Company to cut out as many as seven different middle men and hence ensure that the commissions to these brokers are skipped and retail prices remain low. Imtiaz Super Stores also operates its own grindstones for turmeric, spices, corn flour and other edibles. Besides, all international products sold at the Company's outlets are also imported directly instead of being routed through buying agents. Abbasi contended that besides ensuring low cost, this approach allows the Company to slice delivery times as well. Developing systems and structures Mushrooming demand for a convenient, well-stocked retail outlet which offers a wide variety of quality products at affordable prices has provided Imtiaz Super Stores with the opportunity to expand its portfolio to four stores all over Karachi. However, this rapid growth could only be possible because the Company has put in place, the scalable structures, procedures and systems. Abbasi contended that his Company has the most sophisticated IT infrastructure among all retail chains in the

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

country. He also highlighted that key functions such as finance and supply chain employ qualified professionals that use automated procedures for demand forecasting, cash flow management and other operational purposes. Abbasi highlighted that the Company employs about 1,500 individuals, many of whom are qualified youths. He said that providing opportunities for people has always been a key consideration for this Company. The retail chain owner also stated that dozens of small businesses have been given a platform for growth by this retail chain. Growth and diversification Imtiaz Abbasi revealed that plans are afoot for the Company to acquire a second rice mill. He explained that the Company has been exporting rice over recent years to markets in the Far East, Middle East, Central Asia and Europe, in addition to domestic sales. He stated that demand for Pakistani rice is significant and climbing. At the same time, as the Company drives ahead with its expansion plans within the country, the local appetite for rice that is catered by Imtiaz Store is also growing. For this reason, it has now become necessary for this firm to boost its internal capacity to process and package rice. Abbasi highlighted that providing superior quality rice and unmatched prices to customers has been among the most important selling propositions for this retail chain since its inception, so it is very important to maintain this edge in future. In 2014, the Company will apply the lessons from its backward integration in rice and flour, to another key food item. Imtiaz Abbasi told BR Research that his Company will be launching its own edible oil mill next year. That mill will be operated in a similar manner as the rice and flour mills. Procurement of edible oil for that venture will also be managed by the firm itself. The Company launched its fourth outlet in Karachi just a few weeks back. Now the senior management is already hustling to launch yet another outlet; this time in Clifton. Besides, the Company is considering various possible locations for establishing its inaugural stores in Lahore, Faisalabad and other cities of the country. Imtiaz Abbasi also revealed that the Company intends to tap the country's stock

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

markets to allow it to grow to the next level. "Imtiaz Super Stores will be listed within a couple of years," said Abbasi. He urged that the countrymen should give preference to national companies both in terms of their purchases and their decisions to invest. Organogram of Supply Chain Department

Supply Chain Management at Imtiaz Super Store Supply chain management at Imtiaz super store comprises of the following sub-sections Procurement and Distribution Logistics Management Inventory Management Information management

Procurement and Distribution: Imtiaz Super Stores process of procurement involves reducing its purchasing costs as far as possible so that it can offer best price to its customers. The company procures goods directly from the manufacturers, bypassing all intermediaries. Imtiaz Super Store has distribution centers. Imtiaz Super Stores own warehouses supplies about 80% of the inventory. Each distribution center is divided in different groups depending on the quantity of goods received. The inventory turnover rate is very high, about once every week for most of the items.

PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

Logistics Management: This involves fast & responsive transportation system. Company owned trucks services the stores. These dedicated trucks enable shipping of goods from distribution centers to the stores within 2 days and replenish the store shelves thrice a week. The drivers hired are all very experienced & their activities are tracked regularly. This allows the drivers to be aware of the terms & conditions for safe exchange of Imtiaz Super Store property. For more efficiency, finished goods are directly picked up from the manufacturing site of supplier, sorted out and directly supplied to the stores. This system reduces handling & storage of finished goods, virtually eliminating role of distribution centers & stores. Inventory Management: Considering the expansion of Imtiaz Super Store stores, it was essential to have a very good communication system. Imtiaz Super Store ensures that unproductive inventory is as less as possible, by allowing the stores to manage their own stocks, thereby reducing pack sizes across many categories and timely price markdowns. Imtiaz Super Store makes full use of its IT infrastructure to make more inventories available in case of items that customers wanted most, while reducing overall inventory. By making use of Bar-coding, different processes like efficient picking, receiving & proper inventory control of the products along with easy packing and counting of the inventories was ensured. A Centralized inventory database allows the personnel at the store to find out the level of inventories and location of each product at a given time. It also shows the location of the product like distribution center or transit on the truck. When the goods are unloaded at the store, the inventory system is immediately updated. Information Management: In recent years, Imtiaz Group has achieved growth through an aggressive strategy for opening new stores. While Supermarket sales are a major driver for this strategy, the companys warehouses had become burdened by poor inventory visibility and control and limited data that compromised its decision making. As an expanding business they required a modern IT platform that could consolidate their Retail and warehousing operations and foster the planned pace of growth. No centralized access to inventory information & availability of proper sales data Inefficient stock monitoring & movement High transaction time at point of sale and system constraint to handle high footfall at store Data existed in siloes at each branch & lead inaccurate inventory calculation Unmanageable data consolidation & audits

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PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

For this purpose, iVend Retail Management Suite with SAP Business One was introduced. Benefits of this new system are as follows: iVend Retail was able to enhance key retail transaction performance at store & increased overall employee efficiency Synchronized data transfers between Stores & enterprise ensured accuracy across Retail chain Allowed to measure sales numbers better and track inventory stock levels efficiently Easy identification of slow moving inventories for improved purchasing decision making The benefits of our new Retail management system are splendid. We have full control on what is being purchased, what is being sold, and what is available in the inventory. Now we have obtained a fairly transparent view of store operations through process integration Waqas Hanif, Imtiaz Supermarket

Issues in Supply Chain Management: Inventory management: Stock outs of highly demand products. Logistics & Distribution: Problems in distributing products in all the branches in Karachi due to law and order situation Information management: Issues in maintaining product information in iVend Retail software due to lack of suppliers awareness

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PROJECT-SUPPLY CHAIN MANAGEMENT AT IMTIAZ SUPER STORE

ConclusionRetailing in Pakistan is still in its infancy, chances and scope for growth in retail are huge, keeping this in mind Imtiaz store is expanding its retail stores in different locations to cater all the segments in Karachi but due to the issues in supply chain is lacking behind. We are still running in the dark ages as compared to retailing worldwide which are now moving towards RFID technology which refers to a set of technologies that are used to identify and transmit information from tagged objects by making use of radio waves. This technology is primarily used for automatic data capture and has the potential to revolutionize business performances and change how businesses operate today. RFID technology will not replace bar coding, but it holds even greater promise to improve operations and reduce costs for all parties.

List Of Referenceshttp://www.brecorder.com/market-data/rates-a-schedules/118/1172879/ http://www.scribd.com/document_downloads/direct/114280880?extension=docx& ft=1369225764&lt=1369229374&user_id=48337637&uahk=XxHuKRcQOlt1FLm PZqPG85asowk http://www.citixsys.com/blog/imtiaz-supermarket-goes-live-on-ivend-retail/ http://www304.ibm.com/businesscenter/cpe/download5/29826/RCC_WhitePaper.pdf

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