Damage and Shrinkage Control At Spar Hypermarket

A Summer Project Proposal for

Post-Graduate Diploma in Management

By

Ashish Sarolia
Under the guidance of

Shri KumarSwamy Store Manager Spar Hypermarket(Malleshwaram)

Dr. V. Sebastian Associate Professor IMT, Ghaziabad

May, 2012 [1]

Damage and Shrinkage Control At Spar Hypermarket

By

Ashish Sarolia

May, 2012

[2]

Damage and Shrinkage Control At Spar Hypermarket

By

Ashish Sarolia

Under the guidance of

Shri Kumarswamy Store Manager Spar Hypermarket (Malleshwaram)

Dr. V. Sebastian Associate Professor IMT, Ghaziabad

May, 2012 [3]

Certificate of Approval
The following Summer Project Report titled "Damage and Shrinkage Control at Spar Hypermarket" is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in Management for which it has been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report Name Signature

1. Faculty Examiner

_______________________

___________________

2. PG Summer Project Co-coordinator _______________________

___________________

[4]

Certificate from Summer Project Guides

This is to certify that Mr. Ashish Sarolia, a student of the Post-Graduate Diploma in Management, has worked under our guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge no part of it has been reproduced from any other summer project, monograph, report or book.

Dr. V. Sebastian Associate Professor IMT, Ghaziabad Date

Mr. Kumarswamy Store Manager Spar Hypermarket Malleshwaram,Bangluru Date

[5]

Acknowledgement
I wish to express my gratitude to Spar Hypermarket India Pvt. Ltd. For giving me an opportunity to be a part of their esteemed organization and enhance my knowledge by granting permission to do summer training project under their guidance. I am deeply indebted to my company guide, Mr. Kumarswamy (Store Manager,Spar

Hypermarket,Malleshwaram) for his valuable and enlightened guidance. He provided me with the opportunity to learn the nuances of Retail Sector and spare their valuable time to help me. He provided me with immense opportunity to learn about the working of this company. A special thanks to my faculty guide, Mr. V Sebastian who has been the chief facilitator of this project and helped me enhance my knowledge. I am also thankful to Mr. Dilip Raja Urs(Inventory Head, Spar HyperMarket,Malleshwaram) and his team for providing great support and help in completion of the training. The learning during the project was immense and valuable. My work included the study of various aspects of Inventory Management and Making Strategy for Damage and Shrinkage Control in Electronics Department of the Store.

Regards, Ashish Sarolia IMT Ghaziabad

[6]

Abstract
The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewelry, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process.

The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector in India.

[7]

Table of Contents
Page No. Acknowledgement Abstract Table of Contents List of Figures List of Tables List of Abbreviations I Introduction 12 1.1 Inventory Management 1.2 Inventory Process 1.2.1 Receiving 1.2.2 Handling and Placing 1.3 Inventory Categorization 1.4 Advantages and Disadvantages II About Spar Hypermarket 13 6 7 8 9 10 11

17 18 19

III

About Project 3.1 Objective of the study 3.2 Scope of the study 3.3 Methodology 3.4 Project work

20

IV

Damage and Shrinkage control 4.1 Last 3 months analysis 4.2 Types of Damages and Losses 21 22

Major Issues 5.1 Major Issues at Electronics Department 5.2 Mark Down Policy 5.3 Security Tag Costing 5.4 Big Business Vendors 23 25 30 31

[8]

List of Figures
Figure No. 1 2 3 4 5 6 Description Receiving Flow Chart Stock Checking Process Net sales of past 3 months Shrinkage percentage for past 3 months Ageing Stock Classification(Value Wise) Ageing Stock Classification(No. of Item Wise) Page 16 18 22 22 28 30

[9]

List of Tables
Table No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Description Inventory Categorization Stock Turn Around Ratio Vendor payout ratio Last 3 months analysis Ageing Stock (Value wise) Ageing Stock(No. of item wise) Security Tags costing Big Business Vendors Brand Wise Ageing Stock Top vendors(sales wise) Page 18 18 19 22 27 29 31 33 34 35

[10]

Abbreviations

SKU GRN

Stock Keeping Unit Goods Receipt Note Every Day Low Price Daily Dump Report First In First Out Point Of Inventory Point Of Sale Stock Voucher Distribution Center Repack center Collection Center Ware House Purchase Order Transfer In Transfer Out

EDLP DDR FIFO PI POS SV DC RC CC WC PO TI TO -

[11]

Chapter 1: Introduction

1.1 Inventory Management

Inventory - Goods and Materials that are available in stock by a business Inventory Management-The process to maintain optimum inventory to be able to meet business requirements and avoid over or under inventory that can impact the financial figures

Purpose of Inventory Management

How many units to be order When to order Keeping a sufficient amount of units so that company dont suffer from loss of business To provide better customer service by providing them what they want at the time of demand Reducing operational cost by keeping optimal quantity of stocks

Main tasks of Inventory management team

Daily Dump Report preparation It is the report which shows the daily waste happened in F&V, Non-veg, Concept and Bakery department DDR includes Ideal dump percent for each sub-category, Target for every day and target achieved percent on each day Internal transfer report preparation and Internal transfer checking This is a report that includes transfer of products between one department to another within the store Daily Price change report preparation A,B,C count Checking of the stock Checking the FIFO compliances Checking the PI(Point of Inventory) Stock Voucher creation- This contains the actual stock quantity present in the physical form 90 days stock correction Moving and non-moving stock check

Advantage of various reports and checks

DDR helps in better demand forecasting and also helps in keep track of waste generation Internal transfer report helps in keeping the inventory figures right and to show the internal expenditure happening DPC helps in deciding better costing method FIFO checking helps in better customer service and keeping track of near expiry products Stock vouchers shows the actual movement of products

[12]

1.2 Inventory Process

To get the desired amount of quantity from Vendors Receiving

To safekeeping the stock and protect it from any wear and tear Handling

To putting the stock on to the shelf in most customer friendly way Placing

Providing best customer service in terms of instant availability of products Selling

1.2.1 RECEIVING:
Receiving is a process and science of accepting the stock as per the company requirement with all legal and authorized documents. (Ex. PO, VAT INVIOCE) (VAT)Value added tax) Once vendor is entering the store with proper documents and stocks, PO and Invoice has to be taken from vendor, and PRD needs to be done in the system. PRD - Pre Receiving Document: (Before receiving) Receiving of PO and Invoice has to be done from vendor, Updation of PO No has to be done in the system PRD print out needs to be generated according to PO. Receiving of the stocks needs to be done as per the PRD

RECEIVING STANDARDS:

Check invoice with TIN no. (TAX PAYER IDENTIFICATION NUMBER) Check product manufacturing date & expiry date. [13]

 Check MRP (Maximum retail price) Check quantity and product weight (for private label products) Check quality for Grocery and fresh (as per the instructions) Check barcodes\EAN (European article number) codes. If necessary small quantity needs be bar-coded at the store level and Large quantity need to be sent back to the vendor for bar coding. Check packing measures. (manufacture details-Address of Manufacturer, contents of products, if imported-Date of import, importer details & labels) After checking the stocks enter the MFG Date for all products. Physical quantity of the products needs to be filled in PRD Sheet After receiving the stocks physically, GRN has to be done GRN(Goods receipt note) GRN has to be done as per the PRD After GRN goods has to be shifted to their respective department. Duplicate copy of GRN is to be given to the vendor. GRN original copy needs to be filed. Finally complete documentation has to be made. (PRD, PO, INVOICE AND GRN Copies) and to be forwarded to Head Office with authorized signature every day morning.

DOCUMENTATION TO BE FOLLOWED

Before receiving: PRD (Pre receiving document) After receiving: GRN (Goods received note) Transfer the goods to any location: TO (Transfer out) Receive goods from any location: TI (Transfer in) Stocks return to vendor: NRGP (Non-returnable gate pass) Customers returns: CN (Credit note) Discrepancy note: GAD (Goods acknowledgment cum discrepancy) Stocks return to DC: GRWM (Goods return to ware house memo) Product disposes (Dump): DAD (Disposable authority document)

[14]

Receiving Flow Chart

Figure 1

DC

DSD

Receiving

Reject if tampered

Check seal & trip sheet

Vendor

Unloading

PO/Invoice

Segregate / category wise

PRD

Stock counting

Quality check

Stock verification

Quantity & price check

Reject if not good

Document

Shifting-floor

Cold room

Receiving

GRN

Inform DC
Damage returns

Damages

FIFO

Replacement

NRGP

GRWM

Stacking

Manual gate pass

Stocks hand over

Empty tubs & Cartons

Documentation

Vendor

DC [15]

1.2.2 Handling and Placing the received stock

Handling
The general merchandise department consists of very delicate products such as crockery, glassware which need to be handled with extra care During and after receiving the products need to be checked for damages Avoid throwing or pushing or hushing up of the products Ensure proper stacking of the boxes to avoid damages Handle the products with care while displaying and cleaning

Shelving:
Shelving involves 4 aspects: FIFO, stock handling, ticketing and display

FIFO:
FIFO is the basics of stock maintenance Stock which comes first should be placed at the back and yesterdays stock in the front Ensure a minimum expiries at the store FIFO ensures proper system of stock flow

Stock handling:
Ensure that the products are handled with care during storage and display Check for damage, segregate and document the same

Ticketing: The ticketing is placed at the left hand corner of the product/shelves Ensure proper description and pricing Ensure that the tickets are printed and not hand written/scribbled

Display: Ensure that the products are displayed from Left to right , small to big Ensure that the color blocking is done in the order of Light to darker shades Ensure that the same product group/category products are placed together Ensure that proper face-ups for the products In case of sealed products, demo piece has to be displayed for the customers [16]

1.3 Inventory Categorization

Whole Inventory is being divided into 3 categories on the basis of Shrinkage and Importance Total No. of SKUs 218 305 335 Category check period Thrice in a week Weekly Once in 15 days Table 1: Inventory Categorization SKU(Stock Keeping Unit) A unique identifier for each distinct product and service that can be purchased in business Every Friday there is a promoter stock check takes place 25th of every month there is a stock check for non-sellable products i.e. MAX division stock check Each SKU is checked on its intended date. The checking process is as follows Priority Highest Medium Low

Category Name A B C

Physical Stock Check

System Stock Check

Recheck

Diff is checked

Diff report generated

Figure 2: Stock Checking Process

Ratios In Inventory Management

Stock turn-around ratio measure of the number of times inventory is sold or used in a time period. Eg. Category Name Inventory Turn F&V FMCG Textile 1-2 Days 15 Days 1 Month Table 2: Stock turn-around Ratio Vendor Payout Ratio measures the average number of days a company takes to pay its Suppliers. Eg. [17]

Category Name F&V FMCG GM, Textile

Vendor Payout Ratio 3-4 Days 15 days 2 months

Table 3: Vendor Payout ratio

1.4 Advantages of Inventory Management

Prevent shortages and service delays Track inventory levels in real time Optimize warehouse organization Fewer Missed Sales Opportunities Awareness of Discrepancies

Disadvantages of Inventory Management

Cost incurred More complex system

Major Difficulties in inventory management

Difference in physical stock and system stock due to various reason like Cross Billing and Customer theft Faulty SKU codes and missing EAN codes Damaged and expired product handling Space constraints for storing SKUs Wrong GRN generation

[18]

Chapter 2: About SPAR Hypermarket

SPAR was founded in 1932 in the Dutch city of Zoetermeer. A Spar store may be owned independently, by a franchisee, or be part of a chain, depending on the model applied in any given country. The only common link between the stores in different countries is the brandingthe name and the current logo. SPAR Hypermarkets and Supermarkets in India is the result of a license agreement between the Dubai based Landmark Groups Max Hypermarkets India Pvt. Ltd. and SPAR International. SPAR is the worlds largest independent food retail chain and is present in 34 countries. Max Hypermarkets is responsible for the entire business operation from capex outlay to day to day operations. Management control also rests with Max Hypermarkets. SPAR provides knowledge transfer and brings with it best practices in international retailing and technical expertise to ensure that the brand is being accurately represented, whilst ensuring that the local partner retains their financial independence to deliver the best solution in each market. SPAR International will play an integral support role in the development of the hypermarket format in India. SPAR currently has 13 stores in India, 4 stores in Bangalore, one in Mangalore, two in Hyderabad, one in Coimbatore, one in Delhi, two stores in pune, one store in Gurgaon and One store in Vijayawada. Shoppers have the option to choose from a wide variety of quality products in every category ranging from grocery, fruits and vegetables, bakery, dairy and take away foods, meat, poultry and fish, wine, beer and spirits, home textiles, personal care, crockery utensils and kitchen appliances, electronics and IT accessories and much more. In Bangalore alone, SPAR has 14,000 SKUs in the food and grocery category alone which is unparalleled. SPAR serves 3 million customers annually. SPAR assures excellent value for money throughout the year. The stores have an 'EDLP' or 'Every Day Low Price' concept. This simply means that SPAR offers the lowest retail price on certain products that are fast moving and are an integral part of the housewifes shopping list. SPAR also has Best Deals that run every fortnight and offer the customer the best bargains of up to 75%. In conjunction with the Landmark Groups corporate loyalty program, SPAR launched 'The Inner Circle', a loyalty program for its customers in March 2009 which offers shopping and saving benefits in all stores across the group.

[19]

Chapter 3: About Project

3.1 Objective of the study

The main objective of the study is to understand the Inventory Management System present at SPAR and apply the concepts to design the strategy for Damage and Shrinkage Control in Electronics Department.

3.2 Scope of the study

The report seeks to present the Inventory Management concepts and practices used in Retail Sector.

3.3 Methodology
In order to learn and observe the practical applicability and feasibility of various theories and concepts, the following sources are being used: Discussions with the project guide and staff members Physical Inspection of all the activities related to Inventory Management Technical documents provided by the company Customer Observations Website of SPAR and other net sources.

[20]

Chapter 4: Damage and Shrinkage Control In Electronics Department

4.1 Last 3 months Analysis

Month Feb March April

Net Sales 4277170 7948348 7429813

Shrinkage Value 16389.9 16406.8 6433.29

Shrinkage % 0.383 0.206 0.086

Table 4: Last 3 months analysis

Net Sales
9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Feb March April

Net Sales

Figure 3: Net sales of past 3 month

Shrinkage %
0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Feb March April Shrinkage %

Figure 4: Shrinkage percentage of past 3 months [21]

Note Shrinkage Percentage=Shrinkage Value/Net sales *100 Note Net sales doesnt have a definite pattern but shrinkage percentage has decreased from .38% in February to .08 percent in April. Note Presently we are having a damage stock of 212474 rupees that is lying into CDIT back room.
Total Number of damaged products is 380.

4.2 Types of Damages and Losses

Damage handling can reduce stores shrinkage and Increases the Profitability of store.
1. Manufacturing Damages This kind of damages happens due to technical problems in the product and procurement of faulty products from vendors. This is completely outside the purview of the company and little can be done about this other than having a good replacement policy in place. 2. Transportation Damages This kind of damages happens due to movement of stock from one place from other or from Distribution center to Store. These are the main cause of damages and can only reduce by proper handling of the stock. 3. Customer caused Damages This kind of damages happens due to movements and improper handling of the products by the customers. This happens because of customer unawareness and poor display management of the products. 4. Shrinkage This is not actually damage but caused due to customer theft and difference between physical stock and system stock. This is a big loss to company as neither can we get a replacement nor we can get a price for that product so this should be minimized. 5. Mishandling By the sales staff This kind of damages happens due to callousness and poor handling of the products by the sales persons.

[22]

Chapter 5: Major Issues in Electronics Department

5.1 These are the major issues which I discovered due to which most of the shrinkage and damages were
happening in the store. I have given some solution to rectify these problems.

1
Situation Current Situation Problems in current Situation Possible Solution Description Display pieces is put up by company(Spar) itself Whole cost of damage and responsibility of safeguarding lies with the company(Spar) Display Pieces should be sponsored by respective vendor

2
Situation Current Situation Problems in current Situation Possible Solution Description Ageing stock is moved to the inventory till their sell off to the scrap dealer 1. Overburdening to the inventory room and inventory team 2. Less resell value due to no such policy of Mark Down There should be a 90 days scrap Mark down policy on ageing stock

3
Situation Current Situation Problems in current Situation Possible Solution Description Some Personal EntertainmentProducts dont have security tag and there is no security lock in the shelves containing these products Vulnerable to customer theft 1. There should be security tags on all small appliances like headphones pen-drives CDs etc. 2. There should be security lock on shelves like the shelves sponsored by promoters 3. There should be a security personnel at the bay containing small appliances so that customer theft can be minimized

4
Situation Current Situation Description Damaged products are lying in the CDIT Back room for more than 6 months [23]

Problems in current Situation

Possible Solution

1. Company is losing precious inventory space 2. Company is also losing money on these damaged products as it is not able to get replacement products 1. There should be a good return back and replacement policy with vendor 2. Non-compliance on the part of the vendor should be dealt strictly e.g. Money should be debited from his account 3. Buyers should be make more accountable for noncompliance of the vendor 4. Follow a Mark down policy

5
Situation Current Situation Problems in current Situation Possible Solution Description Cluttered Shelves containing Mixers More prone to damages while displaying and customer inspection Utilize the free space in same department and Use optimal display patterns

6
Situation Current Situation Problems in current Situation Possible Solution Description Product wires hanging out from the shelves More prone to damages while customer movements Respective Sales persons should be more vigilant

7
Situation Current Situation Problems in current Situation Possible Solution Description Blenders are kept erect without any support More prone to damages while customer movements and placing back on shelves There should be blender stand or jar for holding them

8
Situation Current Situation Problems in current Situation Possible Solution Description Water purifiers are kept on the stack of boxes More prone to damages while customer movements Purifier should have stands sponsored by company

[24]

Suggestions
There should be more power sockets for display products. Mix up of GM products with Electronics Products should be do away with. Sales persons should be encouraged to visit competitors Store to observe best things in the industry and implement that in our store for the better growth prospect.

5.2 Why should we use a mark down policy?

Time Period 60-90 (In days ) 1520 No.of products Total value of 2468927 the products

90-120
532 563940

120-180
727 465570

180-270
939 626870

270-365
336 405094

>365
839 468578

Total
8% 9% 60-90 90-120 13% 9% 11% 50% 120-180 180-270 270-365 >365

[25]

Sub Category Wise Ageing Stock (Value in Rs.)

sub category Personal Care Personal Entertainment IT Home Entertainment Large Appliance Small Appliances 60-90(Days) 60369 210779 32211 1840678 131458 193432 90-120 1883 87860 5111 339658 56873 72555 120-180 31674 46558 45873 153060 24329 164075 180-270 29365 15644 30072 157019 76826 317944 270-365 8743 19486 11842 72252 11307 281462 >365 10060 48599 92310 91491 27214 198903

Table 5 : Ageing Stock(Value wise)

Note The data mentioned here are the ageing stocks till Jan 2012.

60-90
2% 8% 5% 9% 1% Personal Care Personal Entertainment IT Home Entertainment Large Appliance Small Appliances 75%

*Home Entertainment here includes LCD, LED, and Plasma TV etc.

[26]

90-120
0% 13% 10% 16% 1% 35%

120-180
7% 10% 10%

60%

33% 5%

180-270
5% 2% 5%

270-365
2% 5% 3%

18% 51% 25% 69% 12% 3%

>365
2% 10%

42%

20%

20% 6%

Figure 5: Ageing Stock classification (Value Wise)

[27]

Item Wise Break Up of Ageing Stock

sub category Personal Care Personal Entertainment IT Home Entertainment Large Appliance Small Appliances Total 60-90 20 1177 90-120 3 375 120-180 39 192 180-270 21 166 270-365 5 106 20 60 1 144 336 >365 9 185 265 184 4 192 839

80 43 226 341 88 42 46 105 8 6 1 6 147 63 223 300 1520 532 727 939 Table 6: Ageing Stock Classification (No. of item wise)

Total
17% 31% 7% 60-90 90-120 120-180 180-270 19% 15% 11% 270-365 >365

60-90
1% 6% 5% 10% 1% Personal Care Personal Entertainment IT Home Entertainment Large Appliance 77% Small Appliances

[28]

90-120
1% 1% 8% 8% 70% 0% 6% 12% 31%

120-180
5%

27%

31%

180-270
2% 18%

270-365
1%

32%

32% 43%

1%

11%

36% 18% 0%

6%

>365
1% 23% 0%

22%

22% 32%

Figure 6: Ageing Stocks (No. of item wise) [29]

Conclusions: We have 50% of our ageing items in 60-90 days period. Thats why we should have a 90 days markup policy on these products so that we can sell them on lower margin instead of let them aged more. Value wise share is always greater for Home Entertainment but no. of item wise its always personal entertainment which is more because of having products with low price. Although we have 75% of items from Home entertainment category in 60-90 days bracket but as the bracket size increases, items from small appliances category occupies more space.
More Items are in 60-90 Days aged category so they need to be mark down so as to get a reasonable value from them. Personal Entertainment and Small Appliances are the major products in each aged category.

5.3 Security Tags Costing There are 2 types of security tags 1. Soft security Tag 2. Hard Security Tag

Type Soft Security Tag Hard Security Tag

Cost(In Rs) Probable use Reusability 3 On CDs and DVDs Non-Reusable 10 Headphones, Pen Reusable Drives, Mouses

Security Tag usage Product Name Current Stock Type Of Tag Past 3 Months Total cost Total Avg to be put Sales(Volume) of putting Shrinkage of Shrinkage/Month tags Past 3 Months Soft Hard Hard 4686 8658 3680 Table 7: Security Tags Costing
[30]

CDs And DVDs

2886

7126 6796 -

2375 2265 -

Headphones & 368 Earphones Pen Drives And Memory Cards

Conclusions: Security Tags cost varies between 3-10 Rs but on comparing their cost with total shrinkage of past 3 months then putting tags are still a viable option. Also reusable security Tags will serve for long thus over a long time hard security tags cost will reduce to less than 1 Rs. Although Soft security tags cost 3 Rs but their cost will be compensate by less shrinkage which is in the tune of 2375 each month.

5.4 Vendors who can be persuaded for putting Display pieces Sub Name Category Vendor Name Major Products Total pieces Sold
742

Total Sales
11781944

Large Appliances

L G ELECTRONICS INDIA PVT LTD SAMSUNG INDIA ELECTRONICS PVT. LTD. VIDEOCON INDUSTRIES LIMITED FAIRDEAL CONSUMER DURABLES PVT LTD PHILIPS ELECTRONICS INDIA LTD USHA INTERNATIONAL LTD SREENIVASA DISTRIBUTORS BAJAJ ELECTRICALS LTD

Refrigerators, Washing Machines, TVs

Large Appliances

LCD,LED

594

10837732

Large/Small Appliances

Coolers,Irons,Cookers(Kenstar),Refrigerators 1531

6130048

Small Appliances

Mixer, Irons,Kettles (Morphy Richards)

2547

5114472

Small Appliances

Dryers,shavers

2575

3738348

SMALL APPLIANCE

Ceiling Fan, Cookers,irons

2394

2877526

Small Appliances

Emergency Lights, rice cookers (Pigeon Brand) Steam Irons

2293

2840044

Small Appliances

3142

2249967

[31]

Gaming Software

VISION INTERACTIVE SYSTEMS (CON) UNIVERSAL CORPORATION LTD (ELECTRONICS) MADHUKAR DOMESTIC APPLIANCES (P) LTD MAHARAJA WHITELINE INDUSTRIES LTD MILLION LIGHTS QUIXOT MULTIMEDIA PVT LTD ARYAH TRADING CORPORATION (WIPRO GM)

CD,DVD

15294

1646747

Small Appliances

Shavers,trimmers

472

1575864

Large Appliances

Pure it Water Purifier, steam Irons etc.

1092

1229720

Small Appliances

Mixers

1148

967537

Small Appliances Gaming Software

Hair Dryers CD,DVD

1612 3031

798775 474729

Small Appliances

Wipro Emergency Lights

401

418314

COMP.ACCESSORIES INTEX TECHNOLOGIES INDIA LTD SMALL APPLIANCE ASTHA ENTERPRISES

Headphones,Pen Drives,Speakers,Web cams

3422

388196

Ascent Steam Iron

Table 8: Big Business Vendors

[32]

Brand Wise Ageing Stocks

Brand Name Symphony LG Hama Maharaja Sony Kodak Panasonic Kenstar Nova Inalsa Morphy Richards Khaitan Whirlpool Philips Lenco Vega Prestige Usha Baltra Gryphon Pagaria Volcco Kenwood Skullcandy EzeeMix Kailash Suraksha Italia Logitech Lords Pigeon Radical Total products with more than 120 day's ageing stock 50 9 847 89 7 19 50 20 39 48 35 44 6 40 12 44 21 23 183 28 26 21 7 14 22 10 11 16 8 23 20 47 Total Value (In Rs.) 191164 126697 111861 94415 86713 84432 73818 65895 57538 55251 50165 48252 48046 45269 44053 37302 34607 32048 28606 25805 24689 20317 20230 17790 16044 15555 8044 8024 7912 6739 6000 4810

Table 9: Brand Wise Ageing Stock

[33]

Conclusions

Apart from big vendors, there is more number of small vendors whose products are
lying for more than 120 days so there is a strong need of a mark down policy plus strong return back policy.

Some of vendors are not getting requisite sales and they are moved from shelves to
back room but still they are not taken back by vendor so such vendors should be called quickly so as to vacate back room.

CD ROMs and DVD Roms are ageing but they dont have some ageing characteristics like small appliances so their mark down policy should be different.

Top Contributors
Vendor Name L G ELECTRONICS INDIA PVT LTD SAMSUNG INDIA ELECTRONICS PVT. LTD. VIDEOCON INDUSTRIES LIMITED SAPNA DISTRIBUTORS FAIRDEAL CONSUMER DURABLES PVT LTD PHILIPS ELECTRONICS INDIA LTD USHA INTERNATIONAL LTD SREENIVASA DISTRIBUTORS BAJAJ ELECTRICALS LTD MIRC ELECTRONICS LTD TANSIHA MARKETING VISION INTERACTIVE SYSTEMS (CON) Total % Contribution 14.45 13.29 7.52 7.4 6.1 4.59 3.53 3.48 2.76 2.72 2.45 2.02 70.31

Table 10: Top vendors (sales wise)

[34]

Conclusions: Top 12 vendors are contributing for overall 70% sales of electronics department. Large appliances vendors like Samsung and LG got total sales of above 1 crore from the store so we can persuade them to put their display pieces thus we can reduce our damage responsibility. Small Appliances vendors are also getting good sales from store so they can be asked to give free display piece whose damage and replacement responsibility will rest on vendor. Thus we will significantly reduce our damages. As we are giving good sales to each vendor thus they all need to be more responsible about replacement otherwise their lateness should be dealt strictly.

[35]