Documente Academic
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Group 2, Section A
Akash Sahu Amit Singhania Megha Agarwal Naveen Agarwal Preetisudha Pandab Pulkit Agrawal
Outline:
Stationery Store Grocery store Pharmaceutical Store Retail Chain
Industry practice Recommendations
Inventory Management
Rent is of fixed floor space (Rs 1500) Godown is at a distance from the shop Re-order point -10 days of inventory Sale of Paper is by FIFO
Time loss in getting goods from warehouse Losing out potential customers due to unavailability of specific products.
Recommendations
Proper monthly demand estimation Bulk purchase should be avoided Historical data should be maintained to aid demand estimation Periodical stock tally Opting for a nearer warehouse
Key issues
Damage of Oil pouches, detergents packets during procurement Breakage of Ketchup bottles due to improper handling and bad packaging Unsold seasonal items can be returned to the vendor only in the next cycle, this leads to undesirable loss of shelf and inventory space and also immobility of funds. Stock check is done on an yearly basis ( Every Diwali ) All accounting and ledger work is done manually
Recommendations
Maintain historical data to predict demand for seasonal products. Use of accounting software to track sale and purchase of goods more efficiently Low level inventory for products like oil, detergent and ketchup bottles to reduce the risk of breakage.
Medicine house is a standalone medicine shop in ID market, Bhubaneswar. Owner: Mr. Pramod Patra
Overview of industry
Large number of drugs and their varieties Several alternatives for the same salt. License needed to manufacture and store drugs Manufacturer provides after supply services unconditional exchange of expired drugs Doctors prescription alters the demand of the drug. The consumer is usually indifferent to the brand. In some generic drugs the brand (eg. Himalaya, Dr. Reddy) may be of importance Several complementary items (eg. diapers)
Computerized system
Medicine House uses a computer software to track supplies and sales The batch number is entered along with the expiry date for each purchase
The sales also follow a data entry in the system, except in case of many customers waiting
The system provides reports of each item. Also alerts about the approaching expiry dates
Arrangement of Inventory
All inventory on shelf. Is available for sale Use of refrigerators for certain items
Medicine house specifics: All medicine arranged in Alphabetical order Bottles and strips arranged in one place Separate rack for expired and near expiry drugs Some items also placed on the counter.
100%
80%
60% 40% 20% 0% drugs in inconsistent demand drugs in continous demand
Small level of inventory maintained. Safety stock determines the order for next day Extra order may be placed for fast moving drugs. Staff keeps an eye on the doctors prescriptions and estimated the demand of a drug. Orders are altered based on this observation.
Recommendations
Use FIFO system effectively Keep the alphabetical system of placing items intact. This will make it easier for the new staff to locate the medicines Manage the drugs in separate plastic boxes to separate strips from mixing up. Use a queue system in each box for implementing the FIFO system. The queue system if implemented will also make the inventory verification easier. Keep faster moving goods in easily accessible locations.
Maruti Mall, Big Bazaar is located at KIIT square. 36000 sq. feet in area 80 employees
BIG BAZAAR
Organization Structure
Big Bazaar
Food Bazaar
Big Bazaar
Centralized DC Quarterly inventory counting
Big Bazaar
The inventory procurement is done on a daily basis No individual warehouses for the individual stores A central warehouse at Kolkata, which distributes to the eastern zone Lead time of about 60 hours
They try to maintain a FIFO method of inventory consumption, but considering that its a self service store that is not much under their control Average sales per day calculated based on the sales last 3 months
Minimum Base Quantity is used
Located on Kolkata
Temporary warehouse
Bhubaneswar Supplies to 3 outlets in Orissa
Distribution centre
Inventory Management
Stock verification is done manually Sales person checks for the expiry dates of individual items manually No special process for peak season demand Estimates done according to last season and extra inventories are ordered Inventory counting is also a manual process, done quarterly
Recommendations
Expiry date verification can be easily automated by the software they are already using i.e. Auto Replenish System Formalization of supply chain process in case of Food Bazaar Use of Cycle counting in place of quarterly counting
THANK YOU