CHAPTER I

INTRODUCTION
&
REVIEW OF LITERATURE

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1. The retail sector-an overview
A retailer is a merchant or occasionally an agent or a business enterprise, whose main
business is selling directly to ultimate consumers for non-business use. He performs
many marketing activities such as buying, selling, grading, risk-trading, and
developing information about customer's wants. A retailer may sell infrequently to
industrial users, but these are wholesale transactions, not retail sales. If over one half
of the amount of volume of business comes from sales to ultimate consumers, i.e.
sales at retail, he is classified as a retailer. Retailing occurs in all marketing channels
for consumer products.

Retailers differ from industrial companies in that they do not produce tangible
products. They purchase merchandise from manufacturers in large quantities for
resale to consumers at a profit. The domestic Retail Store industry is mature and
highly competitive. Many retailers have been in business for the better part of a
century and, thus, have had time to fully cover targeted markets. These companies
must provide desirable products, while managing inventory and controlling costs, to
succeed. From an investment perspective, the sector generally tracks the broader stock
market, on average. Some retail stocks can be volatile, though, making them best
suited for short-term accounts. However, there are a few well-established companies
suitable for the conservative investors.

A Retailer thus, provides value creating functions like assortment of products and
services to the consumers, breaking bulk, holding inventory and provides services to
consumers, manufacturers and wholesalers.

Retailing broadly involves:

1. Understanding the consumers’ needs

2 .Developing good merchandise assortment.

Display the merchandise in an effective manner so that shoppers find it easy and
attractive to buy.

Retail Concept

The retailing concept is essentially a customer oriented, company-wide approach to

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developing and implementing a marketing strategy. It provides guidelines which must
be followed by all retailers irrespective of their size, channel design, and medium of
selling.

The retailing concept covers the following four broad areas:

1. Customer orientation

The retailer makes a careful study of the needs of the customer and attempts to satisfy
those needs.

2. Goal orientation

The retailer has clear cut goals and devises strategies to achieve those goals.

3. Value driven approach

The retailer offers good value to the customer with merchandise keeping the price and
quality appropriate for the target market.

4. Coordinated effort

Every activity of the firm is aligned to the goal and is designed to maximize its
efficiency and deliver value to the customer

Economic Indicators

Consumer spending typically accounts for some two-thirds of Gross Domestic

Product. Therefore, GDP trends usually indicate the health of the retail sector. In
addition, measures of Consumer Confidence help gauge consumer spending and
savings rates, which also relate to the performance of retailers. In tough times,
consumers, having less disposable income, limit their outlays to necessary day-to-day
items. Conversely, during strong economic periods, consumers are more willing to
make big-ticket purchases. Observers should also keep watch on the Consumer Price
Index. Most retailers resist absorbing higher wholesale prices, and attempt to pass on
any increases to their customers. At a certain point, however, consumers will push
back against price hikes, and retailers' sales and margins will then come under
pressure.

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Gross Margin

The difference between the prices retailers pay manufacturers for their goods and the
prices they charge is called the markup. Cost of sales is what is paid to the
manufacturers plus outlays for freight, store occupancy, employees, insurance, and
utilities. Gross margin is a good measure of how well a company builds sales, sets the
markup, and controls costs and expenses. Proper inventory management is vital. Too
much inventory increases carrying costs and forces markdowns to improve turnover.
(Turnover is the cost of sales divided by the average value of inventory over a given
period.) Conversely, an overly lean inventory may translate into lost sales
opportunities. Generally, the higher the turnover, the greater the flexibility in setting
the markup; this improves the chances of maximizing profit.

1.1 The Global Retail Scenario: An Overview

• Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services .The impact can be best seen in countries
like U.S.A., U.K., Mexico,India, Thailand and more recently China. Economies
of countries like Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also
heavily assisted by the retail sector.

• Retail is the second-largest industry in the United States both in number of

establishments and number of employees. It is also one of the largest Industries
worldwide. The retail industry employs more than 22 million Americans and
generates more than $3 trillion in retail sale annually.

About Retail Worldwide

• Retail is the biggest industry in the world with sales of $ 7.2 trillion.

• Every 10th billionaire in the world is a retailer.

• 25 of the top 50 Fortune 500 companies are retail. Retail generated a shareholder
return of 18%.

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1.2 Retailing in India

Retailing in India is one of the pillars of its economy and accounts for 14 to 15
percent of its GDP. The Indian retail market is estimated to be US$ 500 billion and
one of the top five retail markets in the world by economic value. India is one of the
fastest growing retail markets in the world, with 1.2 billion people.
As of 2013, India's retailing industry was essentially owner manned small shops. In
2010, larger format convenience stores and supermarkets accounted for about 4
percent of the industry, and these were present only in large urban centers. India's
retail and logistics industry employs about 40 million Indians (3.3% of Indian
population).
Until 2011, Indian central government denied foreign direct investment (FDI) in
multi-brand retail, forbidding foreign groups from any ownership in supermarkets,
convenience stores or any retail outlets. Even single-brand retail was limited to 51%
ownership and a bureaucratic process.
In November 2011, India's central government announced retail reforms for both
multi-brand stores and single-brand stores. These market reforms paved the way for
retail innovation and competition with multi-brand retailers such as Walmart,
Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple. The
announcement sparked intense activism, both in opposition and in support of the
reforms. In December 2011, under pressure from the opposition, Indian government
placed the retail reforms on hold till it reaches a consensus.
In January 2012, India approved reforms for single-brand stores welcoming anyone in
the world to innovate in Indian retail market with 100% ownership, but imposed the
requirement that the single brand retailer source 30 percent of its goods from India.
Indian government continues the hold on retail reforms for multi-brand stores.
In June 2012, IKEA announced it had applied for permission to invest $1.9 billion in
India and set up 25 retail stores. An analyst from Fitch Group stated that the 30
percent requirement was likely to significantly delay if not prevent most single brand
majors from Europe, USA and Japan from opening stores and creating associated jobs
in India.
On 14 September 2012, the government of India announced the opening of FDI in
multi-brand retail, subject to approvals by individual states. This decision was

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welcomed by economists and the markets, but caused protests and an upheaval in
India's central government's political coalition structure.
On 20 September 2012, the Government of India formally notified the FDI reforms
for single and multi brand retail, thereby making it effective under Indian law.
On 7 December 2012, the Federal Government of India allowed 51% FDI in multi-
brand retail in India. The government managed to get the approval of multi-brand
retail in the parliament despite heavy uproar from the opposition. Some states will
allow foreign supermarkets like Walmart, Tesco and Carrefour to open while other
states will not.

1.2.1 Retail formats in India

1.Hypermarts/supermarkets
Large self-servicing outlets offering products from a variety of categories.
2. Mom-and-pop stores
They are family owned business catering to small sections; they are individually
handled retail outlets and have a personal touch.
3. Departmental stores
Are general retail merchandisers offering quality products and services.

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4. Convenience stores
Are located in residential areas with slightly higher prices goods due to the
convenience offered.
5. Shopping malls
The biggest form of retail in India, malls offers customers a mix of all types of
products and services including entertainment and food under a single roof.
6. E-trailers
Are retailers providing online buying and selling of products and services.
7. Discount stores
These are factory outlets that give discount on the MRP.
8. Vending
It is a relatively new entry, in the retail sector. Here beverages, snacks and other small
items can be bought via vending machines.
9. Category killers
Small specialty stores that offer a variety of categories. They are known as category
killers as they focus on specific categories, such as electronics and sporting goods.
This is also known as Multi Brand Outlets or MBO's.
10. Specialty stores
Are retail chains dealing in specific categories and provide deep assortment.
Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

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1.3 Contemporary issues in organized retailing

In Indian retail sector organized retail is a recent phenomenon. It is a zero-sum game

between 2 players:

a) Organized sector &

b) Unorganized sector

India’s retail is dominated by a large number of small retailers consisting of the local
kirana shops, owner manned general stores, chemists, footwear shops, apparel shops,
paan & beedi shops, hand-cart hawkers, pavement vendors etc. which together make
up the so-called Unorganized retail.

Unorganized 96%

Organized 4%

Organized retail is reflected in sprawling shopping centers, multiplex-malls & huge

complexes which offer shopping, entertainment and food all under one roof. The last
3-4 years have witnessed the entry of a number of organized retailers Opening stores
in various modern formats in metros and other important cities. Organized retailing
has begun to tap the enormous market but its share is small. A number of large
business houses have entered the retail business with very ambitious expansion plan.
However, opinions are divided on the impact of growth of organized retail in the
country.

Concerns have been raised that growth of organized retail may have an adverse
impact on retailers in the unorganized sector. It has also been that growth of organized
retailing will yield efficiencies in supply chain, enabling better success to markets to
producers (including farmers and small producers) and enabling higher prices, on the
one hand and, lower prices to consumers, on the other.

In India, organized retail contributed roughly 4% of the total Indian retail 2006-07,
which is very small even compared with most of the emerging market economics.

During the coming 9 years. It is projected to grow at a compound rate of 40-45

percent per annum and is estimated to contribute 16% to total Indian retail by 2011-
12.
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1.4 Inventory management

Inventory refers to the goods stocked for future use. Every retail chain has its own
warehouse to stock the merchandise to be used when the existing stock replenishes.
Inventory management refers to the storage of products to be used at the time of
crisis.

The retailer keeps a track of the stocked goods and makes sure there is surplus
inventory to avoid being “out of stock”. Such a process is called as inventory
management.

Supply chain management and inventory management (IM) was used interchangeably
in the past but this has changed in the recent years. IM is now recognized as a
discipline under supply chain management together with manufacturing operations,
purchasing, transportation and physical distribution .Lambert (2001) defines SCM as
an all-encompassing discipline that involves all integrated activities that bring the
product to the market and satisfies the customer’s need and aims at linking all the
partners from the manufacturers, distributors to the retailers until the product reaches
the customer. These activities are cost drivers in an organization and would affect its
profitability and competitive advantage. It is therefore the aim of any firm to
minimize the cost to efficiently and sustainably meet demand.

Several key themes in supply chain management have emerged over time. There is
need for a shift from push demand to pull demand where inventory flow results from
actual consumer demand. Customers have become central in the when, what and how
goods are delivered as well as by whom. There is now an increased role of
technological systems to manage the supply chain. Firms are now focusing on the
core activities and there is increased outsourcing for the non-core to field specialists.
Inventory management and elimination of waste in the supply chain has also become
a key theme in SCM.

Inventory management is both a science and an art of ensuring that just enough
inventory is held by the organization to meet demand. The main objective of IM is to
inform managers how much to re-order, when to re-order, how frequently products
should be reordered and the minimum safety stock required. Ogbo, Okenanma &
Ukpere (2014) notes that an effective inventory management ensures that inventory is
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held at the right place, at the right time and at the desired quantities. It also involves
setting of replenishment cycles, forecasting, valuation, available space for inventory,
quality management, managing returns and defective goods and demand forecasting.

Excessive inventory results to additional holding costs and hence increased

operational costs affecting the bottom line of the organization. Inventory management
results to faster inventory turnover hence cash management. On the other hand, out of
stocks result to lost sales and poor customer service which impact the top line of the
firm. Miller (2010) acknowledges that the profitability of a business is affected by the
inventory management systems and controls operationalized by the organization. An
effective inventory management system enables the firm to minimize any
complexities encountered and anticipated in planning or execution and controlling of
resources. By improving the inventory management system, a firm can greatly
improve the top and bottom line of the business. In most cases, inventory is the largest
contributor to the working capital and operational cost of a company and hence
should be given great emphasis by firm management.

Inventory management is one of the key factors for a firm’s competitiveness

especially in modern retail. Its complexity increases with the number of store keeping
units, the degree of varying demand and the complexity of the supply chain. It is
almost impossible to have goods arriving where needed at the exact time when the
need for them arises. Fluctuation in demand at the different levels and unreliability of
a supply chain could cause firms to hold inventory to cushion them from going out of
stock in case of delayed deliveries. Other times, organizations hold inventory for price
protection, to gain quantity discounts or to achieve less ordering costs. Whereas these
could be beneficial reasons to hold inventory, it causes incremental costs to the
company. It is therefore of great importance for a firm to have proper inventory
management systems that ensure that the right levels of inventory are held to achieve
the desired service levels at minimum cost.

Out of stock levels in retail stores are quite frequent. This not only affects the sales
and conversion of inventory to cash, but also affects the service levels of the store. In
the modern retail industry, the unavailability of product does not only result to
immediate sales misses, but is also a major reflection of poor quality. Firms therefore
tend to hold excess inventories while avoiding the poor service levels and lost sales.

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The excess inventories on the other hand can cause unnecessary costs to the firm.
Noel & Jeff (2001) notes that in today’s competitive retail environment, delivering
high quality service can be treated as the basic retailing strategy. The retail service
quality is characterized by the quality of interaction, the physical environment quality
and the outcome quality. The physical environment quality includes the presence and
quality of the goods being consumed. This indicates that lack of product on shelf
affects the service quality of a retailer and eventually affects ability to attract retail
customers.

It is common to find the retailers leveraging their suppliers in responsibility for actual
management of the inventory at the stores that they supply through vendor-managed
inventory arrangements. Inventory in a retail firm could be in the headquarters
warehouse, in the backroom of the branches, in-transit between supplier to warehouse
or warehouse to branch or at the shelf. Inventory management would ensure that the
retailer is in control of the levels of inventory at these stages. There has been
extensive research on inventory management models and strategies and specifically
for the modern retail firms. Since inventory management has been established as a
core item in the operation strategy, efforts should be made to incorporate the firm-
appropriate inventory models and strategies to ensure sustainable competitive
advantage.

1.4.1 Inventory Management and Control

An inventory management policy is required for a retail business to thrive. A
successful inventory policy is one that guides the stores on how much to order, the
reorder points, and the optimum replenishment cycles. For this to work, demand
planning and forecasting is needed and required safety stocks should be defined. To
maintain competitive edge in a world that has higher variability in demand, retailers
would need to have an appropriate inventory policy to ensure that they do not run out
of stock and hence loss of sales. Variability in demand also leads to overstock which
leads to higher costs and lower inventory turnover.
Inventory valuation and control is critical for the retailers. Issues such as inadequate
stock, pilferage, undersupply, wastages and damages could result to improper
inventory valuation and losses to the company. In the traditional inventory
management systems, there was an assumption that the inventory recorded and the
actual physical inventory was equal but in the real world, this hardly is the case.

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Inventory inaccuracy is common in the warehouse and in the backroom as well as
from the shelf (Rekik, 2010). This could either result from shrinkage, misplacement
or transaction errors. After investigating 370,000 skus, DeHoratius and Raman (2008)
reported that about 65% of inventory records in retail stores did not match the
physical amount being held. In fact, about 20% of the records differed from the
physical count by six or more times. Many investigations have been done to
determine the cause of the discrepancies. Rekik (2010) found that shrinkage
accounted to the main cause of inventory inaccuracy.
Warehouse management is one of the key enablers in executing inventory
management. It increases operational efficiency while ensuring cost reduction. The
key performance indicators to impeccable warehouse operations are quality,
flexibility, agility and reliability. Its design, layout and capacity assessment
synchronizes the demand and supply gap and ensures a smooth operation flow.
Technology, by use of the warehouse management system has been used in the recent
past to ensure inventory management and control through inventory record accuracy
(Ferdoush, Mahadi, Mamun, & Zurina, 2014).

1.4.2 Some Important terms on Inventory Management

 3PL

Third party logistics is any provider of outsourced logistics. This could include
warehousing, fulfillment services, shipping, or any other inventory-related logistics.

 Buffer Stock

Buffer stock (also known as safety stock) is stock held in a reserve to guard against
shortages: maybe customers suddenly can’t get enough and haven’t factored that into
the demand, or maybe there’s a delay with the supplier. In any case, buffer stock
keeps covered.

 Cost of Goods Sold

COGS are the direct costs associated with the production of goods, and carrying costs
associated with those goods.

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  CSV file

Comma Separated Value file. This is a file, usually in Excel, which allows values to
be saved in a table format, keeping separate columns for different information.

 Economic Order Quantity

EOQ is a complicated-looking equation used to measure something pretty simple:

how much should re-order, taking into account demand and inventory holding costs.

 Inventory Holding Costs/Carrying Costs

The cost business incurs in storing and holding inventory in warehouse until sale to
the customer.

 Landed Costs

Cost of shipping, storing, import fees, duties, taxes and other costs associated with
transporting and buying the inventory.

 Re-order point

The point at which we decide it’s time to re-order - taking into account current and
future demand, along with how long it will take supplier to send the new order.

 SKU

Stock Keeping Units or SKUs are unique tracking numbers/letters that assign to each
of products, indicating style, size, colour and other attributes.

 Stock out

Stock out refers to a situation when the retailer fails to fulfill the customer’s
requirement due to lack of merchandise. The merchandise is not available in the
current inventory and thus the customer has to return home empty handed.

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1.4.3 NEED TO HOLD INVENTORIES
Martin and miller identified three general motives for holding inventories
 TRANSACTION MOTIVE:
This refers to the need of maintaining inventory to facilitate smooth production and
sales operations.
 PRECAUTIONARY MOTIVE:
Precautionary motive for holding inventory is to provide a safeguard when then actual
level of activity is differ than anticipated. This inventory serves when there is an
unpredictable change in the demand and supply forces.
 SPECULATIVE MOTIVE:
This motive influences the decision to increase or decrease the levels of inventory to
take the advantage of price fluctuations.

1.5 STORE INVENTORY MANAGEMENT IN PANTALOONS

To manage physical inventories, pantaloons adopted platinum standard process as per
following terms.
 Warehouse inwards / outwards done on daily basis.
 Register hygiene checked on daily basis by WH manager .
 Walk way bay is clean and tidy.
 Display of tagging standards done.
 New arrivals sample displayed on the rack.
 Stocks as segregated as per Season / Brand / MC / DM’s wise
 Stocks in the carton segregated as ,Season / Brand / MC / DM’s wise.
 Stock kept in bin kept in similar pattern as kept on floor style wise all colors
options together.
 All Stock are in PP bags.
 NSM & Defectives demarked separately.
 Clear visibility of stocks and easy replenishment for FA’s and Dm’s

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1.5.1-Types of Distribution center & from where stock comes to
pantaloons

Pantaloons Brand

For pantaloons brand, stocks are receiving from following distribution center,

(a) City Distribution Center

(b) Mother Distribution Center

(c) Regional Distribution Center

(d) Other pantaloons store

Non-Pantaloons Brand

For Non-pantaloons brand, Stocks are receiving from following center

(a) Vendors

1.5.2 Logistics service in Pantaloons

In today’s retail sector, one of the most important parts is logistics service. Pantaloons
does stock transfer through following logistics Service Company.

FSC (Future Supply Chain Solutions Ltd.)

FSC is India's first fully integrated and IT enabled end- to- end Supply Chain and
Logistics service provider in India. It provides services to large corporates in Food &
FMCG; Apparels, Footwear & Accessories; Consumer Electronics & Hi- Tech;
Automotive; Pharma and Light Engineering domain.

Promoted by Future Group and Fung Capital, FSC has been a pioneer in modernizing
supply chain and logistics by implementing global best practices in the Indian context.
This has enabled FSC to provide customized Supply Chain Solutions & Services
which reduce Time- to- Market and Cost- to- Market of customers.

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Blue Dart

Blue Dart Express, incorporated in 1991, is one of the leading logistics company in
the world. Blue Dart Express is South Asia's premier courier, and integrated express
package distribution company.It is South Asia's premier courier, and integrated
express package Distribution Company. Its warehouses are at 69 locations across the
country. Under Courier services it offers services such as Domestic Priority, Dart
Apex, Dart Surfaceline, Regional services. The company delivers cargo through its
own charter planes.

RIVIGO

Rivigo is a unique logistics network that aspires to be India’s largest logistics

platform, where all categories of goods (from e-commerce to temperature controlled)
in the country move through our network. Its contributing to building the new India
by defining the next-generation trucking industry with accurate predictions, high
levels of efficiency, simple automated operations, and by making logistics human.

Gati KWE

Gati, founded in 1989, is India’s pioneer in Express Distribution and Supply Chain
Solutions, with a strong presence in Asia Pacific region and SAARC countries, along
with an extensive network across India providing timely deliveries to 19,000
pincodes, covering 672 out of 676 districts in India.

Gati’s integrated and IT backed multi modal network of air, road and rail coupled
with Pan India warehousing facilities across India, allows us to provide customized
Supply Chain Solutions to customers across industries.

FCNS

FCN is a solution based transport and warehousing business based in Brisbane Qld
Australia. It is specialize in Shipping Container Transport Container Unpack/Pack
Warehousing Bulk materials handling National Distribution.

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Safe Express

Safexpress offers a wide range of innovative supply chain services including Express
Distribution, 3PL and Consulting. The firm provides value-added logistics services
for 9 different business verticals ranging from Apparel & Lifestyle, E-commerce,
Healthcare, Hi-Tech, Publishing to Automotive, Engineering & Electrical Hardware,
FMCG & Consumer Electronics and Institutional.

1.5.3 Job work done of a Warehouse in-charge

(a) Maintaining warehouse Dash board on Daily basis

(b) In transit Report

(c) Inward of the merchandise

(d) Outward of the merchandise

(e) Maintaining register

(f) Proper merchandising handling at the warehouse

(g) Proper segregation of cartoons

(h) Brand wise segregation at back storage area

(i) NSM & Defective demarked separately

(g) Checking of Tagging standard of merchandise

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1.5.4 Inwarding at warehouse

Objective: - To ensure smooth movement of stock and merchandise from warehouse,

Vendor and any other location to shop floor, updating the inventory & subsequently
be available for sale.

Process:-

For CDC stock

1st step:- Goods are received according to the Stock Transfer note(STN)

Checking of Documents whether it belongs to store or not

Counting Of cartoons while unloading

Checking of Docket no. in cartoons

Tally of HU (Handling Unit) number with Invoice Document.

Discrepancy stock should be done if in case of shortage or damaged

2nd Step:- Unloaded cartoons are weighed & compare with packaging slip

Stamps and signature posted on Docket for stock receiving

3rd step:- Open SAP software in computer

Finding IRN (Inbound Register Note) by using transcode- ZREG1

Finding GRN (Goods Receipt Note) by using transcode- ZSTORE

Finding ITC (Input Tax Credit) by using transcode- J_1IG_INV

The details of STN, GRN and actual quantity received are recorded in the warehouse
inwards register.

For Vendor stock

1st step:- :- Goods are received according to the Stock Transfer note(STN)

Checking of Documents whether it belongs to store or not

Tally of LR (Lorry Received) no. with cartons & packages

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 2nd Step:- Unloaded cartoons are weighed & compare with packaging slip

Stamps and signature posted on Docket for stock receiving

3rd step :- Open SAP system software.

Enter ZSTORE & Put Site code

Put P.O (Purchasing Document), Invoice no. & IRN no

Press F8 and scanning the product in the cartoons.

Tally the scanned quantity with invoice quantity

After that, post the scanned file data

Then automatically GRN no. generated

The details of STN, GRN and actual quantity received are recorded in the warehouse
inwards register.

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For Shortage & Excess

As per current process 5% tolerance (line item) will be allowed.

• If store received any shortage: - We create manual (paper) discrepancy note as

per current process. We inform immediately to concern vendor/HO
category/zonal inventory/zonal commercial for shortage within 48 hours.
• If store received excess stock: - For excess stock 5% tolerance (article level)
will be allowed as per current process. For more than tolerance level stock, we
sent back to vendor with NRGP & immediately to concern vendor /HO
category/zonal inventory/zonal commercial for the same within 7days.

Discrepancy Note: -

While shortening & excessive, we follow the discrepancy note in below process

 No of shortage in cartoons
 Mailing to concern authority about shortage & excess
 Put IRN no. in the SAP
 Then Put P.O & GRN no.
 Consignee Name
 Challan no./Invoice & Date
 Quantity-price-amount
(P.O-Purchasing Order –Contains 10 numeric digits no.)
GRN no. – Contains 10 numeric Digits no.
Invoice no.- Contains Alpha-numeric digits no.

Proof of Delivery to the vendor

Security staff to stamp the suppliers delivery challan with the inwards received stamp

Store Name/Site code-

IRN No-
GRN No-
P.O. No-
Nos. of cartoon& pieces received-
Received Date-

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1.5.5 Outwarding at Warehouse
Objective: - To ensure smooth movement of stock and merchandise from stores to
warehouse, vendors and any other location and updating the inventory.

Process:

Outward of merchandises are done due to seasonal changes & defective stocks.

1st Step:- For stocks to be outwarded, article list shared through mail

2nd Step:- Mailing to zonal head for approval.

Generating of Delivery no. after receiving STO no.

3rd Step:- Open SAP & enter VL02N transaction code

Scanning & packaging of each stock

4th Step:- All stocks stored brand wise into separate cartoons.

Generate packaging slip by HUPAST transaction code in SAP

5th Step:- Cartoons are properly weighed and weights are recorded in the Outward
Packing slip.

6th Step:- We generate a SAP gate pass of all the deliveries outward against each LR

(One SAP gate pass generated for one LR)

The details of outward no, Delivery no. and actual quantity outward to recorded in the
warehouse outwards register.

Proof of Delivery:-
Security Personnel affixes a seal containing store’s stamp as followed
Site name & Code:-
Security outward no:-
Delivery no.:-
No of cartons:-
Gate pass no:-

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1.5.6 Negative Stock report:-
Negative stocks are obtained due to scanning of other barcodes of same brand while
billing.
Negative inventory are checked on daily basis.
(a) Open SAP and enter MB51 transaction code
(b) Put site name& storage code
(c) Put movement type & posting date
(d) Press executes and enter
(e) Click on Display negative stocks only and execute.

1.5.7 Register & files Maintained by supply chain department:-

There are various purposes for maintaining register to recording, inventory control,
security purposes & auditing.
(1) CDC/MDC/RDC & store inward register
(2) CDC/MDC/RDC & Store outward register
(3) Tag inventory register
(4) Warehouse to floor movement Register
(5) Discrepancy file and book
(6) NRGP (Non returnable gate pass) files (7) Barcode control register

1.6 Literature Review

In the theoretical literature, a vast array of inventory management best practices (for
example, just in time, vendor managed inventory, collaborative planning, forecasting
and replenishment, automatic replenishment, agile system, and material requirement
planning) abound.
Inventory management is a management cum operations function. It requires
operational processes to be followed and maintained on the floor and in inventory
management systems. Coupled with operations, it entails continuous study, analysis
and decision making to control and manage inventory levels. The aim of inventory
management is to hold inventories at the lowest possible cost, given the objectives to
ensure uninterrupted supplies for ongoing operations. When making decisions on
inventory, management has to find a compromise between the different cost

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components, such as the cost of supplying inventory, inventory-holding costs and
costs resulting from insufficient inventories.
According to Wild (2002), inventory controls is the activity which organizes the
availability of items to the customers. It coordinates the purchasing, manufacturing
and distribution function to meet the marketing needs. This role includes the supply of
current sale items, new products, consumables, spare parts, obsolescent items and all
other supplies. Inventory enables a company to support the customer service, logistic
or manufacturing activities in situations where purchasing or manufacturing of the
items is not able to satisfy the demand. Lack of satisfaction could arise either because
of the speed of purchasing or manufacturing is too protracted, or because quantities
cannot be provided without stocks.
Clodfelter (2003) added that a good inventory controls system offers a wide range of
benefits as the proper relationship between sales and inventory can better be well
maintained. First, without inventory control procedures in place, the stores department
can become overstocked or under stocked. Next, inventory control systems provide a
business with information needed to take markdowns by identifying slow-selling
merchandise.
Discovering such items early in the season will allow a business to reduce prices or
make a change in marketing strategy before consumer demand completely disappear.
Marfo-Yiadom et al. (2008) also added that holding large quantity of inventory offers
wide range of benefits to an organisation and can as well be associated with certain
costs. They noted among other things that, holding large inventory helps to ensure
that: possibility of disruption to production from a stock out is remote, large stocks
mean that large orders can be placed so that buyers can negotiate favourable prices
and thus get trade discounts, material drawn from a large stock will maintain a
constant quality whereas if stocks are replenished frequently, separate batches may
have slight differences, large stock protects the firm against price increases for a few
months, large stocks mean fewer and less frequent orders, which will cut the cost of
buying inventory. They further asserted that the associated cost of holding excessive
inventory includes obsolescence, deterioration, increased cost of storage and store
operation and Interest charges. They concluded that if proper stock control is not put
in place to balance the benefits and the cost associated with holding large stock, then
this can have devastating consequences to an organization.

23
Emphasizing the pertinence of the study, Gourdin (2001) noted that inventory is one
area of logistics that has received a great deal of management attention over the
decade. Executives now realize that holding excessive stocks is simply too expensive.
Therefore, a great deal of effort has been expended to eliminate unnecessary
inventory without compromising customer service. However there are numerous
situations where inventory simply must be held, particularly when meeting the needs
of global customers. Management’s goal should be to hold only what is necessary to
satisfy customer requirements and manage it effectively.
According to Joshi (2000), the objectives of inventory management are as follows: to
reduce cost of holding stock, to avoid investment in stock outs (running out of stock)
so as to ensure that production cycle operates smoothly. The first aim persuades the
business to reduce the levels of inventory whereas second one prompts it to increase
the same. Marfo-Yiadom et al (2008) also noted that the main objectives of stock
control are two: first, to maintain adequate sock to avoid production stoppages and
consequent customer dissatisfaction, loss of revenue and increase cost of emergency
action and second to avoid excessive stock levels and consequent tying up of capital.
Deloof, (2003), concluded that the inventory conversion period has a negative effect
on a business’s performance. He posited that, shortening the inventory conversion
period could increase stock out costs of inventory which results in losing sales
opportunities and leads to poor performance. Managers of firms should therefore keep
their inventory to an optimum level since mismanagement of inventory will lead to
tying up excess capital at the expense of profitable operations (Lazaridis and
Dimitrios, 2005).
1.6.1 Methods of Evaluating Inventory
There are four methods accounting uses to cost inventory namely first in first out
(FIFO), last in first out (LIFO), average cost (A.C) and standard cost (S.C). Each has
implications for the value placed on inventory. If there is little change in the price of
an item, any of the four ways will produce about the same results, however in rising
or falling prices they can be a pronounced difference. There is no relationship with the
actual physical movement of actual items in any of the method. Whatever method is
used is only to account for usage.

24
i. First In First Out (FIFO)
This method assumes that the oldest (first) item in stock is sold first. In rising prices,
replacement is at a higher price than the assumed cost. This method does not reflect
current prices and replacement will be understated. The reverse is true in a falling
price market.
ii. Last In First Out (LIFO)
This method assumes the nearest (last) item in stock is the first sold. In rising prices,
replacement is at the current price. In a falling price market existing inventory is
overvalued. However, the company is left with an inventory that may be grossly
under stated in value.
iii. Average Cost (A.C)
This method assumes an average of all prices paid for the article. The problem with
this method in changing prices (rising or falling) is that the cost used is not related to
the actual cost
iv. Standard Cost (S.C)
This method uses cost determined before production begins. The cost includes direct
material, direct labor and overhead. Any difference between the standard cost and
actual cost is stated as a variance (Arnold, et al. 2008).

1.6.2 Scope of the Study

Store inventory Management and control are the most important part of retail sectors
which leads to customer service, lead time, cost, stock counting and warehouse
operational performance.
In today scenario, inventory management plays an important role in proper controlling
of stock, high efficiency and rapid service to customer.
This study would determine effective inventory management and propose the
operational activity at retail sector. In any retail sector, warehouse operational policies
are the main part to cost controlling.

25
1.6.3 Objectives of the Study
The main objective of this study is to have a deeper understanding on Store Inventory
Management (SIM) with special reference to Pantaloons, Bhubaneswar.
General Objective
The general objective is to assess the inventory management in Pantaloons.

Specific Objectives
The specific objectives of the study were;
 To examine the adherence to professionalism with respect to materials
management.

 To examine the level of technology adopted to ensure inventory control.

 To examine the method used in evaluating inventory.

 To examine stock replenishment done continuously in related to sales.
General Question
The general question was to what extent is inventory managed in pantaloons?
Specific Questions
The specific questions of the study are;
 Is the system adopted adequate for proper control of stock?

 How is the inventory priced to ensure efficiency?

1.6.4 Limitation of the Study

This study mainly based on controlling of stock, adaptation of technology,
distribution of stock and improves its efficiency at pantaloons, patia. Despite its
contribution, the study had limitations
(i) Unavailability of space inside the warehouse while working.
(ii) Sometimes, Warehouse operational work activities are done by low manpower
resources.
(iii) The research study is limited to 53 respondents. So that it was difficult to take
large sample for survey.

26
CHAPTER II

RESEARCH
METHODOLOGY

27
Introduction
Research method is a way to plan systematically for conducting research. It tends to a
search for knowledge on the basis of scientific study. This methodology consist of
Tools, Techniques & Software Used, Research Design, Study Area & Sampling
Frame Questionnaire & Data Collection, Data analysis, Elements of the Survey
Questionnaire, plan of the Report.
2.1Research Design
A research design is a systematic approach that a researcher uses to conduct a
scientific study. It is the overall synchronization of identified components and data
resulting in a plausible outcome.
There are three types of business Research
(a) Exploratory research-In explanatory research design a researcher uses his own
imaginations and ideas. It is based on the researcher personal judgment and obtaining
information about something. it is looking for the unexplored situation & In this type
of research there is no need of hypothesis formulation.
(b) Descriptive research-In descriptive research design a researcher describe the
characteristics of objects, people, groups, organizations or environments & also who,
what, when, where, how regarding the current situation. It is a preplanned, designed &
focuses data.
(c) Casual research- In casual research design a researcher allows casual inferences to
be made, seeks to identify cause & effect relationships. If a decision maker knows
what causes important outcomes like sales, stock price, and employee satisfaction,
then he or she can shape firm decisions in a positive way. Casual inferences are very
powerful because they lead to greater control.
In this project, the designing of the research is based on descriptive research. This
designs directs the study toward specific issues and also helps greatly in designing
and implementing a descriptive study which have been addressing who, what, when,
where and how questions.
Since in this case the researcher has sufficient information available on what data
need to be collected and the purpose of the study, the source from where we need to
collect the information, so it is appropriate to go for descriptive study.

In review of various marketing literatures, it is found that different methods & control
technique evaluated by managers. Hence the study focused on stock management,

28
warehouse operational policies, distribution center occurs by the staff members of
pantaloons in retailing sector.

2.2 Data Collection

Because of the descriptive and uniqueness of research of the study, the researcher
collected both secondary and primary sources of data for the study. Primary data was
collected through means of a survey or interaction with respondents, which was based
on a structure questionnaire of nominal, ordinal & interval. This was proper way to
finding out inventory control process in order to get information. Secondary data was
collected from the source of periodicals, journals, and internet & company websites.
These sources were used in order to depth knowledge of the concerned topic.

The survey was carried out by individual staff employees. Data were collected from
individually to knowing about store inventory management and control of pantaloons.
The data was collected as per study purpose and research objectives. Structured and
most important information were collected from the respondents which were used in
according to primary data collection. The questionnaire method was the way to record
by which it prepares for future purposes. The method of data collection was similar to
private, public, government organization.

The questionnaire was having demographic information and inventory management

control. The researcher used questionnaire form for collecting information because of
maintaining respondents’ anonymity. Due to limitation of time the researcher has
collected data from 53 respondents. The questionnaires consist of two sections. First
section describes about demographic information and methods, control of stock.
Second section asked to give their opinion in according to Likert scale. The scale is
being taken from 1 strongly Agree to strongly Disagree.

2.3 Sampling Unit

A sampling unit is an element or a unit containing the element i.e. available for
selection at some stage of the sampling process. Before selection for survey a
sampling unit is taken. The sampling unit was the respondents who involves in store
inventory management at pantaloons, patia, Bhubaneswar.

29
2.4 Sample Size

A sample size is a set of elements picked from the staff employees being studied from
which information is obtained. A researcher first identifies the appropriate sample size
before planning and designing which data collection method would be suitable in that
specific case. Murthy and Bhojama (2008) noted that a sample size is a function of the
population variation and the error term that is allowed for the study. The sample size
in this study was computed error term of 5% was accounted for providing 95%
confidence level. The research study covered 53 staff employees such as warehouse
manager, warehouse assistant and pantaloons sales staff.

2.5 Data Analysis

Data collected were edited and coded. These processed data were analysed using
Statistical Package for Social Sciences (SPSS for windows), the print out of
information from the SPSS was analysed and was presented in the forms of tables and
a discussion of the information contained in those table was done. This was done by
preparing Data file starting on the variable view then proceed on Data view, the Data
view displayed actual data and new variables created.

The variable view window contained the definitions of each variable in the data set
including its name, type, label, width, alignment and other informations. The output
window was where the results of queries were done. To run the SPSS data were
entered directly into the package, analysis function commanded then descriptive
statistics resulted to preparing frequencies. The output was printed directly copied
from the output viewer and pasted to word for presentation and discussion of findings
in the study.

The researcher also used simple statistical calculation like mean by through SPSS.

30
2.6 Plan of the Report

The entire report has been divided into four chapters and again each chapter is further
divided into sub section and various sections.

The first chapter presents introduction and review of literature. This chapter includes
review of existing marketing literatures, store inventory management process and
control and highlights scope of the study, objectives of the study, specific question
and limitations of the study.

The second chapter describes research methodology; it narrates the framework for a
study which guides to collect and analyze the information.

The third chapter contains result and analysis of work, which was analyze the
questionnaire and presents interpretations of research

The fourth chapter deals with conclusions and recommendation. It discusses

interpretation of the study and giving conclusion regarding topic.

31
 CHAPTER III

RESULT /

ANALYSIS OF STUDY

32
Introduction

This chapter presents the results of the study. Data gathered were coded, analysed
using Statistical Package for Social Sciences (SPSS) and descriptive statistical
methods which are frequencies and percentages interpreted and discussed. The
findings have been presented in tabular forms for better and clear understanding.

FSN Analysis

The FSN Analysis is based on the rate of issue or rate of usage of spare parts and the
alphabets F S and N stands for Fast Moving, Slow Moving and Non Moving items.
The FSN classification system categorizes the items based on how frequently the parts
are issued and how frequently they are used.

Usual classification of Items at Inventory can be classified based on the following

criteria

Fast Moving – Items which are frequently issued from inventory which are more than
once for a specific time period
Slow Moving – Items which are less frequently issued which might be once in a
specific time period
Non-Moving – Items which are not issued from the inventory at all in a specific time
period

The FSN classification system is extremely helpful in distributing spare parts which
are kept near the dispensing are having items which belong to the fast-moving
category. The items which fall into the non-moving category can be discontinued if
the further scope of use is not expected. As companies in production for a longer
period have a specific percentage of non-moving spare parts which are usually
disposed at regular intervals. Selling the spare parts or reusing the same can be again
in the capital which can be used for other uses.

33
 Divison wise break up of sales in the
month of april-may
Sum of
Raw Labels Quanitity Category
MN-ACTIVE 342 F
MN-PARTY 453 F
MN-PLUSSIZE 103 S
MN-CASUAL 563 F
MN-FORMAL 320 F
MN-SPORT 205 S
MN-ATHLEISURE 121 S
MN-JEANS 369 F
NA-MN-ACCE 243 F
NA-MN-FTWR 92 S
NA-COSMETICS 134 S
NA-GIRL-FTWR 75 S
NA-WATCHES 42 S
NA-SUNGLASSES 21 S
NA-WW-ACC 139 S
WE-FUSION 213 F
WW-YOUNG 321 F
KD-TODDLER BOY 153 S
KD-JUNIOR-GIRL 78 S
WW-CASUAL 413 F
WW-DENIM 213 F
KD-JUNIOR BOY 54 S
WW-ACTIVE 136 S
NA-FASHION 327 F
KD-INFANT 87 S
NA-HAND BAGS 52 S
WE-PLUS SIZE 78 S

From FSN analysis it will help the top management to design the store layout that the
fast moving items are kept in the front portion of stores such that such items are sales
quickly. And all other slow-moving items will enable the management to take
decision whether it is required in future or to salvage them once for all. If such items
are out warded from store the working capital position of the company will improve
because locked up capital is eliminated. If the company wants to recycle this capital, it
is made available to stock other items which are active use.

34
3.1 Demographic characteristics

Respondents Involved in the Study :-The study involved 53 respondents from staff
of pantaloons. All questionnaires distributed to respondents were 100% collected as
indicated in Table 3.1 below.

Fig 3.1 Respondents Designation

Designation Frequency Percentage

Warehouse Manager 1 1.85
Warehouse assistant 2 3.70
Pantaloons sales staff 50 94.45
Total 53 100
Source:- Primary Data
The above table showed that there are pantaloons staffs (94.45%) are followed by
Warehouse manager (1.85%) as well as warehouse assistant (3.70%).
It was also found that all pantaloons staffs are directly involved the activities of store
inventory management, counting of materials, replenishment of stock, warehouse
operational.

3.2 Work Experience of employees

Fig 3.2-Work Experience

Frequency Percent Valid Percent Cumulative

Percent

0-6 Months 8 15.1 15.1 15.1

6-12 Months 3 5.7 5.7 20.8

12-18 months 26 49.1 49.1 69.8

Valid
18-24 months 2 3.8 3.8 73.6

24 months & above 14 26.4 26.4 100.0

Total 53 100.0 100.0

35
 Graph 3.2- Work experience
Source:- primary data
The above table and graph showed that out of 100% respondents there are 15.1%
respondents having work experience in early stage(0-6 months) followed by 6-12
months (5.7%), 12-18 months (49.1%),18-24 months(3.8%), 24 months and
above(26.4%).
From this graph it indicates that 49.1 % respondents having work experience of 12-18
months. By which it leads to accurate managing of inventory.
This describes pantaloons staff employees are focused on replenishment of stock,
arrangement of stock etc.

3.3 Descriptive Statistics

3.3 Inwarding Report

Month Categories Total

April CDC/MDC/RDC 6542
Vendor 2459
Total 9001
May CDC/MDC/RDC 11613
Vendor 3304
Total 14917
Grand Total 23918

Fig 3.3--Categories of stock Received

Source-Primary Data

36
 Inwarding Quanitity
14000
12000
10000
8000
6000
4000
2000
0
CDC/MDC/RDC Vendor CDC/MDC/RDC Vendor
April May
Graph 3.3- Categories of stocks received
The above graph showed that nearly 9000 of stocks received in month of april in
combine of CDC (6000) & Vendor Stock (3000), where, During month of May 14500
of stock received in combination of CDC (11000) & Vendor (3500).

From this data, it was found that CDC stocks were received more than vendor stock in
a month. Also, the stocks receiving process on May month is greater than April
month.

3.4 Outward Report

Months Categories Quantity

April CDC/RDC -18
Vendor 0
Total -18
May CDC/RDC -1588
Vendor -1086
Total -2674
-2692 -2692 -2692
Fig 3.4- Stock outward in month wise

Outward Quantity
0
CDC/RDC Vendor CDC/RDC Vendor
-500
April May
-1000 Quantity

-1500

-2000

Graph 3.4- Stock Outward quantity

37
3.5 Frequency of Stock Maintenance

Frequency Percent Valid Percent Cumulative

Percent

30 Days 31 58.5 58.5 58.5

Valid 60 Days 22 41.5 41.5 100.0

Total 53 100.0 100.0

Fig 3.5- Maintenance of stock (in days)

Graph 3.5 – Maintenance of stock (In days)

Source-Primary data

Table-3.5 indicates that 58.5 % of respondents gave opinion that the stocks were
maintained throughout 30 days and remaining 41.5 % respondents’ opinion towards
60 days.
It was also found out that stock maintains is very cost effective but large no. of stock
carries high amount of holding cost. Thus, there should be limited period days for
maintenance the stock, otherwise stock mismanagement and cost effective occur
towards the store.

38
3.6 Methods of Evaluating Inventory

Frequency Percent Valid Percent Cumulative

Percent

FIFO 20 37.7 37.7 37.7

LIFO 14 26.4 26.4 64.2

Valid
Average Cost 19 35.8 35.8 100.0

Total 53 100.0 100.0

Fig 3.6- Frequency of inventory method

Graph 3.6- Frequency of inventory method

Source- Primary data

The above table showed that nearly 38 % respondents were giving opinion towards
FIFO (First in first out) method followed by LIFO (26.4%) and Average cost(35.8%).

From this analysis, it was found that most of respondents adopted FIFO method
because they belong to in house brand product. Remaining respondents were mostly
related to vendor and depends on season wise sale. So, they prefer LIFO and average
cost method.
39
3.7 Opinion Regarding out of stock problem

Frequency Percent Valid Percent Cumulative

Percent

Yes 19 35.8 35.8 35.8

Valid No 34 64.2 64.2 100.0

Total 53 100.0 100.0

Fig 3.7- Frequency of Out of Stock

Graph 3.7:- Opinion regarding out of stock

Source-Primary data
Table 3.7 indicates the respondents (staff) response on the stock out problem on the
study revealed that 35.8 % agreed that there is a notable stock out situation which was
mostly caused by technicality of the materials requested by the users (technical
specifications) which made the items needed to a bit delay to be delivered by
suppliers or service providers, but the immediate solution of this problem is to make
request earlier for materials whose specifications seem a bit complicated so as to give
the procurement unit ample time to process the order and deliver the requested
materials timely and training process successful, the remaining 64.2% said that there
is no notable stock out problem on the centre daily operations as every activity is
scheduled.

40
3.8 Opinion regarding Cause of out of stock

Frequency Percent Valid Percent Cumulative

Percent

Delay on inwarding process 3 5.7 5.7 5.7

Late provision of orders to

6 11.3 11.3 17.0
suppliers

Valid Delay on logistics service 7 13.2 13.2 30.2

Technicality of Materials Ordered 3 5.7 5.7 35.8

No Reason 34 64.2 64.2 100.0

Total 53 100.0 100.0

Fig 3.8:- Frequency cause of out of Stock

Graph 3.8:- Main Cause of out of stock

Source – Primary data

The above table fig 3.8 indicates that 13.2% of respondents saying they found out of
stock in case of delay on logistics service followed by late provision order to suppliers
(11.3%), delay on inwarding process (5.7%) and Technicality of materials ordered
(5.7%).
From the study it was also found out that logistics service contributes very effective
cost control towards the organization. Due to depend upon logistics service, it
becomes delay on receiving of merchandise which is main cause of out of stock.

41
3.9 Opinion Regarding Platinum standard process

Frequency Percent Valid Percent Cumulative

Percent

STRONGLY AGREE 14 26.4 26.4 26.4

AGREE 20 37.7 37.7 64.2

UNDECIDED 11 20.8 20.8 84.9

Valid
DISAGREE 7 13.2 13.2 98.1

STRONGLY DISAGREE 1 1.9 1.9 100.0

Total 53 100.0 100.0

Fig 3.9:- Frequency of platinum standard process

Graph3.9:- Adaptation of platinum standard process

Source- Primary Data

Fig3.9 indicates that 37.7 respondents were agreed with store follow up platinum
standard process. But in other respondents gave their review in followed by strongly
agree (26.4%), Undecided (20.8%), Disagree (13.2%), Strongly disagree (1.9%).

From this graph, it showed that most of respondents were saying store was follow
platinum standard process for inventory management. But some of the respondents
were not aware about platinum standard process which they may be belongs to vendor
stock.

42
3.10 Opinion regarding Made to Stock

Frequency Percent Valid Percent Cumulative

Percent

STRONGLY AGREE 11 20.8 20.8 20.8

AGREE 18 34.0 34.0 54.7

UNDECIDED 15 28.3 28.3 83.0

Valid
DISAGREE 7 13.2 13.2 96.2

STRONGLY DISAGREE 2 3.8 3.8 100.0

Total 53 100.0 100.0

Fig 3.10:- Frequency of made to stock inventory

Graph 3.10:- Made to stock inventory system

Source—primary data

From this above graph & figure, it showed that 34% of respondents’ opinion towards
agrees followed by Undecided (28.3%) ,Strongly agree (20.8%), Disagree (13.2%),
strongly Disagree (3.8%).

In retail sector, there must be made to stock of inventory is very essential because of
demand arising. In EOSS season time and festive time, the company follows made to
stock of inventory. So that the stocks problem will never be arise.

43
3.11 Replenishment of Stock

Frequency Percent Valid Percent Cumulative

Percent

STRONGLY AGREE 12 22.6 22.6 22.6

AGREE 21 39.6 39.6 62.3

UNDECIDED 9 17.0 17.0 79.2

Valid
DISAGREE 7 13.2 13.2 92.5

STRONGLY DISAGREE 4 7.5 7.5 100.0

Total 53 100.0 100.0

Fig 3.11- Frequency of stock replenishment

Graph 3.11- Stock Replenishment

Source- Primary data

The above table and graph shows that 39.6% respondents agreed their product
continuously. Also this shows no one does replenishment delay. Replenishment of the
product shows the warehouse operation.

44
3.12 Opinion regarding inventory process

Frequency Percent Valid Percent Cumulative

Percent

STRONGLY AGREE 16 30.2 30.2 30.2

AGREE 14 26.4 26.4 56.6

UNDECIDED 12 22.6 22.6 79.2

Valid
DISAGREE 8 15.1 15.1 94.3

STRONGLY DISAGREE 3 5.7 5.7 100.0

Total 53 100.0 100.0

Fig 3.12 Frequency of Inventory Process

Graph 3.12 Frequency of Inventory Process

Source—Primary data
From this data it was showed that some of the respondents strongly agreed with
inventory process done by computerized data but other respondents were belief that
the inventory process work done on the basis of both computer and physical work.
Here opinion of respondents for strongly agree (30.2%), Agree (26.4%), Undecided
(22.6%), Disagree (15.1%), Strongly Disagree (5.7%).

45
3.13 Opinion regarding infrastructure

Do you find sufficient infrastructure for work done

Frequency Percent Valid Percent Cumulative

Percent

STRONGLY AGREE 10 18.9 18.9 18.9

AGREE 21 39.6 39.6 58.5

UNDECIDED 8 15.1 15.1 73.6

Valid
DISAGREE 10 18.9 18.9 92.5

STRONGLY DISAGREE 4 7.5 7.5 100.0

Total 53 100.0 100.0

Graph 3.13 – Opinion regarding infrastructure

From this graph it indicates that Infrastructure is very essential for store.
Larger infrastructure of warehouse tends to good store inventory management.
So, 59% respondents gave their opinion they were well comfortable with
infrastructure.

46
3.14 Determination of Mean & Standard Deviation from Questionnaire

The questionnaire consists of 10 elements in according to inventory management. The

respondents were asked to give their opinion of the elements on likert scale and
normal scale. The mean and standard deviation score of questionnaire given below in
the following table.

N Minimum Maximum Mean Std. Deviation

Statistic Statistic Statistic Statistic Std. Error Statistic

 Work Experience 53 1 5 3.21 .181 1.321

 maintenance of stock 53 1 2 1.42 .068 .497
 What methods does the
pantaloons use to 53 1 3 1.98 .119 .866
evaluate inventory
 pantaloons faced a
53 1 2 1.40 .068 .494
problem of out of stock
 Main cause of out of
53 1 5 3.55 .197 1.435
stock
 All inventory items in our
stores are classified
53 1 5 2.26 .145 1.059
according to platinum
standard process
 We operate a made to
stock inventory system 53 1 5 2.45 .149 1.084
when demand arises
 Stock replenishment is
53 1 5 2.43 .165 1.201
done continuously
 Inventory process are
made based on 53 1 5 2.40 .169 1.230
computerized data
 Do you find sufficient
infrastructure for work 53 1 5 2.57 .167 1.217
done
Valid N (list wise) 53

Table- 3.14- Mean score and standard deviation of questionnaire

From this table it is indicate that element main cause of out of stock has maximum
mean 3.55. Maintenance of stock got lowest mean score 1.42 by respondents across
this dimension. This result shows that out of stock effects on customer sales and
revenue growth and stock should be improved & maintained for optimum level in
respect to sales.

47
 CHAPTER IV

CONCLUSION & RECOMMENDATION

BIBLIOGRAPHY & ANNEXURE

48
Conclusion:
Overall the study found that inventory management in pantaloons is improving as the
management is struggling to make sure that qualified and competent professionals are
employed and highly paid and who are knowledgeable with the computerized
inventory system with the goal of ensuring high performance as far as materials
management is concerned, unlike delay on stock replenishment tends to loss of
customers as well as revenues. Some of staffs are not aware of all categories of stock.
Lack of availability of infrastructure creates an unhygienic atmosphere. Warehouse
operation is situated in second floor instead of ground floor.

Maximum job work done through computerized process data which tends to accuracy
and time saving. Sometimes operations staffs are facing slowdown of server while
doing work. Sometimes Customers are not getting proper readymade garments due to
deficiency of stock.

Recommendation
(i) The employee should be received well proper trained regarding operational
activities off stock inventory management and control.

(ii)Pantaloons employees should be aware of platinum standard process of warehouse

operations.

(iii) Stock should be maintained less no of days by using method of evaluating

inventory.

(iv)All employees should have noticed out of stock problem so that, customers are
getting proper stock with in right time.

(v) Need of more space for the warehouse transaction which will create a hygienic
and pleasant environment.

(vi) Staff should be well aware about warehouse stock so that they ease to found
while doing stock replenishment.

(Vi) The consignee and supplier might have more responsibility and awareness about
the shortage of stock.

(vii) Every employee should be aware of all stock categories so those customers are
getting proper service without any problem.

49
BIBILIOGRAPHY
BOOKS

Retail management by Levy Weltz

Research methodology by William G zikmund,bary j babin, jon c carr

Retail management by Bajaj, tuli

Supply chain management by sunil chopra, peter meindl, D.v. kalra

World class warehousing and material handling Mcgraw hill Frazelle, E

H(2002)
WEBSITE

www.pantaloons.com

www.scholarshipfellow.com

www.sciencedaily.com

www.asapsystems.com

www.researchgate.net

50
Annexure
About pantaloons
Pantaloons Fashion & Retail Limited is an Indian premium clothing retail chain. The
first Pantaloons store was launched in Gariahat, Kolkata in 1997. As of November
2013, there are 76 Pantaloons stores in 44 cities. A pantaloon was previously
controlled by the Future Group, but has now been taken over by Aditya Birla Nuvo
Limited (ABNL). Spotlighting today's buoyant youth, Pantaloons Fashion Retail Ltd.,
India's premium lifestyle apparel company offers chic and trendy fashion to meet their
ever-changing needs. With innovative designs, concepts and products, the company
brings the latest trends in fashion and clothing styles to the apparel market. Pantaloons
reflect the ideology of always keeping alive the 'newness factor' through fashion
apparel and accessories that are visually appealing and fashionably upbeat.
Pantaloons stores have an abundance of choices across categories that range from
western to Indian wear, formal to party wear and active wear for men, women and
kids. To further add to the customer's innumerable choices that reflect style, attitude,
and comfort, Pantaloons has extended its horizons to fashion accessories like
fragrances, footwear, handbags, watches, sunglasses and much more. With a chain of
81 fashion stores across 40 cities and towns, Pantaloons is constantly extending its
foot-prints into the rest of modern India.
Pantaloons which was previously controlled by the Future Group has now been taken
over by Aditya Birla Nuvo Limited ['ABNL']. ABNL is a part of the prestigious
Aditya Birla Group, a $40 billion Indian multinational, operating in 36 countries
across the globe with over 136,000 employees.
The company offers an incredible and complete one-stop shopping experience to its
buyers through its vast collection of more than 100 prestigious brands for the
discerning fashionista. The 81 aesthetically designed stores spread across the country
display a range of classy and trendy merchandise that truly lives up to Pantaloons’
maxim of ‘fresh fashion’. Pantaloons is recognized by its warm personalized service
that completes the core proposition of this trendy chain.
The Aditya Birla Group ranks high in the League of Fortune 500 Corporations of the
world with a strong mix of talented and capable personnel comprising of 42 different
nationalities, who are credited with anchoring the organization and scripting one
brilliant success story after another.

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Backed by the giant conglomerates, ABNL and Future Group, both the entities will
work in tandem to derive operational synergies for back-end, supply chain and other
crucial value drivers of the business.
With its overwhelming repertoire of lifestyle apparel brands, Pantaloons is focused on
growth while continuing to create fresh fashion. Pantaloons is recognised by its warm
personalized service that completes the core proposition of this trendy chain.
Supply Chain management
It is the management of the flow of goods. It includes the movement and storage of
raw materials, work-in-process inventory, and finished goods from point of origin
(Manufacturing Unit) to point of consumption (Store).
Main functions of supply chain management are as follows:
1) inventory management 2)distribution management 3)channel management
4)payment management 5)financial management 6)supplier management
7)transportation management 8)Customer service management.
Some of their work is already done by planning team only Inventory Management and
Distribution Management. They closely work with planning department and
interchange information regarding stock delivery from supplier to warehouse and
warehouse to store or if any stock is available for inter store transfer or vendor has to
direct supply to store SCM team take care of this things.
Brands

Men’s Wear Women’s Wear Kids Wear Non apps

Private label : Private label : Private Label : Private label :
SFJeans, Altomoda, SFJeans, Bare, Chirpie Pie, , Ajile foot wear,
Baredenim, Spiritus
Altomoda,Baredenim, Rig Kids , Doodle Forever glam,
Richard parker,Ajile
Bareleisure, byford, Rang manch, Jealous Vanheusen,
RIG , Urban ranger Non Private label : Non Private label: ONN
Non private label :,
Barbie, Disney, Non private:
, Wrangler,Levis, And, Kraus,
john miller, Pepe, Biba, Fusion Beats, honey, Poppers, Lakme,
Spykar, Turtle, Global Desi, Dreamz Baggit,Enamor
Allensolly ,
Annabelle Colorbar,Disney
Peter england
Maybelline,

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4.3 Format of warehouse register
4.3.1 Inward register format
Receiving
S.N IRN site/Vendor P.O Transporter
no no Date Name Invoice detail no name

Invoice no Invoice Date Qty

LR Detail GRN Detail Discrepancy Detail Sign

LR LR Way bill GRN warehouse

Date Qty No. Date Qty Amt.
No. date no. No. incharge

4.3.2 Outward Register Format

S.No Date Receiving site code Description of Gate pass Gate pass
goods no. date

No.Of Delivery Detail Transporter Name Sign of

pkgs incharge

no. Date Qty Amt

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4.3.3 Hanger inventory Register format
Hanger Opening Qty Staff
Date Type stock Received Inward qty Closing stock name

4.3.4 Carry-Bag Inventory Register format

Carry bag Opening Qty Inward Closing staff
Date type Stock received qty stock Name

4.3.5 Barcode Control register

Date MC Bran Item Barcode Reason Printe Sign SM
name d Descriptio Number for d Qty of Sign
n Printing Person

4.3.6 External W/H - Floor to WH Stock mvmt

Register

Date In Out From MC MC Issued DM WH Security SM

Time Time dept code name Qty No. Sign Sign Sign Sign
of
pcs/boxes

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 ReturnableRegister

Issue Gate Goods Due Return Total Qty Total

Date Pass Description date of date Value
No. return

Receiver's WH Reason Remarks Gate Gate Pass SM

Sign Sign Pass tallied Sign
returned

4.3.7 Non returnable

Register
Sr. no. Date Gate Description Purpose Store Dept.
Pass of incharge
No. takeaway

Contact Qty MRP Value Security SM Sign

details Sign

Defective stock format

Date Article EAN Brand Type Quantity Date of STO/PO Delivery Remarks
Number Number of Outward Number No.
defect for
Outward

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QUESTIONNAIRE FOR STAFF

Sec A Please put tick ( ) where appropriate

1. Gender: _______________ 2. Age :-___________
3. Experience in Retail :- a) 0-6 months b) 6-12 months c) 12-18 months
d) 18-24 months e) 24 months & above
4. For how many days pantaloons maintain the inventory of stock?
a) 30 Days b)60 Days
5. What method do the Pantaloons use to evaluate inventory?
a) First in first out ( FIFO) [ ]
b) Last in first out (LIFO) [ ]
c) Average cost (A C) [ ] d) Standard cost (S C) [ ]
6. Have you noticed several times that Pantaloons faced a problem of
out of stock?
a) Yes [ ] b) No( )
7. If the answer in question 7 above is ‘Yes’ what is the main cause?
a) Delay on inward process [ ]
b) Late provision of orders to Suppliers [ ]
c) Delay on Logistics service [ ]
d) Technicality of materials ordered [ ] e) No Reason [ ]
Sec B Instruction:- Kindly indicate the extent of your agreement with
the statement below by ticking [√ ] one of the spaces provided. Where
SA = Strongly Agree, A = Agree; U = Undecided; D = Disagree; SD =
Strongly Disagree

S/N Inventory Management Practices SA A U D SD

1 All inventory items in our stores are

classified according to Platinum standard
process.
2 We operate a made-to-stock inventory
system when demand arises.
3 Stock refilling is done continuously.
4 Most inventory process are made based
on computerized data output.
5 Our store have sufficient infrastructure for
work done.

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