Description
It describes chain management in a typical 'kiryana store'.It also covers how their processes would lead to a threat to the organized retail sector.
Supply Chain Management
A study of the Supply Chain Network of a Typical Kirana Store and Threats to it from Large Scale Organized Retail
Project Snapshot
• Name of Organization: Alka Stores
• Type of Organization:
Kirana Store/ Corner Store Stocking
non perishable items and packaged food stuff
• Location:
• Project Part A: • Project Part B:
Navrangpura
A study of the Supply Chain Network of a typical Kirana store Threats to it from large scale organized retail
Deliverables
• Real time understanding of how a supply chain works
• Positioning & prospects of a corner store in today’s booming retail scenario • Difficulties that the retailers face in satisfying the ever increasing consumer demand and the variability associated with it • Understanding issues like –
– Forecasting – Purchase quantity – Lead time – Lost sales – Transactions with the local whole-seller – Storage – Customer service levels etc.
Deliverables
• The organization will get a formal understanding on how they
operate their supply chain
• Strategies to improve the supply chain efficiency of the Kirana store
• Basic strategies to counter the growing influence of megaretailers and how corner stores can maintain their niche
Part A
Customer Relationship Management
• Same Day Home Delivery (10km & beyond) • Database of products preferred by regular and loyal customers • General offers, discounts brought to customer’s notice • Customer parity in treatment towards them • Flexible selling prices as per customers (not necessarily MRP)
Internal Supply Chain Management
• Demand planning - Overstocking
Expected Sales 9 12 15 Target Inventory Level 12 15 18
• Strategic Planning for new products
– Which company is manufacturing the product? Is it from a popular house of brands or branded house? – What type of advertising is taking place for the new product in the market? – Are the customer’s enquiring about the product?
Supplier Relationship Management
• • • • • • • • Sourcing – replenishments by local co. distributors Next Day Delivery Instantaneous Replenishments in case of low weight items Replenishments for perishables Replenishments for frozen food Spot Payment to distributor - called Cash & Carry Payment Advance Payment to only two major players Company feedback by – – TSM or ASM – Co. Distributor’s log book used for demand forecasting
Distributor’s organization
West Zone
• Whole of Gujarat
• Half of Rajasthan • Half of Madhya Pradesh Ahmedabad • New City – Same side of the city as Alka Stores (Satellite to Bopal) • Old City – On the other side of the city across the river (Sarkhej-Rani-KaliChandkheda)
Determining Level of Service Category Characteristics A (Next only to a super market)
Special Schemes, Easy movement of goods, Large number of customers, 100% items sell Only 60% items sell, different schemes 25%-30% items sell, different schemes
B
C
Other Issues in Internal Operations of Alka Stores
• Retailer margins
Margin
5% (Lowest)
Product
Ghee and Butter (Maximum turnover, fast moving goods)
10%-12% (Avg)
20% (Maximum)
Co. branded packaged foodstuff and personal care
Confectionary Items – eg. Bread
• Dealing with Shortages
– Own Tempo sources from distributor in the other zone – Semi-Wholesale market (2% more expensive) – No limit on minimum number of items in an order
Other Issues in Internal Operations of Alka Stores
• Insurance for retailers (New India Insurance Co.)
–In Store Theft
–Earthquake –Flood
–Shoplifting
–Theft of money in transit on way to the bank etc.
• Allocating Shelf Space
–2-3% display allowance
• Shelf life
–Co.’s pick up products 1 month before expiry
Other Issues in Internal Operations of Alka Stores
• PoP displays
• Permanent POP –Refrigerators by Coke-o-Cola, Freezer by Havmor
• Temporary POP – Maggi baskets, Balaji Racks for wafers • POP Storage Items given free
Brand Ponds Fa Kissan
Cost in Rs. Per month 500 400 400
Cycle Views of Supply Chain
• Cycle view
• Push Pull view
– Over Stocking and importance of availability drives Push Strategy – Pull Strategy only for slow moving goods
Levels of Implied Demand Uncertainty
Predictable demand Medium levels of uncertainty Highly uncertain demand
Products like salt, sugar, biscuits
Products like RTE, Cosmetics, fresh fruits & vegetables
Fig: Implied Demand uncertainty Spectrum of Alka stores
Hau Lee’s Uncertainty Framework
Demand uncertainty
Low Efficient Supply Chain (Grocery)
High
Low
Supply uncertainty
Responsive Chain (Computers)
High
Risk hedging Supply chain (Hydro electric Power)
Agile supply chain (Telecom)
Strategic Fit
Responsive chain
Responsiveness spectrum
Zone of strategic fit
Efficient chain Certain demand
ALKA STORES
Implied demand uncertainty
Uncertain demand
Inventory Model
Fixed time re-ordering system
Idle state waiting for customer demand
Demand Occurs Units withdrawn from inventory
NO
Review time ?
YES
Compute inventory position
Compute order to bring inventory upto the desired level
Issue order for units needed
Part B
Indian Retail Scenario
Facing the Competition
Organized Retail • Price advantage due to bulk sourcing and robust supply chain • Variety • Paucity of time Mom and Pop Stores • Personal touch • Care • Know their customers and households well
Recommended Strategies for Alka Store
• Introduce special schemes for bottom of the pyramid
• Improve store design and layout
• Organize the unorganized – Bulk Buying • Research for customized services – Pantry Audits
• Offers niche services
• Offer a step beyond convinience • 3 Vs leading to Kirana Store increasingly being the 2nd choice
• Direct online purchasing
• Brand the store • Seek government assistance
Sources of Information
3 Personal Visits to Alka Stores Dates of Visit – • 13th Nov, 2007 • 16th Nov, 2007 • 11th Dec, 2007 Articles • India’s retail explosion: Boon or bane? – Economic Times dated 16 July, 2007 • Anti-retail protests mainly target Reliance Retail – Business Line dated October 16, 2007 • The Great Gamble – Brand Equity, Economic Times dated October 31, 2007 Online Sources • Blog on buyer behaviour - http://buyerbehaviour.blogspot.com/2007/07/indian-retailconflicts-within.html • Blog on buyer behaviour - http://buyerbehaviour.blogspot.com/2007/02/demise-ofmom-n-pop-stores-not-yet.html • Video on Kirana Stores v/s Department Stores v/s Chain Stores http://www.youtube.com/watch?v=JsE8MCBef5M
Thank You
doc_275945710.ppt
It describes chain management in a typical 'kiryana store'.It also covers how their processes would lead to a threat to the organized retail sector.
Supply Chain Management
A study of the Supply Chain Network of a Typical Kirana Store and Threats to it from Large Scale Organized Retail
Project Snapshot
• Name of Organization: Alka Stores
• Type of Organization:
Kirana Store/ Corner Store Stocking
non perishable items and packaged food stuff
• Location:
• Project Part A: • Project Part B:
Navrangpura
A study of the Supply Chain Network of a typical Kirana store Threats to it from large scale organized retail
Deliverables
• Real time understanding of how a supply chain works
• Positioning & prospects of a corner store in today’s booming retail scenario • Difficulties that the retailers face in satisfying the ever increasing consumer demand and the variability associated with it • Understanding issues like –
– Forecasting – Purchase quantity – Lead time – Lost sales – Transactions with the local whole-seller – Storage – Customer service levels etc.
Deliverables
• The organization will get a formal understanding on how they
operate their supply chain
• Strategies to improve the supply chain efficiency of the Kirana store
• Basic strategies to counter the growing influence of megaretailers and how corner stores can maintain their niche
Part A
Customer Relationship Management
• Same Day Home Delivery (10km & beyond) • Database of products preferred by regular and loyal customers • General offers, discounts brought to customer’s notice • Customer parity in treatment towards them • Flexible selling prices as per customers (not necessarily MRP)
Internal Supply Chain Management
• Demand planning - Overstocking
Expected Sales 9 12 15 Target Inventory Level 12 15 18
• Strategic Planning for new products
– Which company is manufacturing the product? Is it from a popular house of brands or branded house? – What type of advertising is taking place for the new product in the market? – Are the customer’s enquiring about the product?
Supplier Relationship Management
• • • • • • • • Sourcing – replenishments by local co. distributors Next Day Delivery Instantaneous Replenishments in case of low weight items Replenishments for perishables Replenishments for frozen food Spot Payment to distributor - called Cash & Carry Payment Advance Payment to only two major players Company feedback by – – TSM or ASM – Co. Distributor’s log book used for demand forecasting
Distributor’s organization
West Zone
• Whole of Gujarat
• Half of Rajasthan • Half of Madhya Pradesh Ahmedabad • New City – Same side of the city as Alka Stores (Satellite to Bopal) • Old City – On the other side of the city across the river (Sarkhej-Rani-KaliChandkheda)
Determining Level of Service Category Characteristics A (Next only to a super market)
Special Schemes, Easy movement of goods, Large number of customers, 100% items sell Only 60% items sell, different schemes 25%-30% items sell, different schemes
B
C
Other Issues in Internal Operations of Alka Stores
• Retailer margins
Margin
5% (Lowest)
Product
Ghee and Butter (Maximum turnover, fast moving goods)
10%-12% (Avg)
20% (Maximum)
Co. branded packaged foodstuff and personal care
Confectionary Items – eg. Bread
• Dealing with Shortages
– Own Tempo sources from distributor in the other zone – Semi-Wholesale market (2% more expensive) – No limit on minimum number of items in an order
Other Issues in Internal Operations of Alka Stores
• Insurance for retailers (New India Insurance Co.)
–In Store Theft
–Earthquake –Flood
–Shoplifting
–Theft of money in transit on way to the bank etc.
• Allocating Shelf Space
–2-3% display allowance
• Shelf life
–Co.’s pick up products 1 month before expiry
Other Issues in Internal Operations of Alka Stores
• PoP displays
• Permanent POP –Refrigerators by Coke-o-Cola, Freezer by Havmor
• Temporary POP – Maggi baskets, Balaji Racks for wafers • POP Storage Items given free
Brand Ponds Fa Kissan
Cost in Rs. Per month 500 400 400
Cycle Views of Supply Chain
• Cycle view
• Push Pull view
– Over Stocking and importance of availability drives Push Strategy – Pull Strategy only for slow moving goods
Levels of Implied Demand Uncertainty
Predictable demand Medium levels of uncertainty Highly uncertain demand
Products like salt, sugar, biscuits
Products like RTE, Cosmetics, fresh fruits & vegetables
Fig: Implied Demand uncertainty Spectrum of Alka stores
Hau Lee’s Uncertainty Framework
Demand uncertainty
Low Efficient Supply Chain (Grocery)
High
Low
Supply uncertainty
Responsive Chain (Computers)
High
Risk hedging Supply chain (Hydro electric Power)
Agile supply chain (Telecom)
Strategic Fit
Responsive chain
Responsiveness spectrum
Zone of strategic fit
Efficient chain Certain demand
ALKA STORES
Implied demand uncertainty
Uncertain demand
Inventory Model
Fixed time re-ordering system
Idle state waiting for customer demand
Demand Occurs Units withdrawn from inventory
NO
Review time ?
YES
Compute inventory position
Compute order to bring inventory upto the desired level
Issue order for units needed
Part B
Indian Retail Scenario
Facing the Competition
Organized Retail • Price advantage due to bulk sourcing and robust supply chain • Variety • Paucity of time Mom and Pop Stores • Personal touch • Care • Know their customers and households well
Recommended Strategies for Alka Store
• Introduce special schemes for bottom of the pyramid
• Improve store design and layout
• Organize the unorganized – Bulk Buying • Research for customized services – Pantry Audits
• Offers niche services
• Offer a step beyond convinience • 3 Vs leading to Kirana Store increasingly being the 2nd choice
• Direct online purchasing
• Brand the store • Seek government assistance
Sources of Information
3 Personal Visits to Alka Stores Dates of Visit – • 13th Nov, 2007 • 16th Nov, 2007 • 11th Dec, 2007 Articles • India’s retail explosion: Boon or bane? – Economic Times dated 16 July, 2007 • Anti-retail protests mainly target Reliance Retail – Business Line dated October 16, 2007 • The Great Gamble – Brand Equity, Economic Times dated October 31, 2007 Online Sources • Blog on buyer behaviour - http://buyerbehaviour.blogspot.com/2007/07/indian-retailconflicts-within.html • Blog on buyer behaviour - http://buyerbehaviour.blogspot.com/2007/02/demise-ofmom-n-pop-stores-not-yet.html • Video on Kirana Stores v/s Department Stores v/s Chain Stores http://www.youtube.com/watch?v=JsE8MCBef5M
Thank You
doc_275945710.ppt