Damage and Shrinkage ControlAt

Spar Hypermarket

A Summer Project Proposal for

Post-Graduate Diploma in Management

By

Ashish Sarolia

Under the guidance of

Shri KumarSwamy Dr. V. SebastianStore Manager Associate ProfessorSpar Hypermarket(Malleshwaram) IMT, Ghaziabad

May, 2012

[1]

Damage and Shrinkage ControlAt

Spar Hypermarket

By

Ashish Sarolia

May, 2012

[2]

Damage and Shrinkage ControlAt

Spar Hypermarket

By

Ashish Sarolia

Under the guidance of

Shri Kumarswamy Dr. V. SebastianStore Manager Associate ProfessorSpar Hypermarket (Malleshwaram) 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 Mr. KumarswamyAssociate Professor Store ManagerIMT, Ghaziabad Spar Hypermarket

Malleshwaram,BangluruDate 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 6Abstract 7

Table of Contents 8List of Figures 9List of Tables 10List of Abbreviations 11

I Introduction 12

1.1 Inventory Management1.2 Inventory Process 13

1.2.1 Receiving1.2.2 Handling and Placing

1.3 Inventory Categorization 17 1.4 Advantages and Disadvantages 18

II About Spar Hypermarket 19

III About Project 20

3.1 Objective of the study3.2 Scope of the study3.3 Methodology3.4 Project work

IV Damage and Shrinkage control

4.1 Last 3 months analysis 214.2 Types of Damages and Losses 22

V Major Issues

5.1 Major Issues at Electronics Department 235.2 Mark Down Policy 255.3 Security Tag Costing 305.4 Big Business Vendors 31

[8]

List of FiguresFigure No. Description Page

1 Receiving Flow Chart 16

2 Stock Checking Process 18

3 Net sales of past 3 months 22

4 Shrinkage percentage for past 3 months 22

5 Ageing Stock Classification(Value Wise) 28

6 Ageing Stock Classification(No. of Item Wise) 30

[9]

List of Tables

Table No. Description Page

1. Inventory Categorization 18

2. Stock Turn Around Ratio 18

3. Vendor payout ratio 19

4. Last 3 months analysis 22

5. Ageing Stock (Value wise) 27

6. Ageing Stock(No. of item wise) 29

7. Security Tags costing 31

8. Big Business Vendors 33

9. Brand Wise Ageing Stock 34

10. Top vendors(sales wise) 35

[10]

Abbreviations

SKU - Stock Keeping Unit

GRN - Goods Receipt Note

EDLP - Every Day Low Price

DDR - Daily Dump Report

FIFO - First In First Out

PI - Point Of Inventory

POS - Point Of Sale

SV - Stock Voucher

DC - Distribution Center

RC - Repack center

CC - Collection Center

WC - Ware House

PO - Purchase Order

TI - Transfer In

TO - Transfer Out

[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 don’t 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

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]

Receiving

To get the desired amount of quantity from Vendors

Handlin

g

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

Placing

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

Selling

Providing best customer service in terms of instant availability of products

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)

Receiving Flow Chart

[14]

Cold

room

Reject if not good

DSDDC

Receiving

Figure 1

1.2.2 Handling and Placing the received stock

Handling

[15]

Check seal & trip sheet

Unloading

Segregate / category wise

Stock verification

Stock counting

Shifting-floor

Vendor

Documentation

DC

Empty tubs & Cartons

Damages

GRWMStacking

PRD

Quantity & price check

Document

Quality check

PO/Invoice

Reject if tampered

Damage returns

Inform DC

GRNReceiving

FIFOReplacement NRGP

Manual gate pass

Vendor

Stocks hand over

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 yesterday’s 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

1.3 Inventory Categorization

Whole Inventory is being divided into 3 categories on the basis of Shrinkage and Importance

[16]

Category Name Total No. of SKU’s Category check period

Priority

A 218 Thrice in a week Highest

B 305 Weekly Medium

C 335 Once in 15 days Low

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

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 1-2 Days

FMCG 15 Days

Textile 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]

Physical Stock

Check

System Stock Check

Recheck Diff is checked

Diff report generated

Category Name Vendor Payout Ratio

F&V 3-4 Days

FMCG 15 days

GM, Textile 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 SKU’s Wrong GRN generation

Chapter 2: About SPAR Hypermarket

[18]

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 branding—the name and the current logo.

SPAR Hypermarkets and Supermarkets in India is the result of a license agreement between the Dubai based Landmark Group’s Max Hypermarkets India Pvt. Ltd. and SPAR International. SPAR is the world’s 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 housewife’s 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 Group’s 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.

Chapter 3: About Project

[19]

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.

Chapter 4: Damage and Shrinkage Control In Electronics Department

4.1 Last 3 months Analysis

[20]

Month Net Sales Shrinkage Value Shrinkage %Feb 4277170 16389.9 0.383March 7948348 16406.8 0.206April 7429813 6433.29 0.086

Table 4: Last 3 months analysis

Feb March April0

100000020000003000000400000050000006000000700000080000009000000

Net Sales

Net Sales

Figure 3: Net sales of past 3 month

Feb March April0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Shrinkage %

Shrinkage %

Figure 4: Shrinkage percentage of past 3 months

Note – Shrinkage Percentage=Shrinkage Value/Net sales *100

[21]

Note – Net sales doesn’t 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 store’s 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.

Chapter 5: Major Issues in Electronics Department

[22]

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 DescriptionCurrent Situation Display pieces is put up by company(Spar) itselfProblems in current Situation Whole cost of damage and responsibility of safeguarding lies with

the company(Spar)Possible Solution Display Pieces should be sponsored by respective vendor

2

Situation DescriptionCurrent Situation Ageing stock is moved to the inventory till their sell off to the scrap

dealerProblems in current Situation 1. Overburdening to the inventory room and inventory team

2. Less resell value due to no such policy of Mark DownPossible Solution There should be a 90 days scrap Mark down policy on ageing stock

3

Situation DescriptionCurrent Situation Some Personal EntertainmentProducts don’t have security tag and

there is no security lock in the shelves containing these productsProblems in current Situation Vulnerable to customer theftPossible Solution 1. There should be security tags on all small appliances like

headphones pen-drives CD’s etc.2. There should be security lock on shelves like the shelves

sponsored by promoters3. There should be a security personnel at the bay containing

small appliances so that customer theft can be minimized

4

Situation DescriptionCurrent Situation Damaged products are lying in the CDIT Back room for more than 6

monthsProblems in current Situation 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

Possible Solution 1. There should be a good return back and replacement policy

[23]

with vendor2. Non-compliance on the part of the vendor should be dealt

strictly e.g. Money should be debited from his account3. Buyers should be make more accountable for non-

compliance of the vendor4. Follow a Mark down policy

5

Situation DescriptionCurrent Situation Cluttered Shelves containing MixersProblems in current Situation More prone to damages while displaying and customer inspectionPossible Solution Utilize the free space in same department and Use optimal display

patterns

6

Situation DescriptionCurrent Situation Product wires hanging out from the shelvesProblems in current Situation More prone to damages while customer movementsPossible Solution Respective Sales persons should be more vigilant

7

Situation DescriptionCurrent Situation Blenders are kept erect without any supportProblems in current Situation More prone to damages while customer movements and placing

back on shelvesPossible Solution There should be blender stand or jar for holding them

8

Situation DescriptionCurrent Situation Water purifiers are kept on the stack of boxesProblems in current Situation More prone to damages while customer movementsPossible Solution Purifier should have stands sponsored by company

Suggestions

There should be more power sockets for display products. Mix up of GM products with Electronics Products should be do away with.

[24]

Sales persons should be encouraged to visit competitor’s 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 (In days )

60-90 90-120 120-180 180-270 270-365 >365

No.of products

1520 532 727 939 336 839

Total value of the products

2468927 563940 465570 626870 405094 468578

49%

11%

9%

13%

8%

9%

Total

60-9090-120120-180180-270270-365>365

Sub Category Wise Ageing Stock (Value in Rs.)

sub category 60-90(Days) 90-120 120-180 180-270 270-365 >365Personal Care 60369 1883 31674 29365 8743 10060

[25]

Personal Entertainment 210779 87860 46558 15644 19486 48599IT 32211 5111 45873 30072 11842 92310

Home Entertainment 1840678 339658 153060 157019 72252 91491

Large Appliance 131458 56873 24329 76826 11307 27214

Small Appliances 193432 72555 164075 317944 281462 198903

Table 5 : Ageing Stock(Value wise)Note – The data mentioned here are the ageing stocks till Jan 2012.

2%

9% 1%

75%

5%

8%

60-90

Personal CarePersonal EntertainmentITHome EntertainmentLarge ApplianceSmall Appliances

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

[26]

0%

16%1%

60%

10%

13%

90-120

7%

10%

10%

33%5%

35%

120-180

5%2%

5%

25%

12%

51%

180-270

2%

5%

3%

18%

3%

69%

270-365

2%

10%

20%

20%6%

42%

>365

Figure 5: Ageing Stock classification (Value Wise)

[27]

Item Wise Break Up of Ageing Stock

sub category 60-90 90-120 120-180 180-270 270-365 >365Personal Care 20 3 39 21 5 9

Personal Entertainment

1177 375 192 166 106 185

IT 80 43 226 341 20 265Home Entertainment 88 42 46 105 60 184

Large Appliance 8 6 1 6 1 4Small Appliances 147 63 223 300 144 192

Total 1520 532 727 939 336 839Table 6: Ageing Stock Classification (No. of item wise)

31%

11%

15%

19%

7%

17%

Total

60-9090-120120-180180-270270-365>365

1%

77%

5%6%

1%10%

60-90

Personal CarePersonal EntertainmentITHome EntertainmentLarge ApplianceSmall Appliances

[28]

1%

70%

8%

8%

1% 12%

90-120

5%

26%

31%

6%0%

31%

120-180

2%

18%

36%11%1%

32%

180-270

1%

32%

6%

18%0%

43%

270-365

1%

22%

32%22%

0%

23%

>365

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

[29]

Conclusions:

We have 50% of our ageing items in 60-90 days period. That’s 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 Cost(In Rs) Probable use ReusabilitySoft Security Tag 3 On CD’s and DVD’s Non-ReusableHard Security Tag 10 Headphones, Pen

Drives, Mouse’sReusable

Security Tag usage

Product Name Current Stock Type Of Tag to be put

Past 3 Months Sales(Volume)

Total cost of putting tags

Total Shrinkage of Past 3 Months

Avg Shrinkage/Month

CD’s And DVD’s 2886 Soft 4686 8658 7126 2375

Headphones & Earphones

368 Hard 3680 6796 2265

Pen Drives And Memory Cards

- Hard - - -

Table 7: Security Tags Costing

[30]

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 Category Name

Vendor Name Major Products Total pieces Sold

Total Sales

Large Appliances L G ELECTRONICS INDIA PVT LTD

Refrigerators, Washing Machines, TV’s 742 11781944

Large Appliances SAMSUNG INDIA ELECTRONICS PVT. LTD.

LCD,LED 594 10837732

Large/Small Appliances

VIDEOCON INDUSTRIES LIMITED

Coolers,Irons,Cookers(Kenstar),Refrigerators 1531 6130048

Small Appliances FAIRDEAL CONSUMER DURABLES PVT LTD

Mixer, Irons,Kettles (Morphy Richards) 2547 5114472

Small Appliances PHILIPS ELECTRONICS INDIA LTD

Dryers,shavers 2575 3738348

SMALL APPLIANCE USHA INTERNATIONAL LTD

Ceiling Fan, Cookers,irons 2394 2877526

Small Appliances SREENIVASA DISTRIBUTORS

Emergency Lights, rice cookers (Pigeon Brand)

2293 2840044

Small Appliances BAJAJ ELECTRICALS LTD

Steam Irons 3142 2249967

Gaming Software VISION INTERACTIVE

CD,DVD 15294 1646747

[31]

SYSTEMS (CON)

Small Appliances UNIVERSAL CORPORATION LTD (ELECTRONICS)

Shavers,trimmers 472 1575864

Large Appliances MADHUKAR DOMESTIC APPLIANCES (P) LTD

Pure it Water Purifier, steam Irons etc. 1092 1229720

Small Appliances MAHARAJA WHITELINE INDUSTRIES LTD

Mixers 1148 967537

Small Appliances MILLION LIGHTS Hair Dryers 1612 798775

Gaming Software QUIXOT MULTIMEDIA PVT LTD

CD,DVD 3031 474729

Small Appliances ARYAH TRADING CORPORATION (WIPRO GM)

Wipro Emergency Lights 401 418314

COMP.ACCESSORIES

INTEX TECHNOLOGIES INDIA LTD

Headphones,Pen Drives,Speakers,Web cams 3422 388196

SMALL APPLIANCE ASTHA ENTERPRISES

Ascent Steam Iron

Table 8: Big Business Vendors

Brand Wise Ageing Stocks

[32]

Table 9: Brand Wise Ageing Stock

Conclusions

[33]

Brand Name Total products with more than 120 day's ageing stock

Total Value (In Rs.)

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

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 ROM’s and DVD Rom’s are ageing but they don’t have some ageing characteristics like small appliances so their mark down policy should be different.

Top Contributors

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

Total 70.31

Table 10: Top vendors (sales wise)

Conclusions:

Top 12 vendors are contributing for overall 70% sales of electronics department.

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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.

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