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Report on Summer Training
A STUDY OF ROLE OF OPERATIONS MANAGEMENT IN RETAIL
STORE- HYPERCITY
Submitted to Lovely Professional University
In partial fulfilment of the
Requirements for the award of degree of
BBA-MBA (Integrated)
Submitted by:
Saurabh Nagpal
University Roll No. 3020070142
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA
(2011)
1
INDEX
CONTENT PAGE NO ::
INTRODUCTION TO SECTOR 5
KEY CHALLENGES 9
MAJOR PLAYERS 11
SWOT ANALYSIS 18
REVIEW OF LITERATURE 25
INTRODUCTION TO HYPER CITY 36
MY LEARNINGS IN SUMMER TRAINING 42
supply chain management
inventory management at Hypercity 46
role of operations processes to increase sale 50
challenges faced in operations
RECOMMENDATIONS 51
CONCLUSION
BIBLIOGRAPHY 52
2
ACKNOWLEDGEMENT
I owe a debt to “God The Almighty” by whose kindness I have been able to clear another
chapter of my life.
I also owe a great thanks to my project guide, Mr. Anurag Joshi (Servce Manager),
HyperCITY, Amritsar and all the staff members of HyperCITY, who helped me the best
possible way to complete this summer training and this report.
Words are not sufficient to express the greatness, help, guidance and knowledge dispensed to
me by Respected Supervisor, Ms. Dalvinder Kaur, Lecturer in Management, Lovely
Professional University, Phagwara who not only lent his considerable time and energy to the
understanding, but also a great deal in making this report.
Words never can but for the very pleasure of it, I express my sincere thanks to my parents
and dear friends whose love, affections, care and absolute involvement in my day to day life,
academic as well as personal, encouraged me to face problems cheerfully and complete my
work successfully.
I feel proud to be a part of this institution where I learnt a lot and spent some unforgettable
moments of my life.
Saurabh Nagpal
3
Executive Summary
Without practical training, management education is meaningless so long with the theory, practical
training is provided to the management students to expose them to the actual working environment of
any organization. Such training provides a framework of knowledge relating to the concepts and
practices of the assigned topics in the organization. The summer training is an integral part of the
course curriculum of BBA-MBA (Integrated). In this the student is in a position to analyze the
integral working of an organization with mature eyes and understand the dynamics in a much better
manner.
Demographics continue to show a positive report to spur retailing growth. Consumers aged 20-45 years is
emerging as the fastest growing consumer group and the mean age of Indians is now pegged at 27, a mean
age that reinforces spending across all the retailing channels of grocery, non-grocery and non-store.
The government stance of protecting local retailers and prohibiting 100% foreign direct investment in
retailing continued in 2005, restraining international retailers' entry. However, there was gradual
economic reform, giving way to easier and faster franchising agreements as well as the loosening of zonal
regulations on retail expansion, thus stimulating retailing.
Non-store retailing is expected to continue its fast-paced growth from a miniscule base. Across all
channels, growth in retailing is expected to be boosted heightened competition during the forecast period
due to the growing.
Retailing is emerging as a sunrise industry in India and is presently the largest employer after
agriculture. In the year 2010, the size of Indian organized retail industry was Rs 28,000 Crores, which
was only 3% of the total retailing market.
The sunrise of the organised retailers in India creates a major turn in the retail industry. Top major
organised retail players are increasing their market share day by day. Their main focus is based on
FMCG and consumer durables. With modernization, Indian culture is aping the western dressing
sense and lifestyle and these techniques is promoting by the Retailers and by this they are generating a
remarkable revenue from the Indian consumers.
My training was at Hypercity, Amritsar. Hypercity is the product of Raheja`s group. It is one of the
biggest retail store in Punjab.I had learned a lot about the operational activities occurring in the retail
stores to manage their retail store. Some of my learnings are as follows:
How the various operational activities helps to provide best service to the customers.
How to manage the inventories and operational activities like-
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o Whole supply chain(buying and receiving),
o Managing cost(carrying cost and holding cost),
o Daily checking price updates or change in price,
o Cleanliness and hygiene of store,
o PICS (Perpetual Inventory Count Sheet),
o Intactics which refer to RIGHT THINGS or goods at the RIGHT PLACE
o OOS (Out of Stock)
o Blue dot,
o Code management,
o Visual merchandising
5
INTRODUCTION
India’s retail market which is seen as THE GOLDMINE by global players has grabbed
attention of the most developed nations. This is no wonder to the one who knows that the
total Indian retail market is US $350bn. (16, 00,000 crore INR approx.) of which organized
retailing is only around 3 percent i.e. US $8bn (36,000 crore INR approx).
“Retailing includes all activities involved in selling goods or services directly to final
consumers for personal, non-business use. A retailer or retail store is any business enterprise
whose sales volume comes primarily from retailing.” Retail is India's largest industry,
accounting for over 10 per cent of the country's GDP and around eight per cent of the
employment. Retail industry in India is at the crossroads. It has emerged as one of the most
dynamic and fast paced industries with several players entering the market.
The presence of 15million kirana stores brings into light the very fact that the Indian retail
industry is highly fragmented/ unorganized. Retailing in India is gradually inching its way
toward becoming the next boom industry, organized retailing in particular. The whole
concept of shopping has altered in terms of format and consumer buying behavior, ushering
in a revolution in shopping in India. Modern retail has entered India as seen in sprawling
shopping centers, multi-storeyed malls and huge complexes offer shopping, entertainment
and food all under one roof.
The future of Indian retailing may even witness the concept of 24 hour retailing. Even though
this concept has been in existence in few retail segments like pharmaceuticals and fuel, it still
remains to be a challenge for other segments like food and groceries, apparel etc to adopt this
trend.
Although the organized retailing in India is coming up in a big way, it cannot simply ignore
the competition from the conventional stores because of various factors like reach, extending
credit facility and other intangible factors like the human touch which are provided only by
the conventional stores.
The urban retail market has been embracing various new formats and the malls turned out to
be the trend setters by promising the concept of shoppertainment. The trends in the rural
market also have been changing from the old Haats and Melas to the rural malls like
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‘Chaupal Sagar’ launched by ITC, DCM Shriram Groups one-stop shopping destination
called ‘Hariyali Bazaar’, Godrej groups agri store ‘Adhar’ etc.
What is Retail?
The word 'retail' is derived from the French word 'retaillier' meaning 'to cut a piece off' or 'to
break bulk'. In simple terms it involves activities whereby product or services are sold to final
consumers in small quantities. Although retailing in its various formats has been around our
country for many decades, it has been confined for along time to family owned corner shops.
Englishmen are great soccer enthusiasts, and they strongly think that one should never give
Indians a corner. It stems from the belief that, if you give an Indian a corner he would end up
setting a shop. That is how great Indians retail management skill is considered.
The Facts
Retailing in more developed countries is big business and better organized that what it is in
India. Report published by McKinsey & Co. in partnership with Confederation of Indian
Industry (CII) states that the global retail business is worth a staggering US $ 7 trillion. The
ratio of organized retailing to unorganized in US is around 80 to 20, in Europe it is 70 to 30,
while in Asia it comes to around 20 to 80.
In India the scenario is quiet unique, organized retailing accounts for a mere 5% of the total
retail sector. Although there are around 5 million retail stores in India, 90% of these have a
floor space area of 500 sq.ft. or less. The emergence of organised retailing in India is a recent
phenomenon and is concentrated in the top 20 urban towns and cities.
The Reason
This emergence of organized retailing has been due to the demographic and psychographic
changes taking place in the life of urban consumers.
Growing number of nuclear families, working women, greater work pressure, changing
values and Lifestyles, increased commuting time, influence of western way of life etc. have
meant that the needs and wants of consumers have shifted from just being Cost and
Relationship drive to Brand and Experience driven, while the Value element still dominating
the buying decisions.
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Global Scenario
Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in USA.
China on the other hand has attracted several global retailers in recent times. Retail sector
employs 7% of the population in China. Major retailers like Wal-Mart & Carrefour have
already entered the Chinese market. In the year 2003, Wal-Mart & Carrefour had sales of US
$ 70.4 Crore & US $ 160 Crore respectively.
The global retail industry has traveled a long way from a small beginning to an industry
where the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone
accounts for 30 % of the worldwide demand. Retail turnover in the EU is approximately
Euros 2,00,000 Crore and the sector average growth is showing an upward pattern. The Asian
economies (excluding Japan) grew at 6% consistently till 2005-06.
On the global Retail stage, little has remained same over the last decade. One of the few
similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still
holds that distinction. Other than Wal-Mart's dominance, there's a little about today's
environment that looks like the mid-1990s. The global economy has changed, consumer
demand has shifted & retailers' operating systems today are infused with far more technology
than was the case six years ago.
THE INDIAN RETAIL SCENARIO
India is the country having the most unorganized retail market. Traditionally it is a family`s
livelihood, with their shop in the front and house at the back, while they run the retail
business. More than 99% retailers function in less than 500 square feet of shopping space.
The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized
sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is
lying in the waiting for the consumer-savvy organized retailer.
Purchasing power of Indian urban consumer is growing and branded merchandise in
categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery,
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
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introduce new formats have to pay more attention to the brand building process. The
emphasis here is on retail as a brand rather than retailers selling brands. The focus should be
on branding the retail business itself. In their preparation to face fierce competitive pressure,
Indian retailers must come to recognize the value of building their own stores as brands to
reinforce their marketing positioning, to communicate quality as well as value for money.
Sustainable competitive advantage will be dependent on translating core values combining
products, image and reputation into a coherent retail brand strategy.
There is no doubt that the Indian retail scene is booming. A number of large corporate houses
like Tata, Raheja, Piramal, Goenka, have already made their foray into this arena, with beauty
and health stores, supermarkets, self-service music stores, newage book stores, every-day-
low-price stores, computers and peripherals stores, office equipment stores and
home/building construction stores. Today the organized players have attacked every retail
category. The Indian retail scene has witnessed too many players in too short a time,
crowding several categories without looking at their core competencies, or having a well
thought out branding strategy.
GROWTH TRENDS OF INDIAN ORGANIZED RETAIL SECTOR
Retailing in India is gradually inching its way toward becoming the next boom industry. The
whole concept of shopping has altered in terms of format and consumer buying behavior,
ushering in a revolution in shopping in India. Modern retail has entered India as seen in
sprawling shopping centres, multi-storied malls and huge complexes offer shopping,
entertainment and food all under one roof. 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.
Retailing is the most active and attractive sector of last decade. While the retailing industry
itself has been present since ages in our country, it is only the recent past that it has witnessed
so much dynamism. The emergence of retailing in India has more to do with the increased
9
purchasing power of buyers, especially post-liberalization, increase in product variety, and
increase in economies of scale, with the aid of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales are at the highest point in
history and new technologies are improving retail productivity. though there are many
opportunities to start a new retail business, retailers are facing numerous challenges.
KEY CHALLENGES:
1) LOCATION:
"Right Place, Right choice"
Location is the most important ingredient for any business that relies on customers, and is
typically the prime consideration in a customer’s store choice. Locations decisions are harder
to change because retailers have to either make sustainable investments to buy and develop
real estate or commit to long term lease with developers. When formulating decision about
where to locate, the retailer must refer to the strategic plan:
* Investigate alternative trading areas.
* Determine the type of desirable store location
* Evaluate alternative specific store sites
2) MERCHANDISE:
The primary goal of the most retailers is to sell the right kind of merchandise and nothing is
more central to the strategic thrust of the retailing firm. Merchandising consists of activities
involved in acquiring particular goods and services and making them available at a place,
time and quantity that enable the retailer to reach its goals. Merchandising is perhaps, the
most important function for any retail organization, as it decides what finally goes on shelf of
the store.
3) PRICING:
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Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its
interaction with other retailing elements. The importance of pricing decisions is growing
because today's customers are looking for good value when they buy merchandise and
services. Price is the easiest and quickest variable to change.
4) TARGET AUDIENCE:
"Consumer the prime mover"
"Consumer Pull", however, seems to be the most important driving factor behind the
sustenance of the industry. The purchasing power of the customers has increased to a great
extent, with the influencing the retail industry to a great extent, a variety of other factors also
seem to fuel the retailing boom.
5) SCALE OF OPERATIONS:
Scale of operations includes all the supply chain activities, which are carried out in the
business. It is one of the challenges that the Indian retailers are facing. The cost of business
operations is very high in India.
PRESENT INDIAN SCENARIO
Unorganized market: Rs. 583,000 crores
Organized market: Rs.45, 000 crores
5X growth in organized retailing between 2000-2005
Over 4,000 new modern Outlets in the last 3 years
Over 5,000,000 sq. ft. of mall space under development
The top 3 modern retailers control over 750,000 sq. ft. of retail space
Over 400,000 shoppers walk through their doors every week
Growth in organized retailing on par with expectations and projections of the last 5 Years: on
course to touch Rs. 75,000 crores or more by 2012-13
11
MAJOR RETAIL PLAYERS
Retailer Existing formats Brand NamesNo.of
Stores
Total Retail
Space
(‘000 sq ft)
Pantaloon Retail
Indian Ltd
Department store Pantaloon 13 1,948
Hypermarket Big Bazaar 450 5000
Seamless Malls Central 12 1200
RPG Retail
Hyper markets Spencer’s 400 6000
Music Stores Music world 225 230
books Stores Books and Beyonds
Shopper’s Stop
Ltd.
Department stores Shopper’s Stop 20 1000
Books & Music Stores Crosswords 33 N/A
Home furnishing Home Stop N/A N/A
Trent India Ltd Department Stores West side 19 350
Vishal Group
Hypermarkets Star India Bazaar 1 N/A
Books & Music Stores Land Mark 4 N/A
Hyper markets Vishal Mega Mart 183 13,45
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Few of India's top retailers are:
1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is already
India's biggest retailer. In the year 2003-04, it had revenue of Rs 658.31 crores & by 2010; its
revenue increased to Rs 8,800 Crore.
2. Food World: Food World in India is an alliance between the RPG group in India with
Dairy Farm International of the Jardine Matheson Group.
3. Trinethra : It is a supermarket chain that has predominant presence in the southern state
of Andhra Pradesh. Their turnover was Rs 78.8 Crore for the year 2002-03.
4. Apna Bazaar: It is a Rs 140-crore consumer co-operative society with a customer base of
over 12 lakh, plans to cater to an upwardly mobile urban population.
5. Margin Free: It is a Kerala based discount store, which is uniformly spread across 240
Margin Free franchisees in Kerala, Tamil Nadu and Karnataka.
Wholesale trading is another area, which has potential for rapid growth. German giant Metro
AG and South African Shoprite Holdings have already made headway in this segment by
setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai
respectively. These new-format cash-and-carry stores attract large volumes from a sizeable
number of retailers who do not have to maintain relationships with multiple suppliers for all
their needs.
RETAIL FORMATS:
Hypermarket: It is the largest format in Indian retail so far is a one stop shop for the modern
Indian shopper.
Merchandise: food grocery to clothing to spots goods to books to stationery.
Space occupied: 50000 Sq .ft. and above.
SKUs: 20000-30000.
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Example: Pantaloon retail’s Big Bazaar, RPG’s Spencers (Giant).
Supermarket: A subdued version of a hypermarket.
Merchandise: Almost similar to that of a hypermarket but in relatively smaller
proposition.
Space occupied: 5000 Sq. ft. or more.
SKUs: Around 10000.
Example: Nilgiris, Apna Bazaar, Trinethra.
Convenience store: A subdued version of a supermarket.
Merchandise: Groceries are predominantly sold.
Space occupied: Around 500 Sq. ft. to 3000 Sq. ft.
Example: stores located at the corners of the streets, Reliance Retail’s Fresh and
Select.
14
Department store: A retail establishment which specializes in selling a wide range of
products without a single prominent merchandise line and is usually a part of a retail chain.
Merchandise: Apparel, household accessories, cosmetics, gifts etc.
Space occupied: Around 10000 Sq. ft. – 30000 Sq. ft.
Example: Landmark Group’s LifeStyle, Trent India Ltd.’s Westside.
Discount store: Standard merchandise sold at lower prices with lower margins and higher
volumes.
Merchandise: A variety of perishable/ non perishable goods.
Example: Viswapriya Group’s Subiksha, Piramal’s TruMart.
Specialty store: It consists of a narrow product line with deep assortment.
Merchandise: Depends on the stores
Example: Bata store deals only with footwear, RPG’s Music World, Crossword.
MBO’s: Multi Brand outlets, also known as Category Killers. These usually do well in busy
market places and Metros.
Merchandise: Offers several brads across a single product category.
Kirana stores: The smallest retail formats which are the highest in number (15 million
approx.) in India.
Merchandise: Mostly food and groceries.
Space occupied: 50 sq ft and even smaller ones exist.
15
Malls: The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts.
Merchandise: They lend an ideal shopping experience with an amalgamation of
product, service and entertainment, all under a common roof.
Space occupied: Ranges from 60,000 sq ft to 7, 00,000 sq ft.
Example: Pantaloon Retail’s Central, Mumbai’s Iorbit.
The percentage of organized retail per sector wise is very miniscule and this does not mean
that there is stagnation of growth because if we look at the following table we can clearly
observe the burgeoning pace of growth happening in all the sectors of Indian retailing.
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The organized retail industry is growing at 25- 30 percentage and is expected to reach the
mark of 1, 00,000 crore INR by 2010 from the present figure of 35,000 crore INR approx.
With such a mouth watering figures the organized retailing has been attracting many players
and even persuading the existing retailers to expand and experiment with newer formats. This
can also be substantiated by looking the estimation of the organized retail space to be around
72 million sq ft. by the end of 2007.
TRENDS IN PRESENT RETAIL MARKET
New Product Categories:
For a long time, the corner grocery store was the only choice available to the consumer,
especially in the urban areas. This is slowly giving way to international formats of retailing.
The traditional food and grocery segment has seen the emergence of supermarkets/grocery
chains (Food World, Nilgiris, Apna Bazaar), convenience stores (ConveniO, HP Speedmart)
and fast-food chains (McDonalds, Dominos).
It is the non-food segment, however that foray has been made into a variety of new sectors.
These include lifestyle/fashion segments (Shoppers' Stop, Globus, LifeStyle, Westside),
apparel/accessories (Pantaloon, Levis, Reebok), books/music/gifts (Archies, MusicWorld,
Crosswords, Landmark), appliances and consumer durables (Viveks, Jainsons, Vasant &
Co.), drugs and pharmacy (Health and Glow, Apollo).
Increasing competition in the retail market:
New entrants such as Reliance, Bharti Enterprises and the AV Birla group will compete
against well-established retailers, such as Pantaloon Retail, Shoppers’ stop, Trent, Spencer’s
and Lifestyle stores. Foreign retailers are keenly evaluating the Indian market and identifying
partners to forge an alliance with in areas currently permitted by regulations. With an
estimated initial investment of USD 750 million, Reliance is planning to launch a nationwide
chain of hyper marts, supermarkets, discount stores, department stores, convenience stores
and specialty stores. These 5,500 stores will be located in 800 cities and towns in India.
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Increase in Private Labels:
With the emergence of organized retail and modern retail formats, private labels have been
gaining significance. They enhance the profitability levels of product categories, increase
retailers’ negotiation powers and create consumer loyalty. More retailers are introducing their
own brands in all categories including Food & Groceries, apparel, accessories, footwear.
These own brands also do not have to manage intermediaries since retailers maintain
oversight of the supply chain.
The label penetration is in a huge rise. Private Label penetration has been on a rise. It is
mainly growing among FMCG products in most supermarkets with groceries accounting for
45.9%
Expanding to Tier II and III cities:
Indian retailers are planning to extend operations into Tier II and Tier III cities as heightened
IT off shoring activity in these locations have increased consumers’ disposable income. The
population in these cities is typically well educated and willing to purchase goods and
services. Some major retailers, like Globus, Reliance Retail and Pantaloon, have already
begun building a retail presence in Tier III cities before many retailers have finalized their
Tier II retail operations.
Foray into Retail Agri-Business:
India’s most prestigious business houses and global retailers are planning to enter retail agri-
business. Market entrants plan to invest in the entire value chain, moving goods “from the
farm to the fridge at home.” Viewed as India’s next “Sunrise Sector,” retailers are employing
contract farming as a means of boosting their ventures. Contract farming enables farmers to
access land, manpower and farming skill without having to purchase land. Of the total
Cultivable land of 400 million acres in India, contract farming represents 7 million acres thus
indicating a tremendous opportunity. For pure corporate contracts between farmers and
companies, only 2,00,000 acres are used.
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Experimenting with formats:
Selecting the right retail format is essential in modern retailing. The difference between urban
and rural customers is one of the reasons why multiple formats are required in India. Local
conditions and insights into buying-behaviour shape the format choice. No single format will
be suitable for an all India strategy and selecting the relevant format is the key success factor.
SWOT ANALYSIS
A SWOT analysis of the Indian organized retail industry is presented below:
STRENGTH:
1. Retailing is a "Technology-intensive" industry. It is technology that will help the
organized retailers to score over the unorganized retailers. Successful organized retailers
today work closely with their vendors to predict consumer demand, shorten lead times,
reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept
of building competitive advantage through distribution & information systems in the
retailing industry. They introduced two innovative logistics techniques – cross-docking and
EDI (electronic data interchange)
2. On an average a super market stocks up to 5000 SKU's against a few hundred stocked with
an average unorganized retailer. This will provide variety in products (required breadth &
depth for consumers)
3. As a consequence of high volumes, procurement will be direct from the Manufacturer.
Hence, merchandise can be offered at lower costs.
Weakness:
1. Less Conversion level: Despite high footfalls, the conversion ratio has been very low in
the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual
conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other
19
hand, a high street store of retail chain has an average conversion of about 50-60%. As a
result, a stand-alone store has a ROI (return on investment) of 25-30%; in contrast the retail
majors are experiencing a ROI of 8-10%
2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix
for the mall outlets. Since the stand-alone outlets were established long time back, so they
have stabilized in terms of footfalls & merchandise mix and thus have a higher customer
loyalty base.
Opportunity:
1. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by
2010 making India one of the largest consumer markets of the world. The IMAGES-KSA
projections indicate that by 2015, India will have over 55 Crore people under the age of 20
- reflecting the enormous opportunities possible in the kids and teens retailing segment.
2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at
the rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
3. Percolating down : In India it has been found out that the top 6 cities contribute for 66%
of total organized retailing. While the metros have already been exploited, the focus has now
been shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been
concentrated in the metros is beginning to percolate down to these smaller cities and towns.
The contribution of these tier-II cities to total organized retailing sales is expected to grow to
20-25%.
4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking
for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a
diverse range of products from FMCG to electronic goods to automobiles, attempting to
provide farmers a one-stop destination for all their needs." Hariyali Bazar" is started by DCM
Sriram group which provides farm related inputs & services. The Godrej group has launched
the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as
fertilizers & animal feed along with the required knowledge for effective use of the same to
the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for growing
the right quality of tomato for its tomato purees & pastes.
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Threats:
1. If the unorganized retailers are put together, they are parallel to a large supermarket with
no or little overheads, high degree of flexibility in merchandise, display, prices and turnover.
2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls
are just a place to hang around with family and friends and largely confined to window-
shopping.
3. Cultural Variation leads to variation in merchandise in India at different geographical
locations.
Introduction to Operation Management
Operations management is an area of business that is concerned with the production of good
quality goods and services, and involves the responsibility of ensuring that business
operations are efficient and effective. It is the management of resources, the distribution of
goods and services to customers.
APICS The Association for Operations Management also defines operations management as
"the field of study that focuses on the effectively planning, scheduling, use, and control of a
manufacturing or service organization through the study of concepts from design
engineering, industrial engineering, management information systems, quality
management, production management, inventory management, accounting, and other
functions as they affect the organization".
Additionally, The Operations Management Body of Knowledge (OMBOK) Framework
defines the scope of operations management and the activities and techniques that are a part
of the operations management profession.
Operations also refer to the production of goods and services, the set of value-added activities
that transform inputs into many outputs. Fundamentally, these value-adding creative activities
should be aligned with market opportunity for optimal enterprise performance.
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Operations as a Transformation Process
Inputs Transformation Output
Operations management is about the way organizations produce goods and services.
Everything you wear, eat, sit on, use, read or knock about on the sports field comes to you
courtesy of the operations managers who organized its production. Every book you borrow
from the library, every treatment you receive at the hospital, every service you expect in the
shops and every lecture you attend at university all have been produced.
This definition reflects the essential nature of Operations Management; it is a central activity
in organizing things. Another way of looking at an operation is to consider it as a
transformation process.
Operations are a transformation process; they convert a set of resources (INPUTS) into
services and goods (OUTPUTS). These resources may be raw materials, information, or the
customer itself. These resources are transformed into the final goods or services by way of
other 'transforming' resources - the facilities and staff of the operation.
Raw Materials
An obvious example is a cabinet maker, who takes some wood, cuts and planes it, and
then polishes it until a piece of furniture is produced.
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Information
A tourist office gathers and provides information to holiday makers, and assists in
advising on places to stay or visit.
Customers
At an airport, you are one of the many resources being processed. The operation you
are involved in is about processing your ticket and baggage, moving from ticket desk
through the customs and duty-free areas, to deliver you to the awaiting plane.
Extending the process...
If we add a few more parts to the transformation process, we can see the key elements that
operations managers need to consider. Operations is about designing services, products and
delivery systems;
1. Managing and controlling the operations system.
2. Finding ways to improve operations.
Operations Management is all about providing customers with products and services.
You survive by giving customers with what they want
23
Every Product or Service is really a bundle of different attributes.
Product, place, price, performance, quality, timing, service, etc.
Customers are looking for a bundle of characteristics
Total bundle provides the level of value customers deem appropriate
Buying products with the attributes they want at the lowest price possible
Attributes
Price
Quality
Image
Performance
Safety
Place – distribution
Time – delivery, availability
How do you decide which product to produce?
How do you find out what attributes your product should have?
How do you get those attributes into your product?
What process?
What resources do you need?
Where do you get those resources?
Examples of Operations Decisions
Operations managers must make decisions on three levels
Strategic
Tactical
24
Operating
STRATEGIC DECISIONS:
Longer term decisions
Usually made at the senior management level
Product and service strategy
Competitive priorities
Positioning strategy
Location, capacity
Long term partnerships
Quality system and overall approach to quality
TACTICAL DECISIONS
Medium term decisions
Tactical in nature
Made by middle and senior managers
Process design
Technology management
Job design and workforce management
Capacity management
Facility location
Facility layout
25
OPERATING DECISIONS
Shorter term decisions
Made at middle and lower management levels
Forecasting
Materials management
Inventory management
Aggregate planning
Master production scheduling
Production control
Scheduling
REVIEW OF LITERATURE
The changing face of retail sector
Consumers of today are more inclined towards specialized formats of retail outlets like
hypermarkets, super bazaars, shopping malls etc. where they get different variety of products
under one roof rather than typical Kirana stores. It is quite imperative that in such a fast paced
shift, more and more companies are coming up with different formats of their retail outlets,
specially discount stores, department stores, hypermarkets etc. either individually or in
collaboration with foreign partners.
A recent research conducted by Sandhir Sharma and Gautam Bansal of the Punjab College of
Technical Education (PCTE) here reveals that Indian companies had already started taking
initiative in this line. Reliance is planning to go for expansion in the retail sector in the
coming years, Vishal mega Mart retail chain is planning to set up 80 more stores at an
investment of Rs 480 crore in the next financial year. On the same lines, Birlas have decided
26
to roll out its retail business with in the next seven to eight months and is likely to develop
the business of its own rather than in collaboration with any foreign partners.
The researchers said in spite of the fact that the government was still not clear regarding the
decision of allowing foreign players in huge and potential Indian markets, the sector was
buzzing with both domestic and foreign players who were trying to make their presence felt.
Players like Wal-Mart had already tied up with the Bharti group to enter into retail markets,
though they were not coming at the front end operations but definitely it would help Bharti in
gaining the logistical, storage efficiencies, which were important functional areas of retail
operations for gaining competitive advantage.
Sharma and Bansal said the majority of retailers still felt that kirana and small stores would
not be suppressed at any cost as India had a huge market with people from different
segments, class, income groups of society so the need and importance for these traditional
stores would remain there. According to statistics available, 70 per cent of the Indian
consumers was from middle and lower income groups and they preferred to shop from kirana
stores rather than going into big shopping malls. It was only the upper strata (20-25 per cent)
of society which would be attracted towards these big formats of retailing.
The experts in the field say that if the foreign players wanted to tap a major chunk of the
Indian consumer they had to come to the level of kirana stores as had been done by various
domestic players. But one thing was sure that what ever happens it would change the
shopping styles of Indian consumers. Indian consumer was definitely going to respond well
to these changes. Biggest challenge the retailers would face would be the availability of space
for opening their outlets.
However, 98 per cent of the retail is in the unorganized sector. But in recent years, RPG,
Pantaloon, ITC and Ebony have entered the retail sector in a big way. Wal-Mart, world’s
largest retailing company, has also shown keen interest to invest in this sector, but the
government has only allowed it to set up its subsidiary for sourcing material for other
countries.
Dr Arpita Mukherjee, co-author of the report “Foreign Direct Investment in Retail Sector:
India” claimed that even though FDI was not allowed in retailing, foreign players had entered
the Indian market through various loopholes in the regulations. She said the government
27
should open the retail sector in a phased manner over three to five years. “It should also
ensure that existing franchisees are not affected and foreign companies do not indulge in
predatory pricing,” she said.
The report has recommended that any opening up of the FDI regime should be gradual to
give the domestic industry enough time to adjust to the changes. “The FDI should first be
allowed in relatively less sensitive sectors such as garments, lifestyle products, consumer
durable, houseware and entertainment (books and music). Once the market starts adjusting
then it could be allowed in certain sensitive sectors like food and grocery,” she said.
NEW RETAIL CONCEPT
DEVELOPMENT:
A LITERATURE REVIEW
Work In Progress
ABSTRACT
This paper will present a review of the literature regarding New Retail Concept Development
(NRCD). This review is the first step of a programme of research in this area, an area which
has been largely overlooked in the literature. The paper first discusses NPD (new product
development) models in general, with a critique of the usefulness of each model for NRCD
purposes. Next, the paper reviews the existing research pertaining to new service and new
retail concepts. The paper concludes by discussing the implications for NRCD research and
theory development, ending with the presentation of a conceptual NRCD model. Key terms:
Retailing; New Product Development; New Retail Concept
NPD
28
The central importance of innovation was captured by Drucker There are only two
important functions in business: marketing and innovations. Everything else is cost. New
product development (NPD) and planning has assumed a heightened level of importance in
the modern world as organisations recognise the need to improve the NPD process and its
outcomes (Allen 1993, Power 1993). In this part of the paper, the new product development
literature will be reviewed— specifically that relating to the actual process of NPD. The
section begins by exploring the nature of innovation and what innovation is considered to be.
The section then discusses what constitutes a new product and the role extensions play. Next,
the benefits & opportunities and the costs & risks of NPD for organisations are presented.
This is followed by a review of the evolution of generations of NPD models—the generic
(sequential) and various extension NPD models (stage-gate, fuzzy-gate, rugby, activity
blocks, multiple convergent processing, continuous learning, QFD, return maps, chaos
approach) that appear in the literature. Key NPD success factors are then profiled. The
section concludes with a summary and evaluation of the NPD models, including a table
indicating the usefulness of each model for NRCD.
NEW SERVICE (& RETAIL) DEVELOPMENT
The literature base for NPD has been growing with speed in recent years, though the attention
devoted to these two areas is scant (for services) or largely nonexistent (for retailing). In
comparison to industrial and consumer goods, very little research has actually appeared on
the development of new services (Voss 1994), and what has appeared largely concentrates on
service process development (eg., Shostack 1984), the financial-services industry (eg.,
Cooper et al 1994, Cooper and de Brentani 1991), though a trend does increased services
research does seem to be growing (eg., Tax and Stuart 1997). Still, the vast majority of new
product success factor studies have focused on manufactured products (Cooper et al 1994,
Easingwood 1986), whilst retailing research has been primarily limited to testing methods
(eg., Bateson and Hui 1992) or operational aspects (eg., store atmosphere elements). These
areas are discussed in detail in the Retail NPD Literature Review in the following section
of the paper.
NEW RETAIL CONCEPT DEVELOPMENT
This section of the paper opens with the identification and discussion of NRCD issues in
academic sources and the trade press. Next, a variety of theories of retail evolution are
discussed–the Wheel of Retailing, the Accordion Theory,2233 Multiple Wheels (of
29
Retailing), the Retail Life-Cycle, the Theory of the Dialectic Process, the Theory of Natural
Selection, the Retail Ecology Model, and Davies’ Theory of Retail Evolution–before
concluding with a summarisation of the picture of NPD in the retailing literature. As
mentioned before, most NPD research has been of FMCG, consumer durables or industrial
products, with limited research having been devoted to retail situations. Similarly, retailing
texts only briefly deal with new retail concept development (eg. Merrilees and Miller 1996),
whilst principles of marketing texts give even less attention through focusing predominantly
retail evolution (eg., the Wheel of Retailing in Baker 1996, Kotler 1997) or fail to even make
mention at all (eg., Worsam and Wright 1995). By and large, new retail development and
NRCD has been ignored in the marketing journals. What little that has been more directly
written has related to services (eg., Terrill and Middlebrooks 1996, Shostack 1984) rather
than retailing specifically, though there has been research done on aspects of the retail
environment that would be of interest in NRCD (the store atmosphere literature is of principal
interest). What has been covered extensively, however, has been what gives rise to retail
form emergence and evolution. This is best typified by the Wheel of Retailing (McNair
1958) which uses price and service offered to explain how retailers start in the low end of the
market and move up to higher segments through the provision/addition of extra services and
store features, thus creating a gap in the low end of the market which gives rise to new
entrants (and thus “the wheel turns”). McNair’s (1958) theory and others are discussed in the
following sections, but the point to make at this juncture is that these are theories on a macro
level–seeking to explain the emergence of forms of retail formats in the market, eg., because
of price–whereas NRCD is dealing with the micro level– the creation and development of the
individual idea by a single organisation. It is this difference in level which accounts for most
of the discrepancy in the literature and serves as the starting point for this stream of research.
In general, few of the retail change theories have been given unanimous support. All have
been noted to suffer from one thing or another. The Wheel of Retailing has garnished the
lion’s share of research interest and associated scrutiny. The Wheel has been severely
criticised as well as having been held up as “the best thing going” that seems to do a
reasonable job of explaining retail change. Markin and Duncan (1981) are critical of the
wheel of retailing, accordion, and retail life cycle theories. Instead, they put forth the
environment, Darwinism (survival of the fittest) and the dialectic (conflict) as possible
forces/factors. All in all, there is no clear-cut agreement in the literature as to what a model
of retail change should encompass, let alone how it should or couldbe tested.2234
30
CONCLUSION
In summary, attention to retail-based NPD/NRCD issues has been notably lacking, though
services-based NPD research has been growing of late. In terms of NRCD specifically, the
literatures do suggest reasons for the general emergence of new formats (eg., Wheel of
Retailing, Dialectic Theory). However, few examples related to retailing are presented in
NPD texts, and those that are tend to be services. In short, barring Palmer, Lovelock (1996),
Terrill and Middlebrooks (1996) and Shostack (1984) in services, there has been little attempt
to actually research and define the NRCD process on a scale and degree comparable to that in
the NPD literature for the NPD process. The sum of the retailing-related work to date could
best be seen as falling into the latter half of the typical NPD process, where the
implementation of the chosen concepts is done. To conclude, Davies (1995, p. 240) has noted
that “retailing does not have some theory that is specific to it”. The literature reviewed in this
paper suggests that Davies’ views hold equally well for trying to understand how new retail
concepts are developed. The literatures reviewed here talk extensively about the evolution of
retail formats at a macro level, but fail to adequately address the process at the micro level. It
is this deficiency in the literature that will be addressed by a proposed definition and model of
New Retail Concept Development, a model which will serve as the first step in “the way
forward”. The proposed model will conceptualise the situation at the micro level–the
individual store/retail concept level–highlighting the various factors that feed into successful
NRCD. The model will provide a starting point for research into this area–both inductive and
deductive in nature–which will seek to confirm the elements in the model and/or potentially
nominating other factors for inclusion in the model. The results will improve understanding
of what works in NRCD (and what does not work), offering the potential for improved
developmental success of new retailinitiatives.2235
Supermarkets and Beyond: Literature Review on Farmer to Market Linkages in
Sub-Saharan Africa and Asia
D. Tschirley, Michigan State University ([email protected])
July 28, 2007
INTRODUCTION
31
This paper reviews recent literature on selected issues that need to be considered in
designing policies and programs to improve farmer-to-market linkages in Sub-Saharan
Africa and Asia. Since the “supermarket revolution” has received wide attention in the
professional and popular press since the early 2000s, this paper starts with a careful review
of that literature. Yet expectations regarding supermarket growth in Africa and parts of Asia
have cooled considerably over the past two years. For this reason, the discussion of
supermarkets is cast in the broader context of retail modernization; we stress the interaction
of supermarkets and more traditional marketing channels in African and Asian food systems,
and suggest that these systems are likely to remain highly diversified for the foreseeable
future. Additional topics include domestic and regional markets as foci of growth, market
information (including commodity exchanges and modern information and communications
technology - ICT), and contract farming for export crops. Given the rapid pace of change in
marketing systems in developing countries, primary emphasis is placed on research since
2000. Our top three recommended readings out of this review are Reardon and Timmer
(2006) on retail modernization, Jayne et al (2002) on policy for domestic and regional trade,
and Weber et al (2006) on market information.
LITERATURE REVIEW
RETAIL MODERNIZATION: Retail modernization in developing countries and its effect
on the broader food system has been a major focus of research since the early 2000s. The
most visible banner for this work has been the “supermarket revolution”. Supermarkets
existed in Latin America from at least the 1960s
But began to grow much more rapidly in that region during the economic boom and
opening to Foreign Direct Investment (FDI) of the 1990s. Growth began later in
East/Southeast Asia and Central Europe, followed by selected countries of Africa (Reardon
et al, 2004). This growth, together with new procurement practices that the firms work to
apply, has lead to a rash of studies attempting to document and anticipate the impacts of
these firms on existing actors in the food system, and to draw policy implications for
governments and donors.
Early Expectations of Supermarket Takeover: Though distinctions are made between
countries, regions, and types of food products, recurring themes in the supermarket revolution
32
literature have been the “rapid rise” of supermarkets, the difficulty of smaller retailers to
compete with them, the difficulty of small processors to compete with large processors for
the new “supermarket market”, and the urgent need to deal with the exclusion of
smallholders from the supermarket channel. Until very recently, conditions for supermarket
expansion in Africa have been seen to lag but not to differ fundamentally from those in other
regions of the developing world; Africa has been portrayed as a later “wave” in the surge of
supermarket expansion, with “take-off” having already occurred in East and Southern Africa
and beginning in West Africa (Reardon et al, 2004). The following quote encapsulates this
view: “Our premise is that supermarkets will continue to spread over the (African) region …
and thus their requirements will either gradually or rapidly, depending on the country,
become those faced by the majority of farmers … Understanding those procurement systems
… is thus a way of predicting what will be the challenges and opportunities facing farmers
… in the next 5-10 years” (Weatherspoon and Reardon, 2003; parentheses and emphasis
added).
More Cautious Voices on the Supermarket Story: More cautious views regarding the
likely rate of supermarket expansion were expressed early in Asia, and over the past two
years in Asia, Africa, and even Latin America. Patterns in Latin America are relevant as a
potential indicator of future patterns elsewhere. Coca-Cola (2003) notes that “emerging
consumers infrequently shop – if at all – at large supermarkets” in Brazil, despite the heavy
market penetration of such outlets in that country. They refer to “the myth (that) it’s just a
matter of money & time until emerging consumers flock to large supermarkets” (p. 12), and
conclude in general for Latin America that “small retailers have a sustainable business
model”. Farina and Nunez (2005) echo this conclusion in Brazil, noting the persistent
diversity of retail outlets, and that “the number of independent supermarkets (as opposed to
large chains) and traditional retailers has grown, and their share in food sales has increased”
in recent years. Despite that city’s developed economy; they attribute this strength to these
traditional markets’ adaptation to consumer shopping habits. Goldman (2000) was one of
the first to identify consumers’ “selective adoption” of supermarkets, whereby “consumers
who regularly shop in supermarkets continue to purchase fresh food in traditional outlets”;
these findings echo those of others showing continued retail diversity even where
supermarkets have expanded most. In recent work in Vietnam, Cadilhon et al (2006)
anticipate strong growth of supermarkets (from a base of only 2%) but suggest that “policy
makers should not promote the ‘modernization’ of food systems at the expense of traditional
33
channels, which meet important consumer needs”. Maruyama et al (2007) also see strong
growth, but cite serious challenges for supermarkets in lowering their prices and enhancing
their locational convenience, both of which are key factors for
Reviewing literature on supermarkets in Africa, Humphrey (2006) concludes that “the extent
of transformation of retailing … as a consequence of (supermarket expansion) is
overestimated”. In Kenya, where supermarkets had penetrated more than in any SSA
country outside South Africa and perhaps Zambia, Tschirley et al (2004a) and Tschirley et al
(2004b) show that supermarket chains held less than 2% of the national urban fresh produce
market in late 2003, and that nearly all fresh produce purchases in these supermarkets were
made by consumers in the top 20% of the income distribution. They calculate that, to reach
a 10% market share in 10 years, supermarket sales of fresh produce would have to grow 22%
per year in real terms. In a cross-country econometric analysis, Traill (2006) estimates that
Kenyan supermarkets will hold at most a 16% share of total food sales by 2013; this would
correspond to a 4%-5% share of fresh produce. Ayieko et al echo findings elsewhere of
diverse shopping habits among consumers, noting that 94% of Nairobi consumers frequented
at least three different types of retail outlets in the previous month. By 2006, Reardon and
Timmer (2006) had noted the very small market shares of supermarkets in nearly all of SSA.
They suggested “considerable uncertainty about the rate at which the supermarket sector will
grow” even in Kenya and Zambia; in most of the rest of SSA, they deemed it “unlikely that
… we will see supermarket growth for several decades.”
In India, market reform and opening to FDI, along with prospects for 7% yearly growth in
retail sales in a market of 1.2 billion people, have generated billions of dollars of planned
investment in supermarkets by local and multi-national firms, including WalMart and
Carrefour. Yet supermarket shares in India are currently very low (around 2%), due to the
country’s massive and complex small retail sector. Supermarkets there face the 20/20/20
challenge: they must grow their food sales by 20% a year for 20 years just to reach a 20%
market share. Such unprecedented growth would still leave more traditional channels
holding 80% of the food market.
Supermarkets and the Exclusion of Small Farmers: Concern about exclusion of
smallholder farmers from supermarket supply channels is most acute in fresh produce, since
it can be direct marketed to supermarkets by farmers. Concerns are based on the efforts of
fresh produce procurement managers to provide consumers with a stable, yearround supply of
34
safe, high quality produce at competitive prices. Farmers that cannot meet these criteria,
especially the need for fixed quantities every week of the year, fall off the supermarkets’
“preferred supplier” lists. Smallholder farmers are especially challenged in this regard, and
evidence is mounting that all but a tiny minority, whether independent or in farmer groups,
are unable to remain on preferred supplier lists on a sustained basis . As a result, medium-
and large-scale farmers supply the overwhelming majority of produce moving through
preferred supplier programs in Africa. Yet these programs carry a tiny fraction of the food
trade in African countries. For example, in Kenya in late 2003, this share was less than two-
tenths of one percent of all
DOMESTIC AND REGIONAL MARKETS AS A FOCUS OF GROWTH:
Nontraditional agricultural exports have received large amounts of analytical attention over
the past decades. Donor support to market oriented agriculture for smallholder farmers has
also focused heavily on export markets, while “domestic food markets remain
undercapitalized, risky, rudimentary, and relatively thin” (World Bank, 2007). Both
traditional and non-traditional exports have and will continue to be important sources of
growth for some farmers in some countries. Kenya’s exports of fresh and prepackaged
vegetables and fresh flowers to Europe may be the continent’s best example of success in a
non-traditional sector, but other countries are achieving some success along a
similar path. Yet even in Kenya, the domestic horticultural system is four- to five times
larger by value than exports (Tschirley et al 2004a), and involves many times more
smallholder farmers and traders; in Zambia, the domestic fresh produce system is 10-20
times larger than exports. In China in the early 2000s, the domestic horticultural market
was 40-50 times larger than exports. Expected income growth in many countries of east
Asia, in India, and in Kenya and some other countries of Africa, combined with the large
size of the domestic and regional markets, means that the domestic system will be the
main contributor to growth in products such as horticulture and livestock, which have
high income elasticities of demand
35
My Training Place: HyperCITY, Amritsar
36
Introduction To HyperCITY
37
HyperCITY Retail (India) Ltd. is part of the K. Raheja Corp. Group, a leader in the Indian
retail sector. K Raheja Corp helped create retail boom in India with Shoppers Stop, InOrbit
Mall and Crossword apart from their successes in realty and hospitality. HyperCITY offers its
customers a dominating assortment of quality products at great value in a large, modern and
exciting format. It also offers other value added services like consumer finance, ATM
facility, telecom services, pharmacy, Bakery and Restaurants etc under one roof. HyperCITY
launched its first store in Malad, Mumbai, which is spread over 1,20,000 sq ft. Today,
HyperCITY has accomplished a total of 10 stores since inception and have marked its
presence in cities like Mumbai, Hyderabad, Bengaluru, Bhopal, Ludhiana, Amritsar and
Jaipur. It offers over 44,000 products sourced from both local & global markets to choose
from & boasts of quality, distinctive, dominant assortment at great value. HyperCITY
promises convenience of everything under one roof & International shopping ambience that
rivals the best in the world.
There's more to discover
HyperCITY provides a truly international shopping experience, where customers can shop in
comfort in a large, modern, & exciting environment. It offers a wide and contemporary range
of innovative products, sourced from both local and international markets.
The product range covers: Foods, Homeware, Home Entertainment, Hi-Tech,
Appliances, Furniture, Sports, Toys & Fashion.
VISION
38
HyperCITY Team
Mr. Mark Ashman - Chief Executive Officer
Mark Ashman joins HyperCITY Retail (India) Ltd., a leading hypermarket company of India
as the Chief Executive Officer. Most recently he was the CEO of Marks and Spencer
Reliance India Pvt Ltd, where he was instrumental in the roll out of Marks & Spencer’s retail
strategy in India and establishing the JV between Marks & Spencer PLC and Reliance Retail.
Educated in the UK, Mark has a vast retail experience ranging from retail operations, sales &
marketing, merchandising and corporate communications. He has held senior retail leadership
roles in the UK and Internationally
Mark is an intuitive retailer with his pulse on changing consumer needs. As a leader his
strengths lies in his ability to build a highly motivated team.
39
Dharmendar Jain, Vice - President, Head - Finance & Business Development
Dharmendar is a qualified professional and holds various degrees - M. Com, FICWAI, MFM,
DBF, and CMA (AUS). He has over 18 years of experience in various areas of finance,
logistics, project management across various viz. engineering, plastics, media &
entertainment - and retail. Dharmendar is associated with the groups since last 9 years and
leads strategic and business planning, corporate finance & business development function and
is member of Core Executive Committee.
Ashutosh Chakradeo, Head - Buying & Merchandising
Ashutosh Chakradeo holds a Masters degree in International trade. He has worked with The
Bombay Store as a part of their B & M team, for a period of 7 years. He has also worked for
Arcus from 2002 - 2004 as Category Manager, for their Home Improvement Division.
Ashutosh joined Hypercity in 2004 and is currently the business Head - Food and Grocery.
He has acquired knowledge and expertise in sourcing of products across Food & Non-Food
categories over the last 14 years of working in the retail industry. He has traveled widely
through Asia & Europe, in his sourcing management role.
40
Rajiv Nair, Business Head - General Merchandise & Apparel
Rajiv has over 16 years of retail experience had has joined Hypercity to develop and grow the
non-food business. He has over 10 years of buying & merchandising experience followed by
an operations stint in the Shoppers Stop departmental stores. He has worked across the
apparel buying and merchandising segments of men's wear, women's wear & kids' wear for
Shoppers Stop; working with key brands & developing in-house exclusive brands. Prior to
this assignment, he was the business head for Mothercare in India. He was instrumental in
setting 17 outlets in India clocking Rs.45 crores in the second year of operations. Rajiv is a
Commerce graduate & has a Master's degree in Marketing from the University of Mumbai -
Narsee Monjee Institute of Management Studies.
Siddarthan M, Business Head-HR & Admin
An MBA from the Institute for Technology and Management in Human Resources,
Siddharthan has worked with Shoppers Stop for more than 5 years in Corporate Human
Resources and later with HyperCITY as head of Human Resource and Admin. Siddharthan
has had diverse experience across various industries, such as manufacturing, service and
hospitality.
41
Veneeth Purushotaman, Business Head – Technology
Veneeth has over 14 years of experience in technology. He joined HyperCITY as
Head,Technology in May 2006. Prior to that he was at Shoppers Stop and was responsible for
the Loyalty, Point of Sale systems and the data warehouse systems. After his graduation in
Computer Science from Bangalore University and a certificate course from NIIT, he joined
NIIT as a Technical Lead. He worked at NIIT for 3 years after which he had a 1 year stint in
the Indian Railways. He came to Mumbai to do a certification on Mid-range servers from
IBM after which he joined Rhone-Poulenc (India) Ltd in 1998. At Rhone-Poulenc he was
responsible for streamlining the ERP and for their Y2K rollout. He was recently honored by
the CIO Magazine as one of the Top 20 CIO in their CIO Ones-to-Watch category for the
year 2008. He subsequently also won the CIO Bold 100 awards in 2008 from the CIO
Magazine. Hypercity was recently awarded for the use of technology in the Emerging Retail
by JDA for their use of Replenishment tools and Space Planning tools.
AWARDS & RECOGNITIONS
International Awards
HyperCITY, Mumbai won The Award of Merit for Large Format Specialty Store at
the United States International Design Awards in New York on 15th January, 2007.
This is the first time that an Indian Company has received an award like this. This
was the 36th awards function for the Institute of Store Planners/VM+SD
International Store Design, New York.
42
HyperCITY was voted as India's top retail store by ‘Retail Week’, a leading U.K.
magazine revered by retailers world wide. It was voted as the ‘100 Shops You Must
Visit’, across the world and was featured amongst internationally renowned stores
such as Bloomingdales New York, Selfridges U.K, Louis Vuitton Paris and
Carrefour Shanghai. The special report carried weightage for innovation and
creativity in retail, as well as recognizing retail excellence. The report was based on a
survey carried out by ‘Retail Week’ amongst key players in the retail industry
consisting of businessmen, analysts, retail consultants, editors and top shoppers
around the globe.
Domestic Awards
Coca Cola Golden Spoon Awards 2009 - Images award for excellence in food retailing
awarded Gourmet city as "Most Admired Food Retailer of the Year" & "Innovative Retail
Concept".
Star Retailer Awards awarded Gourmet city "Debutant Retailer of the Year 2008".
The Bold 100 - IDG India CIO magazine has recognized Shoppers Stop and
HyperCITY as a recipient of 2008 CIO 100 Award. The annual award program
recognizes those executives and organizations those are playing not just to survive,
but to win and embrace great risk for the sake of great reward.
Most Admired Retailer of the Year for Retail Design & Visual Merchandising -
Images India Retail Forum, 2007.
Star Retailer - Value Retailer of the Year 2007.
Asia Retail Congress - Reid & Taylor Retailer of The Year (Hypermarket).
43
My Learning and Experience at HyperCITY
Objectives of the project:-
The Role of operational department in the growth of Hypercity.
The various operational processes used to manage the retail store.
How these processes put impact on sales.
The supply chain of retail store.
Retail store is divided into three Departments-
General Merchandise
Food
Fashion
44
1) General Merchandise- This department is subdivided into various parts are:-
HAM- Hi-tech Appliances Multimedia.
Sports
Toys
Stationeries
Furniture
Lenia- Bedding, Luggage
2) Food- This department is Subdivided into various parts:-
Ready food
Instant food
Beverages
Staples
Homecare
Personal Care
3) Fashion- This department is subdivided in various parts that are:-
Cloths (div. into kids, men women)
Shoes
Accessories
Retail store Manager`s daily operations
1) SAV- Stock Adjustment Voucher-It is basically used when Product gets defective due to
any reasons (expiry, broken , leakage etc.) and it has no usage value then voucher is filled to
adjust that stock which is removed from the inventory that is known as Stock Adjustment
Voucher.
45
2) Negative Inventory- When inventory or stock is shown negative in the system that
inventory is known as negative inventory. To check negative inventory, if there are two
product having different SKU numbers and different bar codes one product is sold on the
other barcode. For example: If ‘A’ product get finished and ‘B’ has the inventory of two
units. Product ‘A’ is of Rs 100 and Product ‘B’ is of Rs 200 somebody by mistake Product
‘B’ is kept on ‘A’ SKU by which pricing mistake would be there and due and due to which
product ‘B’ would be billed at price ‘A’ by which earlier system shows the inventory of ‘A’
was zero but now after billed inventory of product ‘A’ gets negative this is known as negative
inventory. A special procedure is followed to adjust negative inventory.
3) PICS-Perpectual or Physical inventory Count Sheet- PICS is a process of calculating
variance of the products and preparing a sheet of physically counted inventory that sheet is
known as PICS.
4) Team Briefing-It is a daily routine activity to discuss about the targets of the store, what
the team had achieved yesterday and what they will achieve today this process is known as
team briefing.
5) Man Power Scheduling- It is a process of scheduling man-power in their particular
department according to the need and according to the situation. Like 30%- day time, 10%-
afternoon, 60%- evening or night.
6)Floor Walk- It is a process of checking the Hygiene, ticketing, merchandising etc that
whether the products are placed correctly or not, this process of checking out positive and
negative points by taking a walk on the floor is known as floor walk.
7) Trade Report- It is the process of reporting to the buyers or to the seniors if employees
are facing any problem or want to give any suggestion. It is a communication from the
employee side to the seniors this process is known as trade report.
8) Price checking-It is a daily activity of checking the prices of the products whether the
prices of the SEL (Shelf Edge Label) prices are matching with the system or not. If the prices
are not matching then SHL is changed with new prices, this process is known as price
checking.
9) FMR check- Floor Movement Register- It is the register always placed on the floor to
check out the employees scheduling. This floor register is placed for the purpose, if any
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employee have to go from floor he/she have to register themselves on floor register. By this
anybody would come to know that which employee is missing from his/her place. Noticed
where they had gone and at what time, this process is known as FMR check.
10) OOS- Out Of Stock- When system show that this product have zero inventory then we
can say that product is out of stock this is known as Out Of Stock and then purchase order list
is prepared and send to the Buyer.
11) Visual Merchandise-It is a process of managing the store merchandising on unrelated
Product to attach customers by keeping flowers on cooler this process is known as visual
merchandising so that visually it looks good. There is a general tendency of the buyers that
they get attracted to those things which are good looking in their outward appearance just like
a passerby gets more attracted towards a beautiful girl than an ugly looking girl. So, it is very
important for any retail store to create pleasant visual merchandise which shall catch the eye
of the customer and they should get tempted to enquire about it.
12) Home delivery issues- The issues related to the Home delivery regarding safety regards
of heavy equipments that issues are known as Home delivery issues.
SUPPLY CHAIN MANAGEMENT
1. Buyers – Buyers are the one who buys products or material for the
company or store. Buyers use to purchase centralize or decentralize
(local vendors). Buyers use to contact with different vendors so that
maximum bargaining would be done by which Economic order
quantity would be achieved by purchasing at less price and it would be
benefitted to the organization with better price, better quality and
delivery in time. Buyers make a list in which current price is written of
the particular product ordered and what quality should be received and
this list is posted to the receiving department .
2. Receiving Department- The department which perform the function
of Receiving of the product from different vendors as quality
prescribed by the Buyers is known as receiving department.
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Process of receiving department-
1) Firstly quality of the product is checked.
2) Secondly they measure weight or quantity to receive.
3) Then rates or prices are verified and send the list to the internal
receiving department where prices are verified.
4) If products get selected then that products are entered to the
inventory department after uploading on the server or mms
system that this much inventory received and on that prices are
also uploaded.
5) Then the ordered received send to the inventory department.
3. Inventory Management- During the receiving of the inventory if the
products are DSD(Direct Store Delivery) then products(perishable
goods like vegetables, fruits milk etc) can’t be stored in inventory these
products directly send to floor. The products which are not perishable
send to the inventory room and there stock is settled down.
INVENTORY MANAGEMNT AT HYPERCITY
There are various processes of managing inventory between warehouse and shop floor:
i. PRICE CHECKING
ii. POST
iii. PICS
iv. INTACTICS
v. CODE MANAGEMENT
vi. RECEIVING DEPARTMENT
vii. BUYERS
viii. PLANNOGRAM
ix. I WILL BE BACK
x. BLUE DOT
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xi. REFILLING
1) Price Checking- It is a process of checking the prices of the products whether the
prices of the SEL(Shelf Edge Label) prices are matching with the system or not. If the
prices are not matching then SHL is changed with new prices, this process is known
as price checking. By this process inventory is properly managed, so this process
helps in managing the inventory.
2) Post- It’s a type of communication from vendors and buyers side by which various
messages are conveyed to all the departments that communication is known as post.
3) PICS- Perpetual or Physical Inventory Count Sheet- PICS is a process of calculating
variance of the products and preparing a sheet of physically counted inventory that
sheet is known as PICS. The sheet which is prepared matched with the system the
difference is calculated is known as variance. This is a process of managing inventory
by physically counting products of each and every SKU and then matched with the
system showing inventory of each SKU.
4) In tactics - It is a process of keeping or placing the products at their places only
according to the plannogram and placed in a sequence of FIFO(First In First Out). By
this way inventory at floor is properly managed.
5) Code Management - It is basically to check the expiry date of the products. In this
process, it is calculated for next three months and the product which have nearest
expiry date kept in front and rest sequinsly back to that product. The products which
get expired taken to the back store and change their bar codes with new expiry dates if
that products are of hyperCITY brand. Code management team fill a form and make a
full report that how much products get expired and given to the receiving department.
By this way expired inventory is removed out from the floor.
First step to collect or to make the monthly SKU list from 1st to 30th in
which coding have to do.
A file is made in which it is calculated for the next three months and
according to that sheet is prepared . The main focus of the code
management team is on the latest months expiry. L
Last two months expiry list put on the mms so that expiry would be
updated and every one would get aware. But for this month expiry a
special list is prepared and that list is send to the buyers so to take further
decisions.
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If the product would not RTV then it cost to the company due to which
BOGOF (BUY One Get One Free) offer is created due to which some
price would be received by the company rather to get Zero amount.
6) Receiving department- The department which perform the function of Receiving of
the product from different vendors as quality prescribed by the Buyers is known as
receiving department. Receiving department plays the major roll in managing
inventory. During receiving from the back gate the employees manage inventory and
place the inventory in the proper way at their places. SAV,RTV, FREE GIFTS are
also managed by the inventory management team.
7) Buyers- Buyers are the one who buys products or material for the company or store.
Buyers use to purchase centralize or decentralize (local vendors). Buyers use to
contact with different vendors so that maximum bargaining would be done by which
Economic order quantity would be achieved by purchasing at less price and it would
be benefitted to the organization with better price, better quality and delivery in time.
Function of buyer is also to manage inventory by ordering according to the need.
Dealing better with the vendors so that company should get the product of much
longer expiry date and dealing of RTV if get expired. If the products are on the expiry
date then code management team and receiving department use to see the buyers
response that whether the product which would get expire date is can be RTV or it
would create zero value, If that product would create zero value then BOGOF is
created if then also it can’t be sold and after expiry of that product then that product
will have zero value and that products would be removed from the inventory. But if
the product can be RTV then that product are returned to the vendors. So this process
helps in managing the inventory.
8) Plannogram- It is plan made by the experts of the company where the products must
be placed at the floor, which product would be placed at which place, at which shelf
by this inventory would be kept safe and transparency would be maintained.
9) I Will Be Back- I will be is a tag or a slip pasted on that SKU number is finished or
product of that variety is finished on the counter and slip is pasted ` I will be back`.
Process of ‘I Will Be Back ‘ also help in managing floor are:-
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First of all they will see the products which are not available. Scan there Bar Codes
and Place ‘I Will Be Back’ on it, so that employee should come to know that this
product must be placed soon.
Secondly an employee come and scan all the bar codes where ‘ I Will Be Back ‘ is
placed
Thirdly list is made of the product excel which have to place before making list on
excel. They identify that this product of this sku number are present upto which
Quantity. Count on Hand and What software shows
Then make a list of the product of ‘II Will Be Back’. In this we will remove product
which our software shows not available (N/A) inventory. We will just make a list of
positive inventory.
Find the Products whether they are placed on other counters or that product must be
bring from inventory room.
After finding place it over there places and remove I will be back places.
Challenges faced during ‘I Will Be Back’
Some times two slips are written or pasted on two counters of same SKU number
of that product. In which on one SKU number products are available of that SKU
number. So at that time we will remove ‘I Will Be Back’ SKU number written on
that counter. There must be only one SKU number on one counter not on
different-different counters.
Some of the products were difficult to find from the inventory and that products
keep on coming in the list of ‘I Will Be Back’ again and again.
It is difficult to find out all inventories due to poor inventory management system.
Employees don’t know that this product is at this place.
10) Blue Dot- Blue Dots products are those products which are contributing 60%of there
sales in their departments that are known as Blue Dot products. These Blue Dot
products tells that these products are important to be checked and always get first
preference in the inventory.
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11) Refilling- It is a daily activity process of filling the good in there shelves so that
product should be placed on bulk quantity that is known as refilling.
12) Offers- There are offers or schemes given to the customers for getting more turnover
of any particular good. Some offers are given by companies of the particular good but
some offers are given by the retail store for promoting them. These offers are
basically given on slow moving products to make them fast moving. These offers also
plays the great role in managing the inventory and makes the turnover of the
inventory fast.
Role of operational processes to increase sales
Intactics- By this process customer gets the maximum service and he would able to
view the products easily by which sales get effected.
Buyers- Buyers have the targets to see out the slow moving goods and make that slow
moving goods in the category of fast moving due to which buyer use to put offers on
that goods due to which sales of the goods increases. Buyers also look after the
discounts which the companies are giving for placing the particular product at
particular place by that also sales get affected in a positive way because of the
discount which the company is giving to the retail store and our store is providing to
the customers.
Refilling- It is a daily activity process of filling the good in their shelves so that
product should be placed on bulk quantity that is known as refilling. This refilling
process also affect the sales of the store. If refilling of the product does not completed
then sales get affected so that’s why refilling is the important process and it is
basically done in non-trading time period.
I Will be Back- This process also plays important role in sales. If the product is not
available on shelf then `I will be back` slip is placed then the employees get to know
that this product is not available on shelf and they complete this process by refilling it
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and removes a tag of `I Will be Back` by this sales get affected in a positive way if all
the tags or slips are removed from the shelves by placing the product on that place.
Price checking- It is a daily activity of checking the prices of the products whether
the prices of the SEL (Shelf Edge Label) prices are matching with the system or not.
If the prices are not matching then SHL is changed with new prices, this process is
known as price checking. By this prices gets updated which effect in a positively
regarding the sales.
13) Offers- There are offers or schemes given to the customers for getting more turnover
of any particular good. Some offers are given by companies of the particular good but
some offers are given by the retail store for promoting them. These offers are
basically given on slow moving products to make them fast moving. These offers also
plays the great role in managing the inventory and makes the turnover of the
inventory fast by which sales gets affected in a positive way.
CHALLENGES FACED IN THE OPERATIONS OF THE RETAIL STORE
Shrinkage- Things which theft, lost etc in the store comes in shrinkage or known as
shrinkage. It is the major challenge faced by the employees to reduce shrinkage due to
which variance increases. So it’s a great challenge for the employees to reduce
shrinkage.
Damage- Things or products which breaks down or leaked is known as damage. It’s
the major challenge of the operational manager to reduce the damage happened in the
store and to know why damage occurs generally and to know about the reason behind
that damage and to get the solution out off. Damage can be due to many reasons like-
misplacing of the product , not maintain the standards, keeping at much height, heavy
product placed at heights etc then damages can take place.
Lead time- It is the challenge for the organization to decrease the lead time and take
the maximum output from the employees
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Inventory Management- It is one of the biggest challenge which HyperCITY is
facing that is to manage the inventory. There are 44000 different units are available
with different SKU number so it is difficult to manage these units in the limited area.
Recommendations
It is very important to improve their inventory management system so that the lead
time of the employees should be decreased and take the maximum output from them.
Acc. to the trend and for providing the service to the customers online shopping must
be started by the HyperCITY.
Quality regulation, certification & price administration bodies can be created at
district and lower levels for upgrading the technical and human interface in the rural
to urban supply chain.
Credit availability for retail traders must be encouraged with a view to enhancing
employment and higher utilization of fixed assets. This would lead to less wastage
(India has currently the highest wastage in the world) of perishables, enhance
nutritional status of producers and increase caloric availability.
Conclusion
It was a great experience for me to learn about the operational processes acting in the
HyperCITY, Punjab’s biggest retail store. It was wonderful time for me at hyperCITY
and with lot of cooperation by the management of HyperCITY. I had learned about the
team work, how team are working and achieving their targets. Being the part of the
various team in 45 days learned many things about the retail sector that how retail
sector actually operates. I have recommended certain suggestions which, I saw at
HyperCITY. At last I would say that HyperCITY is having one of the best visual
merchandising and layout as compared to the other stores.
BIBLIOGRAPHY
http://www.hypercityindia.com/about_us.asp http://www.creativematch.com/news/jhp-designs-new-formats-for/94476/ http://www.jhp-design.com/cgi-bin/profile.cgi
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http://www.jda.com/solutions/back-office-system/ http://www.redprairie.com/store-inventory/ http://www.gofrugal.com/pos/point-of-sale.html
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