Inventory Management

At

Spar Hypermarket

Presented By

Ashish Sarolia

IMT Ghaziabad

INTRODUCTION

� Spar was founded in 1932 in the Dutch city

of Zoetermeer

� Headquarter is located at Amsterdam, Netherlands

� It is the world's largest independent voluntary retail

trading chain and largest food retail chain

� Total turnover is 40 billion dollar and operates in 34

countries

� Total Number of stores stood at 12500

� Employs more than 180000 persons worldwide

SPAR IN INDIA

� Spar has a joint venture with Landmark group

and works under the corporate name of MAX

hypermarkets India Pvt. ltd.

� Headquartered at Banglore

� Total stores in India – 13

� Store Format – Hypermarket and supermarket

� Uses 'EDLP' or 'Every Day Low Price' concept

SPAR

Food & Grocery General

Merchandising Electronics Textiles Max apparel

Major Divisions

Fresh Categories & Grocery

Dairy & Frozen

Fruits & Vegetable

Bakery & Concept

Meat & Poultry

Fish & seafood

Staples

Sub-Categories

FMCG

Cleaning Aids

Home Needs

Disposable Ware

Personal Products

Prep food Snack food

Beverages

Ready food

Liquor & Tobacco

Electronics

Home Appliances

Home Entertainment

Personal Entertainment

Telecom

IT

Personal Care

Textile

Basic Bedding

Bath Linen

Floorings

Home accessories

Curtains

Fashion Bedding

Other Accessory

Kitchen & Table Linen

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

INVENTORY PROCESS

Receiving

•To get the desired amount of quantity from Vendors

Handling

•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

MAIN TASKS OF INVENTORY MANAGEMENT

TEAM

� Daily Dump Report preparation – It is the report

which shows the daily waste happened in F&V,

Nonveg, 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

CONTD..

� 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

RECEIVING PROCESS

Receiving process for direct to store products

is intended to facilitate the Store DC/WH

Manager, Supervisor, CSA`s & Loss

Prevention Team to understand the various

attributes about proper receipts of the goods

that are delivered by the vendor directly at

the store for sales.

THE PROCESS

Ord

er

Pla

ced

Order Placed

Deli

very

Sch

ed

ule

Delivery Schedule

Ven

dor

Deli

ver

Vendor Deliver

CHECKING THE VALIDITY.

� Validity of Purchase Order

& Invoice brought in by the

vendor is checked.

� Gate pass issued with the

serial number in the order

of which the vendors stock

will be accepted.

� Details passed to the

receiving staff.

PO – PURCHASE ORDER VALIDITY

Invoice Quantity

Lower

Not Accepted

Excess Returned

to the Vendor

Signed off by Vendor &

Rec Sup

Invoice

corrected to the

available

quantity

Higher

Sent for GRN

CHECKING THE DISCREPANCY.

Discrepancy between PO and Invoice checked

by verifying both the document and are to

inform the security to call the vendor in the

order of the token number given.

Vendor is to unload the stock in the area

designated for receiving and the authorized

staffs are to check the stock for the following

before sending the PO & Invoice for GRN.

Quantity

MRP

Mfd Date

EAN Code

Damages

GRN(GOODS RECEIPT NOTE) PROCESS

� This is the process by which every invoice is feed into the system

� Software – Zensar Retail management System

� For every incoming invoice a TI(Transfer In) number is generated

� For every outgoing invoice a TO(Transfer Out) number is generated

� These documents adjusts the stock level of DC/WH and the store accordingly

� For damaged and expired products which is to be returned back to DC or vendor, a NRGP report is generated

� Every invoice generated have some reason code which shows the type of transaction

GRN PROCESS

PO(purchase order ) placed to the vendor

Vendor generates the invoice and sends a copy to store(PRD-pre receiving document )

Goods received at receivables area and invoice is matched

GRN number is generated, stock information updated into the system and goods are send to the shop floor

For any damaged or expiry product NRGP report generated .If return back agreement is there then send the product back to vendor otherwise send it to dump area

INVENTORY CATEGORIZATION

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

� F:\Mantri Mall - ABC Category List.xlsx

� *SKU(Stock Keeping Unit) – A unique identifier for each distinct product and service that can be purchased in business

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

CONTD..

� 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

Physical Stock Check

System Stock Check

Recheck Diff is

checked

Diff report

generated

RATIOS IN INVENTORY MANAGEMENT

� Stock turn-around ratio – measure of the number of

times inventory is sold or used in a time period

� Eg.

� Vendor Payout Ratio – measures the average

number of days a company takes to pay its suppliers

Category Name Inventory Turn

F&V 1-2 Days

FMCG 15 Days

Textile 1 Month

Category Name Vendor Payout Ratio

F&V 3-4 Days

FMCG 15 days

GM,Textile 2 months

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

TYPES OF DAMAGES AND LOSSES

�Manufacturing Damages

� Transportation Damages

� Customer caused Damages

� Shrinkage

�Mishandling By the sales staff