APPLICATION OF INVENTORY CONTROL TECHNIQUES IN SHOPPING MALLS

ABSTRACT

1 |Page

In todays world, it is absolutely impossible to think of business operations without proper processes designed for inventory control system management in any organization. In most firms, inventory control system management refers to the ways logistics are handled in the company. Inventory control system management is nothing but management of logistics and the process of eliminating general inefficiencies in the company. It refers to the processes of how the different suppliers and the whole network thereof are managed. The overall aim of inventory control system management is to produce effective and efficient operations. The value of inventory control system management goes up all the even more in retail chain organizations. This is due to the fact that every retail chain organization works with a number of suppliers at any given point in time. ll retail firms have to make a conscious effort to integrate the logistics, distribution activities with the suppliers, and the manufacturers overall efforts. This study attempts to go through and systematically review the comprehensive processes for inventory control system management in any retail chain organization. lso, it tries to undermine how the current technology and innovation techni!ues can be leveraged to improve the inventory control system management processes and to make them more consumer"centric and efficient. This study has used the e#ample of $hopping malls, the leading global retail giant. This is a perfect e#ample used to illustrate how inventory control system management processes should be handled in large retail set ups as $hopping malls would be handling materials and supplies from hundreds of suppliers at any given point in time.

% |Page

&ontents
'$T( &T.................................................................................................................. 1 &ontents.................................................................................................................... ) Introduction............................................................................................................... * +iterature review....................................................................................................... , (esearch -ethodology............................................................................................ 1, .indings nalysis..................................................................................................... %/ (ecommendations................................................................................................... %0 &onclusion............................................................................................................... )/ (eferences............................................................................................................... )%

) |Page

Introduction
Introduction: Inventory control system management or logistics management generally deals with the management of materials and flow of information in a comprehensive network which consists of suppliers, manufacturers, customers and distributors. 12agurney, %//,3 4fficient inventory control system processes and logistics would mean that the company is able to manage a ready flow of goods and services and is able to operate effectively in line with its current bandwidth. The firms which are in the retail industry are all the more focused on efficient inventory control system processes as they have to deal with a number of suppliers and distributors at all times. 12agurney, %//,3 The last few years have been phenomenal for the retail industry all over the world as there has been emergence of various new players in the market who are trying to establish their foot hold in the retail market. 4ven big diversified companies like (eliance have come up with their retail chains in order to take ma#imum advantage of the huge consumption patterns which are prevalent in the country. This study will basically focus on how $hopping malls handles its inventory control system management and logistics processes. 15opp and $pearman, %//,3 6enerally, the logistics or inventory control system management is only limited to the way transportation will work for the goods. 'y default, it still somehow does not take into consideration things like warehousing, packaging, invoicing and entry management etc. which should be accounted for within any good inventory control system process. 1Tayur and 6aneshan, %//73 (etail industry is undoubtedly one of the hottest and mushrooming industries all over the world contributing towards employment generation in a huge way. The retail market all over the world is featured with different business models. These shops do not have any defined logistics processes for them. 18liver and 9ebber, %//%3 :ey retail players are ma;orly trying to capitalize on this shortcoming of the street shops by becoming aggregators of goods and selling them at subsidized costs. 8ne more advantage that they have is that because of being big brands, they are able to negotiate the pricing for these products a lot more than any other normal players. 1&hopra and -eindel, %//%3.

* |Page

&onsidering the fact that logistics play !uite a critical role for any firm, and more so for the shopping malls, the research is !uite important. There is no doubt that logistics and inventory control system within an organization enables the retail chain operations to either move the products or store them in a more efficient manner. If done properly, logistics management results in prevention of needless movement of goods from one location to another and thus reduces transportation cost and also frees up storage space for more productive use. 12agurney, %//,3. The research is also important because generally retail stores maintain lower inventories and do not place too much important on logistics and inventory control system management. They hardly understand the fact that logistics management can be beneficial for both the manufacturers as well as the retailers. 1&hen and Paulra;, %//*3 s a firm conducting retail operation, it is really an important task to find the right balance between investing in front end and back end operations. +ogistics, as an industry has been evolving over the years and the channel dynamics are changing !uite rapidly for the e#isting players in the retail industry. 1&hen and Paulra;, %//*3 This is due to the fact that the retail players are increasingly growing in size and therefore their bargaining power is also increasing with each passing day. This should ideally result in some mutual understanding between various manufacturers and retailers so that they can develop a strong inventory control system network. In that case, it would make sense that both the e#isting operators as well as the new operators put collective efforts to eliminate inefficiencies in the inventory control system network. ll big retail players the world over are making big efforts to improve their overall efficiency and effectiveness of inventory control system and logistics.

< |Page

Lit r!tur

r "i #

Introduction lmost all big retail firms across the world rely on good inventory control system management policies and practices for their overall success. 8ne of the ma;or factors behind their success is the right implementation and framework policy of inventory control system and logistics management. 1=ohnson, %//<3 2o wonder big firms across the world are looking to enter the emerging markets and ;oin hands with the biggies> the classic e#ample being 9almart trying to enter India and having a ;oint venture with the 'harti 6roup. The overall strategy here was that 9almart will ;ust manage the back end operations whereas 'harti will manage the front end operations. 1?iswanadham, %//,3 'ig firms all across the world look forward to replicate their global inventory control system model in emerging market countries as they know there is a lot of potential in emerging markets and they can easily tap this market. -ost of the firms emphasize on local sourcing of goods for cost efficiency reasons. 1?iswanadham and 2arahari, %//@3 'ig players like 9almart have already claimed that they aim to capture <<A of the global retail market by the year %/1<. modern management concept that has arisen according to the latest innovative technologies and meets the needs for organizations in the field of Inventory control system -anagement 1I2?42T8(B &82T(8+ $B$T4-3 has a goal of producing effective and efficient operations. product from its initial stage, through its , |Page

intermediate stage to its distribution goes across the I2?42T8(B &82T(8+ $B$T4operations 4rica Plambeck and +yn Cenend. 1%//,3. The term has been arisen to integrate between the logistics, distribution activities with the suppliers and manufacturers efforts. Inventory control system -anagement is also known to +ogistics -anagement during the process of eliminating general inefficiencies in the company. bdinnour"5elm, $. 1%//13

$hopping mallss main strategy is the cost reductions and the efficiency in the product they sell. 9ith the procurement of all the goods directly from the suppliers by"passing the intermediates, $hopping malls has been the leader findings the things for better prices to provide them cheap to its customers Plambeck, 4rica 1%//03. 9ith a saying D&ustomer looks a good for its bottom price with kicking back efficiencyE compared to its predecessors. It spends most of the time spending with its vendors for a clear over view of the cost structure and establishing a relationship with them in shipment services and also costs. lvarstein, ?. and =ohannesen, +.:. 1%//13. 9ith an informal survey and estimates, $hopping malls is far above its competitors

The state"of"art technology for the tracking and predicting the levels of the predecessor stocks in the inventory and logistic management is the ma;or advantage for $hopping malls. Fsage of the latest technological tool would make the organization in the market to meet its customer re!uirements and be able to provide them in the less time span available (oberts, Cavid 1%//73. 9ith the fast changing world of business, the innovative techni!ues help them to gain new customers while maintaining the customer retention. (eadiness and steadiness are the two things which $hopping malls cannot be opposed from the customers from its predecessors rlb;Grn, =.$. 1%//%3. The main thing $hopping malls is different and uni!ue in retailing sector is it is the first ever retail outlet store to release a satellite to make sure they meet the efficient re!uirements with the essentiality of new stores and distribution even to mobile areas and monitoring the communication needs with fast"forwarding technologies. -. 1%///3 0 |Page l"-ashari, -. and Hairi,

new era has been sponsored by $hopping malls with the correlation between Information Technology and Inventory control system -anagement. Indeed, potential human errors in inventory and ware house, manufacturing and distribution can be minimised with the automated system 4rica Plambeck and +yn Cenend 1%//,3. In the designated way, $hopping malls also attracts its suppliers with a hassle free and convenience. $hopping malls is also a genius in the field of optimising IT with I2?42T8(B &82T(8+ $B$T4- to its employees rather than to its e#ecutives and suppliers. 9ith the assigned techni!ues, the work can be aided better with stress free and more efficiently. ngeles, (. and 2ath, (. 1%//13

Inventory department is the most important and essential part of supple chain management for any of the retail stores. 9ith the initiation of Information Technology into I2?42T8(B &82T(8+ $B$T4-, inventory management gains its retention providing the ease to know the status of inventory precisely when ever they need the progress and monitor them mobile uramo, =., minoff 1%//%3. &atering to the customers and serving with the best available prices are being done with the availability and stock check of the inventory with the Information Technology available. 6unther, -ark 1%//,3

In" ntor$ contro% &$&t ' !nd Lo(i&tic& M!n!( ' nt ) Ho# critic!% !r t* & +unction&,

In its broadest sense, inventory control system management deals with the management of materials flow in a huge network which consists of different suppliers, manufacturers, distributors and customers. Inventory control system management does play a pivotal role in the way modern businesses function. ll inventory control system management processes focus on ma#imizing value and reducing the total cost across the entire domain and this done through focusing on speed and certainty of response to the market. 1&hen and Paulra;, %//*3 .irms are looking to drive that competitive edge through their core competencies. s the business climate has rapidly changed and businesses becoming more and more @ |Page

competitive in nature, the firms know that if they do not have an efficient inventory control system model in place, then they are going to struggle a lot. 1$hapiro, %//13 It means management of a network of interconnected businesses involved in ultimately providing product packages which are re!uired by the end customers. The logistics management encompasses all movement and storage of raw material, inventory as well as finished goods the original point of manufacture to the final point of consumption. 1&hen and Paulra;, %//*3 ll firms want to be successful and they know that they can only be successful if they can get their logistics processes right. Fltimately, success in this dynamic sector depends on achieving robust inventory control system processes and this can only be done through logistics professionals. This is due to the fact that these professionals have the capabilities to combine the best systems and e#pertise to manage a ready"flow of goods and services. 1$hapiro, %//13 Fltimately, it is the shopping malls, which is all set to provide boost to a number of allied sectors and as the logistics or inventory control system management industry is considered as the back bone of the shopping malls, it stands to gain the most out of this boom period. The logistics sector does not mean merely transportation any more, it also focuses on activities like warehousing, packaging etc. It is estimated the logistics sector is all set to grow at a rate of %/A or even more in the upcoming years. It is also to be understood that as the retail chains e#tend, inventory control system management will now take on an increasingly important role. This is because the end consumers have become all the more demanding and also conscious about their time. They are also spoilt for choices as there are so many brands in the market, all vying for the consumers attention. The competition is indeed e#tremely tense in the retail market all over the world and all firms are aiming for high customer satisfaction. 1Cr. (amkishen. B, %/1/3 lso, things are not the same in the Indian retail industry as the country is in the process of transformation and have been witnessing changing life styles, increased per capita incomes and individual income levels. The global retail market is 7 |Page

e#panding with each passing year and is e#pected to reach F$I7</ billion by the year %/1<. The retail industry is undoubtedly playing an e#citing and very important role in the overall economic growth of the country. The modern retail market has already captured J%%A market share in the retail market. This has been made possible due to e#pansion of 1% million outlets and due to creation of 1.< million ;obs in nearly ) years. 4verybody in the country is e#cited about the concept of shopping and there is a lot of buzz around hypermarkets, supermarkets, and specialty stores.

In" ntor$ contro% &$&t ' M!n!( ' nt: Addin( "!%u '!%%&

to t*

S*o--in(

These days, inventory control system management has allowed businesses to not only have advantage of productivity> it also has a value advantage. Through this ma#imization of value and also cost reduction in the same time, more innovation can definitely be added to the product and process. There is no doubt about the fact that mass manufacturing offers advantage in productivity but effective supply management processes result in mass customization, which further help customers in fle#ible manufacturing and customized adaptation. 4ffective use of inventory control system management also results in improved product life cycles. Through logistics and inventory control system management, the more accepted offerings by the industry to the consumers would be a variety of products catered to different market segments and customers preferences. Inventory control system management is adding value to the shopping malls as it helps connect efficiently between different suppliers, manufacturers as well as distributors. The shopping malls is full of competition and it gets to such a level that it is indeed the survival of the fittest. 'rands try to outdo each other by newer schemes and through their pricing strategies 1&hen and Paulra;, %//*3. If big retailers such as $hopping malls do not have effective inventory control system management policies in place, then this will surely impact their top line and bottom line numbers.

Ro% t*!t In" ntor$ contro% &$&t ' or Lo(i&tic& & ctor -%!$& in r t!i% '!r. t !%% o" r t* #or%d 1/ | P a g e

There is no doubt about the fact that inventory control system management or logistics play a pivotal role in the organized retail market in the emerging markets and the growth of the organized shopping malls actually depends on logistics. The Inventory control system &ouncil of emerging markets have been formed to e#plore the different challenges that a new retail firm would face and to find possible solutions for these firms operating in the shopping malls all over the world

Ideally, the actual role of inventory control system or logistics in the organized shopping malls in the emerging markets should be a shelf" centric partnership between the retail firm and the manufacturer as this should lead to creation of inventory control systems that are loss free. This will also give rise to top and bottom line growth for all these firms which are operating in the shopping malls in the emerging markets. In the organized shopping malls in the emerging markets, the presence of fresh produce 1vegetables and fruits3 is very small. 5owever, this is slowly but surely picking up as retail firms have started dealing in these items already. This is so for the nature of inventory control system is very fragmented. This shows the important role of inventory control system in the organized shopping malls in the emerging markets.

In the organized retail market in the emerging market countries, the value of inventory control system is e#tremely important as the customer wants at a very affordable price, a variety of product mi#. It is the inventory control system that ensures to the customer in all the various offerings that an organization decide for its customers, be it cost, service, or the !uickness in responding to ever changing tastes of the customer.

The infrastructure in emerging markets in terms of road, rail, and air links are not sufficient. nd so warehousing plays an e#tremely ma;or role as an aspect of logistics or inventory control system operations. To overcome these problems, the retailers is trying to reduce transportation costs and is investing in logistics through partnership or directly. The organized shopping malls in the emerging markets is 11 | P a g e

growing so the role of inventory control system becomes all the more important. It should become all the more responsive and adaptive to customers demand. There is also need for the inventory control system to be more cost efficient and collaborative to win the immense competition in this sector.

The role of inventory control system in organized shopping malls in the emerging markets has e#panded over the years with the boom in this industry. The growth of the retail industry to a large e#tent depends on inventory control system, so efforts must be made by the retailers to maintain it properly and ensuring that it results in more and more growth for the firms operating in the sector and overall growth for the entire industry.

S*o--in( M!%%&/ Lo(i&tic& Str!t ($ The success of $hopping malls is well known across the world. 8ne of the big reasons why $hopping malls is such a big force to reckon with is the right implementation of supply and logistics management. $hopping malls has in fact started replicating its inventory control system model in a number of emerging market countries and they are trying to implement this across all their stores in these emerging market countries. The firm has a very good network of suppliers and distributors across the country who are willing to work with $hopping malls at virtually real time levels. Therefore, whenever $hopping malls has urgent re!uirements to fulfill its orders, it raises a flag to )"* suppliers concurrently and then picks up large volumes to satisfy those re!uirements. 8ne more good thing that $hopping malls has done is that they have a separate team which takes care of all logistics issues and pricing which deals real time with all these suppliers and distributors at the back end, thereby ensuring that their day to day operations run efficiently and smoothly at the front end.

RFI0 in R t!i% In any industry, inventory control system would actually mean integration of the supplier and retailers to provide goods at the right time and in the right place that 1% | P a g e

should truly satisfy the needs of the customers. In todays scenario, the inventory control system is the backbone of all the retail giants, be it 'enetton, Hara, 5ennes K -auritz, $hopping malls, $pencer, $hoppers $top, ?ishal -egamartetc. 'ut due to various problems like stock"outs, lost sales, delayed shipments, production slowdowns, e#cess buffer inventory, shrinkage and billing delays, etc. the management seems to be really missing from inventory control system or logistics management.

5owever, of late, there has been one concept that is really creating a lot of buzz in the retail market in the emerging market countries. There is a new concept called (.IC which is really causing a lot of interest to big retail players. (adio fre!uency identification 1(.IC3 is a term that describes technologies that use radio fre!uencies to identify ob;ects. This is the latest technology that is making headlines in the Inventory control system network. Though it has been in e#istence since 170/s but it is only now that it has starting changing the way people look at inventory control system or logistics, owing to companies who have introduced cheaper ways of producing (.IC tags, (eaders, Tags, Portals and accessories. $hopping malls was the very first company to incorporate (.IC in its inventory control system methods and re!uires its suppliers also to use (.IC. This technology has helped $hopping malls in several functions like tracking inventory, locating various goods, collecting payment, which in turn has helped speed up the movement of goods in the warehouse and reduce cost of labour and errors in every possible way. (.IC has helped $hopping malls save up to I@.)< billion annually. It has helped it in its aim to coordinate with its suppliers to serve its customers more effectively and efficiently. 'ut (.IC does not come to the rescue of inventory control systems without a cost. lot of planning and testing has to be done before implementing (.IC in any organization successfully. The information encoding has to be standardised to help (.IC function in a smooth manner. ll the big firms in the shopping malls know about (.IC and clearly know that they would not be able to succeed without this 1) | P a g e

new technology that is really creating huge buzz amongst all retail players in the emerging markets.

.irms have not really started using it regularly but have reached a stage where they have been trying out a few things and are currently in the testing phase. It is ;ust a matter of time when the firms will understand the true value of (.IC technology and would make ade!uate steps to have (.IC a part of their big inventory control system and logistics plans. It might be a totally new concept in some countries but it is bound to do well due to the clear cut advantages that it offers to retail firms.

41Bu&in && !nd inno"!tion 8ne of the important aspects of e"business implementation is developing a link between I&T companies and innovation. &onsidering such value the telecom companies are placing a great emphasis on the critical role played by innovation in their service delivery to the customers and remain competitive in the market place. 8n the other hand a strong competitive pressure is implied on companies to gain incentives from their innovation and research K development activities. 4"business implementation brings in the competition, competitiveness and innovation intertwined 15aucap, %//)3.e"business in I&T industry is widely recognized as key driver of innovation, specifically driving the process innovation within the company. I&T have been identified and widely recognised as a ma;or enabler of innovation, in particular for process innovation. 0<A of those companies that had introduced new business processes in %//< reported that this innovation was directly related to or enabled by I&T. In many cases, the implementation of e"business processes in a company will constitute a process innovation in itself. In manufacturing sectors, e" business has triggered significant innovation inside the companies, notably in inventory control system and delivery processes, such as automatic stock replenishing and improved logistics. In service sectors such as tourism, the innovative element is more evident in the way that e#ternal transactions are accomplished. .or e#ample, if a company starts to sell its services online, this can imply innovation in the service delivery process and in customer communication 1* | P a g e

16retton,

6ali

and

Parham,

%//)3..

In

some

sectors,

particularly

in

I&T

manufacturing, consumer electronics and telecommunications, I&T are also highly relevant for product innovation. 5owever, as more companies strive to e#ploit the innovation potential of I&T, it becomes more difficult for the individual company to directly gain competitive advantage from this technology. e"'usiness is becoming a necessity rather than a means to differentiate from competitors. In addition, the introduction of innovation can cause substantial costs in the short and medium term, as it may take time before the investments pay off 1Cenis, -c-orrow and (Lger, %//*3.

E1Bu&in && in M!%%& In %//), basic internet access and standard internet applications such as e"mail and use of the 9orld 9ide 9eb had reached very high diffusion levels in the electronics and electrical machinery sectors throughout 4urope. 2inety eight percent of sector companies in the 4F"< had internet access and used email, 7<A of the employees worked in companies that also used the web and 00A worked in companies that used an intranet. In the overall electronics sector, the main drivers of e"business adoption were the high level of its IT know"how, the competitive pressure, the high degree of standardization of products and components, the specialization of firms along a comple# value chain, the globalization of production, and globally dispersed production schemes 1&hristensen, 17703. In addition, this sub"sector was identified as naturally IT"savvy and predestined to be open to e#periment with new technology"driven management solutions. &onse!uently, in the electronics industry, e"business enabled and drove innovative production and logistic schemes, globalization and specialization. In the semiconductor industry, the early success of e"business could be partly e#plained by the high level of standardization of a large part of electronic components used as an input in the production of electronic systems, combined with the short time available to deliver products to market and with the short lifecycle of electronic components. These factors strongly enhanced the industrialization and automation of the purchase process 1'raman, %//*3.

1< | P a g e

R & !rc* M t*odo%o($

R & !rc* O23 cti" & The overall ob;ective is to underline the great impact of technology on the current logistics scenario in the market today. This is important to show how customers can be managed in a better way. R & !rc* P%!n 6enerally, for every piece of research, it is either a deductive approach or inductive approach, which is used. This really depends on the e#act re!uirements of what research is to be done. 9ork done in this study is more !ualitative in nature. research design is arranging properly, the different conditions for collection and analysis of data that aims for both fulfilling the purpose of research and that too in the most cost effective manner. The research has been conducted through a proper mi# of both detailed secondary research as well as primary research to fill the data gaps for which

1, | P a g e

answers could not be found through secondary desk research. To conduct interviews, a structured !uestionnaire has been e#tensively used and under the secondary research, books, ;ournals and the information obtained from the retail stores would be used to analyze the situations. s stated, $hopping malls has a phenomenal growth in the field of retailing sector with which it has concentrated on the customer needs in the present generations. ccording to the latest surveys and up comings, $hopping malls has mong its way on cost reductions and efficient I2?42T8(B &82T(8+ $B$T4- practices through innovation of new technologies from ware house to shop floor. them, few of the models and practices have been discussed in the present research. The inventory control system models such as assigning the strategically proven models and also prioritising the competitiveness are the common basic factors. Inventory control system is also considered to be into two types such as responsive and efficient. Curing the manufacturing and distribution of a product, the speed of the process and the organization life cycle is to be considered. Pull and push process is also considered during the later stages. -ethods and techni!ues such as &ollaborative Planning .orecasting and Procurement are to be considered for the gathering the necessary information for the I2?42T8(B &82T(8+ $B$T4- technical analysis. Cemand and -anagement are the two collaborative techni!ues for the procurement of I2?42T8(B &82T(8+ $B$T4-. The demand of the inventory control system management can be found through the collaborative forecasting. long with this, demand forecasting also implies accordingly. .or the determination of various forecasting methods, several methods can be analysed such as smoothing of the present trend and fast moving products e#ponentially. lso, multiplicative seasonal method can also be implied for the products that depend on the seasons to be sold. S % ction o+ Artic% & -ost of the ;ournals viewed have been sourced from a couple of databases at Inform 6lobal Pro"!uest. lso the main aim of the literature review is to conduct an overview of the snapshot of research being carried out and the techni!ues involved in the filed of I2?42T8(B &82T(8+ $B$T4- $cott, +ee 1%//<3. -ost of the data has been searched from the Informal 6lobal Pro"!uest ;ournals and most of the times a 10 | P a g e

similar keyword Dinventory control system managementE has been revealed most of the times. round */ articles have been reviewed from 1/,/// articles which are term mentioned as control over !uality has been present in the database.

achieved during the search of the articles and publications. (oberts, Cavid 1%//73 M t*odo%o($ Fr!' #or.

6rouping the important concepts and the frame works being carried out> four important methods have been grouped together so that the methods and concepts have been classified. Cescriptive features, concern on theoretical strategies, issues related to both differential and methodological has been brought forward. In which, distribution of time frame and different sectors of the industries has been covered in the first part. &onceptual framing, theoretical perspectives and the research methods have been provided in the later stages. Ti' Hori4on bdinnour"5elm, $. 1%//13

The trends and the technology that has been carried out in the present research have been chosen for a span of , years from the period in between %//< and %/1/. -ost of the traditional techni!ues for the automation of the inventory control system management have been performed past a decade. 'ut as the present research deals with the emerging technologies and the amendments carried out by the latest products such as (.IC, this span has been considered as enough.

R & !rc* An!%$&i& s the present research deals with a descriptive and inductive approach rather than conducive or testing phases, similar statistical data and descriptive methodologies have been considered. -ost of the analytical and descriptive data has been provided in the form of tables and graphs. $cott, +ee 1%//<3

0!t! Co%% ction M t*od&:

1@ | P a g e

s mentioned above, the data has been collected using both the primary sources as well as the secondary sources. The researcher has also read a number of published articles on the logistics and inventory control system management.

Pri'!r$ 0!t!: -ost of the data in this research study has been collected with the help of a structured !uestionnaire. The interviews were conducted with industry e#perts and some key officials M personnel in the logistics sector who have had relevant e#perience in conducting inventory control system management. These e#perts have e#ceptional domain knowledge and best suited to answer !uestions about their companies logistics strategies. The first step was to prepare a structured !uestionnaire which could be used to conduct interviews with the company employees to gather their views on types of inventory control system strategies that their companies are using to engage with potential customers. The structured !uestionnaire which was prepared for this particular e#ercise had a combination of both close ended !uestions and also some open ended !uestions. The !uestionnaire basically comprised mostly of close ended !uestions and couple of open"ended !uestions in order to administer the primary research.

R & !rc* In&tru' nt&: &onducting primary research through structured !uestionnaires is one of the best ways to collect data. The key is to have the !uestions in a proper se!uence while conducting these interviews. The proper se!uence is re!uired and it should be aligned in such a way that it absolutely meets the ob;ectives of the study. The !uestionnaire will mostly have close ended !uestions and a couple of open ended !uestions with the total length of the survey being 0 to 1/ minutes focusing on key inventory control system management strategies and technology related !uestions. S!'-% Si4 : 17 | P a g e

n appropriate sample size is really important for any market research or research pro;ect. This leads to much better reliability and validity of the data and then further analysis. 8nce the right respondents have been chosen, they should be able to provide more realistic and appropriate data and information regarding the ob;ectives of research. s the researcher has clearly mentioned in the data collection section, the interviews have been conducted with the e#perts dealing with logistics in organizations.

T!r( t R &-ond nt&: In order to collect more in"depth information regarding the study ob;ective, the researcher has emailed the !uestionnaire to the following respondentsN +ogistics -anagers $ales -anagers Inventory control system -anagers

S!'-%in(: 6enerally, for such studies, there are different types of sampling techni!ues which are used. These sampling techni!ues can be related to both probability sampling techni!ues and non"probability sampling techni!ues. In probability sampling, every single item within the population has a recognized non"zero probability of to be chosen. These techni!ues generally comprise of random sampling, stratified sampling and systematic sampling. 8n the other hand, in non"probability sampling, the elements are chosen from a defined population in several non"random behaviors. This type of sampling comprises of convenience sampling, snowball sampling, ;udgment sampling and !uota sampling. .

Findin(& An!%$&i&

%/ | P a g e

The inventory control system function within the shopping malls gives the competitive advantage of the company. &ompetitive advantage refers to the operational as well as business benefits over the competitors. In order to better understand the importance of inventory control system management in organized retail industry, I have conducted the primary research with the employees in various organized retail companies. This chapter includes the findings and analysis of primary research.

Findin(& !nd An!%$&i&:

Age Groups

9% 19% 45%

27%

25-34

35-44

45-54

55-60

The above figure shows the split of sample across the age groups of respondents who have been targeted in this study. *<A of the respondents are from %< to )* years of the age as they have better understanding of the inventory control system since they are the actual people who are managing the inventory control system.

%1 | P a g e

Gender

13%

87%

Male

Female

The above figure shows the split of sample between the genders of the respondents as @0A of the respondents were male and rest of them was females.

11% 7% 5%

16% 12%

9% 23%
Supply !a"n #en$!mar%"ng e-pro$uremen' +u'sour$"ng Many suppl"ers

17%
&lan s'ra'eg"$ally ()* supply Fe, suppl"ers Su-$on'ra$'"ng

The above figure represents the systems and application used by the companies for managing their inventory control system. %)A of the respondents replied that they use =ust in Time approach and 10A said that e"procurement is the most prominent system used in their company for effectively managing the inventory control system. 'oth these systems are very old in the field of inventory control system and provide the greater benefits without incurring any additional cost to the companies.

%% | P a g e

ar ki ng

lly

pl ie rs

gi ca

re m

su

pl ie r

rc

st ra te

en c

cu

"# $

su p

su p

s! u

pr !

an y

e'

P la n

S up

pl y

ha

#mpr!*ement

Planning t! #mplement

+lrea,y implemente, an, satis- ie,

.!t at all /ele*ant

The above figure indicates the re!uirement of the companies for managing their inventory control system. Inventory control system benchmarking and plan strategically are the areas where the companies are seeking the improvement for managing their inventory control system effectively.

17%

21%

18% 15%
.ery Su$$ess/ul 0o' Su$$ess/ul Su$$ess/ul 0o' a' all Su$$ess/ul

29%

Some,!a' Su$$ess/ul

The above figure provides the agreement of the companies towards the success or failure after implementing the various systemsMapplications for managing the inventory control system. %7A of the respondents replied that the companies are successful with their current systems since every application or system developed for inventory control system gives separate and sure benefits to the company however it depends on the nature of the business. %) | P a g e

S u)

in

&

c!

ut

nt ra

ct in g

en t

ly

pp

in

80 70 60 50 40 30 20 10 0

3 16 23 4

5 12 25 19 2 17 15 5 1 23 4 9 17 9 3 15

45 5 4 18

23 7 9 17

4 11 17 13

43%

57%

1es

0o

It is essential for the companies to develop strategic plan for managing any of the business process. in this conte#t figure *., shows that <0A of the companies have strategic plan and remaining companies do not have such plans since they are not sure whether their inventory control system is effectively managed or not.

C u

Currently 4sing

The above figure shows the applications which have been implemented or being considered by the companies for managing the inventory control system. 4nterprise resource planning, decision support system and electronic data interchange are the most desired applications which are currently used by the companies and also the remaining companies are considering implementing them. %* | P a g e

m em er ce e n tS 1 n ys te rp te ri m "u se s / t # e s! n $ ( ur im a c e e nu P -a la ct n u n S rin in u p g g p / Ba lie e r r s c / ! ur !, el a ce ing ti! s n P sh la + ip n , n s *a in ( g n a c n / e a , a g e , P m i! la e nn & n re t i n 0u g e S 1 n y le cy st ct e #, m r! e ni n tic 3 ic a at ti! 3 a e n #n ci te si rc ! n h a su ng pp e ! rt sy st e m

P la n

nt s

an

35 30 25 20 15 10 5 0
e m

15 4
g n e m e

14 8 6 6 7 8 3 5 10 4 2 8 4
t

9 13 7 3 5 16 2 1

11

10

19

in

n 1 u se

ip

c! 2 a re h! ( a

ui re

sh

l/ e

ri a

te

st !

m e

/ e

la

ti ! n

Planning t! #mplement

ll the three applications are new to the system and include greater benefits for effectively manage the inventory control system process within the organization.

18%

4% 34%

15% 29%

2uge -ene/"'s

A3erage

Some,!a'

4"''le

0o' a' all

The above figure provides the consent of the companies for having benefits by implementing the above mentioned systems in the inventory control system process. %7A of the respondents replied that their companies are having average benefit however )*A said that their companies are having huge benefits by implementing such system in place.

25 20 15 10 5 0 11 7
)m pr o3"ng '!e 5ual"'y o/ "n/or m a'"on )m pro3"ng '!e $oor d"na'"on am ong '!e de par 'm e n's

21

19 15 9 10

8
6e du$"ng '!e le ad '"m e os ' Sa3"ng )n$re as "ng '!e sale s +p'"m "7"ng '!e -us "ne s s pr o$e ss

For e $as '"ng

Fle 8"-"l"'y

The above figure shows the primary goals of the companies for managing their inventory control system. &ost saving is the most desired goal for the companies looking at the current economic crisis and credit crunch. Increasing sales, %< | P a g e

improvement in the !uality of information, optimizing the business process and forecasting are the second preferences of the companies to manage their inventory control system.

12%

19%

27% 27% 15%

Me' su$$ess/ully

A3erage

Some,!a'

4"''le

0o' a' all me'

The above figure shows the consensus of the companies for meeting the desired goals by implementing the various systems and applications in their inventory control system. There are more than )7A of the companies that have met their desired goals however those which are still seeking the success re!uire the consultant e#pertise for fully implement such systems in place in efficient management of inventory control system process.

33% 47%

20%
)n3es'ory op'"m"7a'"on 9n!an$"ng $us'omer ser3"$e :e3elp"ng $ompe'"'3e ad3an'age /pr '!e $!annel

The above figure shows the reason for developing the inventory control system management within the company. *0A of the companies want to gain the

%, | P a g e

competitive advantage and second preference is to optimize the inventory level which leads the greater cost saving advantage to the companies. .

R co'' nd!tion&
Today, retail businesses are in support of employing techni!ues to their trade advantage. 9hereas controlling costs and increasing functional effectiveness forever be crucial in the low profit retail business, retail businesses are currently moving their concentration to inventory control system resolutions that improve the essential client practice and force income all over the systems. This rebellion has been concentrated on the shops in current situations, other than well"informed retailers will currently want that all I2?42T8(B &82T(8+ $B$T4- techni!ues must have a supportive effect on the consumer practice all over the channels 1$angani, %//*3.

Ro%

o+ IT in i'-ro"in( t*

P r+or'!nc

o+ In" ntor$ contro% &$&t ':

To answer of the above !uestion is unanimously that information is critical and forces the whole system of inventory control system. ccording to ?astag and -ontabon %//0, the idea that shifting information is as significant as shifting goods is a necessary element of the development and enlargement in IT abilities. Through, they varied on precisely how significant IT is to the I2?42T8(B &82T(8+ $B$T4- structure. The main ob;ective of the IT techni!ue is to develop a corporationOs interaction ability. The recent information methods have provided corporations capabilities that corporations did not have before the blast of information technology in their business. In the view of $waminathan and Tayur %//), in the current business environment, changes have been continually catalyst through information technology> other than a few e#perts think that there is a PboundaryP to information technology. This PboundaryP might be locating the issues engaged with information structures compatibility every time connected with the several %0 | P a g e

methods. 8n the other side a few signified that a basic re!uirement for their retail business is to increase their information technology systems.

This idea must be appeared like a competitive benefit concept. 'etter IT has the power to decrease the manual hard work of data entry and wide paperwork. It is identified that in retail business they are performing to efficiently apply information technology, other that are discovering it hard because 0<A of the shipments managed are not marked with bar policies. These consignments appear to characterize produces of .ortune 7/ corporations. 'ar code techni!ue is ;ust first element of the information technology puzzle. This corporations stock and shipment manage methods, fiscal manage method, and client Profit and loss method are modern and offer information to clients and administration 1Tucker and =ones, %///3.

It moreover was signified that for information technology to be efficient and useful, the individual constituent should be mi#ed. Fpton and -c fee %//, argued that IT will perform a superior ;ob in managing the order selection procedure in the future, other than the person mind is even good on a few operations and wants to stay in the process. &hief advantages to this comprise suppleness, compliance, and decision"making skill, which are completed finest employing the person mind.

E% ctronic 0!t! Int rc*!n( : 9hereas 4lectronic Cata Interchange systems are not hard to use, a few corporation rules make it hard and difficult. ccording to ?astag and -ontabon %//0, there have been several issues in the 4lectronic Cata Interchange. There are several difficulties occurs with different kinds of 4lectronic Cata Interchange being employed and process compatibility with their distributors. $ome corporations do not have better application structures, and can re!uire to more concentrating on interfacing their processes. In reply to the above it is recommended that the 4lectronic Cata Interchange system must be reserved easy, yet competent. This would permit every dealer to converse more successfully. It is signified that there %@ | P a g e

was no issue with harmonization between systems highlighted re!uire attaching to essential 4lectronic Cata Interchange norms for it to perform. 4lectronic data interchange must be set"upped for transferring the information to the -iddle 9holesaler. This will build the need e#tra noticeable and supple. Q(C$ will moreover obtain a range to effort successfully for fast replenishment. The pour of the data from the retailers be able to study through the -iddle 9holesaler 19illiams and 4sper, %//%3.

Lo(i&tic&: The focus of ma;or retail e#pansions will be around the food and grocery segment, with all ma;or &orporates entering retail through this segment. 9ith the ob;ective to have better control over price, consistency in product supply as well as !uality, there will be huge investment in inventory control system infrastructure. 9orldwide, IT has been on the forefront in I2?42T8(B &82T(8+ $B$T4- initiatives as it plays an integral role in automation and information sharing during the whole chain 19ilson and &larke, %//<3.

0 ci&ion Su--ort S$&t ' 50SS6: $tefansson, %//% suggest that the Cecision $upport $ystem may also be utilized to help the supply information therefore that the company information is showed to build demand and supply results more simply. This (etail connection method will allow the retailers to divide data with their suppliers 1by -iddle 9holesaler3 on an actual"time source. This will allow the suppliers to test out re!uire fre!uently. This method will moreover allow the -iddle 9holesaler to check the cost provided through individual suppliers. $o in this case, while the supplier providing the finest transaction will be in agreement, his output phase will be flat. This in revolve will decrease the starting duration and the price due to evasion of the inventory outs and reverse order. Impacts of the (etail +ink will be straightly observable in administration the bullwhip affects, in addition to raising the rivalry between the suppliers. ccording to ?astag and -ontabon %//0, this development in effectiveness will slash backorder costs and stock outputs, e!ually for wholesalers in addition to the suppliers. 4verybody comprising the stock administrators, %7 | P a g e

suppliers, and sales persons will be capable to seem on the similar data, on the e!ual time. Therefore, shifting marketplace tendencies observation, pricing, and vendor relative actions, distribution and warehousing operations may be managed from only one middle place 1?okurka, %//,3.

Econo'i & o+ Sc!% : This approach will base on economies of sale while enormous buying decisions will be taken through the middle wholesaler. The unenthusiastic operational capital may be discussed to further add to the negotiating authority, the method $hopping malls does with their complete volume. (etail +ink will permit leisurely increase profits and stilling below"cost the rivalry, for the suppliers. Inferior costs will force profits in share of marketplace and sales 1:etchen and 5ult, %//,3. dvanced sales will in rotate interpret into e#tra profit achievement, which in revolve will provide e#tra funds to spend in decreasing additional cost. Therefore the concept of developing the lesser inventory control system visibility by the recommended information technology instruments and applying &I&- with the recommended planning for the pour of data and products, must be the a footstep in front for consideration in building the retail trade process in India resourceful and successful 19ise and -orrison, %//03.

Conc%u&ion
ccording to $chwarz %//*, in many businesses I2?42T8(B &82T(8+ $B$T4- is a very main issue because corporations understand the value of generating a mi#ed correlation with their consumers and suppliers. business can increase their competitiveness in current marketplace by use of better inventory control system management and decrease all uncertainty and provide better service to their customers. There is a one way for companies to effectively managing the I2?42T8(B &82T(8+ $B$T4- needs through considerate their logistical practices and plans. The effectiveness of Inventory control system management is a very essential element for all organized retail business. 'ut on the other side some of them think that inventory control system management is only a business practice 18llivier, %//<3. ccording to some other e#perts, the practice of inventory control system management is only an information management inside a company but )/ | P a g e

some other states that inventory control system management practice is also a management of inventory. better inventory control system management moreover has helped corporations make the change from a managerial system based on operational silos to a procedure"orientated system. 'ut this action becomes a cause of occurrence of conflict and confusion among corporations and inventory control system management has supported to buffer these impacts. In currents crucial conditions of retail business it a very difficult task for a business to increase their competitive advantages and also sustain these competitive advantages. nd also when every business survives under a great competitive pressure it is too difficult for them to make their position efficient. $ome businesses have seen the inventory control system management as a competitive advantage because inventory control system management is fulfilling the need of resources for implementing the process 1?igilant, %//)3. It moreover provides to raise clout in the channel because these corporations are established like Dleading edgeE and are managed with immense heights of admiration. chieving competitive benefit in the channel adds with peak administration help for reduced waste and costs, as well as raised incomes. $everal corporations take action to push labor costs out of the structure and draw costs back to their supplier. These types of tactics which can reduce the cost tend to raise the competitive effectiveness of the whole process. I2?42T8(B &82T(8+ $B$T4- assists industries superior appreciate the processes that give element stage material for their completed goods. $uch as, in the retail business, relationships with wholesaler are very important for any business and in the vehicle sector, these types of relationships may influence the makers capability to make a car on right time. Through concentrating on I2?42T8(B &82T(8+ $B$T4-, retail business may significantly develop functional effectiveness. I2?42T8(B &82T(8+ $B$T4- looks for to assist retail businesses manage costs through uncovering the problems in their chief connections. The basic problem is that there is a need that every retail business considerate the demand of their customer and after that line up their supply side with these demands. &ooper, +ambert and Pagh, %//0 suggests that by implementing these efforts, corporations may decrease otherwise even stop e#pensive overruns andMotherwise produce lacks. n effective inventory control system management accomplishes these results in different routes and different e#ecutions. Principally,

)1 | P a g e

inventory control system management connects relation between suppliers and their databases that present estimates, present stock, shipping, otherwise logistics time structures inside the consumer firm. Through providing those suppliers true entrance, suppliers may better gather their consumers needs. $uch as, the supplier may settle shipping to make sure that their consumers have the stock essential to gather their consumers demands.

R + r nc &
R e9eek 1%//*3, P$uppliers, competitors balk at 9al"-arts (.IC leadP, available atN www.eweek. comMarticle%M/,10<7,1,*))@,,//.asp

)% | P a g e

.oster, P.(. and 'urberry, (. . 117773, P$cenario of 6lobal (etail businessP, &omple#ity in $upply chain management, ?ol. ), pp. 1"<

$angita ?iswanathan, 1%//*3. . pharmaceutical sector.

cover story on outsourcing survey on

'yfield, I. 1%//,3, PCevelopments in (.ICP, $ensor (eview, ?ol. 1, 2o. *, pp. *"<.

4ngels, C.9. and $arma, $.4. 1%//03, PThe (etail business problemP, $&on $ystems, -an and &ybernetics, ?ol. ), p. ,.

5elo, P. and $zekely, '. 1%//,3, P+ogistics information systemsN an analysis of software solutions for supply chain coordinationP, Industrial -anagement K Cata $ystems, ?ol. 1/< 2o. 1, pp. <"1@.

5ind, C.=. 1%//,3, P(adio fre!uency identification and tracking systems in hazardous areasP, paper presented at the .ifth International &onference on 4lectrical $afety in 5azardous 4nvironments, pp. %1<"%0.

5owes, (., 9illiams,

. and 4vans, -. 1%//03, PThe IT for low cost

applicationsP, Information Technology, ?ol. *, pp. 1"*. R :arkkainen, -. 1%//)3, PIncreasing efficiency in the supply chain for short shelf life goods using (.IC taggingP, International =ournal of (etail and Cistribution -anagement, ?ol. )1 2o. 1/, pp. <%7"),. R $maros, =. and 5olmstrom, =. 1%//<3, P?iewpointN reaching the consumer through e"grocery ?-IP, International =ournal of (etail K Cistribution -anagement, ?ol. %@ 2o. %, pp. <<",1. R 8llivier, -. 1%//<3, P$&- enhances materials handlingP, $ensor (eview ?ol. 1< 2o. 1, pp. ),"7. R Turtle, =.(. 1%//03, PTraditional and emerging technologies a applications in the radio fre!uency identification industryP, paper presented at the (etail store format, pp. <"@. R 5owes, (., 9illiams, . and 4vans, -. 117773, P readMwrite tag for low

cost applicationsP, I44 &ollo!uium on (.IC Technology, ?ol. *, pp. 1"*. )) | P a g e

(aza, 2., 'radshaw, ?. and 5ague, -. 1%//,3, P pplications of (.IC technologyP, I44 &ollo!uium on (.IC Technology, ?ol. 1, pp. 1"<.

'arcovsky, Third

. 1%//*3, PThe versatile (.IC systemP, Proceedings of the :orean International $ymposium on $cience and

(ussian"

Technology, %, pp. 0/7"11. R ?igilant.tv 1%//)3, P'enetton (.IC tagsN wont be disabled at checkoutSP, available atN httpNMM vigilant.tvMarticleM%7*0 R $angani, :. 1%//*3, PIndian (etail 'usiness 8verview, ?ol. </ 2o. *, pp. %%"* R R Peter -eindel, 1%//03 $upply &hain -anagement $chwarz +' 1%//*3 The stat of practice in supply chain managementN a research perspective, in applications of supply chain management and e" commerce research in industry. R &ooper, -.&., +ambert, C.-., K Pagh, =. 1%//03 $upply &hain

-anagementN -ore Than a 2ew 2ame for +ogistics. The International =ournal of +ogistics -anagement ?ol @, Iss 1, pp 1T1* R 4asterby"smith, -. T. 1%//%3 -anagement (esearchN edition +ondonN $age Publications. R 5aag, $., &ummings, -., -c&ubbrey, C., Pinsonneault, ., K Conovan, (. ge 1)rd n Introduction, %nd

1%//,3, -anagement Information $ystems .or the Information &anadian 4d.3, &anadaN -c6raw 5ill (yerson I$'2 /"/0%"@17*0"% R 5alldorsson,

., :otzab, 5., -ikkola, =. 5., $k;oett"+arsen, T. 1%//03.

&omplementary theories to supply chain management. $upply &hain -anagementN n International =ournal, ?olume 1% Issue *, %@*"%7,. R :aushik :.C., K &ooper, -. 1%///3. Industrial -arketing -anagement. ?olume%7, Issue 1 , =anuary %///, Pages ,<T@) R :etchen =r., 6., K 5ult, T.-. 1%//,3. 'ridging organization theory and supply chain managementN The case of best value supply chains. =ournal of 8perations -anagement, %<1%3 <0)"<@/. )* | P a g e

+arson, P.C. and 5alldorsson, (esearch K

. 1%//*3. +ogistics versus supply chain

managementN an international survey. International =ournal of +ogisticsN pplication, ?ol. 0, Issue 1, 10")1.

-iller, =. 1%//*3. TheOinsideO and the OoutsideON finding realities in interviews, in $ilverman, C. 1%//*3, Qualitative (esearchN Theory, -ethod and Practice, %nd edition. +ondonN $age Publications, pp 1//"1%<.

$tefansson, 6. 1%//%3. D'usiness"to"business data sharingN integration of supply chain.E International =ournal of 4conomics 0<N 1)<"1*,.

source for Production

$waminathan, =. -. and $. (. Tayur 1%//)3. D-odels for $upply &hains in 4"'usiness.E -anagement $cience *711/3N 1)@0"1*/,.

$aunders, -. +. et al 1%//)3. (esearch -ethods for 'usiness $tudents, *th edition. 4sse#N Pearson 4ducation +imited.

Tatsiopoulos, I. P., <. T. Ponis, et al. 1%//%3. D(ealization of the ?irtual 4nterprise Paradigm in the &lothing Industry through 4"business Technology.E Production and 8perations -anagement 111*3N <1,"<)/.

Tucker, C. and +. =ones 1%///3. DImportance in supplier retailer relationship.E International =ournal of Physical Cistribution K +ogistics -anagement )/1)M*3N %<<"%,0.

Turowski,

:.

1%//%3.

D gent"based

e"commerce

in

case

of

mass

customization.E International =ournal of Production 4conomics 0<N ,7"@1. R Tyan, =. &., .. 9ang, et al. 1%//)3. D n 4valuation of $upply chain management in (etail business.E 8mega )1113N <<",%. R Fpton, C. -. and . -c fee 1%//,3. DThe 'enefits of $&-.E 5arvard

'usiness (eviewN 1%)"1)). R ?an 5oek, (. I. 1%//13. D4"$upply &hains " ?irtually 2on"4#isting.E $upply &hain -anagementN n International =ournal ,113N %1"%@.

)< | P a g e

?annieuwenhuyse, '., +. 6elders, et al. 1%//)3. D n online decision support system for transportation mode choice.E +ogistics Information -anagement 1,1%3N 1%<"1)).

?astag, 6. and .. -ontabon 1%//03. DInformation Technology and common characteristics, ranking and social acculturation in 8perations -anagement.E 8mega )/1%3N 1/7"1%,.

?lachos, C. and (. Cekker 1%//)3. D(eturn 5andling 8ptions and 8rder Quantities for $ingle Period Products.E 4uropean =ournal of 8perational (esearch 1<1113N )@"<).

?okurka, (. =. 1%//,3. DThe relative importance of ;ournals in 8perations -anagement researchN -anagement 1*1*3N )*<")<<. citation analysis.E =ournal of 8perations

9ilson, T. P. and 9. (. &larke 1%//<3. DProduct $afety and Traceability in the gricultural $upply &hainN Fsing the Internet to Celiver Traceability.E $upply &hain -anagementN n International =ournal )1)3N 1%0"1)).

9illiams, +. (., T. +. 4sper, et al. 1%//%3. DThe e"$upply &hainN Its Impact on the &urrent and .uture $tructure of $trategic +ogistics -anagement )%1@3N 0/)" 017. lliances, Partnerships and +ogistics +eadership.E International =ournal of Physical Cistribution K

9ise, (. and C. -orrison 1%//03. D'eyond the 4#changeN The future of '%'.E 5arvard 'usiness (eviewN @,"7,.

), | P a g e