Title: ERP in Retail Industry

Author: Mr. Dinesh.E & Dr. T. Vetrivel

Journal: International-journal-of-scientific-research

Year of publishing: Feb13

Volume: 2

Issue: 2

URL:

https://www.worldwidejournals.com/international-journal-of-scientific-research-
(IJSR)/file.php?val=February_2013_1359729981_ee5e5_76.pdf

INTRODUCTION:

The article talks about how ERP can be used in retail sector and also on ERP providers like
SAP, Oracle, PeopleSoft, BAAN, Microsoft Dynamics, etc. and their competitive
applicability and pitfalls. ERP uses tangible assets, resources etc., whereas retail comes at the
end of supply chain and is for consumption of purchaser. The retail Enterprise Resource
Planning (ERP) packages help the retailers in better management of their enterprise wide
operations spanning the entire globe. ERP packages are heavily used by larger retail chains.

ERP packages are heavily used by larger retail chains and considered as a competitive tool
across the industry. Order Entry, Accounts Payable, Accounts Receivable, Purchasing,
Distribution etc. are handled by ERP.

CHALLENGES FACED BY RETAIL SECTOR:

Retail sector has 2 main issues:

Market Competition:

Understanding consumer demand in real time scenario is difficult.

Requires proactive approach.
Responding in real time approach ensuring customer satisfaction.

Regulatory Pressures:

The retailers require an enterprise wide process visibility, data access and near-instant
performance reporting.
The need for flexibility, process efficiency, reliable information, and responsiveness is
very hard to achieve.
PROBLEMS IN IMPLEMENTING ERP IN RETAIL:

1. Outdated Architecture: Inflexible and rigid architecture.

2. Limited Scope: Unsuitable for contemporary business environment.
3. High Maintenance Costs: Cost increases with passage of time.
4. Integration and Scalability Problems: Addition & integration of new application is not
possible.
5. Increased Risk to the Business: Heterogeneity in the system is the primary cause of
risk.

BUSINESS IMPLICATIONS OF RETAIL ERP:

Better management of operations

Graphical User Interface (GUI) support
Allows optimum utilization of the resources
Reduction in the overhead and Inventory
Timely responsiveness
Enterprise wide solution
Integrated work environment
Easy scalability and adaptability
Knowledge transfer between industries

CRITICISM:

Primary data was not used. To know in details about the retail sector, experts from industries
were to be used. Retail sector sells different categories of products like clothing, FMCG
products, jewellery etc. ERP packages can be modified or customised according to
organisations wish. ERP will be the most helpful in retail sector for managing inventories,
vendor management and keeping customer records. There are many packages of ERP which
can be used for the retail sector but were not explained in depth. Proper industrial analysis is
missing. Typical ERP currently implemented address the broad "common business processes"
such as order processing, purchase, retail planning, logistics, invoicing and accounting
processes. The retailing companies who have online portals, using ERP for them will be more
beneficial like Amazon. Implementing ERP into Retail from changing the traditional
management is one of the bravest step but nevertheless changes the shape of business
altogether.