ASSIGNMENT ON

APPLICATION OF ERP IN APPAREL & RETAIL INDUSTRY

Submitted to: Ms. Rashmi Gulati
Submitted by: Ruchi Singh MFM 2009-11

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Contents
ERP Introduction
o What is ERP

o Features & Benefits of ERP

ERP in Apparel & Retail Industry

o Necessity of ERP in Apparel & Retail Industry

o Advantages of ERP in Apparel & Retail Industry

o Disadvantages of ERP in Apparel & Retail Industry

Case Study Pantaloon Retail

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

ERP - Introduction

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

ERP
An Introduction

Its a multi-module application software that supports broad set of business activities, that may include a combination any of these:
o o o o o o o o o o Product development Pre and Post Costing Merchandising Planning Purchase Inventory management Production Exports Finance and Payroll

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

ERP
An Introduction
Product development Payroll Finance Pre and Post Costing

ERP
Multi-module application software that supports broad set of business activities, that may include a combination any of these

Merchandising

Exports

ERP
Production Inventory management Purchase

Planning

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

ERP
Features & Benefits

Effective monitoring operations of the company

An ERP system uses a central database called the unified Information System (IS) that holds all the data relating to the various system modules. a

Highly flexibility
A good retail ERP system is highly flexible allows a high degree of customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations.

All users and organisational components integrated

ERP systems integrate all the data and the related processes of an organization. ERP software packages have an enterprise wide reach that offers cross-functional capabilities to the organization

Greater efficiency and performance

ERP helps business process flow more smoothly and improves the efficiency of fulfillment process. It leads to reduced inventory. Eventually, it decreases the overall business cost.

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

ERP In Apparel & Retail Industry

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

The need for ERP

Reason 1 : Market Competition

Efficiency is critical to survive in the retail industry

Margins & Efficiency

Respond to the various inputs in real time across the enterprise.

Consumer Specific Requirements TAT to Customer Response

Respond to the various inputs in real time across the enterprise.

Competition

To beat the competition, retailers have to understand consumer demand at the point of interaction

Problems in the legacy Environment : Sans the ERP

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

The need for ERP

Reason 2 : Regulatory pressures

A combination of flexibility, process efficiency, reliable information and responsiveness is critical to a retail business
Efficiency

Data access and near-instant performance reporting Retailers require an enterprise wide process visibility

Need of an integrated IS infrastructure which continuously monitors and dispatches the information.

Only the complete integration can provide this.

To meet the regulatory standards

Retail business would benefit immensely from an integrated IS infrastructure

Inability of Legacy System to meet these Requirements

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Challenges with the Retail Sector

Why cant they just move to ERP ?

Integration is the prime prerequisite but very difficult. As explained

Difficult to rip and replace the legacy systems

Fragmented legacy software applications

Outdated Architecture

Limited Scope

Over Dynamic legacy systems

Integration & Scalability problems

Risk to business

Previous Investments would go waste

Problems with Legacy systems

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Challenges with the Retail Sector

Problems With Legacy Systems WRT Retail - Explained
Most of the legacy enterprise applications in retail have an outdated architecture that is inflexible and rigid. This inflexibility and rigidity pose a challenge to the business efficiency. The lack of flexibility prevents the legacy software to be used with the contemporary products available in the market that may add muscle to the retail operations. Todays business environment demands real time adaptability from the software systems. Most of the legacy systems were designed to take care of specific problems tasks and as a result, lacked an enterprise wide approach to the problem solving process. This makes such systems unsuitable for use in the contemporary business environment that is highly competitive in nature. Modern businesses require an enterprise wide approach to retail management process and legacy systems fall short of such a requirement. Legacy software does not allow addition and integration of new applications. This prevents such systems from scaling up or integrating with similar systems used by the associates or business partners. Such integration and scalability problems tend to multiply as the size and scope of retail operations increases. A combination of old and new information systems makes the whole system susceptible to failure or crash. The heterogeneity in the system is the primary cause of risk. The solution lies in a close knit, homogeneous information system that can integrate seamlessly with other such systems in real time while imparting the much-needed stability to the whole system.
ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Outdated architecture

Limited scope

Integration and scalability problems

Increased risk to the business

Advantages of Using a ERP Retail Suit

What if Legacy Systems are replaced with Retail ERP Suits ?
Retail specific components

Technology and application integration

Segment specific expandability option

Workflow automation and enterprise process management Support for advanced functionality

Advantages of ERP Suites

Configuration and scalability

Support for the store system

Phased implementation support

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Advantages of Using a ERP Retail Suit

Advantages Explained
Retail specific Unlike a general ERP package, retail ERP suite offers retail centric components that are customized to meet the specific requirements of a retail organization in an effective and efficient manner. This makes a retail ERP suite much more suitable to meet the specific requirements of a retail organization Within the retail sector, there is a wide variety of different segments that vary in their nature and scope of operations. A retail ERP package has provisions to meet the varying needs of the different segments within the retail sector Retail ERP suite offers support for the store systems that form the pivot of a retail business. The critical functions include keeping track of the inventory, ordering and replenishment, loss prevention and task management. This makes retail ERP system suited to the specific needs of a retail organization A good retail ERP system allows a high degree of customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations. Such configuration and scalability prove to be a boon in managing the retail operations across an enterprise. This allows a retail ERP system to grow with the organization

components

Segment specific expandability option

Support for the store system

Configuration and scalability

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Advantages of Using a ERP Retail Suit

Advantages Explainedcontd
Phased implementation support Modern retail ERP systems provide support for phased implementation. This feature allows the software package to be implemented in a step-by-step incremental manner rather than in one go. This makes the transition to an ERP package a lot easier. This feature allows the users to acclimatize themselves to an ERP package that may initially seem complicated to use. Modern retail ERP systems provide support for advanced functionalities that is helpful in the decision making process such as formulating pricing strategies, merchandise planning, inventory optimization and store execution. The advanced functionalities help the users formulate business strategies to introduce efficiencies in the critical business processes. The top management uses this feature to set the benchmarks and achieve the desired results Modern day retail ERP packages offer workflow automation and enterprise process management to make the workflow smooth and seamless across the entire enterprise. This allows the management to monitor and keep track of the workflow while also undertaking the enterprise process management leading to the identification and removal of any inconsistencies in the business process. A good retail ERP system allows technology and application integration to allow a platform independent, seamless transfer of processes across different modules running on different technologies in an enterprise wide environment that may include interaction with legacy systems and external entities such as the suppliers and the customers. Such integration provides the critical enterprise-wide view to the management
ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Support for advanced functionality

Workflow automation and enterprise process management

Technology and application integration

Disadvantages of Using a ERP Retail Suit

Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

ERP systems can be very expensive.

Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). Resistance in sharing sensitive internal information between departments can reduce

the effectiveness of the software.

Some large organizations may have multiple departments with separate, independent resources, missions, chains-of-command, etc, and consolidation into a single enterprise may yield limited benefits.

ERP Systems centralize the data in one place. This can increase the risk of loss of
sensitive information in the event of a security breach

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Case Study:
ERP implementation in Pantaloon Retail

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations.
Rakesh Biyani, Director, Pantaloon

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Retail ERP @ Pantaloon

What led to it !

Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively

The company was looking for a solution that would bring all of its businesses and processes together

After a comprehensive evaluation of different options and software companies, the management at Pantaloon decided to go in for SAP.
ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Retail ERP @ Pantaloon

What led to it !

Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively

The company was looking for a solution that would bring all of its businesses and processes together

After a comprehensive evaluation of different options and software companies, the management at Pantaloon decided to go in for SAP.
ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Retail ERP @ Pantaloon

Snapshot Solution : SAP retail solution Implemented by : SAP team with the help of Novasoft, Singapore Number of users : Around 1,200 Time taken : About six months Cost of implementation : About $10 million Implemented in three phases o Phase one: Blueprinting o Second phase: Development of SAP platform o Third phase: Deployment

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

Thank You

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh

References
http://mindpower.smartads.info/business-

management/article.php?art=5965 http://www.esmartx.com/ http://www.dmsretail.com/erp.htm http://www.networkmagazineindia.com/200703/cases tudy02.shtml

ERP IN APPAREL & RETAIL INDUSTRY BY Ruchi Singh