Inventory management in Retail Sector - Big Bazaar

D. PrabhuVardhan Reddy Robin Simon Sayantan Banerjee 2010159 2010183 2010204 Radhika Agarwal Sagar Malik Debashish Bagg 2010170 2010194 2010298

Agenda
Big bazaar Introduction Growth and financials Inventory Management Summary

Big Bazaar
Launched by Pantaloon Retail Limited, 2001 132 store across country + 53 stores of food bazaar 7.4 million sq ft of retail space Part of pioneers in retail market in India

Growth and Financials

Consistent increase of Financial results
Net sales (o), Profit after tax (o)

Inventory related figures

1.2 Quick Ratio 1 0.8 0.6 0.4 2006 2007 Quick Ratio 2008 2009 2010 Inventory Turnover

110 100 90 80 70 60

Inventory turnover in Days

Financial parameters to measure inventory management

Inventory Management
Matrices used and why

Display Ratio

Lot size
Determined by EOQ Standard cartons used for transportation

Inventory classification
ABC classification
Type A: electronics and furniture mart (10% - 20%) Type B: Apparels, utensils, toys etc (~30% ) Type C: Food items and item of daily usage. (~75%)

FSN classification
Type F: Goods of daily usage, food items, clothing etc Type S: utensils and Home making items like pillows, mattress etc Type N: furniture and electronic gadgets etc

Bill board for demand assessment

Weeks Perks Store Archives% Star performing product

01

02

03

04

05

06

Inventory classification
Branded items (stocks 20%) margin (<10%) Private labels (stocks 80%) margin ( 40 60%)

Supply chain

Checks and Balances

At times big bazaar has Excess Stock Proper place to pile Excess Inventory if compulsory

Summary
Implementation of SAP retail Self managed supply chain Private labels vs. Branded items

Thank you
Happy shopping