“OPTIMIZING EFFICIENCY FOR BUYING,

ASSORTMENT PLANNING AND MERCHANDISE

FLOW FOR FOOTWEAR CATEGORY”

MOHAN CLOTHING COMPANY PRIVATE LIMITED

JANUARY - APRIL2015

BY
ANJANA KUJUR
MUM13MM31

FACULTY GUIDE
SONALI SALDHANA

BATCH 2013-2015
MASTER OF FASHION MANAGEMENT

DEPARTMENT OF FASHION MANAGEMENT STUDIES

NATIONAL INSTITUTE OF FASHION TECHNOLOGY
[MUMBAI]
 CERTIFICATE FROM FACULTY MENTOR

This is to certify that Ms. Anjana Kujur has completed the Degree Project entitled
“Optimizing efficiency for buying, assortment planning and merchandise flow of
footwear” under my guidance. She has been submitting the progress report on time. She is
hereby allowed to participate in the internal and external jury for Degree Project.

(_________________________)

Name of Faculty Mentor: Mrs. Sonali Saldhana

Date: 14th May, 2015

Place: Mumbai.

i
 DECLARATION

I, Anjana Kujur hereby declare that the Project entitled “Optimizing efficiency for buying,
assortment planning and merchandise flow of footwear” is my original work and no part
of the project has been copied from any other reports or any other were carried by someone
else and this have been submitted for any other degree/award. However, any material taken
from any other published sources has been suitably referred and acknowledged at various
places.

Name: Anjana Kujur

Roll Number: MUM13MM31

Batch: Master of Fashion management, 2013-2015

Centre: NIFT, Mumbai

th
Date: 14 May, 2015

Place: Mumbai

ii
 ACKNOWLEDGEMENT

I am grateful to NIFT for providing me an opportunity to do research work on “Optimizing

efficiency for buying, assortment planning and merchandise flow of footwear”. I express
my whole hearted thanks to my faculty guide Mrs. Sonali Saldhana for her encouragement
and moral support in organizing my work and giving me valuable tips for making it
presentable.

I am indebted to Mr M. Qazafi, Category Head & D.G.M. for Knits, Footwear and
Accessories at Mohan Clothing Company Private Limited, my industry mentor who has
guided and supervised me throughout this study. I have no words to express my gratitude to
him.

I am also thankful to Mr. Chetan Saraswat, Senior Merchandiser for footwear, for providing
me the details of conducting the project from its inception.

My thanks are also due to the Footwear team at BlackBerrys for their advice in collecting
data and other relevant information.

I will be failing in my duty if I do not mention the name of my CC Ms. Lipi Choudhary and
other faculty for the help in my Degree Project

NAME: Anjana Kujur

ADDRESS: E-11, Type IV, Hudco Place, New Delhi-110049.

Master of Fashion Management

th
Date of submission: 14 May, 2015

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 TABLE OF CONTENTS

Chapter No. Title Page No.

1 INTRODUCTION
1-5
1.1 Footwear industry in India
1

1.2 1
Customer Segments

1.3 2-3
Domestic Demand

Sales of Footwear Segments

1.4 3

Footwear Production Zones in

1.5 4-5
India

2 Project Overview 6-8

2.1 Objectives for the Project 6

2.2 Process flow of the project 7-8

LITERATURE
3 9-15
REVIEW

3.1 Company Background 9-10

3.2 Company vision 11

3.3 Brand USP and Image 11-13

 3.4 Brand Overview of Business 13

3.5 Business Model 13

Segmentation Target
3.6 13-14
Positioning
3.7 Customer Profile 14

3.8 Organisation Structure 15

THE FOOTWEAR
4 CATEGORY

4.1 Product Offerings 16

4.1 a) Prim n Proper 17

4.1 b) Night Life 18

4.1 c) Sports 19

4.2 Shoe Profile 20

5 MERCHANDISING PROCESS
5.1 Merchandising Concept 22-23
5.2 Historic Sales data analysis 24-35
5.3 Assortment Planning 36-41
5.5 Problem Areas & Suggestions
Inter Store Stock Transfer
5.5 a)
Model
5.5 b) Objective 42
5.5 c) Benefits 42
5.5 d) Feasibility for the model 43-45
5.5e) Conclusion 46
6 Supply chain 47
6.1 Supply Chain Model 48-49
6.2 Problem areas and suggestions 50
 6.2 a) Objective of the proposed model 51
6.2 b) Benefits of the proposed model 51
7 Learning Outcome 54
8 Contacts made during project 58
9 Bibliography 59

TABLE OF FIGURES

Chapter No. Title Page No.

1 Percentage sale of footwear segments 3

2 Major production centres in India 5

3 Manufacturing Plant of the company 9

4 Brands poster showing “GO SHARP” 11

Advertisement showing Slim Possible
5 12
collection
Advertisement showing Wonder of
6 12
whites collection
Brands poster to depict customer
7 14
profile
8 Organisational Structure of the brand 15

9 Brand’s shoe profile 20

10 Round toe profiling 20

11 BB Footwear AW14 24

12 Region-wise sell through 26

13 Highest performing stores 35
Brand’s supply chain model for
14 48
footwear category
15 Article PP-CHAD 55
Powered by TCPDF (www.tcpdf.org)
 EXECUTIVE SUMMARY

The report “Optimizing efficiency for buying, assortment planning and merchandising flow for
footwear category” consists of a comprehensive analysis of the merchandising process for the
footwear category. The analysis of the same combined with sell through analysis report is used to
plan the stock levels and develop inferences for the planning of the next season.The project
provides a basic understanding of the merchandising concept to underline the relevance of
merchandise planning in a retail organization.

Every area of merchandising responsibility needs planning and analysing sell through data to
make it function properly and to ensure successful buying and selling. It is done with proper
coordination with the product development team and supply chain. The goal is to sell the right
merchandise to the right customers at the right time. Hence, efficiency is required to make it
happen.

The first task highlighted in this report is to study the sell through of merchandise and review its
performance for the season Autumn Winter 14. This was done by analysing data collected
through secondary research and only qualitative analysis was conducted. Sell through analysis
was based on six parameters such as region, style, colour, price and store performances.
Inferences were developed on the basis of the analysis for efficient planning of the next season.

The second task was toidentify problem areas in the merchandising process and provide
suggestions. The problem identified was that after End of Seasons Sale there were some stores
which were completely sold out on one SKU while the same was in abundance in other stores.
The model proposed to eradicate the problem was Inter store stock transfer. Analysis to support
the model was done by reviewing the End of Seasons Sales data for each store provided by the
retail team.

The third task was to figure out effective ways to cut down on lead time in the supply chain
process. This was done by analysing current work process and figuring out effective measures
that can be taken to reduce lead time.

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 1. FOOTWEAR INDUSTRY IN INDIA

1.1 Introduction

Footwear is the product to protect human feet from effects of all biological damages. Footwear
industry is age old traditional industry in India and it has been changed structurally into different
segments like casual-wears, dress-wears and sportswear. New segment is emerging for medical
purposes as medical-wear like diabetic footwear. Many companies use to concentrate different
segment like men’s-wear, women’s-wear and children’s-wear separately. Footwear industry has
been giving considerable amount of employment to the nation especially weaker sections and
minority sections of society in India. Population growth, exports, domestic markets are the
factors of expansion of footwear industry and creation of employment opportunities in this
sector.

Until recently, a major part of the demand was met by the unorganized, informal, small sector.
Branded shoes produced by large Indian producers, multinationals p r o d u c i n g i n
I n d i a a n d i m p o r t s , a c c o u n t f o r o n l y l e s s t h a n 2 0 % o f t h e e n t i r e market. The
branded footwear market is estimated to be 100 million pairs, made up of 5 million pairs of
sports and athletic shoes and nearly 95 million pairs of shoes and boots. The segment is
dominated by men’s footwear, and there are not more than three women’s brands known
nationally.

1.2 Customer Segments

Retail footwear segment in Indian is very price sensitive and has been steadily growing over the
year. Major part of the demand is met by the unorganized sector and still there is a shortfall of
300 million pairs. Branded shoe market only account for 20% of the entire market. While
international brands largely dominate the higher end of the spectrum, the lower end of the market
is dominated by home-grown players as well as unorganized players. While men's footwear is
the biggest target category (contributing almost 48%), children's (11%) and women's lifestyle
footwear (41%) is not behind in the race.

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 Table 1 Segment wise classification of footwear segment

1.3 Domestic Demand – Indian Footwear Industry

India’s footwear industry is valued at around $ 5 bn and nearly 1.8 bn pairs. The domestic
market is highly competitive with few national players and multinational players present in the
organized segment and a large unorganized segment characterized by chappals / sandals served
by small scale players. The growth rate of the Indian domestic footwear industry is around 8 %
and is predicted to grow at around 7.5~8% in the near future.

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 Domestic Demand of Indian Footwear

1.4 Sales of Footwear Segments

Men’s footwear accounts for almost 50% of the market. Around 40% of the market is women’s
footwear and the remaining 10% by Children’s footwear. Footwear has different segments like
sports footwear, semi-formal/casual footwear, and formalwear and utility footwear.

Figure 1.Percentage Sales of footwear segments

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1.5 Footwear Production Zones in India

The production of footwear manufacturing concentrated in these centers.

 Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul

 Maharashta - Mumbai
 West Bengal - Kolkata
 Uttar Pradesh - Kanpur, Agra & Noida
 Punjab –Jallandhar, Ludhiana
 Karnataka - Bangalore
 Andhra Pradesh - Hyderabad
 Haryana - Ambala, Gurgaon, Panchkula and Karnal
 Delhi and Surroundings

The major production centers and tanneries are present in:

 Agra  Ambur
 Kanpur  Vaniambadi
 Kolkata  Chennai
 Ranipet

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Leather industry is present in these geographies for many years. Chennai cluster exported leather
for the past 100 years. Kanpur is well known for its saddlery products whose history traces back
to the military cantonments of British era.

Figure 2.Major Production Centers in India

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 2. PROJECT OVERVIEW

2.1Objectives of the project

 To understand the complete merchandising process of the footwear category in the

accessory department
 To review the performances and analyze sell through of the products for the season AW-
14
 To identify the problem areas in the working process of the departments for optimum
efficiency
 To provide feasible solutions to boost the performances of the footwear category

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2.2 Project process flow chart

Brief Overview of the Process

1. Studying the Merchandising Process

An in-depth understanding and learning of the merchandising process for the footwear
category of BlackBerrys will be carried out. Since it is an elongated process, it will be
spanning across the entire tenure of the project.

2. Sell through and Performance Analysis

Historic sales data will be analyzed for the season Autumn Winter 14-15. Sell through
analysis and performance analysis for all merchandise will be done based on the following
parameters:

 Region-wise
 Style
 Price range
 Color
 Size
 Best and poor performing
stores
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3. Study the various other functions in the category

Study will be carried out about the various functioning of the design, merchandising
and supply chain department. The current working process of the departments will be
studied to optimize efficiency in the workflow.

4. Identify problem areas to optimize efficiency

Problems will be identified from the above mentioned and will be used to develop
inferences that will further help to optimize the workflow process of the footwear
category.

5. Recommendations

Lastly, suggestions and recommendations drawn from the study and analysis will be
proposed.

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 3. LITERATURE REVIEW

3.1 About the Brand

BlackBerrys is one of India's leading premium menswear fashion brands. Pioneering branded
structured clothing for the evolving Indian male, the brand was established in 1991- the year
of symbolic 'liberalization' in India. Its iconic Suits and Jackets to Khakis to DLT trousers,
has gradually 'liberated' the Indian male in his quest for a fashion forward look. Knits, Polos
and fashion accessories are pushing the boundaries of a distinct BlackBerrys 'look'. The latest
addition from the house of BlackBerrys is "URBAN", a collection that expresses man's
boundary less approach to fashion.The journey started with the founders recognizing the
growing need for branded, structured clothing for the changing needs of the Indian male.
BlackBerrys started in an office of 500 sq.ft. space in the vicinity of Kotla.
Today it boasts of a 22000 square feet plant specially designed for the manufacturing of suits
and jackets that produces 500 units per day and 1200 formal trousers and 1500 casual
trousers per day. Today it is the one of the largest manufacturer in north India.

Figure 3.Manufacturing plant of BlackBerrys

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BlackBerrys prides itself on its ability to spot trends first & bring them onboard before
anyone else. This reflects in the theme collections BlackBerrys launches twice in a year.
The apparel brand is established as the manufacturer of impeccably designed trousers and
suites. With a recorded growth rate of 40% (over and above the industry average),
BlackBerrys has over the last two decades set a mark for itself as a renowned fashion label
with a strong brand presence across over 100 cities and towns in India. A progressive & agile
organization, BlackBerrys is in the space of continuous innovation. It was the first to
introduce khakis in India keeping in mind the sultry summer, first to showcase the largest
collection of wrinkle free and clean front trousers and many more firsts in men’s apparels
specially formal wear.

BlackBerrys collections have been associated with innovations in fashion. Its ceaseless
passion of innovation is reflected in the theme collection they launch twice a year. The brand
today enjoys a high recall value and is perceived as premium clothing brand. Documented in
various trade surveys as ‘the best FIT’ the BlackBerrys brand represents an image of the
‘Young Power Dresser’. The tag line ‘Sharp smooth and sure’ further accentuates the
irresistible characteristics of BlackBerrys clothes. Little wonder then, that some of the
collections like Un-Official, Slim Possible and Wonder Of Whites have managed to build a
strong emotional connect with the customers.

A testimony to its superior quality and unmatched technique, BlackBerrys has won several
industry accolades over its 20 year history including ‘The Pinnacle Award’ from Shoppers
Stop in Best Men’s Classic Category for two consecutive years (2004, 2005 & 2007), the
coveted Lycra Images Fashion Award ’07 for the Most Admired Trouser Brand of the Year
category and The CMAI Award for ‘Best Formal Wear Brand in 2007 & 2008’. The brand
was also awarded the ‘Best Formal Wear Brand’ and ‘Trouser Brand of the Year’ at the
CMAI Award for three consecutive years in 2007 & 2008 & 2009. Besides this, it has been
awarded the Best suits & blazers brand 2007-08, Iconic suits & blazers brand 2008-10 & the
most admired youth menswear brand-Global youth marketing awards.

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3.2 Company Vision

A ceaseless endeavor to delight the fashion forward customer with great style and care
teamed with speed and innovation.

3.3 Brands USP and Image

BlackBerrys prides itself on its ability to spot trends first and bring them onboard before
anybody else. BlackBerrys collections have been associated with innovations in fashion.
Sharp, smooth and structured garments are the biggest U.S.P. for the brand.

The tagline “Go Sharp” further accentuates the irresistible characteristic of BlackBerrys
clothes. Collections like Slim Possible and Wonder of Whites have managed to build a strong
emotional connect with the customers.

Figure 4.BlackBerrys poster showing its tagline “GO SHARP”

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 Figure 5. Advertisement showing Slim Possible

Figure 6. Advertisement showing Wonder of Whites

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The brands ceaseless passion of innovation is reflected in the theme collection they launch
twice a year. The brand today enjoys a high recall value and is percieved as in various trade
surveys as “The best FIT”. The brand represents an image of the “Young Power Dresser”.

3.4 Brand Overview of Business

BlackBerrys is equipped with the latest technology of manufacturing in 3 factories. The

22000 sq. plant has been specially designed for the manufacturing of suits and jackets
produce 1000 units per day and 1200 formal trousers and 1500 casual trousers per day. A true
assembly line system of production with latest technology in computerized sleeve setters,
automatic pocket welting machines, differential feed machines and specialized press finishing
to facilitate a very high level of consistent quality.

Today BlackBerrys can be accessed across India through about 125 retail outlets, 55
exclusive stores and all large format stores like Shoppers Stop, lifestyle etc.

3.5 BlackBerrys Business Model

BlackBerrys has divided their business model into several arms for precise and better control
over business. Majority of BlackBerrys outlets are companyowned. Its retail network in India
expands over 100 cities with 250 outlets and 55 exclusive stores across the country. Thereby
due to emergence and growing acceptance of other retail formats in India the brand has
started offering its merchandise via multi brand outlets like Shoppers Stop and e-commerce
portals like Jabong.com, Myntra.com and Amazon.com.

3.6 Segment Target and Positioning

The brand is dedicated completely to Menswear clothing and segments Men’s formal and
casual clothing. Along with apparels it offers assortments in accessories as well.

The brand positions itself to offer fashion innovation in its products and also excellent
relationship services to its customers. Its target segment includes fashion conscious men who
are of age group 20-40 and who belong to the upper middle and business class.

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 STP

SEGMENT Menswear- Formal and Casual clothing

TARGET Fashion conscious upper middle class-business class

POSITIONING High customer relationship services

Table 2. Segmentation, Target and Positioning of BlackBerrys

3.7 Customer Profile

The customer profile of the brand can be described as a man who is young, who strives to
make it big at the workplace in the day and loves his champagne in the night. He knows how
to blaze fire on field and loves his beard more than anything. He is always well dressed and
appreciated by the ladies. He never follows others yet makes a sharp mark by his personality.
Just like his sharp personality he never misses a chance to look the best from the rest. Hence
“GO SHARP”.

Figure 7.BlackBerrys poster expressing “GO SHARP” personality

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3.8Organization structure

The Mohan Clothing Company Private Limited (MCCPL) is owned by Nitin Mohan and his
brother Nikhil Mohan who are the Board of Directors. Nitin Mohan handles the product
department and the production units. The Product development department is further
segregated in two departments Design and Category. The Design team has a DGM who
manages the complete operations of the department. Category team also comprises of DGM
who looks after the complete functions of the category team. Both Design and Category
comprise of four major segments Casual, Formal, Footwear and Accessories.

Nikhil Mohan shares the ownership and is the member of board of directors along with his
brother Nitin Mohan. Nikhil manages the Retail and Marketing department of the company.
Retail and Marketing department comprises of a V.P., DGM and Managers who look after
the operations.

Figure 8.Organization Structure of the Company

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 4. FOOTWEAR CATEGORY

The footwear category in BlackBerrys coordinates with the other categories of the brand. The
brand has three major collections Prim n Proper, Night Life and Sports.

Prim n Proper collection is based on the theme that offers styles that targets men who behave
in the correct way and never breaks the rule of etiquette. It basically includes styles which are
for formal wear and outshines in simplicity.

Night Life collection is based on the theme that offers styles that are mainly for party wear.
As the name suggests it offer products that outshines in the night. The product offerings in
this collection are more classy, sophisticated and highly fashionable.

Sports collection comprises of the products that are for casual dressing. All the products that
can be worn daily come under this collection. It includes product which have comfort
clubbed together with fashion.

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4.1 a) Prim n Proper

For the collection Prim n Proper the brand offers three types of styles Brogues, Derby and
Slip-ons.A brogue is a style of low heeled shoe which is characterized by sturdy leather upper
with decorative holes called perforations. Derby is a shoe where the quarter overlaps the
vamp. A slip-on is a lace-less shoe most commonly seen in loafers and moccasins.

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4.1 b) Night Life

The collection Night Life also comprises of Brogues, Derby and Slip-ons. The distinctive
feature of this collection that differentiates it from Prim n Proper is that all the shoe styles are
highly fashionable, classy and sophisticated. The styles have shiny surface as high quality
leather and finishing is done for the consumer to stand out in the night.

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4.1 c) Sports

The collection offers three types of styles which comprises of Loafers, Boots and Mix and
Match. Loafers come under slip-ons. Also Mix and Match is a new style which the brand has
inculcated in their collection that combines fabric with leather.

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4.2 Shoe Profile

Shoe profile is the outline of footwear. It describes the uniform representation of the entire
shoe. Every retail brand in the footwear category has their own distinctive shoe profile which
distinguishes them from the other brands in the competitive market. BlackBerrys shoe profile
is completely based on the brands mantra and tagline “Go Sharp” which is firmly entrenched
on all endeavors of the brand. The shoe profile truly lives the idea of “Go Sharp” which can
be seen in the narrow fits and sharper look. The brand’s shoe profile states that the shoe
should not be square shaped as the other formal shoe brands. The shoe is little round shaped
from the toe and is more sleek than broad. In terms of fit the shoe is narrow fit and sharper as
compared to other brands.

Figure 9.Brand’s Shoe Profile

Figure 10.Round toe profiling

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OPTIMIZING EFFICIENCY FOR
BUYING, ASSORTMENT
PLANNING AND MERCHANDISE
FLOW FOR FOOTWEAR

22
 5. MERCHANDISING PROCESS

5.1Merchandising Concept

The primary goal of the merchandiser is to sell the merchandise. Nothing is more central to
the merchandiser than the product which is to be sold to the consumers. Merchandising is the
process by which the merchandiser attempts to offer the right quantity of the right
merchandise in the right place at the right time while meeting the brands financial goals. The
process also involves the ability to analyze sales data continually and make necessary
adjustments in prices and stock levels so as the product sells.

In any business the main objective is to achieve an adequate return on the investment. The
financial objectives trickle down to the merchandising department and these decisions help
for developing a budget for the entire category and helps in assortment planning.

In BlackBerrys the turnover for the entire brand is approximately 600 crore. Now out of this
about 10% is constituted to the footwear category which comes down to 60 crore. The
category head then does the retail planning for the footwear category and develops a business
plan and the budget for the season. The financial budget and the business plan is the starting
point to begin a new season because the merchandise cannot be developed without financial
commitment although the product ideation and assortment planning is a preceding activity.
This process takes place primarily before the design and merchandising team start up with
their respective work. After the financial objectives are laid down in the form of a business
plan and a budget, the job of the merchandiser starts.

The merchandiser is limited by the amount of budget available for the product and the space
in the store followed by other critical decisions regarding the amount of backup stock to be
maintained in the stores, assortments to be kept in the season and so on. Hence, it is important
for the merchandiser to study the historic sales data and evaluate what particular styles are
performing and the styles which will be deleted in the upcoming season due to its
underperformance.

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24
Analyzing the previous year’s data also benefits in assortment planning by deciding the depth
of the assortment. Outcome of the analysis leads to developing a product grid that is provided
to the designer to give information of the amount of styles which will be present in the
upcoming season. Then the merchandiser does assortment planning which is done store wise.
Since footwear is available only in the exclusive stores, thus, the merchandiser plans which
style will sell in which store and decides the stock levels at every particular store. After the
assortments are planned the pricing is done. Further the merchandiser applies gross margins
and markdowns depending on the sale period and performances. Then the process is followed
by supply chain that involves distribution and coordinating with the distributors so the
product hits the store at the right time and is available to the consumers. In future when the
footwear starts selling the merchandiser analyzes the sell through of every style continually to
extract information of the sales and value.

The entire merchandising concept is listed down in the following parameters:

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5.2 Sell-through Analysis

The analysis involves studying the sales data of the previous year and evaluating its
performance that covers parameters such as region-wise contribution, style contribution, size
contribution, price contribution, color contribution and store performances. It helps the
merchandiser to know which style is performing well and which style should be dropped for
the next season. The analysis provides inferences which helps to control the price and stock
levels. It also provides information for the style that performed the best and turned out to be
the category captain. Sales data analysis is based on the contribution of the merchandise and
its performance in every store. This is done by calculating the sell through of every product.

Sell through is obtained by dividing the sales quantity from the base stock (sales quantity +
closing balance stock).

Sell Through = Sales Quantity/ (Sales quantity + Closing balance stock)

Footwear AW-14 collection comprised of 28 SKU’s. Therefore, sell through analysis was
done from 1st August 2014 to the end of season sale period (EOSS) i.e. 1st March 2015.

The articles that were present in the AW-14 collection are Aikane, Aimer, Alex, Apollo,
Arnold, Ascott, Armel, Adrick, Ackley, Aleck, Ambrose, Aron, Azel, Abba and Accord.

Figure 11.FOOTWEAR AW-14

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5.2 a) Regional sales contribution

BlackBerrys have total 55 exclusive stores at PAN India level and the brand has launched
footwear category only in these exclusive stores. The retail format of these stores has been
divided into 5 major regions North1, North2, East, West and South. Since the brand earns
maximum revenue from the northern India, thus, it has segregated it into two regions North1
and North2 for easy operations. The cities that fall under respective regions can be seen in the
following table:

Table 3.BlackBerrys distribution of EBO in India

REGION CITIES No. Of Stores

New Delhi, Lucknow, Jodhpur, Moradabad, Jaipur, Dehradun,
North1 12
Noida, Kanpur, Ghaziabad
Amritsar,Gurgaon,Ludhiana,Bhatinda,Jalandhar,Chandigarh,Jamm
North2 13
u,Yamuna Nagar
East Ranchi, Patna, Guwahati, Bubhneswar, Assam, Patna, Kolkata 7
West Pune, Indore, Goa, Mumbai, Ahmedabad, Jabalpur, Navi Mumbai 12
Bangalore,Hyderabad,Jayanagar,Calicut,TrivandrumVijaywada,C
South 11
hennai,Vishakapatnam
55

Table 4.Region-wise Sell Through Analysis

Region NORTH2 NORTH1 WEST SOUTH EAST TOTAL

SLS Qty 1056 926 907 613 414 3916

% Sell Through 27 23.6 23.2 15.7 10.6 100
Turnover(In Crores) 0.44 0.41 0.37 0.25 0.17 1.6

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The analysis shows that in the season AW-14 sales quantity was highest in North2 region
with 27% followed by North1 having 23.6% share, West region comprised of 23.2%, South
region had 15.7 % share and the least sales quantity was seen in the East region with only
10.6% share.

Figure 12.Region-wise sell through contribution

Inferences:

Since North2 comprised the highest sell through, hence, the inventory levels should go up in
the coming season. The stock should be adequate to reduce stock-out situations. East region
had the least contribution which states that the consumer response was low to the launch in
the stores of eastern region. One of the reasons for its low contribution is that there are only 7
exclusive stores in East region as compared to other regions, thus, for the next season the
inventory level should be lowered.

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5.2 b)Style Wise Contribution

BlackBerrys Footwear AW-14 Styles

Table 5.Style-wise Sell through Analysis

STYLE MRP SLS Qty % Contribution

PP-ALEXFW 4495 782 20
SP-ARMELFW 4495 661 16.9
PP-ASCOTTFW 6495 487 12.4
PP-ACCORDFW 4995 296 7.6
NL-ADRICKFW 6495 286 7.3
PP-ABBAFW 4995 273 7
PP-AIMERYFW 4495 263 6.7
PP-ARNOLDFW 5995 166 4.2
PP-AIKANEFW 5995 155 4
NL-ARONFW 5495 136 3.5
PP-APOLLOFW 5995 136 3.5
NL-AMBROSEFW 5995 133 3.4
NL-AZELFW 7990 76 1.9
NL-ALECKFW 7990 40 1
NL-ACKLEYFW 6495 26 0.7
Total 3916 100

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The contribution for every style can be seen in the analysis table. Alex style comprised the
highest contribution with 20% followed by style Armel which shows 16.9% share and Ascott
with 12.4%. The style which performed the lowest is Ackley comprising only 0.7% followed
by style Aleck and Azel.

Inferences:

Alex being the highest selling style therefore stock levels must be adjusted to ensure the style
is never out of stock. The style should also be repeated in the next season. Now to the least
selling style Ackley variations can be done to upgrade its performance. To clear its stock
point-of-sales markdown should be allowed. The style can be made occasionally out of stock
or should be deleted from the stock selection.

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5.2 c) Size Contribution

BlackBerrys footwear have total 5 sizes available from 40 to 44 which are 6-10 sizes of
Indian Men according to the Bata size chart.

Size Chart

Table 6.Size-wise Sell Through Analysis

SIZE 40 41 42 43 44 TOTAL
SLS Qty
REGION
North1 154 217 270 186 99 926
North2 134 274 295 226 127 1056
East 71 116 106 85 36 414
West 125 222 230 200 130 907
South 68 126 169 155 95 613

Total 552 955 1070 852 487 3916

% Contribution 14.1 24.4 27.3 21.8 12.4

Overall size 42 or the 8 size for Indian men shows the highest contribution comprising of
27.3% share. Size 44 or the largest size 10 for men comprised only 12.4% contribution which
means it sold the least in the previous season.

32
Inferences:

Adequate stock levels should be maintained for size 42 to ensure the size is never out of
stock. On the other hand stock level of size 44 should be lowered. One important inference
that can be drawn from the analysis is that in the East region the highest seller size is 41,
therefore, the size should be available in balanced amount for the respective region. Also
another major observation after the analysis is that the least selling size in the South region is
size 40. It means the foot size of men in this region is bigger as compared to other regions,
thus, the stock levels of the smallest size 40 should be lowered for South region.

5.2 d) Color Contribution

There are 8 color options available in the AW-14 collection which are Black, brown tan, dark
brown, red, dark green and burgundy.

Table 7.Color-wise Sell through Analysis

SKU SLS Qty % Contribution

BLACK 11 1401 35.8
BROWN 6 1073 27.4
TAN 2 712 18.2
DARK BROWN 4 254 6.5
RED 1 206 5.3
DARK GREEN 2 144 3.7

33
 BURGUNDY 1 112 2.9
PURPLE 1 14 0.4
Total 28 3916 100

There are 8 colors available in footwear. Out of them color black constitutes the highest
contribution with 35.8% which is followed by color brown with 27.4% and color tan having
18.2% contribution. The least selling color is purple having contribution of 0.4%.

Inferences:

Black and brown colors are traditional colors for men’s formal footwear. These colors are
mandatory in every collection. Purple received low consumer acceptance followed by dark
green and burgundy. Stock levels of these colors should be minimized or removed. Variations
can also be developed in these colors to provide something new and attract consumers.

5.2 e) MRP Contribution

The price range for footwear can be seen below:

Table 8.MRP Sell through Analysis

MRP SKU SLS Qty % Contribution

4495 7 1706 43.6
6495 5 799 20.4
5995 6 590 15.1
4995 4 569 14.5
5495 2 136 3.5
7990 4 116 3
Total 28 3916 100

34
The analysis shows that the price range Rs. 4495 has the highest sell through contribution.
The highest price range of the category which is Rs. 7990 constituted the least performance
having 3% contribution.

Inferences:

The styles selling well fall under the price range Rs. 4495. The reason for this is that it
comprises of the maximum SKU’s (7) and is the lowest price in the category. More styles can
be added to the price range. Price range Rs. 7990 shows a very low performance because it
has only 4 SKU’s so markdowns can be applied to the price range.

5.2 f) Store Performance

There are total 55 exclusive stores where the product category is available to the consumers.
The stores are:

Table 9. BlackBerrys EBO Store List

REGION STORE NAME REGION STORE NAME

NORTH1 CP-B-BLOCK NEW DELHI EAST KANKERBAGH PATNA
NORTH1 DLFSAKET NEW DELHI EAST LINDSAY KOLKATA
NORTH1 MI ROAD JAIPUR EAST FRASER ROAD PATNA
NORTH1 CP NEW DELHI EAST JORHAT ASSAM
North1 11 HAZRATGANJ LKU WEST CACULO MALL GOA
NORTH1 KANTH ROAD MORADABAD WEST LINKING ROAD MUMBAI
NORTH1 JODHPUR RAJASTHAN WEST PHOENIX MIIL MUMBAI
NORTH1 SECTOR-18 NOIDA WEST INFINITI ANDHERI MUM
NORTH1 SHIPRAMALL GAZIABAD WEST C.G. ROAD AHMEDABAD
NORTH1 RAJPUR ROAD DEHRADUN WEST RCITY GHATKOPR-2 MUM
NORTH1 TILAK NAGAR KANPUR WEST MGROAD PUNE
NORTH2 WAVE MALL LUDHIANA WEST SEC17 VASHI NAVI MUM
NORTH2 KUNAL TOWER LUDHIANA WEST SAMDAREYA JABALPUR
NORTH2 MALL ROAD BHATINDA WEST CENTURY21 MAL INDORE
NORTH2 SEC 17-E CHANDIGARH WEST AUNDH PUNE
NORTH2 LAJPAT NGR NEW DELHI WEST MARKET CITYMALL PUNE
NORTH2 AMBI MALL GURGAON SOUTH BANJARA HILLS HYD
NORTH2 ALPHA ONE AMRITSAR South 100FT ROAD BANGLORE
NORTH2 YAMUNA NAGAR SOUTH CROSS ROAD JAYANAGAR
NORTH2 WAVE MALL JAMMU SOUTH ORION MALL BANGALORE
NORTH2 V3S MALL NEW DELHI SOUTH PHOENIX MARKET BLORE
NORTH2 KAMLA NAGAR NEWDELHI South MG ROAD VIJAYAWADA
NORTH2 MODEL TOWN JALANDHAR SOUTH WALTAIR VIZAG
NORTH2 KAROLBAGH SOUTH MG ROAD TRIVANDRUM
NORTH2 MAIN MKT RAJOURI SOUTH FOCUS MALL CALICUT

35
EAST G S ROAD GUWAHATI SOUTH NUNGAMBAKKAM CHENNAI
EAST CITADEL RANCHI SOUTH PHOENIX MALL CHENNAI
EAST JANPAT KHARWALA BBSR

Table 10.Sell through Analysis - Top 10 Performers

Sell Turnover(In
Store Name Region SLS Qty CBS Qty
Through(%) Lakhs)

PHOENIX MIIL
West 81 0 100 381869.73
MUMBAI

WAVE MALL
North 2 129 95 57.6 577978.62
LUDHIANA

KUNAL TOWER
North 2 114 87 56.7 480074.36
LUDHIANA

YAMUNA NAGAR North 2 80 71 53 324541.42

DLFSAKET NEW DELHI North 1 136 138 49.6 596212.31

WAVE MALL JAMMU North 2 77 90 46.1 311356.56

ALPHA ONE
North 2 78 95 45.1 332261075
AMRITSAR

LINKING ROAD
West 103 129 44.4 382104.13
MUMBAI

CP-B-BLOCK NEW
North 1 129 164 44 620148.98
DELHI

MI ROAD JAIPUR North 1 100 131 43.3 465253.37

36
 Table 11.Sell through Analysis - Least performers

Turnover(In
Store Name Region SLS Qty CBS Qty Sell Through (%)
Lakhs)

AUNDH PUNE West 51 155 24.8 219862.32

SECTOR-18 NOIDA North 1 52 161 24.4 218652.66

LINDSAY KOLKATA East 52 168 23.6 202841.61

JANPAT
East 64 211 23.3 302127.15
KHARWALA BBSR

FOCUS MALL
South 34 113 23.1 117739.25
CALICUT

MG ROAD
South 39 131 22.9 168503.47
VIJAYAWADA

RAJPUR ROAD
North 1 37 137 21.3 180082.19
DEHRADUN

FRASER ROAD
East 40 178 18.3 165166.73
PATNA

PHOENIX MALL
South 21 114 15.6 83078.64
CHENNAI

JORHAT ASSAM East 13 111 10.5 57101.26

Total 100 348586967

37
The analysis shows that exclusive store in Phoenix Mall Mumbai has the highest sell through
with 100% contribution. This states that the store managed to sell all the products of the
footwear category in the store. This was followed by stores in Wave mall having 57.6% sell
through and Kunal towers with 56.7% sell through contribution in Ludhiana. The least sell
through was observed from Jorhat store in Assam with only 10.5% contribution. This was
followed by store in Phoenix mall Chennai with 15.6% and store in Fraser road Patna having
18.3% contribution.

Figure 13.Highest performing stores in terms of Sell through and turnover

38
5.3Assortment Planning

Assortment planning is the process whereby products are selected and planned to maximize
sales and profit for a season. The assortment plan considers the sales analysis of and the stock
capacity in every store to ensure proper receipt flow.

In footwear category the assortment planning is done based on the sizes. The ideal assortment
for the footwear is in the ratio of 1:2:2:2:1 for the sizes 40:41:42:43:44. This states that a total
of 8 pairs are allotted depending upon the sizes.

Table 12. Assortment Ratio

Sizes 40 41 42 43 44 Total

No. of Pairs 1 2 2 2 1 =8
(Ratio)

Exclusive stores where the footwear products are to be allotted amounts to 55.Now, the 8 pair
ratio are allotted in these 55 stores such that 10% stock is added and kept as replenishment.

55 stores * 8 pair = 440

Replenishment = 10% of stock

Assortment = 440 + 10%

But the assortment depends on the store stock capacity. Hence, for assortment planning the
average number of pairs that a store can keep has to be kept in mind. The size performance is
analyzed store-wise and keeping in mind the SKU the assortments are finally allotted based
on the demand and performance from previous sales data.

39
The size contribution has to be analyzed for every store for efficient assortment planning. The
analysis is done below and it is observed there are various variations in the contribution
which changes region to region and store to store in India. One of the major implications
derived is that size 43 did not sell at all in Jorhat Assam and size 44 failed to sell in Dehradun
store. On the other hand Mumbai phoenix store managed to sell all sizes with 100% sell
through. The analysis can be seen below:

Table 13. Size Contribution for Autumn Winter-14

Size Contribution
Srl.No. Store Name
40 41 42 43 44
1 100FT ROAD BANGLORE 43.3 27.4 30.6 40.6 30.0
2 11 HAZRATGANJ LKU 40.7 32.0 47.2 34.8 21.7
3 ALPHA ONE AMRITSAR 43.5 45.2 51.2 39.0 45.8
4 AMBI MALL GURGAON 31.3 34.3 42.6 22.4 21.2
5 AUNDH PUNE 32.1 27.5 24.0 26.5 10.7
6 BANJARA HILLS HYD 34.5 30.0 41.1 41.4 60.5
7 C.G. ROAD AHMEDABAD 41.4 34.5 36.2 21.4 41.4
8 CACULO MALL GOA 47.6 38.5 43.8 36.4 59.5
9 CENTURY21 MAL INDORE 38.5 30.4 26.7 25.0 19.2
10 CITADEL RANCHI 19.4 35.2 28.8 29.6 37.9
11 CP NEW DELHI 40.7 37.9 43.8 29.2 42.9
12 CP-B-BLOCK NEW DELHI 46.3 42.3 60.3 34.8 30.8
13 CROSS ROAD JAYANAGAR 50.0 37.0 37.7 30.9 20.7
14 DLFSAKET NEW DELHI 58.3 48.5 62.3 38.5 39.5
15 FOCUS MALL CALICUT 15.8 33.3 36.1 10.8 10.5
16 FRASER ROAD PATNA 29.6 10.5 22.2 19.3 13.0
17 G S ROAD GUWAHATI 44.1 45.5 44.6 20.0 23.8
18 INFINITI ANDHERI MUM 41.9 35.5 32.3 38.7 50.0
19 JANPAT KHARWALA BBSR 31.7 20.6 25.4 22.4 16.2
20 JODHPUR RAJASTHAN 56.5 33.3 30.3 43.8 56.5
21 JORHAT ASSAM 21.7 15.2 6.9 0.0 7.1
22 KAMLA NAGAR NEWDELHI 39.1 46.7 36.4 23.9 34.6
23 KANKERBAGH PATNA 50.0 41.0 32.8 27.4 26.1

40
 KANTH ROAD
24 MORADABAD 57.7 34.0 42.2 24.4 28.0
25 KAROLBAGH 29.2 29.4 38.9 13.7 34.5
26 KUNAL TOWER LUDHIANA 37.5 58.8 62.0 56.9 60.0

27 LAJPAT NGR NEW DELHI 41.7 48.1 43.1 33.3 40.0

28 LINDSAY KOLKATA 46.2 28.3 16.1 17.9 18.2
29 LINKING ROAD MUMBAI 52.0 45.0 41.0 41.0 52.0
30 MAIN MKT RAJOURI 32.0 24.1 27.5 18.4 39.1
31 MALL ROAD BHATINDA 46.4 40.4 34.5 37.3 33.3
32 MARKET CITYMALL PUNE 30.0 31.4 30.3 22.9 20.0
33 MG ROAD TRIVANDRUM 11.1 20.0 41.2 20.6 40.0
34 MG ROAD VIJAYAWADA 15.8 25.6 23.8 21.4 25.0
35 MGROAD PUNE 33.3 26.7 42.2 35.6 37.0
36 MI ROAD JAIPUR 66.7 43.1 41.4 37.3 37.9
37 MODEL TOWN JALANDHAR 31.8 31.7 36.6 27.9 69.6
NUNGAMBAKKAM
38 CHENNAI 5.9 23.3 30.0 29.0 36.8
39 ORION MALL BANGALORE 39.1 25.6 52.4 39.1 54.2
40 PHOENIX MALL CHENNAI 11.1 9.1 15.6 25.0 15.0
41 PHOENIX MARKET BLORE 38.1 26.2 38.1 31.0 45.8
42 PHOENIX MIIL MUMBAI 100.0 100.0 100.0 100.0 100.0
43 RAJPUR ROAD DEHRADUN 59.1 19.6 20.5 14.3 0.0
44 RCITY GHATKOPR-2 MUM 32.1 23.5 35.3 27.3 46.4
45 SAMDAREYA JABALPUR 29.2 30.6 32.0 21.6 41.7
46 SEC 17-E CHANDIGARH 31.0 33.3 41.1 36.6 21.4
47 SEC17 VASHI NAVI MUM 33.3 47.9 30.6 28.6 37.5
48 SECTOR-18 NOIDA 36.0 14.0 30.9 22.0 26.9
49 SHIPRAMALL GAZIABAD 33.3 30.6 37.5 29.8 22.2
50 TILAK NAGAR KANPUR 43.8 31.8 33.3 31.8 33.3
51 V3S MALL NEW DELHI 45.8 35.7 45.7 37.8 38.1

41
 52 WALTAIR VIZAG 19.0 15.0 27.5 36.6 29.2
53 WAVE MALL JAMMU 59.1 58.5 58.5 30.0 17.4
54 WAVE MALL LUDHIANA 48.1 53.7 59.6 61.4 62.1
55 YAMUNA NAGAR 65.2 71.4 51.4 48.6 21.7

The ideal ratio 1:2:2:2:1 for stock allotment will be the same for the stores having moderate
contribution. Now for all the stores having contribution less than 20% the stock level has to
be reduced in the coming season AW-15. For them the allotment will be in the ratio of
1:1:2:1:1 depending upon the particular size that had the least sell-through. Stores that
performed well will witness increase in the inventory with assortment ratio being 1:2:3:2:1
for the next season because the stock capacity at every EBO for BlackBerrys store is limited
to 400.

42
High Demand

Size Contribution
Srl.No. Store Name
40 41 42 43 44
42 PHOENIX MIIL MUMBAI 100.0 100.0 100.0 100.0 100.0

There are 28 SKU’s in the next season and Phoenix Mall Mumbai store observed the highest
sell through. This states that the inventory level should be increased and the assortment ratio
for the respective store will be planned in the assortment ratio of 1:3:4:3:1.

Assortment Planning for Phoenix Mall MUMBAI

1:3:4:3:1= 12 Pairs

28 SKU * 12 = 336 Pairs

Assortment Total

Ratio 1 3 4 3 1 12 Pairs

Pairs 28 84 112 84 28 336 Pairs

Low Demand

Size Contribution
Srl.No. Store Name
40 41 42 43 44
21 JORHAT ASSAM 21.7 15.2 6.9 0.0 7.1

43
Store in Jorhat Assam observed one of the lowest sell-through. This states that the inventory
level should be reduced. Size 43 had witnessed nil contribution and size 42 and size 44
observed sell through which is less than 10%. This leads to the adjustment in the assortments
of size 42, 43 and 44. The assortment ratio for the respective store will be 2:2:1:1:1

Assortment Planning for Jorhat ASSAM

2:2:1:1:1= 7 Pairs

28 SKU * 7 = 196 Pairs

Assortment Total

Ratio 2 2 1 1 1 7 Pairs

Pairs 56 56 28 28 28 196 Pairs

44
5.4Problem Areas & Suggestions

5.4 a) Inter Store Stock Transfer

It is observed that at the end of season some of the stores are completely sold out on one
particular SKU while the same SKU is in abundance in other stores. Thus, the proposed
model can help the merchandise that can be sold faster at full price elsewhere. It will help to
move the products from stores where these products are in excess and do not sell very well to
those stores in which the same product have a higher chance of being sold and have lower
inventory on hand. It will depend on the transportation cost, store capacity and SKU demand.
It is a great way to clean shelves from the slow moving merchandise, boost inventory
turnover and sales avoiding unnecessary markdowns.

5.4 b) Objective:

 To effectively transfer products which are in excess and do not sell to those stores
which can sell the same product.
 To reduce the inventory on hand in every store depending on their regions.
 To clear the slow moving merchandise and increase the turnover

5.4 c) Benefits:

 The advantage of inter store stock transfer will enable the stores in every region to
decrease their inventory on hand.
 It will help to clean the slow selling merchandise which has not been performing well.
 Instead of adopting markdowns the slow selling merchandise can be sold at full price
 It will boost the inventory and sales turnover

45
 Table 14.Total stock till date as on 1st March 2015

Size
Article BB Art no. Color Price
40 41 42 43 44 Total
ADRICK FWADRCKBLKC29NLA BLACK 6495 29 23 20 15 26 113
ADRICK FWADRCKREKC21NLA BURGANDY 6495 25 24 22 16 28 115
AIMERY FWAIMRYBLKC29PPA BLACK 4495 22 19 18 12 27 98
AIMERY FWAIMRYBRKC25PPA BROWN 4495 26 21 16 9 22 94
ALECK FWALECKBLKC29NLA BLACK 7990 20 18 0 0 28 66
ALECK FWALECKNYKC15NLA PURPLE 7990 6 0 0 0 9 15
APOLLO FWAPOLOBLKC29PPA BLACK 5995 22 0 19 14 15 70
APOLLO FWAPOLOBRKC25PPA BROWN 5995 12 19 11 0 26 68
ASCOTT FWASCTTBLKB29PPA BLACK 6495 24 21 20 12 35 112
ASCOTT FWASCTTBRKB25PPA BROWN 6495 39 37 32 24 35 167
AZEL FWAZEELBLKA29NLA BLACK 7990 26 23 20 16 16 101
AZEL FWAZEELKHKA18NLA TAN 7990 27 21 19 13 14 94
Grand Total 278 226 197 131 281 1113

The above data shows the total inventory on hand after End of Season’s Sale (EOSS). There
are about 12 SKU’s which performed low and their closing balance of stock in all the stores
can be seen in the above table. The maximum inventory at hand was observed by article
Ascott(Brown) having 167 pairs in total. Ironically, Ascott has been one of the top performers
for the AW-14 season and the reason for its high inventory in stores is that after its good
performance in the initial months it was certainly high on demand therefore the stock was
further replenished and further went on for additional production.

46
5.4 d)Feasibility for the Proposed Model:

Assumptions:

For the inter store stock transfer model we will take two assumptions

i) Let the store from where the stock has to be shifted be Point A and the destination
store where the stock is shifted be Point B

ii) For any transport the demand at Point B is high and all products will be sold
iii) Consumers at Point B will buy at original cost price

Basis of Calculation:

All calculations are based on worst case scenarios. This states that through the calculations all
practical cases will be covered by it. So to send a product from one store to another will have
some transportation cost. For example in the below case the transportation cost are a, b, c, d,
e, f, g and h. For the calculation the transportation costs have been taken as the weights
because we need to optimize the costs and not the distance. In the worst case scenario the
transportation cost to shift stocks from Point A to Point B is the maximum.

47
Calculation:

Total inventory at hand= 1113 pairs

Average inventory remaining per store= 1113/55=20.23

Weight of 1 pair= 800 grams

Total weight of average inventory remaining per store= (20.23*800/1000) kilograms = 16.18
kilograms

Transportation cost for shipment of 16.18 kilograms = 5000 (Approx.)

Total Transportation cost (inclusive of all 55 stores) = 5000*55 = 2, 75,000 Rupees

Value of inventory at hand

Now, average cost price of inventory at hand = (78920/12) = 6576.66 Rupees

Value of inventory at hand = 6576.66*1113 = 7319822.58-40% Markdown = 43, 91,893.55

Rupees

Turnover that will be achieved

Margin= 3.00

Cost price + 3(cost price) = 43, 91, 893

4(Cost price) = 43, 91, 893

Cost price = 1097973.25

Profit = 4391893 – 1097973 = 32, 93,919.75

48
5.4 e)Conclusion

It was observed that the average inventory remaining at each store was 20 pairs and the total
weight for the inventory was 16.18 kgs. The transportation cost for delivering 16.18 kg
amounts to Rs. 5000. The total transportation cost for every store will cost Rs. 2, 75,000. On
the contrary, the value of the inventory at hand amounts to Rs. 43, 91,893 after deducting
markdown. Therefore, this implies that the transportation cost is less and it is feasible to
transport the stock from one store to another.

Now, another question arises whether the inventory will guarantee turnover or not. This can
be seen in the last calculation where the profit that will arise after the transfer is estimated.
The ultimate goal is to earn a monetary profit and customer retention, hence, both can be
achieved.

49
 6. SUPPLY CHAIN

The supply chain format adopted by the footwear category is vertically disintegrated. This
states that the products are completely outsourced to the independent external suppliers in
order to achieve maximised value adding and minimised total cost for the supply chain.
BlackBerrys makes a contract with external suppliers who conduct design and manufacturing
operations aiming at a reduced cost. The decision and the process to obtain the supply of the
footwear is shifted to external vendors. Contractual negotiations, regular evaluation and
reviewing the products are done periodically by the merchandiser.

There are 2 vendors of BlackBerrys footwear category for the season Autumn/Winter-15 who
will manufacture products, namely :

Table 15. Vendor Information for AW-15

SRL NO VENDOR ADDRESS PRODUCTS

Sheep leather, cow

18, G N Chetty Road, T Nagar T leather, buff leather, cow
Pond`s Exports Ltd
Nagar calf leather, buff calf
1 (Hindustan Union
044 2834 5505 leather, others(leather),
Lever Ltd)
goat leather, long/half
boots (gents), sandals
(gents)
Men’s Footwear Classic-
Comfort Classic & Sport
Guide Footwear Agra, Uttar Pradesh
2 Line & all type of
Company
Uppers

50
 6.1 Supply Chain Model

Figure 14. BlackBerrys supply chain model for footwear

The supply chain model for footwear category starts with the product development team who
plan the products to be manufactured and communicate it to the the suppliers . Sometimes the
sourcing is also done by the team when specified materials are required and are mandatory
for production. The vendors then produce the products and the goods are then sent to the
company’s warehouse which is located in Manesar. The logistics are managed by
SafeExpress which handles the footwear along with the other categories of the brand. The
goods are then kept in the warehouse where inspection is done by an officer and the goods
are kept unless the dispatch advice is issued by the retail store managers.

51
 The dispatch advice is an official document stating the quantity of goods required by each
store based on the size, color and article name. The products are then delivered to the
BlackBerrys store by the logistics team.

Table 16. Dispatch Advice for article AIKANE

DISPATCH ADVICE FOR ARTICLE : AIKANE (Showing only 4 stores)

Item code Size Description AcptdQty Bal Indore Pune Patna Ranchi T

PP-
FWAIKBLKC29PPA 40 AIKANE#BLKC29A 20 16 1 1 1 1

PP-
FWAIKBLKC29PPA 41 AIKANE#BLKC29A 40 32 2 2 2 2

PP-
FWAIKBLKC29PPA 42 AIKANE#BLKC29A 50 42 2 2 2 2

PP-
FWAIKBLKC29PPA 43 AIKANE#BLKC29A 40 32 2 2 2 2

PP-
FWAIKBLKC29PPA 44 AIKANE#BLKC29A 10 6 1 1 1 1

52
6.2 Problem Areas & Sugestions

To optimize efficiency in supply chain the only area that can be optimized are the delays.
Since, supply chain is all about managing and delivering goods from one independent entity
to another, thus, time plays an important role in the entire supply chain process. Reducing the
lead time and following the time and action calender striclty can lead to efficiency. But in
reality the picture is quite the opposite. Despite of many attempts there is no guarantee of
production delays from the manufacturer.

For footwear category the products when completed in the factory are delivered to the
warehouse where the actual packing and labeling is done store-wise based on the dispatch
advice where it takes 6-7 days and then the products are delivered to the store. Instead, if the
products are labeled and packed at the factory itself it can further help in reducing lead time.

Current Process Flow

53
6.2 a) Objective of the proposed model:

 To decrease the lead time for the footwear category by directly issuing Dispatch
Advice by the retail to the factory itself
 To achieve optimum efficiency in the supply chain and make it clutter-free

6.2 b) Benefits of the proposed model:

i. From the Factory Perspective

The advantage of directly issuing the Dispatch Advice to the factory can lead to
enhanced relationship with the vendors. It will help to build trust with them leading to
better relations with all the vendors.
For the manufacturer the payments are done after the products are final products are
delivered to the retail stores. Hence, payments to the factory can be done faster as the
warehouse will take less time in inspection and can directly deliver goods to the EBO
after the inspection.
ii. From the Warehouse Perspective
For the warehouse the workload will be decreased and they no longer have to manage
the process of tagging and packing. Inspection will become more convenient as the
articles will be already segregated store-wise. This will lead to better stock handling
and management in the warehouse.
iii. From the Retail Perspective
The lead time will be reduced comparatively as dispatched goods can come directly
from the warehouse to the retail stores.
iv. From the Merchandiser Perspective
This model is beneficial as the overheads at the factory will cost less than the
overheads at the warehouse. The warehouse is located at Manesar and the factories
are located in Agra and Chennai where labour and power is very minimal. Thus it is
cost effective as well.

54
 Proposed process flow

Table 17.Time and Action Calendar for Ponds Vendor located in Chennai

55
 Table 18.Time and Action Calendar after DA is directly issued to Chennai Vendor

From the above data it can be seen that the workload at the warehouse is decreased and
further, lead time can be reduced by 2-3 days and better stock management can be performed
at the warehouse if the model is proposed.

56
 7. LEARNING OUTCOME

Working with BlackBerrys facilitated me to understand the category management and the
merchandising process there. It has given me insight of the design, merchandising and supply
chain departments, their key responsibilities and the overall work process. Also I learned
Costing and assortment planning for the footwear category. It helped me to understand how a
product oriented company works towards achieving turnover considering all the research
work, past data, facts and figures to achieve better sales targets.

Work Done:

 Costing
The merchandise costs consist of the purchase price of inventory sold, inbound
shipping charges and all costs related to the company’s depot operations including
freight from depots to warehouses.
 Coordinating with the vendors managing Purchase Order sheets(PO) and Time
and Action Calendar
Coordinating with the vendors for daily updates and negotiating was very important to
ensure the products followed the TNA calendar efficiently.
 Sell through analysis
Monthly sell-through and percentage contribution was analyzed.
 Developing performance report for the retail department
Footwear is only available in the exclusive stores which are owned by the brand. The
retail operations are carried out through the head office. Hence, monthly sales
performance report had to be developed to provide information to the retail
department.

Suggestions:

While working I realized that there is lack of basic all over process flow knowledge among
employees. Everyone is well versed with their department work area and key responsibility
but all together misses on information related to BlackBerrys working as whole. There should

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be induction plan to bridge this gap and impart basic knowledge of the company structure and
work flow in every department.

There is lack of coordination among team members which leads to various working
problems. There should be employee engagement programs in departments for healthy
working among team members.

Key responsibilities areas for team are same, which shouldn’t be the case as each person is
involved in limited set of tasks only, and figure out issues in this scenario becomes much
more complex. Key responsibilities should be clearly defined to avoid such issues.

Table 19.Managing Purchase Order Sheets and Time and Action Calendar

Purchase Order Sheet for SS-15

Costing of article PP-CHAD

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 Figure 15. Article PP-CHAD

FOB (As quoted by the vendor)= 1410

Excise Tax= 75% of MRP * 6%

CST= 2% of total cost

MRP is calculated by taking the multiplier as 3.5

Therefore, MRP= 3.5 * 1410 (FOB) = 4935

Since, the price grid of the brand is based psycological pricing starting from the range 4495
to 7990. This implies the MRP for article PP-CHAD will be rounded as 4995.

Now, Excise tax = 75% of 4995 * 6% = 224.77

Total Cost = FOB + Excise tax = 1410 + 224.77 = 1634.77

CST = 2% of Total cost = 2% of 1634.77 = 32.69

Standard Cost = FOB + Excise tax + CST = 1410 + 224.77 + 1414.49 = 1667.46

Margin = MRP / Standard cost = 4995 / 3049.26 = 2.99

Table 20. Costing Sheet for article PP-CHAD

Article Std.
S.No. Category Vendor Color Mrp Fob Ecxise CST Margin
Name Cost

PP- PRIM n
1 PONDS GREY 4995 1410 224.77 32.70 1667 3.00
CHAD PROPER

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Table 21.Time and Action Calendar for SS-15

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 8. CONTACTS MADE DURING PROJECT

 Mr. M.Qazafi, Category Head and DGM for Knits & Footwear,
m.qazafi@blackberrys.com

 Miss Meenakshi Roy, Human Resource Head, meenakshi.roy@blackberrys.com

 Mr. ChetanSaraswat, Senior merchandiser for Footwear,

chetan.saraswat@blackberrys.com

 Miss Ankita Thakur, Senior Executive Designer for Footwear,

ankita.thakur@blackberrys.com

 Mr. Shewanaz, Senior executive for Quality Inspection,

shewanaz.siddiqui@blackberrys.com

 Mr. GauravGaba, Senior merchandiser for Knits, gaurav.gaba@blackberrys.com

 Miss ReejuGogoi, HR senior executive, reeju.gogoi@blackberrys.com

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 9. BIBLIOGRAPHY

 http://nmcc.nic.in/pdf/Deloitte_Report_LeatherandFootwear.pdf

 http://www.leatherindia.org/products/footwear.asp

 http://www.rncos.com/Market-Analysis-Reports/Indian-Footwear-
Market-Forecast-2014-IM310.html

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