Professional Documents
Culture Documents
operation. It is a subsidiary of Future Group Venture Ltds, and follows the business
model of United States-based Wal-Mart. Big Bazaar, is the chain of retail stores of the
big banner Pantaloon Retail (India) Ltd., which in turn is a segment of the Kishore
Biyani, regulated Future Group of Companies. Moreover the customer friendly
ambiance and the organized retailing of products also make Big Bazaar one of the
successful retail companies in India.
It’s not just the matter of selling products and services nor just completing
transactions in the need to achieve targets. Every customer is an opportunity to build
a relationship and invite the customer to become a part of the new transformational
scenario. Design management is helping us position the customer at the centre of
every decision we take and also operate with true entrepreneurial spirit.
2.1 Vision
Future Group shall deliver everything, everywhere, every time for every Indian
Consumer the most profitable manner.
2.2 Mission
We share the vision and belief that our customers and stakeholders shall be served
only by creating and executing future scenarios in the consumption space leading to
economic development.
We will be trendsetters in the evolving delivery format, creating retail realty, making
consumption affordable for all customer segments- for classes and masses.
We shall be efficient and cost conscious and committed to quality in whatever we do.
We shall ensure that our positive attitude, sincerity, humility and united
determination shall be the driving force to make us successful.
3. Organisation Chart
4.2 Application Server: The middle tier will comprise of clustered servers also called
transaction servers, as they facilitate transactions taking place in the big bazaar. This
is essential for the system to handle high workloads, especially during peak hours.
The middle tier will serve as an interface between the clients and the database. The
application server runs on a Dell Server.
4.3 Database Server: The database server will receive and process queries received
from the middle tier transaction servers. All the data will be stored in this database
server. The database server is located in Mumbai. The system runs on a HP Super
dome server on HP UNIX 11i and the database is from Oracle.
4.5 Personnel management: For this attendance swapping machines are in place to
keep track of in and out time of employees. Also an IT system, called the PECK
system, is used for automatic ordering of items whose stock goes below a minimum
prescribed level. The reorder level depends on the Minimum Base Quantity (MBQ).
Suppose,
MBQ = 10
Reorder level = 5
Now, whenever the quantity of this item in stock goes below 5, an automatic
purchase order is sent to the centralised warehouse.
Each module handles specific business tasks on its own, but is linked to the others
where applicable. For example, an invoice from the billing transaction of Sales &
Distribution of Big Bazaar would pass through to accounting, where it will appear in
accounts receivable and cost of goods sold.
Client Server
Application Server
Database Server
The Application layer consists of one or more application servers and a message
server. Each application server contains a set of services used to run the R/3 system.
Not practical, only one application server is needed to run an R/3 system. But in
practice, the services are distributed across more than one application server. This
means that not all application servers will provide the full range of services. The
message server is responsible for communication between the application servers. It
passes requests from one application server to another within the system. It also
contains information about application server groups and the current load balancing
within them. It uses this information to choose an appropriate server when a user
logs onto the system.
The application server exists to interpret ABAP/4 programs, and they only run there-
the programs do not run on the presentation server. An ABAP/4 program can start
an executable on the presentation server, but an ABAP/4 program cannot execute
there. If your ABAP/4 program requests information from the database, the
application server will format the request and send it to the database server.cvb.
Although there can be major benefits for Big Bazaar of SAP ERP, the implementation
and training costs are expensive. It has overcome with problems when implementing
SAP ERP software, such as: failing to specify their operation objectives, absence of a
strong commitment or positive approach to change, failing to deal with
organizational differences, failing to plan the change to SAP ERP properly,
inadequate testing. All these factors which cause unsuccessful implementation of
SAP ERP didn’t affect in Big Bazaar and it came successfully in overcoming them. SAP
ERP is implemented correctly in BIG BAZAAR due to which it has gone from its old
calculations system to a fully integrated software package. Potential benefits that it
had gained from it are efficient business process, inventory reduction, and lead time
reduction.
Big Bazaar is a fully centralized system in integration with the Mumbai Head office.
The payment of all the stakeholders are been done through Mumbai branch. A
message is triggered to the Mumbai Head Office the instant the inventory level falls
below a minimum prescribed level; the optimum quantity is being supplied to
maintain the Maximum Base Quantity (MBQ).
To maintain this dynamism across all the outlets and to gain the benefits of volume
discount, a sophisticated IT system is required.
The core competency of the Big Bazaar is in retailing and this application system is a
support-oriented information resource management (as in Mac Farlan’s Strategic
Grid).
Hence, outsourcing was a viable option for Big Bazaar on account of the following
reasons:
Maintenance of skilled staffs is not needed and the management can concentrate on
the core business activities.
3. They sent the Request of proposal (RFP) to the prospective vendors asking for
information relevant to their service capabilities across a spectrum that includes
financial, technical, and operational information.
4. Based on the responses of the vendors, they selected WIPRO for outsourcing.
8.1 Advantages
The advantages of such an infrastructure can be concluded as follows:
Scalability
The architecture deployed currently has been modelled to facilitate the scale of
operation of the company. For instance the application servers can be deployed on
many machines. Also, the database no longer requires a connection from every client
— it only requires connections from a smaller number of application servers. In
addition, many Transaction Processing Monitors could be used to balance loads and
dynamically manage the number of application server(s) available.
Better Reuse
A replication of the same logic can be initiated from many clients or applications.
Since the method of operation is standardized across all the outlets so a mechanism
which can be replicated at less cost, reduces complexity and leads to optimum
utilization of the resources.
Improved Security
Implementation of security mechanisms at multiple levels (not just the database)
improves the security level. Security can be granted on a service-by-service basis. The
placement on a very secure central server makes the business logic more secure.
Reduced Distribution
Any new policy changes like discount offers and other incentives can be easily
incorporated to the complete business logic by simply updating a few application
servers and do not have to be implemented individually across all the clients.
Improved Availability
The operations associated with the organization require the system to support
numerous transactions, at the time of high sales. Such situations make use of
redundant application servers and redundant database servers. Thus, it is possible to
architect an application which can recover from network or server failures.
8.2 Disadvantages
Along with the advantages of the IT Infrastructure, some disadvantages also exist:
Big Bazaar IT infrastructure lags as compare to its global competitors (who are set to
enter Indian Markets) in terms of effectiveness of its Data Mining system. The data
mining system enables the retailer to critically analyze and select its consumer
segments and its specific needs and thus coming up with schemes to target them.
Although existing customer billing system is very robust (failed only once in last 3
years: Kozhikode outlet), it often turns into bottleneck leading to longer queues and
thus increased service time. The problem becomes worse during peak customer
hours and the system proves to be Achilles heel during above estimated demands
(recently in Sabse Sasta Din offer; 26 Jan 2011).
IP surveillance and automation is very difficult in retail sector, hence most retailers
take other measures to ensure a secure network like backups of all application data,
operating system, databases and files were taken on a daily basis onto tape drives
and even on disk. All the backup media was stored offsite on a daily basis. Weekly
and monthly backup tapes are stored at remote locations. If the OS or application
software conks off, data can be restored by reinstalling the concerned software and
retrieving the latest data backup.
The key processes involved in the completion of a transaction at Big Bazaar could be
described as follows:
The order is then processed when the customer makes the payment
If the payment is correct then the inventory level of the corresponding item is
reduced by one and the transaction is complete
However if the payment is not correct then the customer is intimated regarding the
problem. If the customer still wishes to complete the transaction then he pays the
appropriate amount else he decides to cancel the order if he does not have enough
cash at disposal
After the inventory level is reduced by one, it is checked if the current inventory level
is critical
If the inventory level is not critical then the transaction can be considered to be
totally complete and the system is prepared for the next transaction.
However, if the inventory level is critical i.e. based on the MBQ system, an automatic
reorder procedure is activated
This involves sending out a request for invoice order and another one for shipping
order
Once the invoice data is validated with the accounts department, the invoice is raised
and forwarded
Once the invoice order is complete, the items are packed and then shipped from the
suppliers to the warehouse which stores the inventory
Once the inventory has been received at the warehouse, the inventory level is
updated
From the above description it can be observed that IT plays a crucial role in three key
areas namely Payment Processing, Inventory Management and Managing accounting
information.
Payment processing software records the payments received from the customers and
keeps track of the sales amount generated on a day to day basis to understand the
customer behaviour. The role of IT in Inventory management is critical in ensuring
automatic replenishment of the inventory whenever the quantity goes below the
critical level. Finally the accounting system has to make sure that all the goods
received and the invoices generated are in correspondence and to detect and
prevent anomalies that might arise out of errors committed both intentionally and
unintentionally into ballooning into a huge problem for the company. It is important
that the above systems are properly in place for the efficient functioning of the day
to day business activities.
Following is the brief introduction about each entity and its attribute:
HO Site: it is central point in the database unit, which controls all the departments. It
controls various operations like maintaining inventory, organizing suppliers, and
giving salaries to employees and billing to the customers.
HO Employee: It defines the employees who will operate the HO site. They can make
changes in the database of the product, and can even define new levels of cut off
points for both inventory and shelf.
Employee: It defines all the employees working in various departments. This entity
will be accountable for their salaries, their performance, their timings and their
attendance. All the incentives will be decided after seeing the performance graph of
the employee, which will be generated through the DBMS.
Product: This entity will define all the information about the product. It will tell the
cost of the product, its unique ID code, its supplier, its self life.
Supplier: As there are too many suppliers in the market who will be supplying their
products to big bazaar. This entity will help to maintain their database. It will tell
about the supplier name, location, product supplied by him, and about billing of the
supply.
Purchase rec.: This will tell about the purchase record of a particular product by the
customer. It will tell the name of customer who purchased the product, date of
purchasing, quantity purchased etc.
Customer: The end point of the business is customer. To create the database of the
valuable customers, you should know name, address, and product & in what quantity
they purchase.
Inventory: It is the store where all the products are placed before bringing them to
the shelf. The supplies directly come to the inventory.
Customer
Kozhikode branch employee
Supplier
The customer selects the goods he wants to buy and goes to the counter where the
customer pays the amount. The employee at the counter enters the data in the
database which is updated on the continuous basis. This database in turn is
connected to the Mumbai database. Thus the entry made by the Kozhikode
employee gives the inventory, sales etc status of the Kozhikode branch to the head
office. Next, Mumbai head office checks the inventory level of the stock and if found
to be below minimum base quantity level, then order is placed to the supplier
regarding the same. The suppliers get the order request from the head office
through the centrally connected database. All other functions of the Kozhikode
branch are carried out in a similar manner.
We can divide these into four different categories. They are Planning, Store
management, Buying and Supply Chain. For planning the modules of SAP used are
supply Chain Management, Production Planning and Sales and Distribution. For store
management Customer Relationship management, Sales and Distribution
Management, Material Management and Customer Service modules are used. For
Buying Supplier Relationship management and Material management modules are
used. And for supply chain activities Sales and distribution, Logistics and Logistics
Execution modules are used.
On account of the heavy rush on the weekends and the festival season, the available
number of terminals is unable to meet the demand quickly. Hence, the customers
have to wait in queue for longer period. However, there are certain floors wherein
the terminals are idle as the demand for those items are not that high. Hence, the
firm can decide to exchange the location of computers from less used areas to highly
used ones.
15. Recommendations
Warehouse Planning and Inventory Tracking and Tracing – Once you define the high-
level plan, you can focus on optimizing activities within each supply chain location.
Support for cross-docking enables a direct flow from goods receipt to goods issue.
The application also supports the tracking and tracing of inventory down to granular
levels of detail -information needed to initiate recalls. RFID technology makes these
tasks more efficient and ensures accuracy.
Material Flow System – SAP EWM offers complete material flow control without
additional software – allowing all programmable logic controllers to be connected to
SAP EWM via remote function call (RFC) adaptors. To help ensure that goods keep
moving inside the warehouse and to avoid unnecessary (and costly) manual
intervention, the system offers high performance. That level helps ensure that a
carton can be scanned, compared to the expected size and weight, and have a
determination made about where it should be sent – in less than a second.