Intro

STUDY AND ANALYSIS OF FRUITS & VEGETABLES SUPPLY CHAIN AT SPENCERS RETAIL LTD.
WITH A FOCUS ON CUSTOMER END OF THE SUPPLY CHAIN

CHAPTER-1 INTRODUCTION
1.1 OBJECTIVES To study the various echelons and the activities occurring at each end of the fresh foods supply chain. To understand the Retail Inventory Management for perishable goods using Modelling and suggest effective ways to management To compare and bring out the advantages of Spencers Retail over Modern Retail in terms of how it adds value to the customer end of the supply chain. To carry out a Marketing Research at Spencers Retail Store and study the customer buying behaviour and provide feedback to Spencers based on the collected data. To analyse the correlation between the customer shopping experience and freshness of fruits and vegetables. To make necessary recommendations to Spencers to improve and optimize their supply chain performance.
1.2 SCOPE
Retail companies are now turning to their supply chain & distribution strategies as a way to differentiate their products and cut costs. Logistical expertise should be used not only to survive, but also to sustain real competitive advantage. Retail supply chains are complex & composed of multiple interacting supply chains for various categories & formats. They need to be highly effective as well as defect free. This demands careful design of supply chain processes that are both robust & scalable. This project aims to study the customer end of the supply chain at the Spencers Retail in Chennai. It aims to understand the Customer buying behaviour and retail Inventory Management for Three Perishable Commodities namely Onion, Tomato & Papaya though a Multi Product Multi Store Modelling. It brings out the advantage of Spencers Retail over traditional retail in the form of the benefits it brings to the consumer and the farmer.
1.3 MOTIVATION As regular consumers of fruits and vegetables and it being an integral part of everybodys daily needs we wanted to know the reason behind the price that we pay and the amount that goes to the farmer end of the supply chain. The main aim of supply chain is to maximize the realization at both ends of the chain i.e. the farmer end and the consumer end. We have tried to replicate a part of the real system using modelling, which will help in understanding the concept of retail inventory management for perishable commodities. We wanted to study the benefits of Spencers Retail over Traditional Retail and reasons behind the value addition to the consumer. We wanted to study customer attitudes, buying behaviour and analyse the correlation between customer shopping experience and freshness of fruits and vegetables.
CHAPTER-2 LITERATURE REVIEW

2.1 DEFINITION Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Some experts distinguish Supply Chain Management and logistics, while others consider the terms to be interchangeable. Supply Chain Management is also a category of software products. Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.
2.2 NEED FOR SUPPLY CHAIN MANAGEMENT Organizations increasingly find that they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy. In Peter Drucker's (1998) 3
management's new paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. During the past decades, globalization, outsourcing and information technology have enabled many organizations such as Dell and Hewlett Packard, to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Peter Meindl, 1993). This inter-organizational supply network can be acknowledged as a new form of organization. However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories (Donald Bowersox, 1990). It is not clear what kind of performance impacts different supply network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players. From a system's point of view, a complex network structure can be decomposed into individual component firms (Zhong and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of internal management control structure is known to impact local firm performance (Cooper and Douglas, 1979). In the 21st century, there have been a few changes in business environment that have contributed to the development of supply chain networks. First, as an outcome of globalization and proliferation of multi-national companies, joint ventures, strategic alliances and business partnerships were found to be significant success factors, following the earlier "Just-In-Time", "Lean Management" and "Agile Manufacturing" practices. Second, technological changes, particularly the dramatic fall in information communication costs, a paramount component of transaction costs, has led to changes in coordination among the members of the supply chain network (Chopra and Meindl, 1998). Many researchers have recognized these kinds of supply network structure as a new organization form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", Global Production Network", and "Next Generation Manufacturing System". In general, such a structure can be defined as "a group of semi-independent organizations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration" (David Closs, 2001).
2.3 SUPPLY CHAIN MANAGEMENT PROBLEMS Supply chain management must address the following problems: Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers, warehouses and customers. Distribution Strategy: Centralized versus decentralized, direct shipment, Cross docking, pull or push strategies, third party logistics. Information: Integrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation etc. Inventory Management: Quantity and location of inventory including raw materials, work-in-process and finished goods. Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across entities within the supply chain. Supply chain execution is managing and coordinating the movement of materials, information and funds across the supply chain. The flow is bi-directional.
2.4 ACTIVITIES AND FUNCTIONS Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end-consumer. As corporations strive to focus on core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other corporations that can perform the activities better or more cost effectively. The effect has been to increase the 5
number of companies involved in satisfying consumer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. Several models have been proposed for understanding the activities required to manage material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the Supply Chain Management Council. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.
Strategic Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities. Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics. Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management Information Technology infrastructure, to support supply chain operations. Where to make and what to make or buy decisions Align overall organizational strategy with supply strategy
Tactical Sourcing contracts and other purchasing decisions. Production decisions, including contracting, locations, scheduling, and planning process definition.
Inventory decisions, including quantity, location, and quality of inventory. Transportation strategy, including frequency, routes, and contracting. Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.
Milestone payments
Operational Daily production and distribution planning, including all nodes in the supply chain. Production scheduling for each manufacturing facility in the supply chain (minute by minute). Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory. Production operations, including the consumption of materials and flow of finished goods. Outbound operations, including all fulfillment activities and transportation to customers. Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.
2.5 SUPPLY CHAIN BUSINESS PROCESS INTEGRATION
Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become appropriate. Marketing, responding to customer demand, communicates with several distributors and retailers, and attempts to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration. Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. According to Lambert and Cooper (2000) operating an integrated supply chain requires continuous information flows, which in turn assist to achieve the best product flows. However, in many companies, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. The key supply chain processes stated by Lambert (2004) are: Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management
One could suggest other key critical supply business processes combining these processes stated by Lambert such as:
2.6 CUSTOMER SERVICE MANAGEMENT Procurement Product development and commercialization Manufacturing flow
management/support Physical distribution Outsourcing/partnerships Performance measurement Customer Service Management Process Customer Relationship Management concerns the relationship between the organization and its customers.Customer service provides the source of customer information. It also provides the
customer with real-time information on promising dates and product availability through interfaces with the company's production and distribution operations. Successful organizations use following steps to build customer relationships: Determine mutually satisfying goals between organization and customers Establish and maintain customer rapport Produce positive feelings in the organization and the customers
Procurement Process Strategic plans are developed with suppliers to support the manufacturing flow management process and development of new products. In firms where operations extend globally, sourcing should be managed on a global basis. The desired outcome is a win-win relationship, where both parties benefit, and reduction times in the design cycle and product development is achieved. Also, the purchasing function develops rapid communication systems, such as electronic data interchange (EDI) and Internet linkages to transfer possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers. This requires performing resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage and handling and quality assurance. Also, includes the responsibility to coordinate with suppliers in scheduling, supply continuity, hedging, and research to new sources or programmes. Product Development and Commercialization Here, customers and suppliers must be united into the product development process, thus to reduce time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched in ever shorter time-schedules to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must: Co-ordinate with customer relationship management to identify customer-articulated needs; Select materials and suppliers in conjunction with procurement, and Develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination. 9
Manufacturing Flow Management Process The manufacturing process is produced and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible to respond to market changes, and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency of demand to customers. Activities related to planning, scheduling and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and maximum flexibility in the coordination of geographic and final assemblies postponement of physical distribution operations. Physical Distribution This concerns movement of a finished product/service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product/service is a vital part of each channel participant's marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus it links a marketing channel with its customers (e.g. links manufacturers, wholesalers, retailers). Outsourcing/Partnerships This is not just outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage and everything else it will outsource. This movement has been particularly evident in logistics where the provision of transport, warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, to manage and control this network of partners and suppliers requires a blend of both central and local involvement. Hence, strategic decisions need to be taken centrally with the monitoring and control of supplier performance and day-to-day liaison with logistics partners being best managed at a local level. Performance Measurement
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Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. By taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can be both correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly important because the difference between profitable and unprofitable operations becomes more narrow. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts internal measures are generally collected and analyzed by the firm including Cost Customer Service Productivity measures Asset measurement, and Quality. External performance measurement is examined through customer perception measures and "best practice" benchmarking, and includes Customer perception measurement. Best practise benchmarking.
Components of Supply Chain Management are Standardisation Postponement Customisation
2.7 THE MANAGEMENT COMPONENTS OF SCM The SCM components are the third element of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level, ranging from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The literature on business process reengineering, buyer-supplier relationships, and SCM suggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following components which are:
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Planning and Control Work Structure Organization Structure Product Flow Facility Structure Information Flow Facility Structure Management Methods Power and Leadership Structure Risk and Reward Structure Culture and Attitude
However, a more careful examination of the existing literature will lead us to a more comprehensive structure of what should be the key critical supply chain components, the "branches" of the previous identified supply chain business processes, that is what kind of relationship the components may have that are related with suppliers and customers accordingly. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs, 1996). A primary level channel participant is a business that is willing to participate in the inventory ownership responsibility or assume other aspects financial risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level participant (specialized), is a business that participates in channel relationships by performing essential services for primary participants, thus including secondary level components, which are supporting the primary ones. Also, third level channel participants and components may be included, that will support the primary level channel participants, and which are the fundamental branches of the secondary level components. Consequently, Lambert and Cooper's framework of supply chain components, does not lead us to the conclusion about what are the primary or secondary (specialized) level supply chain components ( see Bowersox and Closs, 1996, p.g. 93), that is what supply chain 12
components should be viewed as primary or secondary, and how should these components be structured in order to have a more comprehensive supply chain structure and to examine the supply chain as an integrative one (See above sections 2.1 and 3.1). Baziotopoulos reviewed the literature to identify supply chain components. Based on this study, Baziotopoulos (2004) suggests the following supply chain components (Fig.8): For customer service management: Includes the primary level component of customer relationship management, and secondary level components such as benchmarking and order fulfillment. For product development and commercialization: Includes the primary level component of Product Data Management (PDM), and secondary level components such as market share, customer satisfaction, profit margins, and returns to stakeholders. For physical distribution, Manufacturing support and Procurement: Includes the primary level component of enterprise resource planning (ERP), with secondary level components such as warehouse management, material management, manufacturing planning, personnel management, and postponement (order management). For performance measurement: This includes the primary level component of logistics performance measurement, which is correlated with the information flow facility structure within the organization. Secondary level components may include four types of measurement such as: variation, direction, decision and policy measurements. More specifically, in accordance with these secondary level components total cost analysis (TCA), customer profitability analysis (CPA), and Asset management could be concerned as well. In general, information flow facility structure is regarded by two important requirements, which are a) planning and Coordination flows, and b)operational requirements. For outsourcing: This includes the primary level component of management methods and the company's cutting-edge strategy and its vital strategic objectives that the company will identify and adopt for particular strategic initiatives in key the areas of technology information, operations, manufacturing capabilities, and logistics (secondary level components).
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CHAPTER-3 ORGANISATION STUDY: Spencers Group

3.1COMPANY PROFILE The company was established in 1996.Part of the Rs. 9,000 crore RP-SG Group, Spencers run about 200 stores (including about 30 large format stores) across 45 cities in India, employing more than 7,000 people. Its top Management consists of R.P Goenka, the Chairman Emeritus. Harsh Goenka , the Chairman. Sanjiv Goenka, the Vice Chairman. Spencer's retail is one of the largest supermarket chains in India. Spencer's offers its customers a customized and convenient shopping experience in 5 different formats.
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Figure 3.1:Spencers Retail Chain
3.2 CONSOLIDATION CENTRE One of the consolidation centers for Spencers Retail is Hoskote which is located at a distance of 30 kms from Bengaluru. Farmers grow according to their needs. There are around 400-500 farmers respond to the needs of the Spencers. The CC is centrally located and the F&Vs are grown throughout the year. It is the consolidation centre for the stores in Bangalore, Kerala & Tami Nadu. They cultivate around 90 different products with 110 SKUs. Like Hoskote, Vishakhapatnam, Ananthpur, Araku(a hill station located in A.P) are other C.Cs for Spencers which supply to their stores located in other parts of the country. The farmers receive the indent two days prior to the Store requirement based on forecast.The farmer then prepares the Invoice based on the received indent.A quality and quantiy check is carried out before the goods are sent to the DC.
3.3 DISTRIBUTION CENTRE Separate space has been demarcated for the F&V storage from the Warehouse that stocks the Inventory of non-perishable goods.(they may or may not have a shelf life) 15
It consists of a Chill Room which is a cold storage. It also consists of Security Area Receiving Area Divisioning Area
3.4 QUANTITY AND QUALITY The quantity required is fixed by the Merchandiser. The merchandiser fixes something known as the purchase order or P.O. This is sent to the vendor. The vendor generates the invoice based on the P.O.
Quality standards cannot be defined. The quality testing consists of the following steps. 1. External Appearance-By looking at the external appearance. 2. Tapping-a good quality one will produce a metallic sound. 3. Soft touch- it is examined for scabs 4. Cut & test-This is the final option in Quality testing. If the inspector is not satisfied he can cut and then test it by looking at the appearance and/or eating. Imported Fruits They are mainly imported in crates of quantities 100 tonnes,200 tonnes,500 tonnes etc.They take about 3 months to reach the D .C and kept in the cold storage and are used within another 2 months. The price is fixed by the Washington Commission an independent body that is authorized to fix the prices of imported fruits.
3.5 ACTIVITIES IN DISTRIBUTION CENTRE
Passing at the Security(based on the Invoice)
Quality & Quantity Check
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Receiving based on P.O.
G.R.N (Goods Received Note) given to Vendor.
Pick list (for Store wise division)
Confirm in the P.C.
Transfer Order
Truck Loading (as per T.O.)
3.6 ACTIVITIES IN STORES
Getting Products to Shelf
Indenting & Purchase Orders (POs)
Indenting DC Delivery
Indenting will be happen after checking stock in the store and goods in transit. Or whenever if required any changes in indenting due to season, weekends or any festivals then the quantity is modified. Delivery of fruit & vegetables is after 48hours after being raised.
Receiving
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Receiving Goods in Store: From DC & CPC
Receiving indented goods from the DC is as per the delivery schedule. At the time of receiving goods from DC many things which is followed by the SM, ASM & the Staff: Check the seal in front of driver. Inspect stocks for transit damages. If any HU (Handling unit) / article is found damaged, excess, or missing noted it on the trip sheet for return to DC. Do the GRN (Goods return note) for the delivery for the actual received quantity. Stores are not unloading transit damaged stocks. Transit damages will be returned to DC in the same delivery truck. The main focus during goods receiving must be to unload the crates/ cartons from the truck as quickly and safely as possible.
Replenishment of Goods
Replenish Shelf from Goods Receiving Area
Process of moving goods from goods receiving area to the respective bays/ chillers as per the priority fill rule. Strictly follow FIFO Place previous stock in the front/top of the shelf.
Managing Price Changes
Changing SELs for those SKUs where price has been changed. All the changing of SKUs is done by headquarters in Chennai.
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Getting Products from Shelf to Customers
Promotion management (setting up the store for new promotions). ASM/SM briefs the staff at the morning and afternoon meeting on the promotion details. Staff need to be briefed on the following : o Details of the promotion o Period of the promotion o Advantages to the customer o Any special arrangements at the till o Sales target for the promotion
Stock Display Management Fill F&V in a similar manner using crates stored in the bottom shelf of the wall racks, below heapers and in back room. Follow the FIFO rule. In case of F&V, place the older products on top of the newer products FIFO Checking of temperature of chillers and freezers is also a part of SDM. It is the process of checking and moving stocks to ensure that the older stock gets sold before the newer ones. The thing which is strictly followed is removal of damaged part of the F&V will not be carried out at the shop floor under any circumstances.
Managing Waste and Markdowns Segregation of damaged and expiry in store
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For F&V crates are received carefully for the item not for sale as per reliance retail quality and are removed from the shelf. It is done by the store staff. Expiry An expired product is segregated and is treated as per following.
Product Type DC supply
Treatment Dump in store.
Dumping of damages & expiry product:- Treatment for damaged & expired product are done in following manner
Loss type Type C damage
Action Dump in store (shown in SAP) Dispose in store.
For processing of dump (damaged & expired) approval is obtained from store manager. After dumping, all the dump are entered into dump register in the presence of SM with his /her signature. The entire dumped product is then handed over to garbage collection agency. Finally the dump register is present near SM for approval (signature).
Dump on arrival On arrival of goods (F&V stock received from DC) poor quality goods are segregated. 20
The respective SM is informed. In the GRN (goods received Note) for the delivery, poor quality stocks are entered as Damaged Quality. Further it is kept for inspection and area F&V executive is informed. Email is send to the F&V head. Finally dumped stocks are hand over to garbage agency. Returns Goods return to DC And GRDC is created in SAP for the quality to be returned. Finally it is loaded and dispatched to DC in DC truck and return to DC documents is get signed by the truck driver and is kept with itself.
Physical verification of stock All Purchase Order (P.O) documents present in the system are checked and closed. Stocks take checklist is updated. Following are checked and ensured:o GRN for all DC deliveries have been prepared. o All damaged products (type C ) have been dumped. o All expiry product have been dumped.
SKUs by count and weight: Product variants are segregated. Number of units are counted and all SKUs are weighed . The Goods Received report is generated is SAP and inventory differences is listed.
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CHAPTER-4 MULTI STORE MULTI PRODUCT MODELLING

The Model is a simple replication of a real system which consists Three Stores of Spencers Retail namely Velachery, Nelson Manickkam and Ashok Nagar being the locations and three products Onion, Tomato and Papaya which are taken for wastage analysis. Real data which was obtained from Spencers Retail was used to validate the System.
4.1 OBJECTIVES To Build a Model for a multi product-multi retail system that focuses on the Customers side of the Supply Chain at a Retail Store. It aims to analyse the Dump (or Wastage) for the entire year for the perishable commodities, tomato, onion and papaya and address the ineffectiveness of the supply chain. 22
Software Used: ARENA 12.0
4.2 STUDY OF ARENA Arena is an easy to use, powerful tool that always uses to create and run experiments on models of system. By testing out ideas in the computer laboratory we can predict the future with confidence and without disrupting the current business environment. Arena basic edition software lets you bring the power of modelling and simulation to business process improvement. It is designed primarily for newcomers to simulation and serves as an introductory product and foundation to the rest of the arena product family. Typically any process that can be described by means of a flow chart can be simulated with Arena Basic Edition. Arena Basic Edition is most effective when analyzing business, service or simple manufacturing process or flows Typical scenarios include Documenting, visualizing and demonstrating the dynamics of a process with animation. Predicting system performance based on key metrics with costs , through put , cycle times and utilizations. Identifying process bottlenecks such as queue build ups and over utilization of resources. Planning staff, equipment or material requirement.
Arena Modelling Environment There are three basic panels which constitute the project bar namely Basic process panel: contains the modelling shapes called modules that we use to define our process, Reports panel: contains the reports available for displaying results of simulation runs. Negative panel: allows us to display different views of our model including navigation through hierarchical sub-models and displaying a model thumbnail.
In the model window there are two main regions. The flow chart view will contain all of your model graphics including the process, flow chart , animation and other drawing elements. The lower spread sheet view displays model data such as times, costs and other parameters.
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The flow chart module: flow chart modules are the set of objects that are placed in the model window to describe the simulation process. These include Create module: This module is intended as the starting point for entities in a simulation model. Dispose module: This module is intended as the ending point for entities in a simulation model. Process module: This module is intended as the main processing method in the simulation. Decide module: This module allows for decision making process in the system. Batch module: This module is intended as the grouping mechanism within the simulation model. Separate module: This module can be used to either copy an incoming entity into multiple entities. Assign module: This module is used for assigning new values to variables, entity types, entity pictures or other system variables. Record module: this module is used to collect statistics in the simulation model.
Data modules: data modules are the set of objects in the spread sheet view of the model that define the characteristics of various process elements such as resources and queues. Entity module: This data module defines the various entity types and their initial picture values in a simulation. Queue module: This data module may be utilized to change the ranking value for a specified queue. Resource module: This data module defines the resources in the simulation system including costing information and resources availability. Variable module: This data module is used to define a variables dimension and initial value variables can be referenced in other modules can be reassigned a new value with the assign module and can be used in any expression. Schedule module: This module may be used in conjunction with the resource module to define an operating schedule for a resource. Set module: This data module defines various types of sets , including resource , counter , tally , entity type and entity picture.
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The Visio Process simulation add-in
Statistical Distribution: Arena contains a set of built-in function for generating random numbers from the commonly used probability distributions. These distributions appear on pull down menus in many Arena modules where they are likely to be used.
Library Shapes and Symbols Arena-plb-picture files: Arenas picture libraries contain images that we may use for entity , resource and global picture.We can use the images in the libraries for any of these three types of picture animation. Arena symbol factory: Arena animations can also be enhanced using Arena symbol factorys extensive library for ever 4000 symbols. The symbols can be used for entity resource, transporter or global pictures or as graphic symbols with in a model window.
4.3 MODELLING
Method The data used for validation was generated using the SAP ERP Software. The annual demand pattern was generated using the Input Analyser in ARENA using the sales data. The overall Inventory for each of the product and for each of the store was known. The Model was simulated for 12 hrs/day for 365 days. The Customer Arrival Pattern was got from the SAP system which gave the Customer Arrival for each commodity assuming that it was the only product bought by the customer at a time. The demand pattern was got using the input analyzer in ARENA.
Procedure
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1. Click and drag the create module from the basic process into the model window. Name it as Customer1. Similarly click and drag create module into the model window twice more and name them as Customer2 and Customer 3 respectively. 2. Double click the create module and change the time between arrivals type as Expression, the expression as EXPO(16), set the units as hours, entities per arrival as 1, max arrivals as Infinite and first creation as 0.0. Similarly change it for Customer2 and Customer 3. 3. Click Object, click on sub-model and then select add sub-model. Rename the submodel as Retail1-velachery. Link it with Customer1. Similarly Create two more submodels and name them as Retail2-Nelson Manickkam and Retail3-Ashok Nagar respectively and link them with Customer2 and Customer3 respectively. 4. Click and drag a dispose module into the model window and name it as Dispose1. Connect all the three sub-models to the dispose model. 5. Click on the first sub-model. Click and drag a decide module into the model window and name it as What to buy1. Connect it to the start of the sub-model. Double click the module and change the type as N-way by chance. Click on add and select the percentage as 33.33. Add another percentage with value 33.33. 6. Click and drag an assign module and name it as onion1. Similar add two more assign modules and name them as tomato1 and papaya1 respectively. Double click the onion1 module and add an assignment of type attribute, attribute name as Type1 and value as 1. Add another assignment of type attribute. Name it as Demand1 and value as NORM(1430,266). 7. Double click the tomato1 module and add an assignment of type attribute, attribute name as Type1 and value as 1. Add another assignment of type attribute. Name it as Demand1 and value as TRIA(1023,1513). 8. Double click the papaya1 module and add an assignment of type attribute, attribute name as Type1 and value as 1. Add another assignment of type attribute. Name it as Demand1 and value as UNIF(115,242). 9. Connect the onion1 and tomato1 to the true end of the decide module and papaya1 to the else end of the decide module. 10. Click and drag a decide module and name it as Check the inventory1. Double click on it and change the type as N-way by condition. Add the condition as an Expression and value as Demand1<=Inventory1(Type1). Connect the ends of the 3 assign modules to the start of the decide module. 26
11.
Click and drag an assign module and name it as Take away from Inventory1.
Double click and add an assignment of type attribute and name it as Amount Lost1 and value as Inventory1(Type1). Add another assignment of type other and name it as Inventory1(Type1) and value as Inventory1(Type1)-Demand1. Connect the assign module to the true end of the decide module. 12. Click and drag a dispose module and name it as Dispose3 and connect it to the else end of the decide module. Add a record module and name it as Dump1 and connect it to the end of the assign module. Double click on it and change the type as expression, value as Amount Lost1, tally set name as Lost Quantities1, set index as Type1 and tick the record into set. Connect it to the exit of the sub-model. 13. Close the first sub-model and double click the second sub-model. 14. Click and drag a decide module into the model window and name it as What to buy2. Connect it to the start of the sub-model. Double click the module and change the type as Nway by chance. Click on add and select the percentage as 33.33. Add another percentage with value 33.33. 15. Click and drag an assign module and name it as onion2. Similar add two more assign modules and name them as tomato2 and papaya2 respectively. Double click the onion2 module and add an assignment of type attribute, attribute name as Type2 and value as 1. Add another assignment of type attribute. Name it as Demand2 and value as TRIA(369,576,664). 16. Double click the tomato2 module and add an assignment of type attribute, attribute name as Type2 and value as 1. Add another assignment of type attribute. Name it as Demand2 and value as NORM(497,90.7). 17. Double click the papaya2 module and add an assignment of type attribute, attribute name as Type2 and value as 1. Add another assignment of type attribute. Name it as Demand2 and value as 76 + (167*BETA(0.628,0.433)). 18. Connect the onion2 and tomato2 to the true end of the decide module and papaya2 to the else end of the decide module. 19. Click and drag a decide module and name it as Check the inventory2. Double click on it and change the type as N-way by condition. Add the condition as an Expression and value as Demand2<=Inventory2(Type2). Connect the ends of the 3 assign modules to the start of the decide module. 20. Click and drag an assign module and name it as Take away from Inventory2. Double click and add an assignment of type attribute and name it as Amount Lost2 and value as 27
Inventory2(Type2). Add another assignment of type other and name it as Inventory2(type2) and value as Inventory2(Type2)-Demand2. Connect the assign module to the true end of the decide module. 21. Click and drag a dispose module and name it as Dispose4 and connect it to the else end of the decide module. Add a record module and name it as Dump2 and connect it to the end of the assign module. Double click on it and change the type as expression, value as Amount Lost2, tally set name as Lost Quantities2, set index as Type2 and tick the record into set. Connect it to the exit of the sub-model. 22. Close the second sub-model and double click on the third sub-model. 23. Click and drag a decide module into the model window and name it as What to buy3. Connect it to the start of the sub-model. Double click the module and change the type as Nway by chance. Click on add and select the percentage as 33.33. Add another percentage with value 33.33. 24. Click and drag an assign module and name it as onion3. Similar add two more assign modules and name them as tomato3 and papaya3 respectively. Double click the onion3 module and add an assignment of type attribute, attribute name as Type3 and value as 1. Add another assignment of type attribute. Name it as Demand3 and value as 147 + EXPO(78.6). 25. Double click the tomato3 module and add an assignment of type attribute, attribute name as Type3 and value as 1. Add another assignment of type attribute. Name it as Demand3 and value as (81 + (280*BETA(0.554,0.733))). 26. Double click the papaya3 module and add an assignment of type attribute, attribute name as Type3 and value as 1. Add another assignment of type attribute. Name it as Demand3 and value as UNIF(10,42). 27. Connect the onion3 and tomato3 to the true end of the decide module and papaya3 to the else end of the decide module. 28. Click and drag a decide module and name it as Check the inventory3. Double click on it and change the type as N-way by condition. Add the condition as an Expression and value as Demand3<=Inventory3(Type3). Connect the ends of the 3 assign modules to the start of the decide module. 29. Click and drag an assign module and name it as Take away from Inventory3. Double click and add an assignment of type attribute and name it as Amount Lost3 and value as Inventory3(Type3). Add another assignment of type other and name it as
28
Inventory3(type3) and value as Inventory3(Type3)-Demand3. Connect the assign module to the true end of the decide module. 30. Click and drag a dispose module and name it as Dispose5 and connect it to the else end of the decide module. Add a record module and name it as Dump3 and connect it to the end of the assign module. Double click on it and change the type as expression, value as Amount Lost3, tally set name as Lost Quantities3, set index as Type3 and tick the record into set. Connect it to the exit of the sub-model. 31. Close the third sub-model. Click on run and select the run setup, change the replication length as 365 and time units as days and change the hours per day to 12. Keep the run base time as hours. 32. Click go to simulate the model.
Model
29
Figure 4.1:Modelling Screenshot
30
Figure 4.2:Modelling Screenshot
31
22:20:43
User Specified
March 25, 2012

Replications:
Multi-Product Multi-Store Modelling Replication 1 Time Persistent

Time Persistent Store1 Onion Lost Store1 Papaya Lost Store1 Tomato Lost Store2 Onion Lost Store2 Papaya Lost Store2 Tomato Lost Store3 Onion Lost Store3 Papaya Lost Store3 Tomato Lost
Average Half Width Start Time:
0.00
Stop Time:
4380.00
Time Units: Hours
Minimum
Maximum
967.69 385.12 3045.66 98.56 788.01 831.31 6.577 102.00 96.367
(Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated)
0 0 0 0 0 0 0 0 0
18,233.98 2,753.91 16,673.07 6,276.06 3,037.67 6,898.23 2,717.62 440.47 3,352.05
Output
Output Store1 OnionDump% Store1 Papaya Dump% Store1 TomatoDump% Store2 OnionDump% Store2 Papaya Dump% Store2 TomatoDump% Store3 OnionDump% Store3 Papaya Dump% Store3 TomatoDump%
Value
0.0381 0.1879 0.1560 0.0978 0.2687 0.1113 0.0013 0.2226 0.1538
32
Results The following table shows a comparison between the simulated values and the actual values. There are slight variations between the simulated values and actual values. The Annual Average Daily dump for each of the consumable is got from the Avg Daily Invoice-Avg. Daily Sales. Note: Quantities are measured in Kg. Store 1 Table 4.1:Result of Simulation (Store 1) Store 2 Table 4.2:Result of Simulation (Store 2) Store 3 Table 4.3:Result of Simulation (Store 3) Average Daily Sales Table 4.4:Average Daily Sales Onion Tomato Papaya Average Daily Dump Table 4.5:Average Daily Dump Store 1 2.83 10.05 1.52 Store 2 0.31 2.54 2.33 Store 3 0.03 2.56 0.45 Store 1 47.12 35.63 6.02 Store 2 16.88 16.35 5.99 Store 3 7.41 6.62 0.75
Onion Tomato Papaya Inference
The simulation was run for 365 days based on the demand pattern for each of the consumable for each store. The simulated results are based on the validated input data and since the results are close to the actual values it means that the model is valid and it is a replication of the actual system. The actual values are obtained from the ERP System of the Company. 33
There are deviations from the actual values may be due to the fact that the yearly dump pattern is considered and it is simulated for the entire year. A better way would have been to generate the monthly demand pattern (based on daily sales) and simulate for each month. The quantum of data would be very large and it would be very time to generate. This might have resulted in getting values even closer to the actual values. Among the Dump being analysed, Store 3 has the least wastage for Onion. This can be because of perfect forecasting. When we take a look at the three commodities onion has the lowest dump % being 0.03,0.09, 0.001 for Stores 1,2 and 3 respectively. This is because it has got the longest shelf life among the vegetables. The daily forecast for onion needs to be corrected for Store 1.Forecasting for Stores 2 and 3 are perfect. Store 1 has had an improper forecast for tomato which has resulted in a yearly dump of 3045 kg. leading to a wastage of around Rs.30450 /store /vegetable annually.(Tomato annual avg. cost Rs10.per Kg.). Store 2s tomato dump is lesser compared to Store 1 which comes to about 2.54 kg per day and 2.56 kg per day respectively. It is better to have a perfectly pull system for tomato as is it has got the lowest shelf life. Since the consumption is high for tomato the Store Merchandiser goes for additional inventory to account for uncertainty. Papaya has the highest dump percentage among these. It is because it has got a low shelf life and is highly perishable. This can be because it is not a very popular fruit variety say compared to apple or banana. Its total dump might be less compared to the other two but the dump percentage is quite high. Sales of a particular fruit might also be influenced by the regular buying trend of other consumers. The daily papaya dump averages to be 2.18 Kg. at store 2.This has to be corrected by at least 1 kg which would result in a saving of Rs 10,800 annually (Avg. Material Cost is Rs.12/Kg). Say 1 Kg. Of Papaya goes a waste, on selling the Stores might gain a profit of Rs.8/Kg. But if it goes waste, it results in a loss of Rs. 12(that is the Material Cost).The perishable commodities must be handled mainly based only on the pull system. How much the customer would require must be based on the weekly forecast and on looking at the Sales volume also based on the previous days of the week and look for the demand patterns for each of the fruits and vegetables. Necessary adjustments must be made at the advent of say Festivals, Public Holidays etc. It is better for the store to witness a stock out situation for the perishable commodities rather than incur losses due to wastage. The problem with dump is that the dump is mainly a result of stock expiry over time. There is another problem while ordering inventory. It is ordered only on Whole number quantities like say 21 kg. The daily customer buying pattern cannot be predicted and some 34
amount of stock would definitely go a waste and that is unavoidable. There is a possibility that the dump is not cleared properly and the customer might encounter the bad stock which could affect the customer shopping experience, result in bad word of mouth. This might influence the customer from buying elsewhere. The main focus must be on selling fresh fruits and vegetables to the customers rather than previous days left over inventory(which might still be in a good condition).The customers must be made aware of the fact that they are sold only fresh fruits and vegetables. This results in improved buying behaviour and intangible value addition to the supply chain besides the supply chain profitability.
CHAPTER-5 FIELD STUDY TO DETERMINE THE CUSTOMER BENEFITS DUE TO ORGANIZED RETAIL
A study was carried out at Hoskote in Bengaluru, Koyembedu Market in Chennai, Spencers Retail and some wholesale distributors, semi-wholesalers and street cart vendors were enquired regarding the prices of Tomato, Papaya and Onion. The study examined the following: Price paid by the consumer compared to the price received by the farmer in Modern Retail System Traditional System Price Realization of each Intermediary in the Traditional Channel
Traditional System Price Per Kg of Produce Price Paid by end consumer
Onion 14 28
Tomato Papaya 9 30 10 25
35
Price Received by Farmer Mark-up (%) Price Paid by end consumer to Price Received by farmer
14 2
8 3.75
10 2.5
Spencer's Retail Price Per Kg of Produce Price Paid by end consumer Price Received by Farmer Mark-up (%) Price Paid by end consumer To Price Received by the Farmer
Onion 16 25.91 16 1.61
Tomato Papaya 10 27.9 10 2.79 12 22.9 12 1.9
Traditional System
Spencers Retail
Producer Price Rs.14 ` Auction Centre/Market Yard(2% commission) Wholesaler Price Rs.17 Semi Wholesaler Price Rs.21
Producer Price Rs.16
Realization up by 14.28%
Consolidation Centre Price Rs.16
Retailer Price Rs.24
36
Price Down by 7.46%
End Consumer Price Rs.25.91
Figure 5.1: Comparison in the case of Onion
Traditional System
Spencers Retail
Producer Price Rs.9 Auction Centre/Market Yard(2% commission) Wholesaler Price Rs.14 Semi Wholesaler Price Rs.18 Retailer Price Rs.24
Realizatio n up by 11.11%
Price Down by 7% 37
Figure 5.2: Comparison in the case of Tomato
Traditional System
Spencers Retail
` Auction Centre/Market Yard(2% commission) Wholesaler Price Rs.14 Semi Wholesaler Price Rs.18
Realizatio Producer n Rs.12 Priceup by 20%
Retailer Price Rs.22
38
Price Down by 8.4%
Figure 5.3: Comparison in the caase of Papaya
Table 5.1:Traditional Distribution Vs. Spencers Retail Benefits to End Consumers: Traditional Distribution System vs. Spencer's Retail Onion Tomato Papaya Traditional System 28 30 25 Spencer's Retail 25.91 27.9 22.9 Benefit Realized by Customer(%) 7.46 7 8.4
Observations under the Traditional System There is a lack of price transparency and price awareness at both the Consumer end and the Farmer due to ignorance and illiteracy. There is a wide variation between the price at which it was sold by the farmer and the price at which it was bought by the consumer The Wholesale vegetable market which was examined had very bad hygienic conditions. The Wholesale Market was congested, unorganized and lacked the necessary storage space to handle the volume. There is a lot of wastage at the Wholesale Market at the end of the day On an average there is a cumulative wastage of 28 % that occurs from the distributor end to the retailer end. Wastages are due to multiple handlings, poor bagging without crating, lack of Cold Storages and Chill Rooms to extend the shelf life and poor infrastructure(roads, warehouses, market yards)
39
There is a huge realization among the middle men for non value added activities and the price has to be borne by the end consumer.
Observations at Spencers Retail The Farmers are under the contract of Spencers Retail which gives them the forecast(day wise/week wise/month wise) so that the farmers can plan for their cultivation accordingly which reduces the wastage at the Farmers end and direct procurement results in better realization. The Farmers are given specification regarding the shape and size and crops are tailor made according to Spencers requirement. Spencers buys only the best quality from the farmers and the supply from the farmers is fresh and free from defects. Integrated Crop Management (ICM) and Integrated Pest Management (IPM) also allowed prolonged crop production leading to off season supply late in the season. One of the key changes introduced was grading of fruits and vegetables. Due to the amount of time expended, and the perception that grading would lead to lower returns, farmers consistently resisted grading produce. Spencers had trained farmers to grade the fruits and vegetables based on quality and consistency of produce. Spencers regularly procures the best grades. As farmers came to realize which grades fetched them the highest returns they made greater efforts to bring the quality of their produce upto that level. Farmers who started with only 30% of their produce in grade A, by the end of the first year had 90% of their produce in this grade. It goes to the stores the next day itself and the F&V retain their freshness. The benefits of direct procurement and elimination of middle men are passed on to the end consumers who pay lesser than the price at a regular retail. There are lesser number of handlings which results in reduction in wastage. The Spencers Retail stores are well organized, spotless and offer a better shopping experience to the consumer.
40
CHAPTER-6 MARKETING RESEARCH TO STUDY THE CUSTOMER SIDE OF THE SUPPLY CHAIN
6.1 OBJECTIVES
To increase the retailer performance To improve and gain better control of supply chain. To evaluate the performance of Retailer. To analyze the various parameters that determines the choice of Consumer in Spencers.
6.2 RESEARCH METHODOLOGY
Research Design
The research design which was selected was narrative one. It narrates the whole research in a simple manner.
41
Types of Data Collected Primary Data Questionnaires are prepared and interview was conducted. Most of the questions are
consist of multiple choices. Generally 23 questions are prepared and asked to the customers. Secondary Data Secondary data was collected from Internets, various books, Journals, and Company Records. Questionnaire Construction In this, the Questionnaire was constructed on the basis of two types. There are Multiple choice and Close ended ( Yes/ No) Questions.
Defining the Population The Population or Universe can be Finite or infinite. The population is said to be
finite if it consist of a fixed number of elements so that it is possible to enumerate it in its totality. This projects consist of a finite population.
Sample Size The sample size is 50.
Field Work The field works is done in Spencers Retail located in Nelson Manikkam,Chennai
Period of Survey The period of survey is from Dec 2011 to Jan 2012.
Statistical Tools Used Percentage Method In this project Percentage method test was used. The following are the formula
42
No of Respondent Percentage of Respondent = _____________________ Total no. of Respondents x 100
Simple Correlation
In probability theory and statistics, correlation, also called correlation coefficient, indicates the strength and direction of a linear relationship between two random variables. In general statistical usage, correlation or co-relation refers to the departure of two variables from independence.
Formula:
r=
(X-Xi) (Y-Yi)
(X-Xi) 2 (Y-Yi) 2 Where X- Reason for repurchase Y-Preference of respondent
43
6.3 DATA ANALYSIS AND INTERPRETATION
Percentage Method - General Information
SEX OF THE RESPONDENT
Table 6.1:Sex of the Respondent S.NO 1 2 OPTIONS MALE FEMALE NO OF RESPONDENTS 22 28 50 PERCENT 44.0 56.0 100.0
TOTAL
Source: Primary Data
Inference: From the above table it is inferred that out of 50 samples, 44% of the Respondents are male and 56% of the respondents are female. 44
100 90 80 70 60 50 40 30 20 10 0 M ALE FEM ALE
SEX
Chart 6.1:Sex of the Respondents OCCUPATION OF THE RESPONDENTS
Table 6.2:Occupation of the Respondents S.NO 1 2 3 4 OPTIONS Business Employed Unemployed Student Total NO OF RESPONDENTS 5 21 22 2 50 Source: Primary Data PERCENT 10.0 52.0 34.0 4.0 100.0
Inference: From the above table it is inferred that out of 50 employees, 10% run their own business,4% of the Respondent occupations are students employed and 34% are unemployed. 52 % of the respondents are
45
100 90 80 70 60 50 40 30 20 10 0 BUSINESS EMPLOYED UNEMPLOYED STUDENT
OCCUPATION
Chart 6.2:Occupation of the Respondents
INCOME GROUP OF THE RESPONDENTS
Table 6.3:Income Group of the Respondents S.NO 1 2 3 4 OPTIONS <20,000 p.m. 20,000-50,000 p.m. 50,000-1,00,000 p.m. >1,00,000 p.m. Total NO OF RESPONDENTS PERCENT 23 19 6 2 50 Source: Primary Data 46.0 38.0 12.0 4.0 100.0
Inference: From the above table it is inferred that out of 50 employees, 46% earn less than 20,000 per month,38% earn between 20,000-50,000 per month,12% earn between 50,0001,00,000 per month and only 4% earn greater than 1,00,000 per month. 46
100 80 60 40 20 0 <20,000 20,00050,000 50,0001,00,000 >1,00,000 INCOME GROUP
Chart 6.3: Income Group of the Respondents
NO. OF MEMBERS IN THE FAMILY
Table 6.4:No. of Members in the Family S.NO 1 2 3 4 OPTIONS 2 3 4 >4 Total NO OF RESPONDENTS 3 15 20 12 50 Source: Primary Data PERCENT 6 30.0 40.0 24.0 100.0
Inference: From the above table it is inferred that out of 50 samples, 6% of them are a part of a family with 2 members, 70% of them have 3-4 members in their family and 24% of them have more than 4 members.
47
100 90 80 70 60 50 40 30 20 10 0 2 3 4 >4 NO. OF MEMBERS IN THE FAMILY
Chart 6.4:No. of Members in the Family PURCHASE OF FRUITS AND VEGETABLES
Table 6.5:Purchase of Fruits and Vegetables
S.NO 1
OPTIONS From street vendors selling in carts From unbranded Retail stores From Spencers Retail From other Organized Retail Total
NO OF RESPONDENTS 8 11 31 3 50 Source: Primary Data
PERCENT 16.0 22.0 62.0 6.0 100.0
2 3 4
Inference: From the above table it is inferred that out of 50 samples who shop at Spencers , 16% buy from Street Cart Vendors,22% buy from unbranded Retail Stores,62% buy from Spencers and 6% buy from similar stores. 48
100 90 80 70 60 50 40 30 20 10 0 C ARTS LO CAL VENDO RS SPENC ER'S O THER RETAIL PURC HASING FRUITS AND VEGETABLES
Chart 6.5:Purchase of Fruits and Vegetables
PRICE OF OUR PRODUCTS
Table 6.6:Price of our Products S.NO 1 2 3 4 OPTIONS High Medium Normal Marginal TOTAL NO OF RESPONDENTS 13 15 20 2 50 Source: Primary Data PERCENT 26.0 30.0 40.0 4.0 100.0
Inference:
From the above table it is inferred that out of 50 samples,26% feel that the Prices
are High,30% feel it is medium,40% find it normal and 4% find it marginal.
49
100 90 80 70 60 50 40 30 20 10 0 HIGH MEDIUM NORMAL MARGINAL PRICE
Chart 6.6:Price of our Products PRODUCTS YOU USUALLY BUY AT SPENCERS
Table 6.7:Products you usually buy at Spencers S.NO 1 2 3 4 OPTIONS Fruits and Vegetables Groceries, Meat, Dairy Products and other consumables Non edible goods More than one of the above TOTAL NO OF RESPONDENTS 7 5 10 28 50 Source: Primary Data PERCENT 14.0 10.0 20.0 56.0 100.0
50
Inference: From the above table it is inferred that out of 50 samples, around 56% shop for a variety of Products and only 14 % come exclusively for fruits and vegetables.
100 90 80 70 60 50 40 30 20 10 0
V F& E OC GR ,ME IES R Y AIR T,D A N NO I BL ED ES OF B EA TH E OV
BOUGHT AT SPENCER'S
E ON AN H ET OR M
Chart 6.7:Products you usually buy at Spencers
WHY DO YOU PREFER SPENCERS?
Table 6.8:Why do you Prefer Spencers? S.NO 1 2 3 OPTIONS Price Quality Spencers Brand NO OF RESPONDENTS 10 24 7 PERCENT 20.0 48.0 14.0
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All the above TOTAL
9 50
18.0 100.0
Inference:
From the above table it is inferred that out of 50 employees,48% of the
Respondents prefer Quality, 20 % of the Respondents prefer Price 14% prefer it for the brand 18% for a combination of these.
100 90 80 70 60 50 40 30 20 10 0 PRICE QUALITY S PENCER'S BRAND ALL OF THE ABOVE PURCHAS E OF F& V AT SPENCER'S
Chart 6.8:Why do you Prefer Spencers? ARE THE PRODUCTS ACCORDING TO YOUR NEED?
Table 6.9: Are the Products according to your need? S.NO 1 2 OPTIONS Yes No TOTAL NO OF RESPONDENTS 48 2 50 PERCENT 96.0 4.0 100.0
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Inference:
From the above table it is inferred that out of 50 Respondents.96% of them feel
that Spencers caters to their requirement of Fruits and Vegetables and only 4% feel it does not.
100 90 80 70 60 50 40 30 20 10 0 YES NO F & V AT SPENCER'S AVAILABLE ACCORDING TO NEEDS
Chart 6.9: Are the Products according to your need?
HOW OFTEN DO YOU BUY FRUITS AND VEGETABLES FROM US?
Table 6.10: How often do you buy Fruits and Vegetables from us? S.NO 1 2 3 4 OPTIONS Very Often Often Sometimes Never TOTAL NO OF RESPONDENTS 2 28 7 13 50 PERCENT 4.0 56.0 14.0 26.0 100.0
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Inference:
From the above table it is inferred that out of 50 respondents, 60% buy F&V
from Spencers Often or Very Often,14% buy occasionally and 26% of them do not buy.
100 90 80 70 60 50 40 30 20 10 0 VERY OFTEN OFTEN SOMETIMES NEVER PURCHASE OF F& V AT SPENCER'S
Chart 6.10: How often do you buy Fruits and Vegetables from us?
HOW WAS YOUR SHOPPING EXPERIENCE?
Table 6.11: How was your shopping experience? S.NO 1 2 3 4 OPTIONS Very Happy Happy Neutral Unhappy TOTAL NO OF RESPONDENTS 15 19 11 5 50 Source: Primary Data PERCENT 30.0 38.0 22.0 10.0 100.0
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Inference: From the above table it is inferred that out of 50 Respondents,68% are happy or veryhappy,22% felt neutral and 10% were unhappy.
100 90 80 70 60 50 40 30 20 10 0 VERY HAPPY HAPPY NEUTRAL UNHAPPY CUSTOMER'S SHOPPING EXPERIENCE
Chart 6.11: How was your shopping experience? ARE THE WORKING HOURS OF THE STORE TO YOUR CONVENIENCE?
Table 6.12: Are the working hours of the store to your convenience? S.NO 1 2 OPTIONS Yes No TOTAL NO OF RESPONDENTS 46 4 50 PERCENT 92.0 8.0 100.0
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Inference:
From the above table it is inferred that out of 50 Respondents,92% feel the
working hours are convenient and 8% feel inconvenient working hours.
100 90 80 70 60 50 40 30 20 10 0 YES NO CONVENIENT WORKING HOURS
Chart 6.12: Are the working hours of the store to your convenience?
ARE YOU SATISFIED WITH THE STORE EMPLOYEES?
Table 6.13: Are you satisfied with the store employees? S.NO 1 2 3 4 OPTIONS Highly Satisfied Satisfied Neutral Not Satisfied NO OF RESPONDENTS 11 21 16 2 PERCENT 22.0 42.0 32.0 4.0
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TOTAL
50
100.0
Inference:
From the above table it is inferred that out of 50 Respondents, 64% are
satisfied,32% have a neutral opinion and 4% are not satisfied.

100 90 80 70 60 50 40 30 20 10 0 HIGHLY SATISFIED SATISFIED NEUTRAL DISSATISFIED SATISFACTION WITH SPENCER'S STAFF
Chart 6.13: Are you satisfied with the store employees?
RATE THE QUALITY OF FRUITS AND VEGETABLES FROM OUR STORE.
Table 6.14: Rate the Quality of Fruits and Vegetables from our Store. S.NO 1 2 OPTIONS Yes No TOTAL NO OF RESPONDENTS 42 8 50 PERCENT 84.0 16.0 100.0
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Inference:
From the above table it is inferred that out of 50 Respondents,84% are satisfied
with the quality and 16 % of them are not satisfied.

100 90 80 70 60 50 40 30 20 10 0 GOOD BAD QUALITY OF F&V
Chart 6.14: Rate the Quality of Fruits and Vegetables from our Store.
DO YOU FIND OUR FRUITS AND VEGETABLES FRESH?
Table 6.15: Do you find our Fruits and Vegetables Fresh? S.NO 1 2 OPTIONS Yes No TOTAL NO OF RESPONDENTS 28 22 50 PERCENT 56.0 44.0 100.0
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Inference:
From the above table it is inferred that out of 50 Respondents,56% are satisfied
with the quality and 44 % of them are not satisfied.
100 90 80 70 60 50 40 30 20 10 0 GOOD BAD FRESHNESS OF F&V
Chart 6.15: Do you find our Fruits and Vegetables Fresh?
ANALYSIS BY CORRELATION BETWEEN CUSTOMER SHOPPING EXPERIENCE AND FRESHNESS OF FRUITS AND VEGETABLES
Table 6.16: Correlation Analysis Factors Customer Shopping Experience Good Bad 34 16 28 22 9 -9 3 -3 81 81 60 60 9 9 Freshness X-Xi Y-Yi (X-Xi)2 (X-Xi)(Y-Yi) (Y-Yi)2
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Total
50
50
162
120
18
Xi = 50/2= 25 Yi = 50/2 =25
Formula: r = (X-Xi) (Y-Yi) (X-Xi)2 (Y-Yi)2
Calculation: =120/(18*162) =0.04 Inference: The value of r is 0.04. it indicates that there is a positive correlation between freshness and customer shopping experience. 6.4 FINDINGS OF STUDY 44% of the Respondents are male and 56% of the respondents are female. 10% run their own business,4% of the Respondent occupations are students 52 % of the respondents are employed and 34% are unemployed. 46% earn less than 20,000 per month,38% earn between 20,000-50,000 per month,12% earn between 50,000-1,00,000 per month and only 4% earn greater than 1,00,000 per month. Among those who purchase,6% of them are a part of a family with 2 members, 70% of them have 3-4 members in their family and 24% of them have more than 4 members. Among those who purchase at Spencers , 16% buy from Street Cart Vendors,22% buy from unbranded Retail Stores,62% buy from Spencers and 6% buy from similar stores.
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26% feel that the Prices are High,30% feel it is medium,40% find it normal and 4% find it marginal. 56% shop for a variety of Products and only 14 % come exclusively for fruits and vegetables. The reason for preference to Spencers was analyzed.48% of the Respondents prefer Quality, 20 % of the Respondents prefer Price 14% prefer it for the brand 18% for a combination of these. 96% of them feel that Spencers caters to their requirement of Fruits and Vegetables and only 4% feel it does not. 60% buy F&V from Spencers Often or Very Often,14% buy occasionally and 26% of them do not buy. With Store Employees, 68% are happy or veryhappy,22% felt neutral and 10% were unhappy. 92% feel the working hours are convenient and 8% feel working hours to be inconvenient. On shopping experience,64% are satisfied, 32% have a neutral opinion and 4% are not satisfied. With the Quality 84% of them seem satisfied and 16% of them are not. 56% are satisfied with the freshness and 44 % of them are not satisfied. There is a positive correlation between customer shopping experience and freshness of fruits and vegetables.
6.5 LIMITATIONS OF THE STUDY Due to the lack of time, we were unable to collect more information from Customers. Some customers be may afraid to share information. Ignorance from the customer side could result in the wrong information. The customers view might not be accurate. The views would be definitely subject to biases and perceptions. The whole population cannot be studied due to Selection of limited Samples the
6.6 SCOPE FOR FURTHER STUDY
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The project throws on the needs for understanding the customer end of the supply chain as the customer is the one who pays for the products. This study was undertaken to help the organization understand the customers needs. It will be helpful for the management to identify the needs of the consumer and make necessary decisions regarding marketing, operations and supply chain. This project can be the base for the students who are doing a field study in related areas and for the organization to take up further studies to understand the buying behavior.
6.7 RECOMMENDATIONS TO IMPROVE RETAILER PERFORMANCE AND CUSTOMER SATISFACTION The suggestions are gathered from public to improve the responsiveness of the fruits They have to study their overall supply chain performance and define metrics for
and vegetables supply chain towards the customer side. better clarity and understanding regarding what goes on at each end of the supply chain. Other than the overall profitability, profitability at each link of the supply chain has to They have to focus on other forms of FMCGs as customers look for a wide array of be measured and it must be maximized. products. Opening up of hypermarkets would benefit both the customer and retailer as it would provide everything under one roof. The location of the Retail Store plays a crucial role as accessibility would ultimately influence whether the customer would come to buy. The location must be based on where it is needed rather than where the real estate is available. The infrastructure in the form of footpaths to the store, car parking spaces influence the Introducing private labels would help the consumer.In-store labels are cheaper because customer choice towards a retail store by a large extent. they cut out middlemen costs and pass on the benefit to the consumer. Private labels enhance the bargaining power of the retailer while negotiating with manufacturers and suppliers.In the long run, the retailer can use the Private Labels to attract customers to the outlet. The company could go on an image rebuilding exercise and re-create the brand image Home Delivery systems using the E-Commerce model could be adopted. This requires through viral marketing, innovative advertising, social media marketing etc. heavy investment in logistics and other support infrastructure. This would play a crucial 62
role and would form a large part of their sale in the upcoming years. Although there are small enterprises that operate on this model, there is no front runner who is leading the market in this form of business. For all the convenience that it offers, electronic retailing does not help the products where `look and see' attributes are of importance, as in fruits and vegetables, or where the value is very high, such as jewellery, or where the performance has to be tested, as of consumer durables. The most critical issue in electronic retailing relates to payments and the various security issues involved. Outsourcing their logistics to a 3PL would help cut down costs but there is an absence The store visibility is very crucial .Some Stores are not distinctly visible on the street There is a reduced shoppability due to improper layout design and space not being Added to discounts and reduced prices, companies can offer innovative value added of a mature 3PL player to provide high levels of service at competitive prices. outside due to a smaller display boards. They have to be replaced with larger ones. effectively utilized. services like happy hours on shopping deals offers for senior citizens, contests for students, lottery gains, etc. Proper workforce management is important and training needs to be given to the staff. Investment in CRM and consumer research analytics is necessary. Customer Advisory The staffs poor customer interaction skills is an issue which needs to be addressed. Boards (CABs) could be set up as a measure for receiving valuable customer feedback. Through CABs the management could get closer to customers and give them a platform to voice their opinions about the stores. CABs usually consist of influential people of the community who hold meeting and collect feedback from consumers. The feedback is then assessed and implemented by management to develop better customer relationships. Backward integration is necessary. There is a need to reduce the number of
intermediaries so as to increase the efficiency and profitability of retailers. One way to do that is to integrate the functions of the supply chain there have been initiatives in this regard in rural India following the governments approval of contract farming and land leasing. This is likely to allow accelerated technological transfer, capital inflows and assured market for crop production. This is likely to eliminate the intermediaries sucking away a large chunk of the margins. Spencers Consolidation Centres strategic positioning is an example of a vertical co-ordination leading to an efficient supply chain.
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IT has helped retailers improve forecasting, accuracy, reduce stock-outs, increasing
sourcing efficiency, increasing product movement visibility, reducing lead time and optimizing transportation.ERP implementation has helped maintaining optimal inventory resulting in reduced input costs. Overall there is a huge market which is waiting to be served, ready to splurge, willing to explore new products and services. Retailers can tap these huge economies of scale with the help of effective supply chains implemented with an efficient Customer Relationship Management.
CHAPTER 7 CONCLUSION
Spencers intervention at the farmers end through farm management Services has ensured quality and timely supply of produce for the operations. The Farmer-Spencers relationship has helped both the farmers and the Spencers in bringing the high quality Fruits and Vegetables to the retail shelf. The project first analyzed how the customers buy from Spencers and it analysed the dump quantity and percentage of the dump and the reasons behind it.
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A Field Study was carried out to know the price differences at customer end between Traditional Retail and Spencers Retail and it showed how the Farmer and the Customer gains due to Spencers directly procuring from the farmers, the benefits of direct procurement and elimination of middle men which are passed on to the end consumers who get a reduced price than the regular retail. Then a Marketing Research was carried out to study the customer buying behaviour, customer satisfaction and find out the correlation between customer shopping experience and the freshness of fruits and vegetables. The results of these studies helped in analyzing and knowing the factors which would help in improving the effectiveness and efficiency of the Supply Chain, improving the profitability delivering value to the Customer end of the supply chain. The analysis and recommendations were presented before the Organization which had acknowledged to make changes based on the recommendations and findings if feasible. Some changes are easy to implement and since most suggestions might involve huge changes in the Companys Operational Strategy and are capital intensive they have to be carefully studied by the companys experts and the cost benefit analysis of the implementation would have to be carried out.
REFERENCES
1. Lancioni, Richard A. January 2000; New Developments in Supply Chain Management for the Millenium ; Industrial Marketing Managemen; 29. 2. Raghunath, S and D, Ashok; Delivering Simultaneous Benefits to the Farmer and Common Man: Time to Unshackle the Agricultural Produce Distribution System. 3. Chopra, Sunil and Meindl, Peter. Supply Chain Management. 4. Drucker, Peter. The Practice of Management.
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5. Lehmann, Donald R. Marketing Research. 6. Altiok, Tayfur and Melamed, Benjamin. Simulation Modelling and Analysis with ARENA. 7. Dilts, David M and Zhong, Yang. System Dynamics of Supply Chain Network Organization Structure. 8. Cooper, Martha C and Lambert, Douglas M. Issues in Supply Chain Management. 9. Bowersox, Donald and Closs, David; Supply Chain Logistics Management.
APPENDIX
QUESTIONNAIRE
1. Sex a) Male b) Female
66
2. Occupation a) Business b) Employed c) Unemployed d) Student
3. Income group a) <20000 per month b) 20001 to 50,000 per month c) 50,000 to 1,00,000 per month d) >1,00,000 per month
4. No. of Members in the family a) 2 b) 3 c) 4 d) >4
5. Where do you usually purchase your fruits and vegetables? a) From street vendors selling in carts b) From Spencers Retail c) From Unbranded Retail d) From other Organized Retail
67
6. Please rate your satisfaction with the pricing of our fruits & vegetables. a) High b) Medium c) Normal d) Marginal
7. Which products do you usually buy at Spencers? a) Only Fruits and Vegetables b) Only Groceries, Meat, Dairy Products and other consumables c) Only non-edible goods d) More than one of the above
8. You prefer Spencers Retail because of its . a) Price b) Quality c) Brand name d) All of the above
9. Are the Fruits and Vegetables available according to your needs? a) Yes b) No
10. How often do you buy fruits & vegetables from us? a) Very often 68
b) Often c) Occasionally d) Never
11. How would you rate your shopping experience? a) Very Happy b) Happy c) Normal d) Unhappy 12. Are the working hours of the shop to your convenience? a) Yes b) No
13.
What is your satisfaction level with the store employees?
a) Highly satisfied b) Satisfied c) Neutral d) Dissatisfied
14. Do you find the quality of our fruits & vegetables to be good? a) Yes b) No
15. Do you find our fruits and vegetables fresh? a) Yes
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b) No
SALES REPORT
January
70
Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard 2,315.5 5 310.67 455.84 1,549.0 4 2,157.1 1 324.18 491.63 1,341.3 0 445.98 41.56 162.54 241.88
Dump
48.206 1.875 13.96 32.371 367.99 6 148.77 8 56.2 163.01 8 64.736 19.96 23.51 21.266
Invoice
2,363.76 312.545 469.80 1,581.41
San-Tomato Hybrid Prem Ashok Nagar Nelson Manickam Road Velachery Fresh San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya
2,525.11 472.958 547.83 1,504.32 510.716 61.52 186.05 263.146
Ashok Nagar Nelson Manickam Road Velachery Fresh
February
Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya 1,759.63 223.2 396.68 1,139.75 1,695.94 283.75 463.74 948.45 348.51 22.93 137.99 187.59
Dump
13.996 1.49 10.36 2.146 378.05 33.261 77.752 267.037 56.093 8.55 12.16 35.383
Invoice
1,773.63 224.69 407.04 1,141.90 2,073.99 317.011 541.49 1215.487 404.603 31.48 436.083 222.973
71
March
Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya 2,328.17 292.9 535.46 1,499.81 1,924.14 360.85 526.03 1,037.26 373.85 23.58 213.15 137.12
Dump
41.618 0.7 28.22 12.698 414.906 46.04 119.849 249.017 73.63 1.686 38.24 33.704
Invoice
2,369.79 293.6 563.68 1,512.51 2,339.05 406.89 645.88 1286.277 447.48 25.266 251.39 170.824
April
Sales
Dump
29.613 0.5 15.174 13.939 447.02 83.154 78.49 285.376 112.342 4.48 48.262 59.6
Invoice
2,374.25 361.29 531.05 1,481.91 2,166.96 300.064 525.73 1341.166 499.472 18.7 259.012 221.76
72
May Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard 2,416.23 281.18 663.05 1,472
Dump
22.465 0.5 6.8 15.165
Invoice
2,438.7 0 281.68 669.85 1,487.1 7 2,383.3 0 269.757 686.26 1,427.2 9 534.114 22.04 270.81 241.264
San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya
1,836.74 189.74 567.34 1,079.66 469.45 17.18 228.69 223.58
546.562 80.017 118.92 347.625 64.664 4.86 42.12 17.684
June
Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh Ashok Nagar Nelson Manickam Road Velachery Fresh Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya 2,418.95 210.37 588.92 1,619.66 2,271.16 214.17 543.07 1,513.92 458.65 19.99 227.97 210.69
Dump
76.102 2.432 15.12 58.55 1,034.43 256.842 62.852 714.732 94.42 7.105 21.124 66.191
Invoice
2,495.05 212.802 604.04 1,678.21 3,305.59 471.012 605.92 2,228.65 553.07 27.095 249.094 276.881
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July Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard 2,448.05 190.99 551.09 1,705.97
Dump
76.775 1.23 2.4 73.145 776.79 5 87.257 77.58 611.95 8 137.01 4 39.009 83.605 14.4
Invoice
2,524.83 192.22 553.49 1,779.12
San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem
1,992.65 187.49 519.52 1,285.64
2,769.45 274.747 597.10 1,897.60
Papaya Papaya Papaya Papaya
460.65 36.3 228.49 195.86
597.664 75.309 312.095 210.26
August Sales
Dump
74.52 0.8 5 68.72 447.987 72.527 85.98 289.48 89.95 0 63.92 26.03
Invoice
2,401.90 154.13 606.50 1641.27 2,595.71 317.597 694.71 1,583.40 573.43 34.96 306.7 231.77
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September Sales
Dump
56.06 0.25 4.7 51.11 325.99 37.24 56.94 231.81 128.521 14.11 67.991 46.42
Invoice
2,056.81 176.56 528.56 1,351.69 2,046.68 149.3 682.77 1,214.61 558.301 39.93 283.821 234.55
October Sales
Dump
50.586 0.4 6.1 44.086 330.949 29.239 53.9 247.81 106.884 9.28 54.41 43.194
Invoice
1,910.57 147.74 394.23 1,368.60 1,674.77 110.799 490.85 1,073.12 432.904 28.45 152.58 251.874
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November Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya 2527.97 163.56 575 1789.41 1,543.14 100.45 473.93 968.76 275.75 10.19 144.4 121.16
Dump
37 0.7 1.8 34.5 308.625 31.666 110.245 166.714 190.201 30.039 47.399 112.763
Invoice
2,564.97 164.26 576.80 1,823.91 1,851.77 132.116 584.175 1,135.47 465.951 40.229 191.799 233.923
December
Sales
Ashok Nagar Nelson Manickam Road Velachery Fresh San-Onion Standard San-Onion Standard San-Onion Standard San-Onion Standard San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem San-Tomato Hybrid Prem Papaya Papaya Papaya Papaya 1,323.36 196 369.32 758.04 1,040.86 101.53 265.73 673.6 202.1 10.2 76.4 115.5
Dump
27.4 0.1 1.7 25.6 150.128 28.268 29.78 92.08 166.305 25.288 61.837 79.18
Invoice
1,350.76 196.1 371.02 783.64 1,190.99 129.798 295.51 765.68 368.405 35.488 138.237 194.68
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DEMAND PATTERN
Velachery
Onion Tomato Papaya NORM(1430, 266) TRIA(825, 1023, 1513) UNIF(115, 242)
Nelson Manikkam
Onion Tomato Papaya TRIA(369, 576, 664) NORM(497, 90.7) 76 + 167 * BETA(0.628, 0.433)
Ashok Nagar
Onion Tomato Papaya 147 + EXPO(78.6) 81 + 280 * BETA(0.554, 0.733) UNIF(10, 42)
RESULT OF SIMULATION
Store 1
Results of Simulation
Dump % Dump 967.69 3045.66 385.12
Actual Values
Dump % Actual Dump 0.0567 1,034.6 5 9 0.2199 3,666.6 1 6 0.2018 555.81 3 5
Onion Tomato Papaya
0.0381 0.1879 0.156
Store 2 77
Dump % 0.0978 0.1113 0.2687 Dump 98.56 831.31 788.01
Actual Values
Dump Actual % Dump 0.02 111.33 0.13 928.49 0.2799 9 850.511
Onion Tomato Papaya Store 3
Dump % Dump 6.577 96.367 102
Actual Values
Dump % Actual Dump 0.0040 4 10.977 0.2787 934.28 2 9 0.3731 164.36 7 7
Onion Tomato Papaya
0.0013 0.1538 0.2226
78

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STUDY AND ANALYSIS OF FRUITS & VEGETABLES SUPPLY CHAIN AT SPENCERS RETAIL LTD.

WITH A FOCUS ON CUSTOMER END OF THE SUPPLY CHAIN

CHAPTER-2 LITERATURE REVIEW

2.5 SUPPLY CHAIN BUSINESS PROCESS INTEGRATION

Components of Supply Chain Management are Standardisation Postponement Customisation

CHAPTER-3 ORGANISATION STUDY: Spencers Group

Figure 3.1:Spencers Retail Chain

3.5 ACTIVITIES IN DISTRIBUTION CENTRE

Passing at the Security(based on the Invoice)

Quality & Quantity Check

Receiving based on P.O.

G.R.N (Goods Received Note) given to Vendor.

Pick list (for Store wise division)

Confirm in the P.C.

Truck Loading (as per T.O.)

3.6 ACTIVITIES IN STORES

Getting Products to Shelf

Indenting & Purchase Orders (POs)

Receiving Goods in Store: From DC & CPC

Replenish Shelf from Goods Receiving Area

Managing Price Changes

Getting Products from Shelf to Customers

Managing Waste and Markdowns Segregation of damaged and expiry in store

Product Type DC supply

Treatment Dump in store.

Loss type Type C damage

Action Dump in store (shown in SAP) Dispose in store.

CHAPTER-4 MULTI STORE MULTI PRODUCT MODELLING

Software Used: ARENA 12.0

The Visio Process simulation add-in

Figure 4.1:Modelling Screenshot

Figure 4.2:Modelling Screenshot

March 25, 2012

Multi-Product Multi-Store Modelling Replication 1 Time Persistent

Time Units: Hours

967.69 385.12 3045.66 98.56 788.01 831.31 6.577 102.00 96.367

(Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated) (Correlated)

18,233.98 2,753.91 16,673.07 6,276.06 3,037.67 6,898.23 2,717.62 440.47 3,352.05

0.0381 0.1879 0.1560 0.0978 0.2687 0.1113 0.0013 0.2226 0.1538

Onion Tomato Papaya Inference

Traditional System Price Per Kg of Produce Price Paid by end consumer

Onion 16 25.91 16 1.61

Tomato Papaya 10 27.9 10 2.79 12 22.9 12 1.9

Producer Price Rs.16

Consolidation Centre Price Rs.16

Retailer Price Rs.24

Price Down by 7.46%

End Consumer Price Rs.25.91

Figure 5.1: Comparison in the case of Onion

Consolidation Centre Price Rs.10

End Consumer Price Rs.27.9

Figure 5.2: Comparison in the case of Tomato

Realizatio Producer n Rs.12 Priceup by 20%

Consolidation Centre Price Rs.12

Retailer Price Rs.22

Price Down by 8.4%

End Consumer Price Rs.22.9

Figure 5.3: Comparison in the caase of Papaya

6.2 RESEARCH METHODOLOGY

Sample Size The sample size is 50.

No of Respondent Percentage of Respondent = _____________________ Total no. of Respondents x 100

(X-Xi) 2 (Y-Yi) 2 Where X- Reason for repurchase Y-Preference of respondent

6.3 DATA ANALYSIS AND INTERPRETATION