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ENTERPRISE RESOURCE PLANNING (SWE1014)

PROJECT DOCUMENTATION
TITLE: WHOLESALE TO RETAIL MANAGEMENT

GUIDED BY
Prof. KUMARESAN P

TEAM MEMBERS:
17MIS0038 - CH.NIKHIL
17MIS0337 - KALIN SHARAN PAUL
17MIS0384 - K.HARISH KUMAR
17MIS0492 - B.VENKATA SIVA KRISHNA

SLOT: C2
SITE
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SWE1014 ENTERPRISE RESOURCE PLANNING PROJECT REPORT

S No. CHAPTER PAGE No.

1. TITLE 1

2. ABSTRACT, KEYWORDS 3

3. LITERATURE REVIEW 3-5

4. ERP TOOL DESCRIPTION 5-7

5. FLOW DIAGRAM 7-8

6. DESCRIPTION OF FUNTIONAL OPERATIONS 8-10

7. IMPLEMENTATION- SCREENSHOTS 10-22

8. SUCCESS AND FAILURE OF THE ERP SYSTEM 22-25

9. REFERENCES 25
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Abstract:

The Wholesale Trade sector comprises establishments engaged in wholesaling


merchandise, generally without transformation, and rendering services incidental
to the sale of merchandise. The merchandise described in this sector includes the
outputs of agriculture, mining, manufacturing, and certain information industries,
such as publishing. The wholesaling process is an intermediate step in the
distribution of merchandise Wholesalers are organized to sell or arrange the
purchase or sale of (a) goods for resale (i.e., goods sold to other wholesalers or
retailers), (b) capital or durable non-consumer goods, and (c) raw and intermediate
materials and supplies used in production. Wholesalers sell merchandise to other
businesses and normally operate from a warehouse or office. These warehouses
and offices are characterized by having little or no display of merchandise. In
addition, neither the design nor the location of the premises is intended to solicit
walk-in traffic.

Keywords: Wholesale, Retail, Trade, Sell, Merchandise, Distribution, Supply

Literature Review:

PAPER-1:- Demand management in downstream wholesale and retail distribution


Lau, K. H. (2012). Demand management in downstream wholesale and retail
distribution: a case study. Supply Chain Management: An International Journal.

As a result of globalisation, companies nowadays are facing greater challenges in


increasing product variety and amount of customer-adapted products as well as
shortening product lifecycle (Christopheret al., 2004). These challenges have
added to the uncertainty of the demand, which requires greater responsiveness to
cater for (Chopra and Meindl, 2010). On the other hand, intense competition also
increases the pressure for being efficient. This is particularly true for the retail
industry, which usually involves a great variety of products, and hence high
inventory, and a large number of customers requiring delivery. In a conventional
retail supply chain, downstream distribution involves different types of customers,
which include distributors, wholesalers, and retailers, before the products reach the
final end users he significance of these intermediaries in the physical distribution
of products in a supply chain has long been recognised (Ballou, 1992; Lambert and
Stock,1993). A distributor serves multiple roles of being an independent
representative of a manufacturer and a collector of orders from retailers for the
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manufacturer’s products. It acts as a wholesaler to stock the goods for more


efficient distribution.

PAPER-2:- Wholesalers and Retailers in US Trade


Bernard, A. B., Jensen, J. B., Redding, S. J., & Schott, P. K. (2010). Wholesalers
and retailers in US trade. American Economic Review, 100(2), 408-13.

International trade models typically assume that producers in one country trade
directly with final consumers in another. In the real world, of course, trade can
involve long chains of potentially independent actors who move goods through
wholesale and retail distribution networks. These networks likely affect the
magnitude and nature of trade frictions and hence both the pattern of trade and its
welfare gains. To promote further understanding of how goods move across
borders, this paper examines the extent to which US exports and imports flow
through wholesalers and retailers versus ―producing and consuming‖ firms. We
highlight a number of stylized facts about these intermediaries and show that their
attributes can deviate substantially from the portrait of trading firms

PAPER-3:- Retailer buying behaviour


Hansen, T. H., & Skytte, H. (1998). Retailer buying behaviour: a review. The
International Review of Retail, Distribution and Consumer Research, 8(3), 277-
301.

With centralized buying organizations, growth in market coverage and turnover,


retailers have become gateways to the consumer markets. Therefore, knowledge
about retailers's and trade buyers' buying behaviour has become important to
producers. We review the literature on retailer buying behaviour and find that
research findings appear scattered and unrelated. Most of the previous research has
been concerned with generating lists of criteria used by retailers when deciding
whether or not to accept a new product. Other areas that have caught the interest of
researchers are: the role of buying committees, the relationship with
manufacturers, European buying alliances, the use of information, retail buyer task,
sales staff influences, acceptances of trade deals, country or origin effects and new
information technology.
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PAPER-4:- Inventory models with lateral transshipments


Paterson, C., Kiesmüller, G., Teunter, R., & Glazebrook, K. (2011). Inventory
models with lateral transshipments: A review. European Journal of Operational
Research, 210(2), 125-136.

Lateral transshipments within an inventory system are stock movements between


locations of the same echelon. These transshipments can be conducted periodically
at predetermined points in time to proactively redistribute stock, or they can be
used reactively as a method of meeting demand which cannot be satisfied from
stock on hand. The elements of an inventory system considered, e.g. size, cost
structures and service level definition, all influence the best method of
transshipping. Models of many different systems have been considered. This paper
provides a literature review which categorizes the research to date on lateral
transshipments, so that these differences can be understood and gaps within the
literature can be identified.

ERP tool Description:

ERPNext is an open source web-based system aimed at small and medium sized
businesses. It assists companies with accounting, human resource management,
sales, purchase, inventory, CRM, administration, project and task management,
manufacturing, and even website. ERPNext is built using Python, Frappe, and
MySQL. ERP systems, which stands for Enterprise-Resource Planning, are
necessary for every modern company and take care of all aspect of a business. The
main issue is that ERPs are complex and expensive due to cost of the system itself,
hardware and consulting fees. In this case web-based ERP solution is less costly to
implement and maintain.

ERPNext is the perfect example of the software that will help company to organize
and manage the work of each department. ERPNext is an open source web-based
system aimed at small and medium sized businesses. It assists companies with
accounting, project and task management, sales, purchase, inventory, CRM,
administration, human resource management, manufacturing, and even website.
This system is the most suitable for businesses in manufacturing, retail, and
distribution spheres. Extensive functionality is integrated into a single platform for
easy management. ERPNext is built using Python and MySQL as the database
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backend. The underlying web app framework is called Frappe and is a separate
platform for development and deployment of rich web applications. ERPNext has a
Model-View-Controller architecture that together with metadata modeling tools
provides flexibility: users are able to adapt the system to unique purposes of their
business without the need for custom programming. Users can use ERPNext as a
Software as a service or host it on their own.

Main ERPNext features:

 Cross-compatibility. Since ERPNext is an online tool, it can be used on a


wide variety of platforms and devices.
 Flexibility. Metadata modelling allows to customize applications without
programming.
 Comprehensive user interface. Enhanced UI was designed to be
understandable, productive and easy to use.
 Organisation: calendar, simple social network and messaging service, built-
in to-do lists and projects, time log entries, embedded reporting system with
office suite integration.
 Accounting and Billing: multi-currency and multi-country support, powerful
accounting with tax calculations, company’s chart of accounts and cost
centres, a wide range of reports, built-in tools for bank and payment
reconciliation, payment vouchers.

 Sales and CRM: reports for all company’s sales, quotations, support
requests, newsletters, management and communication with both existing
and potential customers.
 Inventory management and Manufacturing: inventory warehouses, inventory
valuations, managing the stock either batchwise or by Serial Numbers of
items. Production Planning Tool helps to plan production and materials
beforehand.
 HR: leave and attendance management, expense claims submission, payroll,
appraisals, etc.
 Website and Shopping Cart. Users can generate a fully functional and styled
website with their product catalog and shopping cart
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ERPNext shows that ERP does not need to be complex and heavy to be effective.
This system is simple, powerful, and full of features. It allows departments of
small or medium sized companies to run smoothly and communicate with one
another using resources of one unified solution. Moreover, Frappe helps to extend
ERPNext and implement custom functionality via the API or creation of fully
featured extensions for specific business needs.

Flow Diagram:
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Description of Functional Operations:

Wholesaling is one of the basic business functions and hence it originated in


ancient times. It was a natural extension of commerce. As trade expanded between
regions, ships bearing cargo brought goods to different shores. Wholesaling was
generally international, since goods arrived in ships in large quantities and were
sold and offloaded at ports.
Consequently, wholesaling was largely associated with importing and exporting.
The shipping companies and owners of stock needed a trader who could take
delivery of the entire load at the docks. It is here that wholesalers helped. They
would take the ship’s cargo and then sell in smaller lots to local traders.
Sometimes the ship owners took over this task themselves. We find a reference to
wholesale in the Middle Ages (500-1500 AD), when markets and fairs in Europe
made a distinction between wholesale and retail trade. Dealers Sold both en gros
(at wholesale) and en detail (at retail) as per the opportunity available.
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Later, wholesalers made a powerful guild and determined who could enter the
trade. Such a system was portrayed in the movie Guru, where the protagonist finds
it difficult to enter the trade initially. Trade was conducted in markets or mandis, or
transacted at fairs.
Mercantilism followed the Commercial Era (1500-1800 AD). The importance of
wholesalers grew, as it suited the then existing system of trade. The wholesaler
organized and controlled the selling functions. Wholesaling institutions evolved,
including brokers, who made bargains between merchants and traders.
Financing evolved too, as trade was financed through bills of exchange. Auctions
were held when the goods arrived and became an important method of wholesale
trade.
The Industrial Revolution ushered in mass production of goods, and with it,
changes in the wholesaling business. Modern wholesale trade emerged as factories
were setup, along with other changes such as the faster modes of transport,
improvements in communication technology, and development of organized
banking. Wholesalers linked manufacturers to retailers and then on to customers.
The marketing concept encouraged the fulfillment of consumer needs.
Wholesaling is the back end of marketing, but it is also its backbone—since
without wholesaling, factories would find it difficult to move goods. However,
even as the trade evolved into building of supply chains, the basic functions of
wholesale remained the same.

1) Customer Relation Management(CRM):


Customer and history is maintained for all communication. Customer-wise
Item rates. Party wise-items, rates, discounts. Sales order generation and
invoicing. Sales order with delivery schedule. Orders dispatch status.

2) Supply chain management (Sales and Stock Exchange):


Creation of organized distributor and dealer network. Sales order collection
form dealers and distributors. Stock transfer in distribution network.
Payment collection and due payments details. Purchase order generation
against indent. Supplier wise Quotation comparison of different item.

3) Human resource management:


Payroll is the process by which employers pay an employee for the work
they have completed. Any business with employees should have a payroll
process established; Payroll is often the largest expense for a business. An
effective and efficient payroll process will ensure that employees are paid
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accurately and consistently, keeping them satisfied with this aspect of


employment and allowing HR to focus on other areas.

4) Marketing and finance:


Planning, Organizing, directing and controlling of production activities. It
supports other functional areas in an organization such as marketing, finance
and personnel. The marketing department will find it easier to sell good
quality products and Finance department will get more funds due to increase
in sales. The personnel department will be able to manage the human
resources effectively due to better performance of the production
department.

5) Accounting:
Payroll accounting involves a company's recording of its employees'
compensation including: gross wages, salaries, bonuses, commissions, and
so on that have been earned by its employees. With holding of payroll taxes
such as federal income taxes, Social Security taxes, Medicare taxes,

Implementation –Screenshots:-

Company:
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Organization and details:


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Warehouse Core Products:

Customer Details:
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Company Organizer:

Customer Groups:
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Stock Entries:
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Stock Balance:
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Item Details:

Employee HR
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Employee Payroll Entry:

Employee Attendance:
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New Sales invoice:


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Payment :
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Sales leads:

Analysis Based on stock and market sales:


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New lead:

Sales Funnel:
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Success and Failure of the ERP system

Success of the ERP System


For many companies, the long and sometimes tedious process of selecting an ERP
system is considered easy compared to what awaits next – the ERP implementation.
Clearly, the ERP implementation is as equally important as the selection process,
although an implementation is widely considered a more complex and daunting
project which can be quite disruptive to a business especially if things go wrong. That
can be validated just by reading the numerous horror stories in the industry press
about massive scale ERP failures experienced by some of the leading and well-known
global brands. The social media sphere takes that a step further and features countless
blogs, tweets or postings by users musing about unmet expectations from their ERP
implementations. It’s not surprising then that most companies feel a deep sense of
apprehension over a pending ERP implementation. While virtually any ERP
implementation can be complex and challenging, a successful implementation can be
the norm and not the exception.

Over the years, market analysis and industry research have thoroughly studied the
primary root causes of most ERP failures. It is the proactive addressing of these
causes which undoubtedly will help ensure an ERP project ends as a success
storyrather than a failure, which can cost a company untold sums of money, wasted
time and resources and damage the bottom line. Below are the Top 10 Critical
Success Factors which directly address those root causes of ERP failures and offer
a framework to a successful implementation. These are not revolutionary or even
new ideas, but ones that have been used by myself and my consulting colleagues
here for hundreds of successful ERP implementations in a variety of industries.
These Success Factors are tried and tested and offer real world consulting insight
into the most challenging of IT projects: the ERP implementation.

Outlined below are the Success Factors which are critical to the successful
deployment of an ERP solution:
1. Strong Executive Sponsorship
2. Focused Project and Scope Management
3. Minimize / Eliminate Customizations
4. Approved Solution Design
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5. User/SME Participation and Engagement


6. Process Owner Led User Training and Sign-off
7. Documented User Procedures
8. Targeted Data Migration Strategy
9. Thorough System Testing
10. Knowledge Transfer

Failure of the ERP System


There are many factors that determine the success and failure of ERP
implementation. Failure of ERP implementation can be a result of improper
planning, unclear objective or too much customization. The major reasons why
ERP implementations fail are:
Reasons for why ERP implementations fail are: -

1. Lack of Management Participation

One of the major causes of ERP implementation failure is lack of management


backing, ERP needs the active participation of people in the organization and until
and unless management doesn’t make clear that ERP implementation is a priority
there will always chance of delay or complete ERP implementation failure.
2. Lack of Planning

Companies build a high-level plan with broad assumptions or underestimate the


amount of business change involved. Due to lack of planning many unforeseen
problems may come which causes failure of ERP implementation. The plan for a
successful ERP implementation needs to be specific, detailed and realistic
3. Unclear business objective

Business should clearly define what is their definition of success. Having a clear
destination means defining the important business processes, financial benefits,
and deadlines up front and making certain stakeholders agree how to address them.
Without a clear destination, the endpoint becomes a moving target and hence
harder to reach.
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4. Under-estimating resources required

Most common blunder to happen is with resources projected. Having a solid


understanding of the internal and external resources needed to complete the project
is critical. A correct estimation of the resources required is necessary to avoid ERP
implementation failure.

5. Unrealistic Expectation

If ERP is successfully implemented it can make the business more efficient but
realistic expectation should be set up, ERP should not be expected to perform
miracles. Vendors should make management aware of what kinds of benefit should
they expect after successful ERP implementation.

REFERENCES:
- Lau, K. H. (2012). Demand management in downstream wholesale and retail
distribution: a case study. Supply Chain Management: An International Journal.
- Bernard, A. B., Jensen, J. B., Redding, S. J., & Schott, P. K. (2010).
Wholesalers and retailers in US trade. American Economic Review, 100(2),
408-13.
- Hansen, T. H., & Skytte, H. (1998). Retailer buying behaviour: a review. The
International Review of Retail, Distribution and Consumer Research, 8(3), 277-
301.
- Paterson, C., Kiesmüller, G., Teunter, R., & Glazebrook, K. (2011). Inventory
models with lateral transshipments: A review. European Journal of Operational
Research, 210(2), 125-136.
- Li, C. G., Dong, H. M., Chen, S., & Yang, Y. (2014). Working capital
management, corporate performance, and strategic choices of the wholesale and
retail industry in China. The Scientific World Journal, 2014.
- Boute, R., Lambrecht, M., Lambrechts, O., & Sterckx, P. (2007). An analysis of
inventory turnover in the Belgian manufacturing industry, wholesale and retail
and the financial impact on inventory reduction. Wholesale and Retail and the
Financial Impact on Inventory Reduction.
- Johnston, A., Porter, D., Cobbold, T., & Dolamore, R. (2000). Productivity in
Australia's wholesale and retail trade.

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