INVENTORY MANAGEMENT SYSTEM AT BIG BAZAAR

A.SIVARAM
04224501713
BBA III A(E)

OBJECTIVE

.
To study the current practise of inventory management in Retail industry.
To study the inventory control techniques.
To analyze the current performance of inventory management at BIGBAZAAR
To analyze the growth of inventory level at BIGBAZAAR
To study the inventory turnover ratio
To analyze the cost of inventory at BIGBAZAAR.
To suggest measures to better inventory management system

Scopeofstudy:

Merchandise stocks in a retail store contribute to profits only when their sale puts
money into the cash register. In a literal sense, inventory refers to stocks of anything
necessary to do business. These stocks represent a large portion of the business
investment and must be well managed in order to maximize profits. In fact, many
small businesses cannot absorb the types of losses arising from poor inventory
management. Unless inventories are controlled, they are unreliable, inefficient and
costly.

Inventory management is primarily about specifying the size and placement of

stocked goods. Inventory management is required at different locations within a
facility or within multiple locations of a supply network to protect the regular and
planned course of Sales against the random disturbance of running out of materials
or goods. The scope of inventory management also concerns the fine lines between
replenishment lead time, carrying costs of inventory, asset management, inventory
forecasting, inventory valuation, inventory visibility, future inventory price forecasting,
physical inventory, available physical space for inventory, quality management,
replenishment, returns and defective goods and demand forecasting.

Such an analysis would lead to newer and better strategies to increase satisfaction of
Suppliers and decrease the loss due to Internal Stock management. Focus on such
Issues can lead BIGBAZAR more strategic and more profitable compare to its
competitor.


.
RESEARCHMETHODOLOGY

WhatisaResearch?
"Research and experimental development (R&D) comprise creative work undertaken
on a systematic basis in order to increase the stock of knowledge, including
knowledge of man, culture and society, and the use of this stock of knowledge to
devise new applications." (OECD (2002) Frascati Manual: proposed standard
practice for surveys on research and experimental development, 6th edition. It is
used to establish or confirm facts, reaffirm the results of previous work, solve new or
existing problems, support theorems, or develop new theories. A research project
may also be an expansion on past work in the field. To test the validity of
instruments, procedures, or experiments, research may replicate elements of prior
projects, or the project as a whole. The primary purposes of basic research (as
opposed to applied research) are documentation, discovery, interpretation, or
the research and development of methods and systems for the advancement of
human knowledge. Approaches to research depend on epistemologies, which vary
considerably both within and between humanities and sciences. There are several
forms of research: scientific, humanities, artistic, economic, social,
business, marketing, practitioner research, etc.

Formsofresearch

Scientificresearch relies on the application of the scientific method, a harnessing

of curiosity. This research provides scientific information and theories for the explanation of
the nature and the properties of the world. It makes practical applications possible. Scientific
research is funded by public authorities, by charitable organizations and by private groups,
including many companies. Scientific research can be subdivided into different
classifications according to their academic and application disciplines. Scientific research is
a widely used criterion for judging the standing of an academic institution, such as business
schools, but some argue that such is an inaccurate assessment of the institution, because
the quality of research does not tell about the quality of teaching (these do not necessarily
correlate totally).
Researchinthehumanities involves different methods such as for
example hermeneutics and semiotics, and a different, more relativist epistemology.
Humanities scholars usually do not search for the ultimate correct answer to a question, but
instead explore the issues and details that surround it. Context is always important, and
context can be social, historical, political, cultural or ethnic. An example of research in the
humanities is historical research, which is embodied in historical method. Historians
use primary sources and other evidence to systematically investigate a topic, and then to
write histories in the form of accounts of the past.
Artisticresearch, also seen as 'practice-based research', can take form when creative
works are considered both the research and the object of research itself. It is the debatable
body of thought which offers an alternative to purely scientific methods in research in its
search for knowledge and truth.

Stepsinconductingresearch:

Identification of research problem

Literature review
Specifying the purpose of research
Determine specific research questions or hypotheses
Data collection
Analyzing and interpreting the data
Reporting and evaluating research
Communicating the research findings and, possibly, recommendations

PRIMARYDATA
Data observed or collected directly from first-hand experience is known as primary data.
SECONDARYDATA
A secondary data is that data that is required to conduct the study and can be obtained
from books, journals, magazines, records etc. Secondary data is data taken by the
researcher from secondary sources, internal or external. Secondary data is collected from
following sources: Magazines and journals
Company websites.
Internet
Books

ANALYSISANDINTERPRETATION

Table No. 3.1

VALUE OF STOCK IN EACH DEPARTMENT IN RELATION TO TOTAL INVENTORY:
Name of the
Dept.

Value of the stock

(In lakhs)

Total
Inventory
(In lakhs)

Percentage

Apparels

15455.2

304854.00

5.069

Food Bazaar

13225.6

304854.00

4.388

Electronics

50624.2

304854.00

17.00

Furniture
Bazaar

45524.4

304854.00

15.00

Jewellery

180024.6

304854.00

59.05

Analysis-

This table shows the measure stock is held in jewellery department

compare to other which carries 59.05 percentage of Total Inventory.
Electronics bazaar follows Jewellery department which carries 17
percentages of total inventory. Other departments like apparels, food
bazaar, furniture bazaar carries 5, 4.5,17 percentages respectably.

GraphNo.3.1
350000

300000

250000

200000

Value of the stock

Total Inventory

150000

Percentage

100000

50000

0
Apparels

Food Bazaar

Electronics

Furniture Bazaar

Jewellery

Interpretation-

This shows there is more stock in jewellery department which shows these are the
slow moving product and it incurs more cost to handle and manage inventory
compare to other product because the cost incurred in managing inventory is directly
related to the amount of product in case of precious metal like Gold and Diamond.
Other department having average inventory in relation to customer demand.

Table No. 3.2

GROWTH OF INVENTORY LEVEL IN LAST FIVE YEAR AT BIGABAZAAR :
In inventory management the level of inventory plays an vital role . It determines
the inventroy control technique , Inventory cost and many more things.
Below table shows how the level of inventory is increasing year by year:

Year

Level of inventory
(In Crores)

Growth in percentage

April 2008

157.60

100

April 2009

275.93

175.08

April 2010

507.02

321.78

April 2011

885.96

562.15

April 2012

1,429.84

907.25

AnalysisSo from above table it shows that how fast the level of inventory is increasing year by
year in big bazaar. Generally the trend shows it is increasing rate which is un
predictable. In the year 2011 it is increased to closely 9 times more if you take April 2008
as base year. And in other years like in 2009 it is 175 percentage, in 2010-20011 the
level of inventory becomes 321 and 562 percentage respectably.

FINDINGSANDINFERENCES

There has been tremendous increase in the level of inventories year by year.

There is a increase in inventory turnover ratio from previous year.

There is no special inventory management technique.

SARATHI software now takes care about all the Ordering, Maintaining and Logistic
decision.

There are no specialized people to take care about the inventory.

There is no reverse logistic process which causes a significant part of loss in

inventory for damaged goods.

No special reordering system

The various items and products are stored at different warehouse according to the
suitability of their use near to respective Stores. But same are controlled from central
location i.e. from zonal center.

As and when product received in the store, the same is given product as well as
SAP code. These codes are decided in company itself.

Still there number of issue with suppliers

Generally BIGBAZAAR not shares its strategic information with its suppliers.

There are no proper specialized people to handle problem caused in a product at the
time of the sale.

There is no product care center for BIGBAZAAR

There is no special inventory costing method

There is a significant decrease in transportation cost.

There is a in Reduced material obsolescence

The satisfaction level of suppliers is increased from previous year

Number of suppliers also increased compare to previous year

Ordering system is quite flexible compare to other buyer.

Many of the suppliers are not satisfied with vendor help desk of BIGBAZAR

Companys inventory holding period is increasing year by year.

The cost of inventory increasing continuously from last 5 years.

Increase in inventory turnover ratio.

RECOMMENDATIONS

There should be a proper department for inventory

The company should employ the qualified people for inventory management as well as
supply chain management
The warehouse of the BIGBAZAAR should be modernized with new storage technique
like JIT.
The software system should be modernized in order to increase the clarity of
communication among various departments
There should be a specialized team to take decision like procurement, logistic and supply
chain management
The vendor help desk should be supplier friendly
There should be an adequate MIS to fulfill the customer order.
The company should have a modernized ERP system.

CONCLUSION

Indian retail sector is witnessing one of the most hectic Marketing activities of all times.
The companies are fighting to win the hearts of customer who is God said by the
business tycoons. There is always a first mover advantage in an upcoming sector. In
India, that advantage goes to BIG BAZAAR. It has brought about many changes in the
buying habits of people and changing a number of aspects in Store Management,
Inventory Management and Product Delivery. It has created formats, which provide all
items less than one roof at low rates.
The consumers preferences are changing & they are moving from Traditional Kirana
stores to Modern Retail outlet. Its the main challenge to the Modern retail outlets to
attract the customers towards them from that of competitors. To attract more customers
companies have more Inventory or stock at the store in order to satisfy the customers
demand. Again it is important the inventory should be managed in proper manner as it
act as life blood for hyper market like BIGBAZAAR. BIG BAZAAR has maintained that
uniqueness & has succeeded in attracting customers.
What truly separates successful competitors from the "also rans" in today's global
competitive race is suppliers. Many companies that the years have thrown "everything"
into the battle for competitive advantage are only now coming to admit that their best
and strongest resources are their suppliers. So Now a-days it is important to have a
good relationship with suppliers to be successful.

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