Inventory Management at SPAR -A retail Chain

1. Inventory Management
At
Spar Hypermarket
Presented By
Ashish Sarolia
IMT Ghaziabad

2. INTRODUCTION
Spar was founded in 1932 in the Dutch city
of Zoetermeer
Headquarter is located at Amsterdam, Netherlands
It is the world's largest independent voluntary retail
trading chain and largest food retail chain
Total turnover is 40 billion dollar and operates in 34
countries
Total Number of stores stood at 12500
Employs more than 180000 persons worldwide

3. SPAR IN INDIA
Spar has a joint venture with Landmark group
and works under the corporate name of MAX
hypermarkets India Pvt. ltd.
Headquartered at Banglore
Total stores in India – 13
Store Format – Hypermarket and supermarket
Uses 'EDLP' or 'Every Day Low Price' concept

4. Major Divisions
SPAR
General
Food & Grocery Electronics Textiles Max apparel
Merchandising

5. Sub-Categories
Fresh Categories & Grocery
Dairy & Fruits & Bakery & Meat & Fish &
Staples
Frozen Vegetable Concept Poultry seafood

6. Cleaning
Aids
Liquor & Home
Tobacco Needs
Disposable
Ready food
Ware
FMCG
Personal
Beverages
Products
Snack food Prep food

8. Home
Appliances
Home
Personal Care
Entertainment
Electronics
Personal
IT Entertainment
Telecom

9. Basic
Bedding
Kitchen &
Table Bath Linen
Linen
Other
Accessory Textile Floorings
Fashion Home
Bedding accessories
Curtains

10. INVENTORY MANAGEMENT
Inventory - Goods and Materials that are
available in stock by a business
Inventory Management-The process to maintain
optimum inventory to be able to meet business
requirements and avoid over or under inventory
that can impact the financial figures

11. PURPOSE OF INVENTORY MANAGEMENT
How many units to be order
When to order
Keeping a sufficient amount of units so that
company don’t suffer from loss of business
To provide better customer service by providing
them what they want at the time of demand
Reducing operational cost by keeping optimal
quantity of stocks

12. INVENTORY PROCESS
• To get the desired amount of quantity
Receiving from Vendors
• To safekeeping the stock and protect it
Handling from any wear and tear
• To putting the stock on to the shelf in
Placing most customer friendly way
• Providing best customer service in terms
Selling of instant availability of products

13. MAIN TASKS OF INVENTORY MANAGEMENT
TEAM
Daily Dump Report preparation – It is the report
which shows the daily waste happened in F&V,
Nonveg, Concept and Bakery department
DDR includes Ideal dump percent for each sub-
category, Target for every day and target achieved
percent on each day
Internal transfer report preparation and Internal
transfer checking – This is a report that includes
transfer of products between one department to
another within the store

14. CONTD..
Daily Price change report preparation
A,B,C count – Checking of the stock
Checking the FIFO compliances
Checking the PI(Point of Inventory)
Stock Voucher creation- This contains the actual
stock quantity present in the physical form
90 days stock correction
Moving and non-moving stock check

15. ADVANTAGE OF VARIOUS REPORTS AND
CHECKS
DDR helps in better demand forecasting and also
helps in keep track of waste generation
Internal transfer report helps in keeping the
inventory figures right and to show the internal
expenditure happening
DPC helps in deciding better costing method
FIFO checking helps in better customer service
and keeping track of near expiry products
Stock vouchers shows the actual movement of
products

16. RECEIVING PROCESS
Receiving process for direct to store products
is intended to facilitate the Store DC/WH
Manager, Supervisor, CSA`s & Loss
Prevention Team to understand the various
attributes about proper receipts of the goods
that are delivered by the vendor directly at
the store for sales.

17. THE PROCESS
Delivery Schedule
Vendor Deliver
Order Placed
Order Delivery Vendor
Placed Schedule Deliver

18. CHECKING THE VALIDITY.
Validity of Purchase Order
& Invoice brought in by the
vendor is checked.
Gate pass issued with the
serial number in the order
of which the vendors stock
will be accepted.
Details passed to the
receiving staff.

19. PO – PURCHASE ORDER VALIDITY
Invoice Quantity
Higher Lower
Not Accepted
Invoice
Excess Returned corrected to the
to the Vendor available
quantity
Signed off by Vendor &
Rec Sup
Sent for GRN

20. CHECKING THE DISCREPANCY.
Discrepancy between PO and Invoice checked
by verifying both the document and are to
inform the security to call the vendor in the
order of the token number given.

21. Vendor is to unload the stock in the area
designated for receiving and the authorized
staffs are to check the stock for the following
before sending the PO & Invoice for GRN.
Quantity
Damages MRP
EAN Mfd
Code Date

22. GRN(GOODS RECEIPT NOTE) PROCESS
This is the process by which every invoice is feed into
the system
Software – Zensar Retail management System
For every incoming invoice a TI(Transfer In) number is
generated
For every outgoing invoice a TO(Transfer Out) number
is generated
These documents adjusts the stock level of DC/WH and
the store accordingly
For damaged and expired products which is to be
returned back to DC or vendor, a NRGP report is
generated
Every invoice generated have some reason code which
shows the type of transaction

23. GRN PROCESS
PO(purchase order ) placed to the vendor
Vendor generates the invoice and sends a copy to store(PRD-
pre receiving document )
Goods received at receivables area and invoice is matched
GRN number is generated, stock information updated into
the system and goods are send to the shop floor
For any damaged or expiry product NRGP report generated .If
return back agreement is there then send the product back to
vendor otherwise send it to dump area

24. INVENTORY CATEGORIZATION
Whole Inventory is being divided into 3 categories on
the basis of Shrinkage and Importance
Category Total No. of Category Priority
Name SKU’s check period
A 218 Thrice in a Highest
week
B 305 Weekly Medium
C 335 Once in 15 days Low
F:Mantri Mall - ABC Category List.xlsx
*SKU(Stock Keeping Unit) – A unique identifier for
each distinct product and service that can be
purchased in business

25. CONTD..
Every Friday there is a promoter stock check
takes place
25th of every month there is a stock check for non
sellable products i.e. MAX division stock check
Each SKU is checked on its intended date. The
checking process is as follows
Physical System Diff
Diff is
Stock Stock Recheck report
checked
Check Check generated

26. RATIOS IN INVENTORY MANAGEMENT
Stock turn-around ratio – measure of the number of
times inventory is sold or used in a time period
Eg. Category Name Inventory Turn
F&V 1-2 Days
FMCG 15 Days
Textile 1 Month
Vendor Payout Ratio – measures the average
number of days a company takes to pay its suppliers
Category Name Vendor Payout Ratio
F&V 3-4 Days
FMCG 15 days
GM,Textile 2 months

27. ADVANTAGES OF INVENTORY MANAGEMENT
Prevent shortages and service delays
Track inventory levels in real time
Optimize warehouse organization
Fewer Missed Sales Opportunities
Awareness of Discrepancies

28. DISADVANTAGES OF INVENTORY MANAGEMENT
Cost incurred
More complex system

29. MAJOR DIFFICULTIES IN INVENTORY
MANAGEMENT
Difference in physical stock and system stock due
to various reason like Cross Billing and
Customer theft
Faulty SKU codes and missing EAN codes
Damaged and expired product handling
Space constraints for storing SKU’s
Wrong GRN generation

30. TYPES OF DAMAGES AND LOSSES
Manufacturing Damages
Transportation Damages
Customer caused Damages
Shrinkage
Mishandling By the sales staff