Pantaloon employs category management for its merchandising, focusing on product categories rather than individual brands. It divides merchandise into classic, fashion, and collection categories. Planning is a top-down, bottom-up process where targets are set and category managers study trends to create merchandise assortments. Category managers work with design, merchandising, and planning teams to develop products, create control charts to track orders and allocate stock, and analyze performance to improve future categories and sizes. Vendor management also aims to satisfy customers and maximize returns for all parties.

1. Stores that score
Running a successful retail enterprise is a formidable task. Dealing with multiple
products and ensuring their availability at the right place at the right time and in the right
quantities can be complex indeed, Perhaps the best way to understand the intricacies of
retailing is to learn from the experiences of those who have made a mark in the industry.
So in this chapter, we take a look at Pantaloon’s expertise in merchandising; we go
through the intense planning process at Shoppers’ Stop’s and discover what makes Ebony
north India’s retail star. Giordano’s tale of simplicity emphasises that having great
products is fine but having a specific focus is more essential and Lifestyle’s sourcing
expertise shows how the right mix of products is a perfect match for success.
Successful retailing is all about superior merchandise management:
fla
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Efficient merchandising methods prevent stagnancy and propel a retailer towards growth.
This is something that Pantaloon firmly believes in. And
this is where the company has made a difference. Against the traditional brand
management merchandising practice followed by most retailers, Pantaloon has employed
the concept of product (which it calls category management) management in its day-to-
day merchandising function. “The core assumption Pantaloon makes is that customers are
more product-driven than brand-driven, when they go shopping”, says Kishore Biyani,
MD, Pantaloon Retail. Pantaloon’s internal studies confirm this - out of every 100
customers that enter a retail store to buy a specific product 98 are not very particular
about the brand. This is primarily because there are various factors like price, quality of
the garment texture, colour and so on that influence a customer’s choice of merchandise.
So the customer’s preference for a particular brand gets overshadowed by these other
aspects, which lead to his ultimate decision. Thus, management of a category of
merchandise is a more effective tool than managing individual brands.”The whole idea of
category management as implemented by Pantaloon is to create products across the
length and breadth of a category at different price points. as in fabric, design, shape,
seasons, colour and
__________________..-‘-— %___________
importance being given to any particular brand”, says Nikhil Chandra, senior category
manager, Pantaloon Retail, The aim is to create products, which are traffic builders and
margin managers within the store, rather than brands that compete with each other. The
Pantaloon system does not lay any emphasis on the brand and does not require the
creation of shops in shops. Therefore, excessive building or spending on brands becomes
unnecessary. Instead, the company stresses on promoting a product category, thus making
brand marketing a secondary function.
.
Pantaloon’s merchandising team is divided into the category management team and the
merchandise management team. There is also a special design team. To understand the
functions of each, let us first look at the type of merchandise presented by the company.

2. The Pantaloon model differs from the others on category management, especially for the
apparel segment. Most other models start with
The Brand-Category Link:
I
gyanagement and finally end up with an individual selection
classes, sub-classes play an important function of the store due to the fact that multiple
brands and “What we have done the brands, with no
of products across various and brands. Thus, brands do role in the merchandising in other
models. This is also most other stores deal with not with own store labels. is segregate the
functions of
brand cannibalising on the
function of the other brands”, says bina
Mirchandani, chief category manager (ladies & kids). For example, John Miller is formal
and semiformal shirts, Sare is denim and casual wear, the Pantaloon brand represents
only trousers, Knighthood is evening wear, Annabelle is western wear for women over
25, while Y? is western wear for women aged between IS and 25. Thus, the significance
of the brands is limited and even at the stage of brand management the company deals
mainly with a product category (see charts ‘Priority for Products’).
The merchandise developed by Pantaloon is of three types. The first is classic - these are
products that last for one or two seasons. Then there is
fashion or style or standalone type - mainly fashion- related merchandise that stays for
one or two months. Finally, there is the collection or the stories type. Collections,
especially in womenswear, are part of fashion merchandise. In the women’s segment,
close to 60 per cent is fashion category. For men, 40 per cent of formals, 30-40 per cent
knits and 20 per cent of casuals fall under the fashion category - the rest is all core. There
are coordinated collections of tops, blouses and trousers in women and shirts, T-shirts
and trousers in men, which complement each other and can be bought as sets. For
example, a typical story for women would include two blouses, two T-shirts, one trouser,
one capri and one skirt. The collections category follows a theme and Pantaloon has
several running during the year in the different seasons. For the January-March season1
the company is planning themes like Desert Song, Ocean Blues, Blue Fin and Spirit in
womenswear Desert Song is merchandise in earth colours and batik prints - typical of a
desert Ocean Blues has products in various shades of blue with water- related prints,
while the Spirit collection is mainly
embroidered white and beige garments. For men,
I
the collections are usually based on colours and fabrics. Symphony on Ice and Cloud
Nine are some of the themes in menswear Often, accessories are developed to match with
the theme. The collections are part of fashion merchandise and enjoy a shelf life of one or
two months.

3. The lines are developed in such a way that they appeal to all age groups. In womenswear,
Pantaloon’s in-house design team’s forte is western wear For ethnic clothing, the
company mainly depends on external labels. Sometimes, the category manager for ethnic
wear may offer suggestions on the type of merchandise required and the vendors develop
this for the store. The company does not have any brand in this segment and the goods
are sold under the vendor’s labels. This saves on the double excise levy, which it would
have had to pay if it used its own name.
Before moving on, let us first understand how the merchandise functions are monitored at
Pantaloon (see chart ‘Down to the Last Detail’). It has nine departments, representing the
various products housed by the store - menswear, womenswear,
household articles, jewellery, cosmetics and
fragrances, books, music and stationery, toys and footwear. Each department has sections
within; for instance, menswear is classified into formal and casual wear This is where
category management comes in. Each sub-department is further divided into categories.
Thus, formal wear is grouped into shirts and trousers and so on. Category managers are
appointed for each of these. Currently, Pantaloon deals with 16-17 categories. Then there
are sub-categories, which primarily deal with details like stripes, checks and plains. Each
sub- category is further divided into classes, which cover fabrics like cotton, blends and
so on. Subclasses focus on styles as in sleeves and collars, among others. Here the final
stock-keeping unit (SKU) is arrived at. In apparel itself, any Pantaloon store at any point
in time, deals with as many as 17,000 different SKUs. There are 3,000 options (classes)
in apparel, each of which has at least 5 styles (sub-classes). Overall, any store stocks as
many as 36,000 different SKUs.
To keep a track of the performance of the SKUs, the company has evolved a coding
system. Each SKU
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is allotted a 14-digit code. The first 4 digits represent the department and the sub-
department, the next 2 stand for the price point, the next is the season’s collection and the
last 7 digits symbolise the design, shape, colour and size of the product The company
now plans to replace th’is code by the Universal Product Code (UPC), which is followed
internationally.
The Planning Process: -
Planning at Pantaloon is a top-down, bottom-up process. The top management forecasts
the sales for each store and category and decides the space allocation for each category
based on which targets are set for sales, gross margins, inventory turnover, discounts,
mark-ups, stock levels and net margins for each store and each category. The category
managers take a more micro approach wherein they study the category’s past
performance and trends in the marketplace. This helps them prepare a range plan,

4. procurement plan and distribution plan. The range plan deals with the merchandise mix
that the category manager feels would sell in the coming year Based on the range, its
r”’—..
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procurement and distribution plans are laid. The category manager here performs the twin
functions of vendor development and sampling of SKUs, which would finally go frito the
merchandise mix of the stores. This is known as an assortment plan. The objective is to
try and achieve the sales and return per square foot target laid down by the top
management. The category manager also provides feedback to the top management on
the ability of the category to match the sales target. We now closely examine how the
entire planning process happens once the top management lays down the sales forecast.
The Merchandising Process: .
First, the design team develops the design or a new pattern. The team is led by the visual
merchandising head and has 20 designers for product development. The design
department depends on fashion forecast magazines, exhibitions and may also visit leading
retailers in the city to understand the latest styles. Designs are developed not only for the
fashion and collections category but also for the classic segment so that
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there is something new every season. The new designs are presented to the category
management team, which consists of close to 40 people handling 16-17 categories of
merchandise. The category captain and his team is given the entire year’s budget and
sales target for the category based on which he decides whether to experiment with a new
design or not. If yes, then the category manager will first establish the total purchase
quantity of that design and the stores in which this should go. This is the most crucial
stage where the category manager prepares the merchandise control chart (see table
‘Keeping a Tab on Tags’).
This chart gives the details to be ordered from each vendor and the total cost and revenue
it would generate. It also puts out the style code for the design for all future reference.
This code gives information on the style, brand, the season for which it is ordered and the
vendor The merchandise control chart is attached to the catalogue which describes all the
styles and designs, colour options, visual merchandising and
mood of the merchandise and all the categories
within which the given style has to be
——
there is something new every season. The new designs are presented to the category
management team, which consists of close to 40 people handling 16-17 categories of
merchandise. The category captain and his team is given the entire year’s budget and
sales target for the category based on which he decides whether to experiment with a new

5. design or not. If yes, then the category manager will first establish the total purchase
quantity of that design and the stores in which this should go. This is the most crucial
stage where the
category manager prepares the merchandise
control chart ç b on JaQSj::
a
This chart gives the details to be ordered from each vendor and the total cost and revenue
it would generate. It also puts out the style code for the design for all future reference.
This code gives information on the style, brand, the season for which it is ordered and the
vendor The merchandise control chart is attached to the catalogue which describes all the
styles and designs, colour options, visual merchandising and mood of the merchandise
and all the categories within which the given style has to be
manufactured. For Desert Song, for example, the catalogue gives the various colours and
fabrics to be used, the number of blouses, trousers, skirts, capris and so on which would
be made under the collection, the visual merchandising plan and the mood plan. The
mood for the line comes from a single dried out tree standing in the midst of the desert,
with major use of earth, brown, beige and maroon colours and big prints. Thus, the entire
selection of colours, designs and patterns revolves around this mood.
Then the merchandise team comes into the picture. Each category team has a
merchandiser who helps in sourcing the right kind of material as per the specifications
given by the category manager and is responsible for the quality and timely delivery of
the merchandise. They also negotiate for prices with the vendors. At Pantaloon, almost 70
per cent of the menswear and 50 per cent of womenswear merchandise is produced by
Pantaloon Industries t..j a group company. The company has 25-35 private
vendors. The category manager is involved in the negotiation process with external
vendors whereas for in-house vendors, merchandisers handle the
entire deal.i_.,i______r.d Along with the details on the products to be manufactured, the
category manager also has to
give the time and place of delivery to the vendor, which emerges from the micro-
merchandising chart. This chart details the product category, description of style, style
number (reference number), category of merchandise - story or classic or fashion, ratio of
sizes, colour, store of allocation, time and place of delivery to the warehouse or the store.
The column listing total number of pieces helps in tracking the movement of merchandise
across the stores (see table ‘How Much of What Goes Where & When’).. The micro-
merchandise chart is the allocation plan of the company and is based on the ratio of sizes
in each merchandise category (see table ‘Sorting out Sizes’), Fqr example in
womenswear, Pantaloon has 4 sizes - small, medium, large and extra large. The
merchandise control chart is the basis of open-.. to-buy (OTU), which defines the month-
on-month or season-on-season purchases by each store, based on the opening stock and
closing stock situation.
Thus,

6. Opening stock + sales - closing stock = Open to buy.
The company makes the 0Th for the season on which the micro-merchandising chartis
based. The basis of OTS is the merchandise control chart which, in turn, is derived from
the inputs received from the designers for the forthcoming seasons of the year and the
analysis of past performance.
The table ‘Sorting out Sizes’ shows the OTS for the past season. Here the key is the
analysis of the closing stock of merchandise. Pantaloon follows a principle that the
closing stock of the merchandise should be equivalent to at least two-months’ sales. This
rule is based on the past studies of the merchandise mix and the average requirement of
stock. So if the season was for 4 months then the two-months sales for each size is given.
The table clearly shows that while small size has the right proportion of closing stock, the
medium and large sizes are under-stocked and the extra large size is over-stocked. This
implies that Pantaloon may have missed out on some potential sales in the medium and
large categories whereas the buying decision for the extra large size was totally wrong.
This
forms the basis of next season’s ratio between sizes. Now, the company would see to it
that it buys
higher quantities of medium and large sizes and lower quantities of extra large sizes in
ladies’ blouses, irrespective of the story it is presenting in the store. So the design team
decides which design will sell whereas the quantities that should be purchased are
calculated by the category management team based on their analysis of past sales
performance across various styles and sizes.
This analysis is also done on month-to-month and store basis so that the company can
generate the revised 0Th for every month and every store based on the movement of each
style. The revised 0Th is then matched with the original merchandise control chart OTS
and the original micro-merchandising chartto check:
o The movements of merchandise as compared to the plans
o Any serious deviations from the original plan
o The performance of each store as compared to the projections
o For new trends that are emerging in any store. “
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Marketing channels are often conflict ridden as manufacturers haggle to get the most for
their goods and services and retailers pit vendors against one another to get the lowest
possible prices. In recent years, this process is changing. Manufacturers and wholesalers
have come to realise that selling merchandise to retailers accomplishes little if those
retailers cannot resell it to customers who will consume the goods. Thus, their emphasis
has shifted to satisfying the customer and retailers are now less concerned with getting
the lowest possible price and more with maximising the long-term returns for all parties.
This new perspective has fostered a much closer association between retail buyers - the
people who purchase the items - and vendors/salespeople - those who sell the

7. merchandise to buyers. As a result the consumers now get what they want at the right
time and price and all members of the channel benefit
This is the drivingtorce behind Pantaloon’s vendbr
management policy. The key aspects that the
Vendor Management:
- .
company looks at while selecting a vendor are:
o Price points
o Timeliness and quantities of deliveries
oQualityofgoods
o Credit period given
o Type of inputs the vendor can provide to
P a nta loon
o His production capacity and whether he has
sales tax registration. Pantaloon does not employ a
vendor who does not have a minimum of 20-25
machines.
o His financial strength and the level of
dependence he would have on Pantaloon
o The relation he keeps with Pantaloon
o His ability to keep back-up in terms of fabric and
garments, which would also depend on his ability
to do repeat business.
While some of these factors are important in the introduction process, the others decide
the long- term relationship with the vendor Usually, the vendor approaches the company
and if approved. the quality control team conducts a survey of its facilities. The vendor is
also asked to fill in a registration form.
A. p..
The lead-time for any consignment right from the 1± design stage to delivery is 270-300
days. The company takes six months to develop the design, 45-60 days for procuring the
fabric and 30 days for manufacturing. The company also takes into account 10-15 days
for delays in transit. The company is planning a system of order cancellation, where if the
order gets delayed by over 15 days, it can get cancelled or the vendor would have to shell
out 7-15 per cent discount. It is I also introducing rules in terms of excess supplies.
Typically, in case of fashion garments, the vendors tend to supply more than the ordered
quantity due to availability of extra fabric. The company will now start a policy of
accepting only + 5 per cent variance in quantities. It has also successfully introduced the
system of getting shelf-ready merchandise in 60 per cent of the western women swear
category. This is expected to help the company bring in concepts like cross docking at the
warehouses.
The company is also developing a statistical programme to measure vendor performance
against select parameters and throw up serious deviations.

8. All the planning and strategies undergo the ultimate test when the merchandise actually
reaches the shop floor The company plans for two major seasons - spring-summer and
festive season. During January-February and July-August, the company has clearance
sales, which do not just include unsold merchandise but some fresh stock too. Thus,
Pantaloon makes clearance sales an event for which special merchandise is planned.
In terms of on-shelf strategies, Pantaloon has a clear policy for each category of
merchandise. The company gets weekly reports on Tuesdays, which it calls dump. This
data is analysed to see the movement of various types of goods. The tracking is done
based on the merchandise category
classic, fashion or collection. Every month, the company identifies the good and bad
sellers. According to company policy, a bad seller is a product that stays on the shelf for
more than 60
This would influence retaining vendors and
On-shelf Strategies:
the company’s decision on on training them.
fE
days. In case of any slow moving goods, the company analyses the results in context of
price. style, colour and size. The company believes that if the style or colour is not right
no amount of discount will help sales. So if the merchandise does not move during its
shelf life, it is just removed and kept at the warehouse for end of season sale. If the price
appears to be a deterrent, the company corrects it right away and marks down the price
immediately. The company has been able to reduce the amount of wrong decisions in
classics as it has an in-built learning on this range. But at times it does falter on the
fashion and the collections series, in which case it just removes the goods from the stores
and sells these at a discount. To its advantage, the company is present in three formats -
the Pantaloon department store, the factory outlet and the Big Bazaar. A slow moving
good is often moved to the factory outlet or the Big Bazaar, where it is discounted and
sold. The factory outlet stores also hold sales to dispose off the merchandise. In each of
these cases, the company takes the approval of the vendor and often, the vendors take
part in the sales. The company discounts the goods -- from 10-40 per
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cent -- at the factory outlet to get rid of the stock. Thus the factory outlet acts as a
liquidation agency for the Pantaloon department store.
If the goods move very fast, then the company’s action depends on the timing and type of
merchandise. In the collections range, the company’s sole aim is to get rid of the goods.
So even if the merchandise does really well, the company does not reorder the goods. The
performance of each story is documented for future reference. On the other hand, for the
classic or fashion categories, if the company can gauge the demand in the beginning of
the season, it

9. immediately increases the order sizes of future
consignments. But if it is end of the season, it just
allows the merchandise to exhaust and documents the learnings for the next season. In
any case, the company follows a policy of base stock levels for classics and so whenever
the stocks touch that point which is about two months sales, the order for replenishment
is placed directly by the supply chain management team.
Merchandise Performance Evaluation:
_____-r - -r
Finally, the company completes the season with a strategic review meeting that it
conducts every 6 months. The meeting is attended by the CEO, category managers,
assistant category managers, zonal heads, heads of various departments and the store
managers, The idea of this meeting is to sort out all the miscommunications and gaps in
the functioning of the merchandise department and the stores. All the performance data
for the season is presented to bring outthe reasons for under or over- performance. The
highlight of this meeting is the learning process. New insights on the customer,
merchandise or other aspects of the business are revealed and general issues like
competition, international retailers and world-class practices are discussed. The company
plans to have these meetings on a three-monthly basis. It is also in the process of
implementing a balanced scorecard approach. This would bring out department-specific
performance on key quantitative and qualitative parameters. For example, a typical
scorecard for the category managers would include:
o Targeted versus achieved gross and net sales in the category
o Stock turns in the category
1r
o Mark-downs in the category
o Percentage of private label sales versus other
label sales. (The company has a policy that private
label sale should not be less than 75 per cent of
total sales)
o Gross and net return on capital targeted versus
actual
o Gross and net margins
o Year-on-year growth of that category
o Addition of new stores and same store growths in
the category
o Mind to market - the amount of time the manager
took in introducing new designs.
o Sourcing leadership - this is a qualitative [actor
A rough version of the balanced scorecard was
used in the March 2001 strategic review meeting
and the company is in the process of further
streamlining this approach.
Supply Chain Infrastructure:

10. The function of the supply chain management (SCM) department starts where the
functions of the category management and merchandise I management departments end.
The SCM team is
given the entire delivery schedule of the merchandise and the store allocation schedules
with exact dates. This team handles several regional, zonal and city warehouses along
with the store warehouses (see chart ‘Taking Stock’ where the arrow lines show the
communicatiQn links between the various warehouses).
‘rach store has a warehouse, which is around 10- 15 per cent of the size of the store and
holds around 7 days inventory. The stores deal with either the zonal or city warehouse for
replenishments. Pantaloon has3zonal warehouses in bangalore, Kolkata and Mumbai and
one city warehouse in Hyderabad. The city warehouse can, in turn, deal with the zonal
warehouse for some of its requirements. The zonal and city warehouses store 7 days
inventory and use the central warehouse for refills. The company has three central
warehouses - two in Mumbai and one in Tarapore. In the future, one central warehouse in
Mumbai will be closed to form a zonal warehouse. The central warehouse keeps 2 weeks
inventory. Pantaloon also has its own manufacturing base in one of its group companies -
Pantaloon Industries.
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This company has a manufacturing warehouse which deals individually with each of the
other warehouses. However, the company is now in the process of streamlining all
commuhications and
plans to link the manufacturing warehouse with
only the central or zonal warehouse. In all, the
company maintains one-month inventory plus the inventory in transit
This maze of warehouses is not without reason. The company was mainly present in
western and southern India, with a store in Kolkata. Since Kolkata was a very different
market, the company needed to source material from the region and so had a zonal
warehouse. Sangalore was too far to feed the Hyderabad market, where the company now
has major interests. Thus, Hyderabad has its own city warehouse. The role of the zonal
warehouse is mainly to house the goods procured from the region, so that these do not
have to travel all the way to the central warehouse. Of course, the future plan is to move
to a more zone-specific structure. Here, there may be only one central warehouse to
receive common goods and each zonal warehouse would procure goods from its
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region to sell not only in stores based in the zone, but to other stores as well. As of now,
the entire structure and the communication pattern is very fluid and should become more
concrete with more stores coming up. Today, a lot of material is centrally procured - this
may change with time and so would the role of the zonal warehouses.
Bar coding of the merchandise is done at the zonal warehouses. Roughly 50 per cent of
the goods that Pantaloon receives today is pre bar coded - this means that this
merchandise is available in shelf- ready form. In this case, only one entry is made at the

11. zonal or central warehouse. The goods are then dispatched to the respective store
warehouse or are held at the zonal or city warehouse. Here, a quality check is conducted
and the goods are bar coded and sent to the stores. This entire process takes at least 3
days. The company is now moving towards cross docking and is training its vendors to
send shelf-ready goods to reduce the cycle time.
The key sources of merchandise for Pantaloon are:
o Pantaloon group companies manufacturing the in- house brands
o Vendors manufacturing only the Pantaloon in-
- — -.-.
-
house brand”
o Vendors manufacturing external labels like Freelook
Almost 7 0-80 per cent of the stocks in the store is Pantaloon in-house brands and this
makes supply chain management much simpler The SCM team, on receipt of the delivery
schedules (micromerchandising chart) from the category managers, receives the goods,
checks their quality, bar codes them and sees to it that they reach the respective stores on
time. In case of fashion and new merchandise, the purchase invoice is raised by the
category management department since the goods are under test of performance. But for
regular goods and replenishments, the SCM team raises the invoice and informs the
category management department accordingly. 60-70 per cent of the SKUs in the store
are regular goods. Usually, vendors for various goods are given the plan 3-4 months in
advance. The merchandise team normally works for three seasons.
After the goods are made shelf ready at the zonal warehouse or after they are ready for
shipping at
the central warehouse, the SCM department arranges for the transporters and courier
companies. These are decided according to the weight of the shipment and the
destination. The company has a host of transporters managing vehicles of various sizes..
It is usually the transporters responsibility to arrange the entire truckload and the reverse
loads as well. Once the goods reach the zonal warehouses, the company has its own set of
vehicles to transport the goods to stores in the area. If the stores are in different cities,
they are transported through third party transporters. Replenishment is mainly done either
at night (at Big Bazaar, for example) or early morning (Pantaloon departmental store). I
Replacements during the day are done from the
store warehouse.
Use of IT:
Pantaloon has employed ERP software Baan to better manage its merchandising
functions. The aim was to get ahead of the competition by a clear 18
to 24 months and set benchmarks in (faster) 1 response, lower inventories and (quicker)
cycle
time turnarounds. Pantaloo&s mantra is to build upon its existing retail network by
adding more space in cities where it already has a presence, as well as moving to fresh

12. markets. The company used Saan - a simple, flexible, open-ended software - to
incorporate latest business practices like category managemenL Not easy for a retailing
operation generating two mn transactions per month through 46 retail shops across the
country, totalling a data size of 15G5 every month.
The main challenge was tracking dispatch and replenishment of stocks to all the stores in
the country. These weren’t merely challenges, but primary sales drivers as well, as the
company knew it was registering lost sales due to mistimed stock allocations to various
retail outlets and inability to meet customer demands. Fixing this was critical for Panta
loon.
In Pantaloon, each department was divided into categories; the product lines too were
converted into categories based on the revenue generated by each of them. The categories
were then mapped to seven levels in the category master in Baan and 14-
digit items were assigned to these. Managing business at the category level helps the
organisation to stay focused, as each category is treated as a business unit and therefore
run as a separate business. The seven levels of category master capture the attributes of
the consumer buying process and the entire supply chain is linked to these levels (see
chart ‘Getting Tracking on Track’).
Pantaloon went live on aan1V2 in a quick ten months and the systems are online at the
transaction levels. A business transaction at the head office and central warehouse is
effected online in an integrated environment and all modules - finance, distribution,
purchase, sales and manufacturing - have been implemented in one go. A leased line has
also been drawn up from the central warehouse at Goregaon to connect to the 8aan server
at the head office in Andheri to enable online information sharing. This should connect
the diverse operations of the company and makes information easily accessible. In fact,
Pantaloon is - the first customer of 6aan in the retai[ LO to go
online anywhere in the world and the second
glob&6;anoustomerin garment manufacturing.
The implementation happened following manner Category Man a gement: Pa ntaloon
implemented category management through Baan with massive customisation. Eighty per
cent was customised independently and the rest via Baan’s process module. The
software’s open-ended architecture enabled implementation and the seven levels were
mapped to Baan. The company used Baan’s GRT module extensively to define the
lengthy 14-digit item code structure that classifies each product.
Integration: Prior to Baan, Pantaloon was on Lotus Notes. Saan discussion databases on
Lotus Notes facilitated a higher level of integration across functional users.
£t, ,4t
The implementing team at Pantaloon used the Dynamic Enterprise Modeler extensively
to map the
company’s processes and linked the roles, responsibility and accountability of the various
in the
DEM Tool:
j.
.2

13. functional users. This simplified processes and
clarified authorisation issues in day-to-day
operations.
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Interfaces:
Pantaloon operates in a very complex and highly processor-oriented environment.
Currently, it has 46 retail shops across the country and plans to open ten more in the
current year. The company
has 65,000 14-digit items in its item data master. Secause of this complexity and usage of
various middleware, the company developed 11 interfaces with baan that were built in the
sales, stock transfers, delivery, receipts and between the central warehouse and all the
retail shops. These interfaces ensure accurate MIS to top management (see chart
‘Knowing is Rewarding’). -.
The company has achieved the following operational effectiveness through Baari
More Control: , k
The major gain is in efficient allocation of materials
to various product lines. The company has 15 work centres in Mumbai. Earlier, due to
faulty allocation, they were actually cancelling purchase orders. With Baan, the company
has attained very hih visibility, which enables it to pinpoint the exact workload at each
centre and the capacities are optimally utilised. The company has achieved 60 per cent
more accurate material allocation after going online with Baan. Other incremental
benefits include:
1. Timely delivery to various retail outlets and absolutely no overloading; hence space
which is at a premium at the retail outlets is used effectively
2. A great deal of money otherwise incurred in shipping materials to-and-fro between
work centres and retail outlets has been saved
3. Because of the visibility in data flow, the company now has the flexibility of
reallocating and changing the work centre to meet a particular demand.
Less Losses: By implementing a greater retailing concept - category management - a lot
of workflow
initiatives have been automated. With Baan, the - company has detected almost 30K dead
items
which constitute 5 per cent of the total stock in the
warehouse. Raw materials like buttons, tags, zips and collars, which were either
misplaced or lying unused, were utilised
Better Systems:
With Baan, Pantaloon understood that it was operating in a high growth environment and
clearly
wanted to establish top class systems and processes to handle moving targets and manage
growth effectively.
The spin-offs are many:
1. Cycle-time turnaround is reduced by half. Currently, stock turns are once every quarter
2. Safety stock levels have been recalibrated to be updated every month

14. 3. Data visibility and information sharing is better. The company is now getting proper
MIS reports.
4. There is an integrated information flow across various departments of the company and
more transparency.
5, Currently, requirement of fabrics, MRP and production orders for finished goods are
automated and generated from the Baan system. The company now manufactures
garments with online integration
-
with the supply chain process.
6. The company balance sheet is prepared through
S a a n
The company has developed its P05 software in- house and this has been integrated with
Saan to cull out useful data. Since the ERP software does not help the company in
undertaking intelligent analysis of the vast data generated by the system, company
executives manually analyse all the data to understand the trends. The company is in the
process of implementing business intelligence software called Adaytum, which it has
developed in- house. With this software, the company will be able to generate custom-
made reports. Using Adaytum, the company claims that it would be in a position to
decide the exact shelf to display a particular product in every store. The software will
create a range plan catalogue, which would help the company to present to the store all
the merchandise it can expect in the next season. The floor staff would be trained
accordingly on the merchandise, its fabric and features so that they are better prepared to
assist customers. This software will enable the convergence of visual
:i.c:, t’”
The company has developed its P05 software in-
house and this has been integrated with Saan to
cull out useful data. Since the ERP software does not help the company in undertaking
intelligent analysis of the vast data generated by the system, company executives
manually analyse all the data to understand the trends. The company is in the process of
implementing business intelligence software called Adaytum, which it has developed in-
house. With this software, the company will be able to generate custom-made reports.
Using Adaytum, the company claims that it would be in a position to decide the exact
shelf to display a particular product in every store. The software will create a range plan
catalogue, which would help the company to present to the store all the merchandise it
can expect in the next season. The floor staff would be trained accordingly on the
merchandise, its fabric and features so that they are better prepared to assist customers.
This software will enable the convergence of visual merchandising efforts of the
company with its allocation plans. Moreover, it will help in dynamic
planning and would further reduce the gaps between results, actions and plans.