Chapter 1

Introduction

1.1 About BBSM- Abinash

Chain retail stores in nepal and why we choose bbsm

1.2 Inventory management in BBSM-Trijya

So as discussed above, BBSM has been the most widely ….. Retail stores out there. The low cost and
convenience that it provides comes from it’s successfully managed warehouse. As rapid as the growth
of Batbhateni is going on one would assume it would not be able to control the inventory through
centralized system but the main reason of its low cost is centralized warehouse system. Vendor
Managed Inventory and Two bin system are some ways how BBSM has been able to maintain its position
as the leader in retail chain stores of Nepal.

With our interview with the representatives from the company we came to know about the practices of
Vendor Managed Inventory. There are suppliers of products like Samsung and LG who manage their
inventory by themselves. They have their own employees who keep track of the information regarding the
product’s inventory level.After analyzing the inventory level of their product they deliver the product to
BBSM’s warehouse. While the information regarding the products is managed by the suppliers, the
delivery of the product is done through the centralized warehouse itself.

While some of these companies manage their own inventory, there are other ones who do not employ
their staffs to keep track of the inventory level. For these companies Bhat Bhateni employs its own staffs.
VMI
Mini Store
Reverse Logistics

1.3 Information System in BBSM-Trijya

CRM-Loyalty Cost (Customer CLub Card)
Humidity for perishable goods
Electronic Thumb Attendance-TPS
IMS Software-Barcode Scanning Method

1.3 Objectives of the Study-Abinash

1.To determine IT practices in Nepalese retail chain stores
2. To know the attitude of the management of retail chain stores towards RFID.
3. To know the attitude of the customers of retail chain stores towards RFID.

1.4 Limitations of the Study-Trijya

Commented [1]: BCR ko berema vanda pani history of
warehouse management or information system kaile
Chapter 2
dekhi warehouse management ma use huna thalyo
Literature Review lekhne ho ki?
Commented [2]: ah inventory ko lai kun kun IS use
2.1 What is BCR- Prajwol hunthyo paile tyo bata start gare huncha bcr ma
focused huna vanda ni
History of BCR
How does BCR work
Concerns about BCR
Reasons for implementation of bcr

2.2. About RFID-Abinash

When was RFID first introduced
How does RFID works
Present scenario worldwide and Nepal

2.3 Movement from BCR to RFID:

The origins of Radio-frequency identification (RFID) can be traced back as early as World War II where
a crude version was developed by the British armed forces entitled “Identification of Friend or Foe
system”. In this system, radar pulses from the ground drove the transponder in the plane to reply to coded
messages and identify themselves as a friendly aircraft (Ollivier 1995). In mid-2000 IBM pictured the
application of RFID in future supermarkets.

RFID has created a huge buzz all over the world for its superiority over other technologies such as: BCR,
Yellow tags, etc. in inventory management. (Prior, n.d.)These technologies give retailers the ability to
track items through every point of the supply chain—from the warehouse right to the store shelves. Using
RFID technologies gives retailers a new degree of visibility into their inventory. Unlike the barcode,
RFID tags don't need to be within sight to be read. This means retailers can easily locate products and
inventory numbers without having to scan products manually. In fact, these tags can even help retailers
track down a "lost" item (say, a specific phone model stocked on the wrong shelf at a wireless retailer
store location), so that no sale is missed due to misplaced inventory. To some, it would appear RFID has
put the barcode at risk of extinction.

RFID uses radio waves to identify and track objects from distance. Unlike yellow tag where the tags and
scanner had to be attached in exact direction, RFID readers and tag communicate through antenna. A tag
usually made of tag-chip (also known as IC) is connected to antenna. The tag chip contains information
about the product as electronic product code (EPC). An RFID reader is a network connected device, fixed
or mobile, sends power, data and command to tag. It is widely used in supermarkets and shops for anti-
theft and security.

According to a research study at Auburn University, RFID is proven for a significant improvement in
increasing inventory accuracy, sales, margins, and expedited returns. RFID not only boost sales and
increase customer satisfaction, it also boosts employee morale by enhancing job satisfaction. Innovative
retailer, Zara, has built their business around RFID. They are now able to conduct a physical inventory in
their outlets in about 15% of the time it used to take.
 Chapter 3
Methodology

3.1 Overview of the approach:

Case study represents a special category of qualitative research that emphasizes detailed
contextual analysis of a limited number of events or conditions and their relationships. For
designing the scientific approach to the present research, the following six steps have used
(Stake, 1995):

1. Determine and define the research questions

The main research question was ‘How is information system being used for inventory
management in Bhat-Bhateni Super Market (BBSM)?’
The sub-research questions were:
a. What are the different information system practices in BBSM?
b. What is the information system specifically designed for Inventory Management?
c. Does the management believe the RFID technology serves a useful purpose in furthering
their mission? How?
d. Do the customers believe RFID would do well to them?

2. Select the cases and determine data gathering and analysis techniques

Different cases of various retail giants around the world have been taken as reference as shown
in the literature review section above.

3. Prepare to collect the data

Firstly, BBSM, the organization to be studied was contacted to gain their cooperation, explain
the purpose of the study, and assemble key contact information. It was planned that the
researchers would state the intent to request copies of various related documents, and plans for
storage, classification, and retrieval of these items beforehand.

4. Collect data in the field

Considering the organization’s unwillingness in revealing the numerical figures, a rigorous
qualitative approach was considered as the contingent plan which was semi-structured interview.
For the representative(s) on behalf of firm’s management the guidelines for the interviewer were;
i. Available IT practices currently (more inclined towards inventory management)
and comparison of scenarios before and after the application of information system in
terms of parameters like cost, staffing, convenience etc.
ii. Issues faced by BBSM considering current inventory management practices in
terms of aspects like, queue management, service time length, recent case of shoplifting
etc.
iii. Attitude towards RFID application:
a. Level of interest towards RFID
b. Level of staff-training required
c. Level of perception about whether benefits will overshadow costs or not
This will address the following research questions;
a. What are the different information system practices in BBSM?
b. What is the information system specifically designed for Inventory Management?
c. Does the management believe the RFID technology serves a useful purpose in furthering
their mission? How?
For the customers of firm, the guidelines for the interviewer were;
i. What if question aimed to judge their reaction on new approaches brought by RFID.
ii. Overall acceptance level; whether one likes or not
This will in turn address the following research question;
a. Do the customers believe RFID would do well to them?

5. Evaluate and analyze the data

Triangulation technique was adopted by interviewing the managing heads of different sections of
the warehouse of BBSM. Further the consistencies of things were re-visited through participant
observation technique. With-in case analysis was done where the researcher grouped the
responses coming from the interviewees. Cross-case analysis was not conducted since no
dissimilarities were noted in the different interview sessions conducted.
6. Prepare the report

Finally, the written report was formed under the case study research approach. Qualitative data
collection techniques like interviews and observation has been pointed out. Further, based on the
findings and comparison with global retail giants, appropriate conclusion and recommendation
has been signified.

3.2 Research design overview:

Qualitative research model based on case-study approach has been selected for the purpose. It is
both descriptive and exploratory in nature. Semi-structured interviews were conducted to the
management heads of all the different sections of warehouse like Groceries, Electronics and
Cosmetic sections of BBSM. The qualitative data was collected based on semi-structured
interviews and observations techniques. The data included audio recordings, field notes and
transcription of interviews. Purposive sampling was used to choose people for interview from the
company’s side where as convenient sampling was used to select customers at different branches
of BBSM. The customers’ interview was limited to 20 people, 5 from each of the four branches
of the company in the capital city.

Chapter 4
Findings-Shilpa (input from everyone)
Findings from case study-Shilpa

Chapter 4
Findings
Chapter 5
Findings

5.1 From ‘Yellow tags’ to BCR and probability of RFID in BBSM:

Since its establishment BBSM had adapted Yellow price tag. Here, each yellow tag is stamped
manually and then attached in every product. This process consumed a lot of time and had
numerous limitations such as:
1. The tag used adhesive which was quite difficult to take off and would hamper the
aesthetics of products.
2. According to a research held among 150 respondents in a laboratory study, it was proven
that customers perceive that a yellow price tag is presenter of discount. It is misleading and
customers were discouraged seeing high prices on yellow tags too.
3. It was time consuming and monotonous to employees stamping every tag and then
attaching the tags. It reduced job satisfaction.

In recent years, BBSM adapted BCR. While interviewing Ms. Samjhana Rai, electronic
inventory supervisor, we came to know that after adopting BCR from ‘Yellow tag’ system,
employees were more than happy. The efficiency improved significantly. Even though the retail
outlets of BBSM has increased over year and increased operations, adopting BCR did not
required addition of further employees with increase in flow of inventory. The same number of
employees handling few outlets are now able to handle all 14 outlets. After receiving the
electronic items, each item would be tallied with the receipt, given barcode and recorded in MIS.
Then again registered at each store after receiving. The MIS at each store is then supervised
weekly.

All the other department had same procedure and efficiency. While we discussed about how Zara
increased its efficiency by adopting RFID by 15%, Ms. Rai had a positive attitude towards
adaptation of RFID in inventory management. But investment is a huge constraint here. Only if a
close competitor like BigMart, KK mart, adapt RFID, BBSM thinks it will be compelled in
adapting RFID as well. Else they are happy with BCR in electronic inventory management.

While in FMCG inventory department, the scenario was quite opposite. The efficiency had
increased through BCR yet each and every product were checked manually, recorded tallied,
repacked by attaching barcode and then dispatched to every outlet. The goods were recorded in
same manner in MIS and every outlet’s MIS were supervised weekly. But the constraint in
adapting RFID that Mr. Pawan Prajapati, FMCG inventory in charge, expressed was even though
RFID is adapted, it will take equal time to attach tags and close inspection of each and every
product will still be done in same way. The working efficiency is not likely to change. However,
he did not denied the fact that RFID will help in increasing inventory accuracy, sales, margins,
and expedited returns.

4.2 Attitude towards RFID:

To know about the disposition of company personnel towards applying RFID in the inventory
management in their organization, semi structured interviews were conducted centralizing on
different parameters as summarized in the findings table below:
Table 5.1: Attitude towards RFID application by company personnel

Interviewee’s department
S.N. Interview guidelines High Medium Low

Electronics
1 Interest towards RFID ü

Groceries
2 Staff-training requirement ü

Cosmetic
3 Benefits overshadowing costs ü

The above table suggests that the company as a whole is highly positive towards application of
RFID in their inventory management practices. However, the company has no current plans of
rapid cut-over approach towards RFID application. The main reason behind it is that as RFID is
basically a new technology in retail sector and no entity in the retail industry has applied it as of
date, the company though having positive inclination towards it is not applying it due to the
strategic directions set by the boards who feel that on the present day, instead of jumping to new
technologies, it is important for them to expand their business and penetrate the market further
deep. Accordance to it, the company is planning to open new branches in Biratnagar and in
Kathmandu valley (Saatdobato area) respectively in the upcoming fiscal year.
Besides the company personnel, the customers representing from the different branches
(Bouddha, Kalanki, Koteshwor, Thimi) from major areas all over the capital city were found to
be very positive towards RFID implementation. However, the customers mostly were unknown
to this new technology but on describing its benefits, they seemed very inquisitive and quickly
agreed towards the advantages provided to them like real-time price summation, self-provision
of service and the like. This suggests that use of RFID shall have no impact on the customer base
of BBSM. Moreover, adopting this technology will definitely help the company to gather
customer attention by providing international shopping experience within the national
boundaries.

Chapter 5

Conclusion and Recommendation-Swarna and editing :D

Conclusion ko laagi:

From the highly consistent interview results from the different company personnel implies the
presence of strong organizational culture in BBSM.

Recommendation ko laagi:everyone give input

The company personnel being highly receptive towards the shift from bar code based system to
RFID and the customers waiting to enjoy this technology make us strongly recommend the firm
to adopt this new technology and harvest the first-mover advantage gained from this adoption.

Things to be considered by BBSM before swtiching to RFID:

We are strongly recommending BBSM to go for RFID and it members are very positive towards
adapting RFID for inventory management. Nevertheless, before planning a few RFID pilot
projects for thier stores, there are five things they should keep in mind about RFID. Such as:

1. BOPIS for customers:

Considering that BBSM is adapting a click to motar organizational structure by oferring its
product to customers online. RFID will help to offer buy-online, pick-up-in-store (BOPIS)
advantage.
2. Faster check out:

(Laney, n.d.) Consumers today demand high levels of service. As your customer stands in line
waiting to give you her money, she grows exponentially impatient with each minute she has to
wait. With RFID technology, the impatience melts away. Instead, she’s left delighted by her
buying experience – something you can bet she’ll remember the next time she needs to make
another purchase from you or your competitors.

3. Retail RFID adapted faster than ever:

International retail chain stores have now moved on to RFID. 18.4% of international retailers are
to adapt RFID in next two years. If BBSM’s close competitor BigMart adapts RFID, it will be
compelled to adapt RFID as well, so why not adapt it at first place and get first mover
advantage?

4. Huge cost:

According to a 2009 RFID Journal report, retailers were spending an average of $30,000 for a
single store pilot. In recent years, conversely, the cost has been reduced. Yet importing such
technology and adapting it on every branch will cost BBSM a fortune.

5. Calculation of ROI:

BBSM lacked the data of improvement in ROI ( Return On Investment) after switching from
yellow tags to BCR. But calculation of ROI after switching from BCR to RFID Technology is
highly recommended. There are various tools such as: RFID Journal’s Fashion Retail ROI
Calculator that calculates every cent of ROI.
 Bibliography
Laney, B. (n.d.). Allertteach. Retrieved from http://alerttech.net/retail-rfid-technology/
Prior, C. (n.d.). Retrieved from www.iqmetrix.com: http://www.iqmetrix.com/blog/is-rfid-
really-the-future-of-retail
Stake, R. E. (1995). The art of case study research. Thousand Oaks, California: Sage
Publication.