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Graduation Research Project

“CONCEPTUALIZATION, IMPLEMENTATION,
MONITORING AND CONTROL OF AUTO
REPLENISHMENT”

Submitted By-
DEVASHISH

IN PARTIAL FULFILLMENT OF THE POST GRADUATE DEGREE


"MASTER OF FASHION MANAGEMENT (MFM)

Submitted to

DEPARTMENT OF FASHION MANAGEMENT


STUDIES (FMS)
NATIONAL INSTITUTE OF FASHION TECHNOLOGY
IDCO Plot No. 24, Chandaka Industrial Estate
Bengaluru, PIN - 560102
Ph.Fax: 2304710
Web: www.nift.ac.in
May, 2016

i
Graduation Research Project

“CONCEPTUALIZATION, IMPLEMENTATION,
MONITORING AND CONTROL OF AUTO
REPLENISHMENT”

Submitted By-
DEVASHISH

Under the supervision of-


Mrs. Gulnaz Banu
Associate Professor

IN PARTIAL FULFILLMENT OF THE POST GRADUATE DEGREE


"MASTER OF FASHION MANAGEMENT (MFM)

Submitted to

DEPARTMENT OF FASHION MANAGEMENT


STUDIES (FMS)
NATIONAL INSTITUTE OF FASHION TECHNOLOGY
IDCO Plot No. 24, Chandaka Industrial Estate
Bengaluru, PIN - 560102
Ph.Fax: 2304710
Web: www.nift.ac.in
May, 2016
ii
UNDERTAKING BY THE STUDENT

Title of the Report: ARS: Conceptualization, Implementation, Monitoring and Control

Student: Devashish

The undersigned hereby undertakes that the research work, analysis and the documentation
carried on and subsequently produced in this report is my original work and thus, undertaken
by me. I hereby assign all the rights under copyright to NIFT Bangalore that may exist in and
for the above work submitted for the requirement of the industry internship jury at National
Institute of Fashion Technology, Bangalore, India. Further, if any research work/content in
this report is later on found to be copied from any other source, the institute may take
appropriate action as desired as per it’s rules.

Devashish

MFM/16/172

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CERTIFICATE OF FACULTY MENTOR

This is to certify that Mr. DEVASHISH of National Institute of Fashion Technology (NIFT),
Bengaluru has successfully completed his/her GRP work titled “Conceptualization,
Implementation, Monitoring and Control of Auto Replenishment” in partial fulfilment of
requirement for the completion of 2 Years Post Graduate Programme "Master of Fashion
Management (MFM)" as prescribed by the Department of Fashion Management Studies
(FMS), National Institute of Fashion Technology.

This 'Graduation Research Project' report is the record of authentic work carried out by him
during the period from 26th December, 2017 to 10th May, 2018 under my mentorship.

Signature

Mrs. Gulnaz Banu

Associate Professor

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ACKNOWLEDGEMENT
It was a great opportunity to do my Graduation Project with Flying Machine (Arvind Brands
Limited, Bangalore).

I would like to thank Mr. Deepesh Tewari (Senior Manager) who was my industry mentor
and project guide. He guided me throughout the internship and was a constant support.

After Mr. Deepesh left as the Senior manager, I was guided by Mr. Anukool Shukla who is
now the senior manager for flying machine. He gave me a better understanding about the
brand and enough exposure to learn about the various aspects of retail planning followed in
the brand.

Also, I would like to express my deep regards and Gratitude to my mentor Mrs. Gulnaz Banu
for giving me the proper guidance, direction and constant support during the project for
proper understanding of the organization.

Devashish
MFM/16/172

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Table of Contents
Chapter Page
Title
number no.
List of Figures viii
List of Tables ix - x
Abstract 1
1 Arvind Brands and Flying Machine 2
1.1 Arvind Limited 3
1.2 Arvind's Progress over the years 4-5
1.3 Arvind Brand divisions 6
1.4 Arvind Lifestyle Brands Limited 7
1.5 Basic Hierarchy for diiferent Categories 8
1.6 Departments in Arvind 8-9
1.7 Flying Machine 10-11
1.8 Departments in Flying Machine 12-13
Retail Planning and Automatic Replenishment
2
System 14
2.1 Retail Planning and Inventory Planning 15-16
2.2 Automatic Replenishment System 17-18
2.3 ARS Masters 19
2.4 Phases in Auto Replenishment 20
2.4.1 Conceptualization 20-42
2.4.2 Implementation 43-48
2.4.3 Monitoring 49-50
2.4.4 Control 51-54
Analysis of FM Business in Reliance as on 6th
3
May 55
3.1 Synopsis 56-57
3.2 Literature Review 58-59
3.3 Data Analysis 60-69
3.4 Findings and Suggestions 70-71
3.5 Conclusion 72
3.6 References 73

vii
List of Figures
Figure Description Page no.
1 Basic hierarchy of brands in Arvind 8
2 Flying Machine Logo 10
3 Departments in Flying Machine 12
4 Process of auto-replenishment 19
5 Phases in auto replenishment 20
6 Core vs Fashion 21
7 Data management tab in miebach 33
8 Software Miebach logo 43
9 Meibach login page 44
10 Homepage 45
11 Planogram Data tab 45
12 Sample of cutomer buy plan on software 46
13 Succesful upload 46
14 Reports in Software 49

viii
List of Tables

Page
Table Description
no.
1 Reliance store list for SS18 22
2 YTD Sales Data 23
3 Mapping SAP code against store code 24
4 Calculation of Average Sales 25
5 Sales Vs Racking 25
6 Store prioritization 26
7 Customer Segmentation 27
8 Mapping final racking capacity 28
9 Sales Contribution % 29
10 Mapping from Sales Data 29
Percentages multiplied with acking
11
capacity 30
12 Ratio For Fashion Products 31
13 Ratio for core products 31
14 Segmentation on the basis of ratios 32
15 Determining the final Depth of options 32
16 Category ID 34
17 Style Attribute 35
18 Customer Buy Plan 36
19 Planogram Norm 37
20 Planogram Size Ratio 38
21 Core planogram 39
22 Customer Storage Location 40
23 Customer Priority 41
24 Customer Schedule 42
25 Allocation File 47
26 Allocation Summary 48
27 Store stock sufficiency report 51
28 Sell thru report 53
29 Category Analysis 60
30 Region and Category 60
31 State wise Analysis 61
32 Colour Analysis 63
33 Size level Analysis 65
34 Best performing stores 66
35 Non performing stores 66

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36 Core VS Fashion 67
37 Best performing styles 67
38 Sales contribution of sizes 68
39 GRN contribution of sizes 68
40 Efficiency Table 69

x
ABSTRACT

The dynamics of the fashion and lifestyle markets are strong Fashion is developing constantly
and must always be re-invented. This also applies for the logistics of the fashion industry.
What yesterday seemed to be only a vision for the far future, is today a requirement for
action: same-day delivery or delivery time windows show the dynamics of the market. E-
Commerce, Omnichannel and increasing returns volume ensure a complexity within an
excellent logistics system and leads to a crucial competitive advantage. The success of a
company in the fashion industry depends on the ability to achieve all logistics requirements
efficiently. A targeted Supply Chain Management ensures that customers also in volatile
markets are still well served. While customer requirements continually increase, companies
must evolve and adapt to these changes.

The issue of buyer-seller relationships in supply-chain management research is becoming


increasingly critical. Global competition and maturing domestic markets have driven supply-
chain members to reassess their distribution techniques to remain competitive in the market.
Firms need inventory replenishment systems that enhance customer service whereas at the
same time reduce inventory costs. Many retailers are demanding time phased replenishment.
They want delivery made just as they need the stock for sale. High levels of anticipatory
inventory are no longer acceptable. Retailers want high-volume, high- turn items delivered on
a just-in- time basis.

Majority of the Indian Retailers are continuously aiming to improve Customer loyalty by
offering good service. At the same time, they are struggling to reduce the costs in order to
stay competitive. This is where Automatic Store Replenishment comes into play.

We now elaborate on the Parent company of the brand followed by the Daughter company
Flying Machine followed by the Project in Hand-” Conceptualization, Implementation,
Monitoring and Control of Auto-Replenishment.”

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Chapter 1: Arvind Brands and Flying
Machine

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1.1 Arvind Limited

Arvind Ltd is the flagship company of the Lalbhai Group that has been around since 1930.
Arvind started as a superfine fabric manufacturer in the early 30s. Since then, the company
has been constantly reinventing itself by venturing into new categories in textiles like denim,
suiting,
shirting, etc. Its headquarters is in Naroda, Ahmedabad, Gujarat, India. It has units at Santej
(Near Kalol). Its segments are Textiles; Brands and Retail; Real Estate, and Others. The
Textiles segment includes fabric, yarn and garments. The Brands and Retail segment includes
retailing of branded garments, apparels and fabrics. The Real Estate segment includes real
estate development. The Others segment includes electronics, technical textile, construction,
e-commerce and project activity. It also manufactures cotton shirting, denim, knits and
bottom weights (Khakis) fabrics, and jeans and shirts garments. The Company, through its
subsidiary, Arvind Lifestyle Brands Limited, markets branded apparel and licenses
international brands in India. Its brands portfolio includes international brands, such as
Arrow, US Polo, Izod, Elle and Cherokee. It also operates Unlimited apparel value retail
stores. Sanjaybhai Lalbhai is the Chairman & Managing Director of Arvind & Lalbhai
Group. It also has presence in telecom business directly and through joint venture
companies.

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1.2 Arvind’s Progress over the years

1991 – Arvind reached 100 million meters of denim per year, becoming the fourth largest
producer of denim in the world

1992 – The company increased the production of denim cloth by 23,000 tonnes per day by
modernizing the plant at Khatraj of Ankur Textiles.

1994 – The company operations were divided into Textile Division, Telecom division and
Garments division.

1995- Garment division launched ready to stitch jeans pack under the brand Ruf & Tuf.

1997 – The marketing and distribution network of `Newport` brand was strengthened and the
relaunched Flying Machine and Ruggers brand were strengthened.

a. Arvind Mills set up an anti-piracy cell for the first time in India to curb large
scale counterfeiting of their brands Ruf & Tuf and Newport jeans.
b. Arvind Mills adopts the franchisee system for the manufacture and distribution
of Ruf and Tuf jeans.
c. Arvind Fashions doubles its capacity in the manufacturing facility in
Bangalore to produce Lee jeans
1998 – Arvind Mills emerges as the world's third largest manufacturer of denim.

2003 – For the fourth quarter, Arvind Mills witnesses 280% growth in the net profit

2005 – For the fourth quarter in a row, Arvind Mills posted a profit growth in excess of 80
per cent. Arvind Mills buys entire stake in Arvind Brands from ICICI Ventures.

2007 – Arvind expands its presence in the brands and retail segment by establishing
MegaMart One of India's largest value retail chains.

2010 – Arvind launches The Arvind Store, a concept putting the company's best fabrics,
brands and bespoke styling and tailoring solutions under one roof. Arvind launches its first
major Real Estate projects. Arvind becomes one of India's largest producers of fire
protection fabrics.

2012 – Joint venture with PD Group, Germany, for manufacture of glass fabrics

4
2014 – Joint venture with PVH Corp for Calvin Klein Businesses in India. Launches Formal
suits with Goodhill Corporation Limited of Japan. Joint venture with OG Corp, Japan, for
manufacture and sale of non-woven fabrics, project being spearheaded by Dr. Kunal Shah.
Forayed into the E-commerce segment with custom clothing brand 'Creyate'

2016 – The company completely entered online retailing and launched the omnichannel retail
platform NNNOW in 2016.

2018- Witnessed the launch of futuristic denim technology brands like E-Indigo, Boomerang
360, Boomerang Bounce, Chrome Cord and Hybrid Chinos at the Arvind Festive 2018

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1.3 ARVIND BRAND DIVISIONS:

1. Heritage Brand Division(HBD): Arrow, IZOD, Hanes


2. Lifestyle brand Division (LBD): US Polo, Flying Machine, TCP, TrueBlue, Ed-
Hardy
3. Bridge to Luxury(BTL): Gant, Nautica, Aeropostale
4. Specialty Retail Division: Sephora
5. Unlimited Business Division: The original company used to be Megamart which is
now changed to Unlimited.

HERITAGE BRAND DIVISION


 Arrow
 Hanes
 IZOD

LIFESTYLE BRAND DIVISION


 Flying Machine
 US Polo
 Ed Hardy
 TCP
 TrueBlue

BRIDGE TO LUXURY:

 Aeropostale
 GANT
 Nautica

SPECIALITY RETAIL DIVISION:


 Sephora
1.4 ARVIND LIFESTYLE BRANDS 6LIMITED

Arvind Lifestyle Brand is a subsidiary of Arvind Ltd. which is one of the most respected
groups in the Textile Business of India. It has been a pioneer in bringing many International
Brands to India with Arrow being the first brand in 1993. Later many brands like GANT,
IZOD, Hanes, Cherokee, USPA, Elle, Massimo, Calvin Klein, and GAP came under its hood.
Arvind also has a joint venture with Tommy Hilfiger for its business in India.

It owns and operates approximately 800 stores and 14.2mn retail space. The company is
based in Bengaluru, India. Arvind Lifestyle Brands Limited is a subsidiary of Arvind Brands
and Retail Limited.

VISION, MISSION AND CORE VALUES

VISION
Their Vision is ‘Enriching Lifestyles’.
To Enable People to experience a Better Quality of Life by providing Enriching and Inspiring
Lifestyle Solutions.

MISSION
The Company is driven by Collective Excitement and Resolve to be the Market Leader in
Chosen Market Segments by 2020.

VALUES
 Service: Putting the Needs of the Customers & Consumers First
 Speed: Act quickly and decisively to get things done efficiently
 Innovation: Driven by Out of the Box Thinking and New Ways of Working
 Living the Brand: Being a ‘proud ambassador’ by personifying the brand values and
principles
 Care: Respect and Dignity for the Individual and Well Being of Employees above
anything else

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1.5 BASIC HIERARCHY FOR DIFFERENT CATEGORIES OF
ARVIND LIMITED

CEO(J.
Suresh)

CEO of CEO of LBD Speciality Division CEO of BTL CEO of CK CEO of GAP
HBD(Ramani) (Alok Dubey) Vice President (Sumit Dhengre) (Parag Dani) (Oliver)
(Merdunish Rai)

Arrow US Polo Aeropostale


Sephora

IZOD Flying
GANT
Machine

Hanes TCP Nautica

TrueBlue

Ed-Hardy

Figure 1- Basic Hierarchy of Brands in Arvind

1.6 DEPARTMENTS OF ARVIND LIFESTYLE BRANDS LIMITED

HUMAN RESOURCE
The human resource department is responsible for recruitment of personnel and providing
them salaries. All the activities or events conducted on different occasions are done by the
HR department in order to create a healthy working environment in the organization. The
department also organizes trips, guest lectures and other fun activities inside as well as
outside the company. The basic purpose behind guest lectures and training program is to
guide as well as train the employees according to the dynamic environment.

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FINANCE

The finance department looks after all the finance related aspect of the brand. It allocates
budget to the different departments. It manages the brands account and ensures the company
is earning sufficient profit for the overall growth.

Each division as well as the brand has separate budgets and all the expenses to be incurred
are taken into consideration according to the estimated budget given to each division or
brand.

SOURCING

The main work of the sourcing team is to source all the required fabrics and trims from the
other companies and to make sure cost bearing of the product is less by finding the best mills
to source the fabric.
Another responsibility of the sourcing department of all the teams is to develop the samples
once approved by the product and design team of the respective team.

INFORMATION TECHNOLOGY
They are the IT team who take care of any software or hardware technical problem for
computers or printers. It maintains the office internet and takes care of the employs desktop
that is provided by the company. It also maintains the license for all the software’s used by
the company and to make sure they renew them.

SUPPLY CHAIN

The management of the flow of goods and services, involves the movement and storage of
raw materials, of work-in-process inventory, and of finished goods from point of origin to
point of consumption.
1.7 Flying Machine 9

Figure 2- Flying Machine Logo

Owned by Arvind Lifestyle Brands Ltd., Flying Machine is India’s first home bred denim
brand. Launched in 1980, the brand was the first amongst the first in its category to introduce
authentic details, original graphics, first in class urban innovation and true Italian styling to
achieve cult status over the next ten years.

Today, Flying Machine is sold in over 175 exclusive brand outlets, 242 Large Format Stores
like Shopper’s Stop and Lifestyle, and over 500 Multi Brand Outlets nationwide.

Born in the year 1980, flying machine was considered a cult for the next 10 years. Launched
in 1980, at a time when only smuggled jeans were available.

Cornered substantial market with innovations of Indian fit, a ‘guaranteed brand’ available at a
decent price. By 1994 it had become a leader in branded jeans in India and is still seen as
trendy and premium.

Flying machine has a tie up with the famous Italian designer Chicco who has designed for
names like Brad Pitt, Beyonce etc. Chicoo has given brand an Indo-Italian touch which has
added to the brands style quotient and popularity. The tagline of the brand “I am sexy when I
am me” has a Very good recall value as youngsters can easily relate to it.

Flying Machine also recognized the need to keep pace with the rapid changes in India with
the new store design, an international collaboration of Italian style, Indian craftsmanship had
come together to launch a new urban youth fashion store 'Flying Machine' in India, designed
by JHP – London which aimed to showcase 'eclectic fusions of Indo-Italian style, translated
into a contemporary store environment that will be become the instant signature of the stores'.

Flying machine range of apparel reflects the future of Indian youth fashion that believes in
bringing real time international fashion to Indian audience. The brand with its contemporary
styling focuses on trends and fads of season. These styles are created for the Indian youth

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which is not only well-informed, but also well-travelled. With the introduction of
Nanotechnology, flying machine has come up with technological advances like temperature
regulation as the wearer goes through hot and cold zones and stain free jeans.

Flying Machine is casual clothing & accessory brand whose target customers have always
been young fashion-conscious people and that might be the reason why face of brand is
Sushant Singh Rajput.

Flying machine product assortment includes apparels, footwear, accessories. Flying machine
collection every season is different, better and funkier than the last one. The clothing line of
Flying Machine includes denims, t-shirts, shorts, shirts etc. for men and women. Flying
machine has really trendy footwear in bright as well as monochromatic colors. The shoes are
available in different styles like high ankle, distressed etc. which complements the uber cool
clothing line of the brand. Flying Machine also has a range of accessories which includes
sunglasses, caps etc. under its name. The association of the designer Chicoo has given a
vintage touch to the brand and made it a unique combination of trendy present and classy
pass.
1.8 Departments in Flying Machine
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Figure 3- Departments in Flying Machine

 Product and Design

Responsible for studying and analysing trends in the domestic as well as international
markets, creating aligned products and designing a range of garments in line with the brand
promise and customer expectations. This department is basically developing sample of
merchandise and developing range of merchandise for upcoming season and work closely
with buying department. Designer attains fashion events and shows to keep tap on current
and upcoming trends.

 Marketing
To create, communicate and reinforce brand persona in the psyche of the target consumers.
Loyalty program Responsible for turning walk-ins into frequent buyers through customized
offerings, thereby resulting in customer loyalty. They basically communicate the value of
product to the customers.

 Planning Department
This department is making OTB plan, Option plan, allocation, offers, monitors day wise sells,
end of season sale, stock in warehouse and store. They also recommend buyer about which
style is hitting the shopping floor, monitor 12
sales, stock in warehouse and shop floor, sell
through, offer planning and do allocation of merchandise according to requirement of
particular merchandise in particular store. This is also known as Inventory Management and
Distribution Management. Planner are the backbone of any company if there over stock or
stock out its planner responsibility to control inventory and coordinate with other team like
buying and also hold meetings with other senior people of company.

 Operations
Responsible for sales & margin, shrinkage control, implementation of processes, customer
experience at stores. To Identify new properties & negotiate with builders. They work to
make sure that employers' businesses run effectively, smoothly and professionally. This
includes all those who work in the organisation from the management to assembly line
workers up to the guys loading and offloading trucks in manufacturing and retail distribution
centers.

 VM Department
This department coordinates with designer and buyer for the theme of season and then they
make visual of store accordingly. Their responsibility to change visual of all store at the same
time, this include display of merchandise and lighting. There are some elements that are
involved in visual merchandising are Window Displays, Interior Displays, Signs, Cosmetic
Productions and other Special Sales and Promotions. Team tries to combine these elements
and convey their idea to customer.