WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT& RESEARCH

SPECIALIZATION PROJECT

ON

KAIZEN AT BIG BAZAAR

BY

NIKHIL GALA MMS 2010 2012 (OPERATIONS SPECIALISATION) ROLL NO. 104

PROJECT FACULTY GUIDE PROF. V H IYER

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

PROJECT COMPLETION CERTIFICATE

This is to certify that Mr. NIKHIL GALA has successfully completed the project titled KAIZEN AT BIG BAZAAR during the IV Semester of his MMS OPERATIONS course in partial fulfilment of the Master's Degree in Management Studies recognized by the University of Mumbai through the Prin. L. N. Welingkar Institute of Management Development & Research, Matunga, Mumbai.

This project in general is done under my guidance.

___________________________ (Signature of Faculty Guide)

Name: Prof. V H Iyer

1|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

PROJECT SYNOPSIS
1. 2. 3. 4. 5. 6. Name of the Student: Program & Year: Area of Project Research: Name of the Faculty Guide: Title of the Project: Project Details a. Objective of study Improve efficiency of operations by suggesting Kaizen techniques b. Research Methodology i. ii. iii. iv. Collection of primary data and secondary data Tabulation and presentation of data collected Analysis of above tabulated data, using statistical tools Drawing conclusions and giving suggestions Nikhil Vinod Gala MMS 2010-12 Kaizen Prof: V H Iyer Kaizen at Big Bazaar

c. Expected Results of the study Reduction in the wastage of stored material and cost of operation Faculty Guide: Name: Prof. V H Iyer Student: Name: Nikhil Vinod Gala Contact No: 9370251269 Signature: Date: _____________

Signature: Date: ______________

Record of interactive sessions with Faculty Guide during preparation of Specialization Project Interactive Session No. 1 2. 3. Date Signature of Faculty Guide _______________________ _______________________ _______________________

______________ ______________ ______________

2|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

ACKNOWLEDGEMENTS

On the event of this project Kaizen at Big Bazaar, I take the opportunity to express my sincere thanks and deep senses of gratitude to my project mentor Prof. V H Iyer who gave me guidance and inspiration right from the conceptualization to the finishing stages, proved to be very essential in the completion of the project.

3|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Declaration

I hereby declare that this research project report is submitted by me as part of the Course Curriculum for Semester IV of Master's Degree in Management Studies recognized by the University of Mumbai through Prin. L. N. Welingkar Institute of Management Development & Research, Matunga, Mumbai.

This report is based majorly on secondary data and primary data include a live case study. All research work as part of this report is meant solely for academic and study purpose. No other intentional use of this report, whatsoever, will be made.

Submitted by, Nikhi Gala

4|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

1. Executive Summary:

5|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

2. Research Methodology: Data was collected using both primary and secondary sources. About 70% is Primary data collected from Big Bazaar at Phoenix Mills. This was done to study the operational efficiency of Big Bazaar. Study was conducted using 30% of secondary data. There are many advantages in searching for and analyzing data before attempting the collection of primary data. In some cases, the secondary data itself may be sufficient to solve the problem. Usually the cost of gathering secondary data is much lower than the cost of organizing primary data. Moreover, secondary data has several supplementary uses. It also helps to plan the collection of primary data, in case, it becomes necessary.

6|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

3. Company Analysis: ABOUT FUTUER GROUP: Future Group understands the soul of Indian consumers. As one of Indias retail pioneers with multiple retail formats, we connect a diverse and passionate community of Indian buyers, sellers and businesses. The collective impact on business is staggering: Around 220 million customers walk into our stores each year and choose products and services supplied by over 30,000 small, medium and large entrepreneurs and manufacturers from across India. And this number is set to grow. Future Group employs 35,000 people directly from every section of our society. We source our supplies from enterprises across the country, creating fresh employment, impacting livelihoods, empowering local communities and fostering mutual growth. We believe in the Indian dream and have aligned our business practices to our larger objective of being a premier catalyst in Indias consumption-led growth story. Working towards this end, we are ushering positive socio-economic changes in communities to help the Indian dream fly high and the Sone Ki Chidiya soar once again. This approach remains embedded in our ethos even as we rapidly expand our footprints deeper into India. OUR BELIFS: Future Group was founded on a simple idea: Rewrite rules, retain values. This fundamental belief created a new kind of marketplace, forever transforming Indian retail. Today our core values continue to guide how we do business and improve the quality of life of the people we serve. At Future Group we are committed to being a catalyst of positive change in the communities, societies and business sectors in which we operate. We envision Indias transformation into the legendary 'Sone Ki Chidiya' (golden bird), taking wings once again to reach greater heights. We take pride in our Indianness. Our belief in inclusiveness for long-term sustainable growth and economic prosperity evokes trust among consumers, employees, suppliers, partners, shareholders and the community. OUR MISSION: We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments for classes and for masses.
7|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost- conscious and committed to quality in whatever we do. We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful. OUR VALUES:

Indianness: Confidence in ourselves. Leadership: To be a leader, both in thought and business. Respect & Humility: To respect every individual and be humble in our conduct. Introspection: Leading to purposeful thinking. Openness: To be open and receptive to new ideas, knowledge and information. Valuing and Nurturing Relationships: To build long term relationships. Simplicity & Positivity: Simplicity and positivity in our thought, business and action. Adaptability: To be flexible and adaptable, to meet challenges. Flow: To respect and understand the universal laws of nature.

8|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

4. Introduction: On October 12, 2001, they launched Big Bazaaras their offering in the value retailing segment. By removing inefficiencies from the distribution chain they were able to unleash attractive savings which are passed on to the consumer. Big Bazaar is Indias first hypermarket in the discount store format. Big Bazaar provides more than 2,00,000 items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationery, electronics and white goods which are sold at a discount to the maximum retail price. Kishore Biyani-led Future Group is planning to open 30 more Big Bazaars in the next six months as part of its overall plan to create 5 million sq ft of retail space by 2011. Going by conservative estimates of each Big Bazaar over 50,000 sq ft, the Future Group will create almost 1.5 mn sq ft of retail space under the value retail format in the next six months. Asked about expansion plans, Biyani said, We will have at least 30 more Big Bazaars in the next six months. The value retail format of the group, which consists of Big Bazaar and Food Bazaar, is likely to have almost 8.5 million sq ft of retail space by 2011. Biyani had hived off Big Bazaar and Food Bazaar into a separate company Future Value Retail from January 1 this year as managing a $1 billion business was becoming a challenge for the group. The market has been abuzz with speculation that Future will float an IPO for Big Bazaar. While he did not rule out the possibility of an initial public offering, he said the company at present is not in any stage of IPO for Future Value Retail. We have other plans to raise capital, he said. Meanwhile, the Future Group is aiming at a turnover of $3 billion by 2011 from its value retail formats. We wanted Big Bazaar to develop its own balance sheet. We thought it is right to separate Big Bazaar, which caters to the mass market segment, Biyani said. The group has already set a target of achieving $2 billion turnover from the retail operations by June 2010. We have planned to create a total of 17 million sq ft of retail space by 2011, he said. The group has 12 million sq ft of retail space at present. Last year, Biyani said the group will add 18 million sq ft of retail space across various formats by 2013-14. We are in line with our 2013-14 target, he said. Led by its flagship enterprise, Pantaloon Retail, the group operates in 73 cities and towns and 65 rural locations across India. Price is the principal value proposition at these stores.A big driver at Big Bazaar is the product variety. This is achieved by selling a wide range of products and through the Shop-in-Shop format. As a result, a typical Big Bazaarcomprises shops that stock medicines, optical accessories, camera rolls, bakery products, dry fruits, crockery, glassware, health and beauty products, ladies accessories, electronics, infant necessities, watches, clocks, computer accessories, food and beverages, stationery, readymade garments, household appliances, home furnishings, luggage.We believe this is a win- win situation as the customer is assured of product availability, the shop owner can benefit of the infrastructure and we enjoy assured income without needing to stock inventory.
9|Page

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Also the Shop-in-Shop offering is able to increase the customer traffic into 62the stores. The Big Bazaar has been positioned to the customer as a place where the customer can shopfor each and everything for which it goes to a market.The number of Big Bazaar stores has increased from 4 in 2002 to 21 till October 24, 2005 fresh food. Spurred by the popularity of the services offered by Food Bazaar they launched their Private Label programme covering various products such as tea, salt, ready mix masala(Food Bazaar Tea), basmati rice, dals and pulses (Premium Harvest), jams and sauces (Tasty Treat), handwash and shampoo(Caremate), cleansers (Cleanmate) etc.

10 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

5. PROBLEMS IDENTIFIED Working in Big Bazaar was very exciting experience. There were thousands of items Big Bazaar deals in. Thus to deal in these thousands of items it was necessary for them to perform plenty of operations. As these operations were performed by humans, there were many flaws or problems faced while operating. Some of the problems which were identified were as follows: a. In Big Bazaar we see signages all over, were they display their prices. These signages are made up of paper. No doubt these signages helps in increasing the sales of the company, but after end of the scheme these signages are waste. While printing these signages, signages are wasted due to wrong printing order or misprinting. Thus, lot of paper was being wasted. Not only paper but these mistakes results in the loss of electricity, ink in the printer and the time of the employee. b. Trucks or vans which are loaded with goods or merchandise of Big Bazaar have to wait for very long time to get unload. c. In warehouse especially in staples section, goods are unloaded in such a manner that it becomes very difficult to identify what items are there in stock and what items are not there in stock. d. There was very little amount of sale of 1ltr Gowardhan Ghee packets from last 2 months as compared to the purchases made. The more shocking thing was that there was very little amount of stock actually present on the floor for sale. e. Almost 180 pieces of Newzealand Royal Apple were sold as Washington Royal Apple. f. Bikaji Soanpapdi which was to be sold in the offer Buy 1 & Get 1 was sold in single i.e without offer. g. The amount of damages and defects in the warehouse was very much. This directly affects the profits of the company.

11 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

6. Kaizen
Kaizen was created in Japan following World War II. The word Kaizen means "continuous improvement". It comes from the Japanese words ("kai") which means "change" or "to correct" and ("zen") which means "good".

Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to increasing productivity: "The idea is to nurture the company's human resources as much as it is to praise and encourage participation in kaizen activities."Successful implementation requires "the participation of workers in the improvement." People at all levels of an organization participate in kaizen, from the CEO down to janitorial staff, as well as external stakeholders when applicable. Kaizen is a system that involves every employee - from upper management to the cleaning crew. Everyone is encouraged to come up with small improvement suggestions on a regular basis. This is not a once a month or once a year activity. It is continuous. Japanese companies, such as Toyota and Canon, a total of 60 to 70 suggestions per employee per year are written down, shared and implemented. In most cases these are not ideas for major changes. Kaizen is based on making little changes on a regular basis: always improving productivity, safety and effectiveness while reducing waste. Suggestions are not limited to a specific area such as production or marketing. Kaizen is based on making changes anywhere that improvements can be made. Western philosophy may be summarized as, "if it ain't broke, don't fix it." The Kaizen philosophy is to "do it better, make it better, improve it even if it isn't broken, because if we don't, we can't compete with those who do." Kaizen in Japan is a system of improvement that includes both home and business life. Kaizen even includes social activities. It is a concept that is applied in every aspect of a person's life.

5 Main elements of Kaizen:

Teamwork Personal discipline Improved morale Quality circles Suggestions for improvement

12 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Kaizen v/s Innovation:

KAIZEN = CONTINUOUS IMPROVEMENT 1. Effect 2. Pace 3. Timeframe 4. Change 5. Involvement 6. Approach 7. Mode 8. Spark 9. Practical requirements 10. Effort orientation 11. Evaluation criteria 12. Advantage Long term and long lasting but undramatic Small steps Continuous and incremental Gradual and constant Everybody Collectivism, group efforts, systems approach Maintenance and improvement Conventional know-how and state of the art Requires little investment but great effort to maintain it People Process and efforts for better results Works well in slow growth economies INNOVATION

Short term but dramatic Big Steps Intermittent and non-incremental Abrupt and volatile Select few champions Rugged individualism, individual ideas and efforts Scrap and rebuild Technological breakthrough, new inventions, new theories Requires large investment but little effort to maintain it. Technology Results for profit Better suited to fast growth economy

13 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

7. RECOMMENDATIONS

Recommendations are the suggestion given to Big Bazaar in order to increase their efficiency in operation. Recommendations are as per the above mentioned problems :

a. Trucks and vans which brings goods and merchandise to Big Bazaar from warehouse / DC and various vendors. These trucks and vans carry both staples and other goods. Vendors of goods other than staples, unload their goods on the ground out of the warehouse and go. Mean while labors of Big Bazaar take these unloaded goods to warehouse. The same is not possible in the case of staples. They cannot be unloaded on the ground in front of the warehouse. They have to be unloaded directly in the warehouse only. Thus, trucks and vans carrying staples have to wait for long time to get unloaded as the goods on the ground have to be cleared first. Therefore it became necessary to find an out solution which can reduce waiting time of trucks & vans and to reduce the traffic inside the mall. It was recommended that trucks and vans carrying staples should come at night. This will not only help Big Bazaar but also the drives of trucks and vans. Waiting for whole day and getting their vehicles unloaded was restricting them to get other job, or was a waste of time for them. Whereas they can do some other job and can earn for themselves. By calling them at night, drivers time is not wasted in waiting. Instead he can sleep while his truck is being unloaded. On the other hand there was no problem traffic in the premises of mall can also be solved. This can help in improving supply chain of Big Bazaar. b. In the warehouse maximum space is occupied by the goods or merchandise of the staple department. Bag of Wheat, Rice, Tur Dal, Moong Dal, Basmati and various other commodities are stored in the warehouse in the size of 30 kgs and 50 kgs, but the ways of storing these bags was such that they use to store them one upon the other. In other words as new stock is arrived it is places on the old stock. Thus using FIFO methods was very difficult. Therefore recommendation was given that these bags of various goods should be stored separately i.e. wheat should be stored in one side of the warehouse and rice on the other side. So it becomes easier to identify and count available stock in the warehouse and the volume of the stock getting spoiled can also be reduced. c. The signages which used are all used from one side and the other side is plain. This unused side of the signages can be used. All the used signages should be collected and books can be made. These books then can be donated to the needy ones. By doing this waste papers are used effectively and this activity of can be shown as CSR of the Big Bazaar.
14 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

d. Usually stock in the Big Bazaar, of warehouse and of the floor, is checked quarterly. To reach at the root cause of the problem suggestion was made to conduct checking of stock fortnightly. At present the difference in the stock of 1ltr packs of Gowardhan Ghee was resulting in the loss of Rs.16,000/-. It was also recommended that more CCTV cameras must be put up in order to cover every corner of the Big Bazaar. e. The mistake of selling Newzealand Royal Apples in the code of Washington Royal Apples is purely the mistake of the employees of Fruits and Vegetables section. Therefore recommendations was given that employees of Fruits and Vegetables section are required to go through a planned training sessions and brief them regarding the impact of wrong codes punching. f. To reduce the mistake of selling Bikaji Soanpapdi without offer, which was in the offer of Buy 1 & Get 1 following recommendation was given that to ensure offer skus sold in same barcode which it has been inwarded g. Defects and damages of goods or merchandise mainly happens in the warehouse. The main cause of this defects and damages are the house keeping people in the Big Bazaar. The basic rule of storing goods in warehouse is that heavy goods or merchandise should be kept in the lower sections of the rack and the light weighted goods or merchandise should be kept in the upper sections of the rack. The main reason of keeping goods or merchandise in this way is that, if ever goods kept in upper section of the rack falls amount of damage reduces. This is not taken care by the housekeeping staff. Therefore the amount of damage in the warehouse is very much. Thus, recommendation given was that housekeeping staff should strictly follow the basic rule of storing goods in warehouse.

15 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

8. STORE OPERATIONS Reducing Stock Damages Stock Damages have a huge bearing on our operations. They adversely affect our saleable merchandise which directly impacts our sales and margins and clogs our backend space and distribution system thereby reducing our productivity. The way we handle and store our merchandise will go a long way in reducing stock damages. A) Warehouse Management : Securing of the Warehouse: Secure the warehouse by sealing off/securing all unnecessary outlets (e.g. open drains, vents, damaged walls) to prevent accessibility by rodents.

Pest Control of the Warehouse: Annual maintenance contract to be entered with a Pest control agency to ensure regular and comprehensive pest control gets done in the warehouse. Schedule for pest control to be clearly laid out, plus agency to be on call whenever required.

Adequate Racking Capacity and Bins in the warehouse : In the absence of racks, merchandise gets stacked on top of each other. This is a sure recipe for damaging the items which are at the bottom of the heap. Further more when goods are stacked on top of one another it gets difficult to remove goods as per First in First Out methodology. (Detailed further) Adequate racking capacity to be made. Most effective is having slotted angle steel racks which allow one to adjust the height depending on type of merchandise being stored. Warehouses should also have adequate bins. The advantage of bins is fragile merchandise can be placed in bins and bins can be placed on top of each other without any load coming on the merchandise. Thus if fragile material is being placed on top of each other it is to be done only by using bins.

Storing of Merchandise : The basic principle to be followed whilst storing merchandise is; Goods to be placed on top of each other only to the extent that the items do not get damaged in any way. Fragile merchandise to be stored ensuring easy accessibility and no load on the merchandise. The goods to be stored in a manner that ensures retrieval of the merchandise as per First in First Out method of stocking. Hence to achieve the above the following steps to be followed when inwarding and storing merchandise.
16 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

When goods arrive in the warehouse on each carton the date of inwards to be recorded with a marker pen. Thus at one glance we get to know when a particular lot has got inwarded. Cartons can be either directly stored in the racks or its contents emptied into bins. Fragile merchandise preferably to be stored in bins e.g. BB accessories like toys, crockery, glassware, general plastic merchandise e.g. hair clips, etc. to be stored in bins. In FB, items such as wafers, snacks, biscuits, detergent packets which can tear and other FB items which can break to be stored in bins. Heavy merchandise to be stored in the lower racks. This hence reduces the load when the merchandise is being put in or removed. The warehouse space available to be segregated into different areas for ease in storing and retrieving merchandise. Merchandise of a similar category to be stored together. E.g. for Big Bazaar, apparel in one area, electronic items in another, general merchandise in another. For Food bazaar, personal product items together, soaps and detergents stored in one area, consumables stored together.
Note: It is not always possible to stick to these demarcations due to varying loads of merchandise which our stores receive. However a segregation plan is a must as it helps locate merchandise very easily. The benefit of this is not only for identifying merchandise according to the FIFO plan but also during ordering. Visually one can ascertain the stock which is present and based on that what replenishments are needed.

Cartons and or bins to be placed in the racks in a sequential order i.e. from left to right and from bottom rack to top rack. Any order can be followed top to bottom, bottom to top order is mainly to ensure that items can be located according to the FIFO method (as explained below)

First In First Out Method of Goods movement (FIFO) The FIFO method of goods movement is an important aspect of merchandise management which ensures that goods which arrive first are brought to the store floor first. This ensures that goods do not unnecessarily lie in the system for longer periods of time and get stuck in the system even as newer lots arrive and get sold. This is especially true for Food Bazaar where the merchandise has expiry dates and hence the old lot should be sold prior to selling new lots else they will reach their expiry date. Steps to follows for carrying out FIFO As mentioned earlier when a carton is inwarded the date of inwarding is to be marked on the carton to identify when the carton was inwarded. Whilst stacking merchandise a systematic order should be followed e.g. Left to right, bottom to top. When removing merchandise to move to the floor, remove the merchandise placed first i.e. start from the bottom left, move to the right, then move upwards and again left to right. This ensures that we follow FIFO method of goods movement and old material doesnt get

17 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

stuck in the system. B) Stacking of Merchandise on the Store Floor General Stacking Principles: Proper stacking of merchandise on the store floor plays an important role in reducing stock damages. Merchandise should be stacked on the floor in a manner such that; Goods are not dumped on each other thereby damaging them. Goods are easily accessible by the customer thereby preventing dropping, breakage of the item. When goods are removed from the shelf their should be assistance to reshelf the items. Even if the customer directly places the items on the shelf it is important for the floor staff to arrange the item appropriately. Unless this is done in no time does the entire shelf become messy and chances of damages becoming high.

Stacking Of Fragile items in Big Bazaar: Items which are fragile in nature e.g. crockery, toys, electronic items,etc, should always be stored one by one on a rack. They should never be all dumped together in a bin. Display on the rack should also be such that each type of SKU i.e.each style should be clubbed together with similar pieces being placed behind one another. Thus from the frontage of the section one can make out and access each SKU. The height of the shelf should also be such that it doesnt necessitate the need to place items one on top of the other. For fragile goods the shelf space should be enough for just one row of items. There should also be adequate space between items enable one to remove a piece from the rack. When some items are stacked on top of each other e.g. plates it is advisable there are many lots rather than a few high stacked lots. When stacking is done on the floor it should be done in a non intrusive area or in an area which doesnt block traffic flow but more so aids it. Its also a good idea to have shelf talkers and signages placed in front of the stacked merchandise as it serves as a barrier and prevents customers from stumbling on to the goods.

Stacking of items in Food Bazaar : Food Bazaar has numerous articles which are fragile, perishable in nature which need to be stacked properly to avoid damage. Stacking of Snacky items e.g. Wafers, Indian snacks These items need to be stacked in shelves where each packet is placed one behind the other. It is advisable not to stack them one on top of the other as the merchandise can get crushed. Stacking of biscuits, chocolates Items such as biscuits, etc. are stacked in the form of a pyramid on the rack. Chocolates in a lot of cases come in cardboard boxes which can be

18 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

placed on top of each other. Stacking of Grains which are in sacks, Large sized detergent powder packets - These items are generally stacked on top of each other. Caution to be taken to ensure the stacks are not too high as the lower bags can get damaged due to the weight. Also if varying sizes are being stacked the heavier packets to be at the bottom. In this category of items Warehouse and Floor staff need to be alert to any break/damage in the packing as the merchandise can spill from their packaging. Hence wrt sacks/ polypropylene bags/ detergent packets, as soon as a tear is noticed, the pack to be isolated.

o o

For Grains: immediately torn pack to be weighed to ascertain the quantum of loss of merchandise. If the spilled grain has not been contaminated with any other material and can be segregated that needs to be done immediately. The clean merchandise can then be refilled in the sack and the sack sewn up. In cases were the spilled merchandise has got contaminated it is to be disposed off and not refilled in the sack. If loose material of the same quality is available then only with the permission/direction of the Food Bazaar Store Manager/Assistant Store Manager and after completing the relevant documentation (as detailed later) should the required quantity of loose material be taken and filled in the sack to complete the sack. Else that sack to be sealed to prevent further loss of material and kept aside for returning to the vendor. For other branded items in packets e.g. detergent powder, the damaged pack to be sealed to prevent further spillage of material and kept aside for returning to the vendor.

Stacking of tetrapacks, liquid bottles (softdrinks, water, etc.) Generally these are stacked one on top of the other. However this can damage the lower bottles. To prevent these, items to be retained in their carton with the cartons placed on top of each other. With this part of the weight gets distributed to the cartons. Also bins can be used to store the lower rung items. Storing of Perishable items Perishable items have to be paid special attention to because they have very short expiry dates and if not stored properly get spoiled very easily. Thus this class of items is very susceptible to getting spoiled. o For perishable items the cold storage in the warehouse and the chill stations on the store floor need to be functioning properly and their temperature set to the appropriate range. All stores to ensure that they have the necessary equipment to store these items and annual maintenance contracts are in place which ensures regular servicing and upkeep of the equipment. o On a day to day basis administration along with the relevant floor staff to ensure that relevant temperature standards required for the various families of perishable items (e.g. milk and dairy products, meats, frozen desserts) are maintained and items stacked within the capacity of the chill stations. o Following the FIFO method of stock management is an absolute necessity for perishable items. On a continuous basis, whenever shelving is being done, the floor staff to arrange the merchandise such that earlier lots with earlier expiry dates are in the front with newer lots being placed behind them.

19 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

For suppliers supplying perishable, terms have been negotiated where expired merchandise is taken back. Hence the front end staff to be proactive to identify the items which have expired, soon to expire but in their experience will not move and return these items to the warehouse who in turn will pass it on to the supplier for take back.

20 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Inwarding of Food Bazaar Merchandise A) Order Creation Process for Food Bazaar Merchandise For merchandise required by Food Bazaar, vendors visit the stores for taking orders. The products required are identified by the Food Bazaar category teams and based on this requirement; a Purchase Order is issued to the Vendor according to which material is supplied. This process hence examines the creation of the Purchase Order. Follow the Vendor Scheduling SOP and schedule the vendors. Identify the SKU and respective purchase order to be placed by the section TL in consultation with respective DM. This P.O. is then handed over to the vendor. Purchase Order Creation: In case of supplies directly to store e.g. Chill, Frozen & Fresh goods The P.O. is raised at the store directly by the DM. In case of other goods The FB Category team decides the order quantities and release the P.O. from the FB warehouse through SAP. Bar Code Generation : The items required are invoked by means of the article number, against which the required quantity is keyed in. The vendor needs to pay attention to the following cost elements for the product i.e. MRP of the product. If Food Bazaar bar codes need to be affixed on the items, the bar codes for the ordered quantity are printed out and handed over to the vendor Note:- If an article number doesnt exist in the system, the item cannot be ordered. The ordering team required to get in touch with the store category team and H.O. category team for first creating the article in the SAP system. Only then can orders be placed for the item. If the cost elements of the product are incorrect they need to be altered. The Purchase Price, VAT and MRP of the product need to be altered by the FB team. MRP in SAP is maintained for each site specifically. Any MRP change in items, H.O. article creation team needs to be immediately informed to enable them to send new I-docs wherein the items new MRP appears in the REM system.

Signing of Purchase Orders: The final P.O. to be taken to the Assistant Store Manager/ Warehouse in charge of FB and their signature taken on the P.O. With this the P.O. is approved and is handed over to the vendor for execution.

21 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

B) Inwarding of Food Bazaar Merchandise Process examines the methodology of inwarding merchandise in Food Bazaar. While inwarding, care needs to be taken to ensure that items delivered are as per the purchase order placed. Any variations from the purchase order issued need to be noted. The physical quantities which are received need to be ascertained and recorded on the supporting documentation. Receipt of Goods at Inward Bay : Goods are brought by the Vendor to the inward bay of the store. (Inward Bay - any area where goods can be unloaded and physically checked by the FB personnel. It should be reasonably secure wherein the security guards present can keep an eye on the items and the area should be such that it is not easily accessible by the general public around). Note: While receiving the goods from the vendor, the receiving team should ensure atleast 60% validity of the shelf life of the product. However, if category had decided to go for promotion of certain products, then such cases can be considered as exception.

Examination of Supporting Documentation: For any consignment that arrives, the following documents are required. The supporting Purchase Order based on which the delivery has been effected . The invoice of the vendor from whom the supplied items are billed. FB warehouse personnel to check the documents and ascertain whether delivery has been affected within the expiry date mentioned in the P.O. Note: - If the P.O. has have been affixed cannot be inwarded. In this be undertaken to If Food Bazaar bar codes expired the goods on the items sample check to case a new P.O. needs to codes have been properly affixed. ascertain if barbe created. The goods can now be inwarded against the new P.O. Note:- If bar codes have not been affixed properly Food Bazaar Warehouse Manager / DM of that particular category in consultation with each other to decide if they require the goods and then proceed with inwards. If not urgently required the items to be returned to vendor.

If we are proceeding with inwards, new bar codes to be generated for that item and once inwarded, bar codes to be affixed to the item in the FB Warehouse prior to bringing the item on the floor.

Physical inwarding of consignment: If the documentation supporting the consignment is in order, the goods to be unloaded at

22 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

the inward bay by the vendors personnel. After unloading, the FB inwarding personnel to check the consignment, for the same. The carton contents to be ascertained. The P.O. is checked to ensure that the items received are the ones ordered for. For each SKU ordered, a sample of the item is to be taken and the MRP of the item to be checked against the MRP mentioned in the P.O. and as recorded in the vendors invoice. For any discrepancy in MRP the same to be noted on the P.O. and the vendors invoice. Note: - If goods of a different MRP have been received, a decision in consultation with Warehouse Manager and DM has to be taken whether we wish to accept these goods. If the goods are not to be accepted they are returned back to the vendor. If they are to be accepted the changed MRP is recorded in the P.O. and the invoice of the vendor and the inwards process is carried on with.

Additionally for items where PRIL bar codes have been affixed a sample check of a couple of items to be done for ascertaining if the correct bar code has been pasted on the product. Product name and MRP of product mentioned on the bar code to be checked versus the actual product. A global count of all items to be undertaken to ascertain the actual quantity received. It is mandatory to undertake a global count of all items received in cartons, which are open. Packed and sealed cartons with vendors tape need not be opened. However if there is any suspicion of a carton having been opened, the carton needs to be checked. As a rule global counts to be done on the maximum no. of cartons possible. Quantity received to be checked with the P.O. and any discrepancy to be noted in the P.O. and invoice of the vendor.

Documentation process governing the consignment: Once the goods are physically inwarded the FB inwarding personnel to take the supporting documents to the security personnel at the inward bay. The security personnel record the inwards in his security register.The invoice of the vendor is stamped and the inward no. and quantity inwarded is recorded on the stamp. The documents pertaining to the consignment are then used for inwarding in the system. The principle followed here is that the item description & quantity being inwarded need to be exactly the same as mentioned in the P.O. While, the item description has to be exactly the same as P.O., the quantity can be same or lower than the P.O. but in no case can it be higher than P.O. issued. A GRN has to be prepared checking the items & exact quantities recorded against the vendors invoice. A copy of the GRN is attached to the document set pertaining to that consignment and passed onto accounts for effecting payment along with the vendors invoice. Physical transferring of items into Food Bazaar: - As far as possible FB house keeping staff appointed by Food Bazaar should move the checked merchandise into the store warehouse and where required directly to the section on the floor dealing with that category. Each SKU should be scanned in the Store warehouse to see if the REM system

23 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

recognizes the item. If not, capture the correct A/C in the system or paste the appropriate barcode prior to sending it to the floor. If the vendors delivery boys are being used for moving goods into the warehouse/store floor it should be done strictly as per the following: An FB employee should accompany the vendors delivery person into the store and escort him out of the store. Whenever anyone exits the store premises frisking of the person should be done. Shortages while opening cartons: FB warehousing team to locate the vendor responsible for the same and the P.O. against which this consignment was inwarded. The vendor needs to be informed and either the missing goods to be replaced by the vendor or his invoice to be amended according to the exact quantity received. Note: - If the vendor doesnt take the responsibility of shortage, a written warning to be given to him for the same. Outwarding of Food Bazaar Merchandise The need to outward the food bazaar merchandise arises in case of damages at the store, expiry of products and non-moving stocks. These items can be handled as follows: o Returns to vendor o Return to warehouse o Scrap & Damages Basic Principle governing the process: o For goods to be outwarded, an Outward Purchase Order (P.O.) listing the items needs to be created by the store. o Each item is to be entered against this P.O. and outwarded from the system. C) Outwarding of Merchandise In case of items that are sent from the warehouse to the stores, the returns of the same to the vendor should happen from the warehouse itself. An approval of which needs to be taken from the warehouse manager. In case of items delivered direct to store, the store manager and the respective department manager need to approve for the outward of stocks to the vendor. In case of scrap/damage disposal, approval of commercial manager also needs to be taken. Damages like rat eaten stocks, especially foods are generally not taken back by the vendors.

24 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Preparation of the Outward P.O.: A P.O. listing each SKU and quantity to be outwarded is to be prepared. The P.O. to be signed by the person preparing the same and the department manager

Scanning and Outwarding of items to PRIL Warehouse/Delivery Centre/Vendor: The items to be outwarded are collected, checked against the underlying P.O. and packed for dispatch. The outwarded items are saved as an outward GRN, of which three copies are printed. Warehouse personnel to supervise loading onto the delivery vehicle according to the GRN. The security personnel to simultaneously maintain a count of the cartons being loaded on the vehicle and tally the same with the number of cartons as per the GRN. Security personnel to affix a seal containing stores stamp & securitys signature on the delivery vehicle. Warehouse personnel to record the Outward P.O. and GRN details, merchandise details and quantity in their outward register. Security personnel to record the outward in their security register and create a gate pass for the consignment. The GRN and gate pass are stamped with an outward stamp by the security. The outward number according to the security register, number of cartons and date are to be recorded on the stamp. The P.O., two copies of the GRN and the gate pass are to be handed over to the delivery vehicle staff. The other copy of the GRN and gate pass is handed back to the warehouse personnel for filing of the same. When the consignment reaches the warehouse/D.C., the respective personnel to acknowledge the receipt of the goods on one copy of the GRN, which needs to be then sent back to the dispatching store for their records. In case of returns to vendor, latest by his 3rd visit, vendor should take back returns of goods delivered in his 1st visit. If the vendor doesnt take back the stocks even after his 3rd visit, food bazaar category then comes into the picture. It is the categorys responsibility to debit the same to the vendors account or recover the money from the vendor and authorise to destroy the stock at the store/warehouse.

25 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Trolley and Basket Management The first thing a consumer touches upon entering the store is a shopping Trolley or Basket. Trolleys and Baskets are essential tools that facilitate convenience to customers at the store resulting in bigger ticket size as well as sales enhancement. These tools ensure customers to spend more time on the floor thereby giving them the freedom to choose their needs and wants at the store. Following are the keys factors influencing the management of Trolleys and Baskets at the store: Locations for Trolleys/Baskets Movement of Trolleys/Baskets Maintenance and control of Trolleys/Baskets Responsibility Store Manager to form a Trolley Basket Team at the store and the Housekeeping Supervisor to be made responsible for the entire process. Process Location for Trolleys & Baskets Trolleys/Baskets to be located at all the entry points and prominent locations of the store that fall within the vicinity of the customers Trolleys/Baskets Management Team to ensure proper availability of Trolleys/Baskets at those locations throughout the trading hours. In case of multiple entry points, preference to be given to the key entry points drawing more footfalls. Trolleys/Baskets to be neat, clean and properly arranged in order to facilitate easier access to customers entering the store. A Trolley/Basket Management Team member to be deployed at the main entry point to actively assist customers by providing Trolleys/Baskets to them. Movement of Trolleys/Baskets Store Manager to ensure that all the departments have ample space for Trolley movement at the store. Trolleys/Baskets Management Team to conduct frequent rounds inside and outside the store to collect all empty Baskets and Trolleys respectively and place them at appropriate locations thereby facilitating recycling effectively. Trolleys/Baskets Management Team to focus at optimum utilization of Trolleys/Baskets and ensure none of the Trolleys/Baskets are lying idle during peak hours. Trolleys utilized for moving stocks to floor to be kept back at their respective location after use. Store Management to ensure that no Trolleys/Baskets are allowed to wash rooms, trial rooms and other restricted areas inside the store. Trolleys/Baskets Management Team to ensure that no Trolleys are being taken beyond the restricted area outside the store.

26 | P a g e

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

Maintenance and Control of Trolleys/Baskets All Trolleys and Baskets to be counted every day before closing and the details to be recorded in Trolley/Basket Register by the Security Staff. Baskets to be always kept clean, well maintained and to be washed with soap water once in a week and damaged baskets to be removed from floor. Trolley/Basket Management Team to ensure that the Trolleys are able to move smoothly in all directions, free from rattling noise and wheels in proper shape. To tighten up all nuts and bolts once in a week. Trolleys/Baskets to be handled with care and ensure not to overload them that might cause damage.

It is the responsibility of the Store Manager to ensure that process set out in this SOP is followed at the Store without any deviation. The House-keeping Supervisor to check the Trolley Basket Register to ensure the trolley/basket operations is carried on effectively at the Store. The Store Manager shall confirm and approve the Trolley/Basket on daily basis. The Business Manager shall audit the adherence of the procedure as per the checklist during his/her store visits and copies of such audit report shall be available at the store.

27 | P a g e