ERP in Apparel n Retail

ASSIGNMENT ON

APPLICATION OF ERP IN APPAREL & RETAIL INDUSTRY

Submitted to:Ms. Rashmi Gulati

Submitted by:Ruchi SinghMFM 2009-11

ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh

Contents

• ERP – Introductiono What is ERP

o Features & Benefits of ERP

• ERP in Apparel & Retail Industryo Necessity of ERP in Apparel & Retail Industry

o Advantages of ERP in Apparel & Retail Industry

o Disadvantages of ERP in Apparel & Retail Industry

• Case Study – Pantaloon Retail


ERPAn Introduction

• It’s a multi-module application software that supports broad set of business activities, that may include a combination any of these:

o Product developmento Pre and Post Costingo Merchandisingo Planningo Purchaseo Inventory managemento Production o Exports o Finance ando Payroll


ERPAn Introduction

Finance

Pre andPost Costing

Exports Planning

Purchase

‘ERP’

Merchandising

Payroll

Production

Inventory management

‘ERP’Multi-module application

software that supports broad set of business activities, that

may include a combination any of these

Productdevelopment


ERPFeatures & Benefits

• Effective monitoring operations of the company• An ERP system uses a central database called the unified

Information System (IS) that holds all the data relating to the various system modules. a

• Highly flexibility • A good retail ERP system is highly flexible allows a high degree of

customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations.

• All users and organisational components integrated

• ERP systems integrate all the data and the related processes of an organization. ERP software packages have an enterprise wide reach that offers cross-functional capabilities to the organization

• Greater efficiency and performance • ERP helps business process flow more smoothly and improves the

efficiency of fulfillment process. It leads to reduced inventory. Eventually, it decreases the overall business cost.


The need for ERPReason 1 : Market Competition


Mark

et

Com

pet

itio

nEfficiency is critical to survive in the retail industry

Respond to the various inputs in real time across the enterprise.

Respond to the various inputs in real time across the enterprise.

To beat the competition, retailers have to understand consumer demand at the point of interaction

Margins &Efficiency

Consumer Specific Requirements

TAT to Customer Response

Competition

Problems in the legacy Environment : Sans the ERP

The need for ERPReason 2 : Regulatory pressures


Reg

ula

tory

pre

ssure

s A combination of flexibility, process efficiency, reliable information and responsiveness is critical to a retail businessNeed of an integrated IS infrastructure which continuously monitors and dispatches the information.

Only the complete integration can provide this.

Retail business would benefit immensely from an integrated IS infrastructure

Efficiency

Data access and near-instant performance

reporting

Retailers require an enterprise wide process

visibility

To meet the regulatory standards

Inability of Legacy System to meet these Requirements

Challenges with the Retail SectorWhy cant they just move to ERP ?


Fragmented legacy software applications

Risk to business

Integration & Scalability

problems

Outdated Architectur

e

Limited Scope

Over Dynamic legacy systems

Integration is the prime prerequisite but very difficult.

As explained

Difficult to rip and replace the legacy

systems

Previous Investments would

go waste

Problems with Legacy systems

Challenges with the Retail SectorProblems With Legacy Systems – WRT Retail - Explained


Outdated

architecture

•Most of the legacy enterprise applications in retail have an outdated architecture that is inflexible and rigid. This inflexibility and rigidity pose a challenge to the business efficiency. The lack of flexibility prevents the legacy software to be used with the contemporary products available in the market that may add muscle to the retail operations. Today’s business environment demands real time adaptability from the software systems.

Limited scope

•Most of the legacy systems were designed to take care of specific problems tasks and as a result, lacked an enterprise wide approach to the problem solving process. This makes such systems unsuitable for use in the contemporary business environment that is highly competitive in nature. Modern businesses require an enterprise wide approach to retail management process and legacy systems fall short of such a requirement.

Integration and

scalability

problems

•Legacy software does not allow addition and integration of new applications. This prevents such systems from scaling up or integrating with similar systems used by the associates or business partners. Such integration and scalability problems tend to multiply as the size and scope of retail operations increases.

Increased risk to

the business

•A combination of old and new information systems makes the whole system susceptible to failure or crash. The heterogeneity in the system is the primary cause of risk. The solution lies in a close knit, homogeneous information system that can integrate seamlessly with other such systems in real time while imparting the much-needed stability to the whole system.

Advantages of Using a ERP Retail SuitWhat if Legacy Systems are replaced with Retail ERP Suits ?


Advantages of ERP Suites

Technology and

application integration

Segment specific

expandability option

Support for advanced

functionality

Configuration and scalability

Phased implementatio

n support

Support for the store system

Retail specific components

Workflow automation

and enterprise

process management

Advantages of Using a ERP Retail SuitAdvantages Explained


Retail specific

components

•Unlike a general ERP package, retail ERP suite offers retail centric components that are customized to meet the specific requirements of a retail organization in an effective and efficient manner. This makes a retail ERP suite much more suitable to meet the specific requirements of a retail organization

Segment specific

expandability

option

•Within the retail sector, there is a wide variety of different segments that vary in their nature and scope of operations. A retail ERP package has provisions to meet the varying needs of the different segments within the retail sector

Support for the

store system

•Retail ERP suite offers support for the store systems that form the pivot of a retail business. The critical functions include keeping track of the inventory, ordering and replenishment, loss prevention and task management. This makes retail ERP system suited to the specific needs of a retail organization

Configuration and

scalability

•A good retail ERP system allows a high degree of customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations. Such configuration and scalability prove to be a boon in managing the retail operations across an enterprise. This allows a retail ERP system to grow with the organization

Advantages of Using a ERP Retail SuitAdvantages Explained…contd


Phased implementation support

•Modern retail ERP systems provide support for phased implementation. This feature allows the software package to be implemented in a step-by-step incremental manner rather than in one go. This makes the transition to an ERP package a lot easier. This feature allows the users to acclimatize themselves to an ERP package that may initially seem complicated to use.

Support for advanced functionality

•Modern retail ERP systems provide support for advanced functionalities that is helpful in the decision making process such as formulating pricing strategies, merchandise planning, inventory optimization and store execution. The advanced functionalities help the users formulate business strategies to introduce efficiencies in the critical business processes. The top management uses this feature to set the benchmarks and achieve the desired results

Workflow automation and enterprise process management

•Modern day retail ERP packages offer workflow automation and enterprise process management to make the workflow smooth and seamless across the entire enterprise. This allows the management to monitor and keep track of the workflow while also undertaking the enterprise process management leading to the identification and removal of any inconsistencies in the business process.

Technology and application integration

•A good retail ERP system allows technology and application integration to allow a platform independent, seamless transfer of processes across different modules running on different technologies in an enterprise wide environment that may include interaction with legacy systems and external entities such as the suppliers and the customers. Such integration provides the critical enterprise-wide view to the management

Disadvantages of Using a ERP Retail Suit


• Re-engineering of business processes to fit the "industry standard"

prescribed by the ERP system may lead to a loss of competitive advantage.

• ERP systems can be very expensive.

• Once a system is established, switching costs are very high for any one of

the partners (reducing flexibility and strategic control at the corporate

level).

• Resistance in sharing sensitive internal information between departments

can reduce the effectiveness of the software.

• Some large organizations may have multiple departments with separate,

independent resources, missions, chains-of-command, etc, and

consolidation into a single enterprise may yield limited benefits.

• ERP Systems centralize the data in one place. This can increase the risk of

loss of sensitive information in the event of a security breach

“The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations.”Rakesh Biyani, Director, Pantaloon


Retail ERP @ Pantaloon What led to it !

Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively

The company was looking for a solution that would bring all of its businesses and processes together


After a comprehensive evaluation of different options and software companies, the managementat Pantaloon decided to go in for SAP.

Retail ERP @ Pantaloon Snapshot


•Solution : SAP retail solution•Implemented by : SAP team with the help of

Novasoft,•Singapore•Number of users : Around 1,200•Time taken : About six months•Cost of implementation : About $10 million•Implemented in three phases

oPhase one: BlueprintingoSecond phase: Development of SAP platformoThird phase: Deployment

Referenceshttp://mindpower.smartads.info/business-management/article.php?art=5965

http://www.esmartx.com/http://www.dmsretail.com/erp.htmhttp://www.networkmagazineindia.com/200703/casestudy02.shtml


ERP in Apparel n Retail

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