IT led strategy towards enhanced profits and future expansion for a Local Bakery

MIS Report Group 3 | 1

IS PLAN For

THE CAPTAIN’S TABLE

SUBMITTED TO

DR. DHRUV NATH

BY: GROUP 3, SECTION – D

Akashdeep Gupta (10P185) Anant Garg (10P187) Ashutosh Chaudhary (10P193) Harpreet Singh (10P200)

Kalika Jain (10P203)

Kamal Pandey (10P204)

DATE OF SUBMISSION: 12 MARCH 2011

Management Development Institute

Gurgaon-122001


Acknowledgment

We are deeply indebted to Dr. Dhruv Nath, Professor, Information Management,

Management Development Institute, Gurgaon whose help, stimulating suggestions and

encouragement helped us in the time of research for developing the IS plan.

We would also like to thank Ms. Shruti Sud, the co-owner and manager of The Captain’s

Table for giving us valuable information about her bakery without which the project could

not have been complete.

Contact Information

1. Capt. Arvind Sud

Proprietor – The Captain’s Table

Mob.: +91 9953886109

2. Ms. Shruti Sud

Manager – The Captain’s Table

Mob.: +91 9911271169


Executive Summary

The Business Analysis Report (BAR) documents the goals for The Captain’s Table based on discussion with management, identifies strategies for the defined goals, and goes on to determine information requirements, drawing in part from a process study. The report concludes by listing key application functionalities required to fulfil critical success factors. The relevance of IT-driven business processes is well-established for organisations that have the characteristics of high volume of transactions, frequent product launches and high growth rates. The bakery in question has goals and visions which it seeks to answer through the application of IT led strategies. The Captain’s Table is an established bakery in the Sector 14 market of Gurgaon from the past seven years. With an annual turnover above 3 lacs and association with retail stores such as Spencers and SRS, the enterprise is looking at avenues of rapid expansion. Following set of Long Term and Short Term Goals were determined after a set of detailed interview based discussions with Ms. Shruti Sud, Manager – The Captain’s Table.

Long Term Goals 1. Establish the brand "The Captain’s Table"

2. Expand "The Captain’s Table" successfully over the NCR region

Short Term Goals

1. Bring down wastage and pilferage to a tenth of what was being produced currently

2. Incorporate proper inventory management systems to expedite the procurement process

3. Introduce a comprehensive accounting system which integrates all the revenue generating units of the enterprise

4. Increase visibility of the enterprise vis-à-vis the competition

The stated goals are identified and IT applications are developed for their accomplishment.

The following applications are proposed for implementation:

The Captain’s Table Inventory Management System (TCT IMS)

The Captain’s Table Customer Relationship Management (TCT CRM)

The Captain’s Table Forecast Management System (TCT FMS)

The Captain’s Table Accounts Management System (TCT AMS)

The Captain’s Table Personnel Management System (TCT PMS)

Thus, the report analyses the stated goals and the feasibility of the proposed IT applications.


Table of Contents

1. INTRODUCTION………………………………………………………………………………………………………05

1.1 Captain’s Table - The story so far………………………………………………………………………..05

1.2 Business Model and Organizational Structure……………………………………………………..05

1.3 The Vision…………………………………………………………………………………………………………….07

2. CURRENT BUSINESS ENVIRONMENT……………………………………………………………………….08

3. CHALLENGES…………………………………………………………………………………………………………..11

4. ORGANIZATIONAL GOALS……………………………………………………………………………………….12

1.1 Methodology………………………………………………………………………………………………………..12

1.2 Long Term Goals…………………………………………………………………………………………………..12

1.3 Short Term Goals………………………………………………………………………………………………….12

5. STRATEGIES AND CRITICAL SUCCESS FACTORS………………………………………………………..13

1.1 Methodology…………………………………………………………………………………………………………13

1.2 Identified Strategy and related CSFs……………………………………………………………………..13

6. ANALYSIS OF CURRENT INFORMATION SYSTEMS AND INFORMATION GAPS………..16

1.1 Current Information Systems Assessment…………………………………………………………….16

1.2 Key Information Requirement………………………………………………………………………........16

1.3 Information Gaps and Automation Options…………………………………………………….......16

7. POSSIBLE IT INTERVENTIONS…………………………………………………………………………………..18

8. PRIORITIZATION……………………………………………………………………………………………………..21

1.1 Value Analysis………………………………………………………………………………………………….21

1.2 Readiness Analysis…………………………………………………………………………………………..22

1.3 Readiness Value Matrix……………………………………………………………………………………23

9. IMPLEMENTATION PLAN…………………………………………………………………………………………24

10. CONCLUSION………………………………………………….………………………………………………….25


1. Introduction

1.1 The Captain’s Table – The story so far

It all started in the fall of 2003. A couple’s vision gave birth to an enterprise whose aim was to

satiate the taste buds of the city. In October 2003, Capt. Arvind Sud and Ms. Shruti Sud

started The Captain’s Table – a bakery which was innovative yet traditional, delicious yet

healthy, and though a shop yet homely ambient. Seven years later it has become the apple of

the eye of the people who flock the Sector 14 market. Be it the coconut pie or the chocolate

truffle or the cheese puffs, The Captain’s Table had the best variety a bakery could possibly

offer.

The Captain’s Table boasted of a spacious restaurant which was situated in the basement of

the bakery. It served as the perfect hanging out joint for the young and the old who enjoyed

the mouth-watering delicacies with the soothing ambience. But, unfortunately because of

some operational issues it had to be closed down in May 2010.

But just like it always had something new and exciting on its menu, The Captain’s Table also

had other sources of revenue generation at hand. It started supplying confectionary and

bakery items to the Spencer Retail Store in DLF Mall from October 2009. This year, i.e. in

2011, The Captain’s Table has acquired a separate counter at the SRS store in the new Raheja

Mall on Sohna road. This counter is not only bringing in more sales, but is also increasing the

market presence of the bakery. At present, The Captain’s Table has a turnover of above 3 lacs

annually from all the selling points.

During the discussions with Ms. Shruti Sud, the manager of the bakery, the vision of the

bakery were made clear. The Captain’s Table wants to establish itself as a brand all over

Gurgaon and also in the NCR region in the near future, apart from increase in the annual

sales.

1.2 Business Model and Organizational Structure

Mission Statement: Focus on mediocre personal gains with expansion through improved

returns from the lowest level.

The Business Model of Captain’s Table is that followed by any small in-house bakery. The

focus is on catering to the demands of the local area and providing innovative and quality

products superior to the branded products available in the market. The marketing spend is

low but inclination is more on providing preferred and tailor-made products for the

customers. The model is easy to function with and positions the bakery well in the market in

which it is situated.

The bakery works by providing two kinds of product types – one, which are pre-made and

others, which are ordered by the customers and can be customized based upon their


requirements and preferences. The orders can be placed over the counter or over the phone,

as per the convenience of the customer.

Apart from the shop, the bakery also has an association with a Spencers Retail Shop, which

sells products of the bakery such as bread, muffins, etc. It also has an outlet at SRS Store in

Raheja mall, which is manned by a sales boy. The outlet provides the bakery a better

presence vis-à-vis the Spencers.

Currently, the bakery doesn’t have a specific hierarchical organizational structure with

positions of responsibility being rotated depending upon the requirements for a certain day

or period. The bakery is headed and managed by Ms. Shruti Sud, who’s a co-owner with Mr.

Sud. The organizational chart is shown below.

Organizational Chart of The Captain’s Table

As shown, the bakery has three bakers who are responsible for the production of the bakery

items sold. These bakers are supported by a helper staff of three, which means every baker

can have a separate helper at any given moment. Moreover, these helpers double as cleaners

and secondary help to the two counter boys, as and when they are needed. The billing

counter is manned by one cashier. In contingencies, the bakers might do the jobs assigned to

the helpers in the kitchen. Similarly, the billing counter is manned by any of the counter boys

in the absence of the cashier and vice versa. The sales boy manning the outlet at the SRS

Store also doubles as the cashier for the sales.

Ms. Shruti Sud

Co-owner/ Manager

Bakers

(3)

Helpers

(3)

Customer

Attendants (2)

Cashier

(1)

Outlet

Attendant (1)

At bakery shop At retail outlet

Interchangeable roles when required

Capt. Arvind Sud

Proprietor


1.3 The Vision

The vision of The Captain’s Table is to become a brand name by 2020, primarily in Gurgaon

and also in the rest of NCR. The bakery-cum-restaurant in the past was a step in this direction

but could not succeed because of improper operations planning and ignorance of public

demand. But of late, it has started expanding by making presence through Spencers and

other retail outlets. This step is helping the bakery in a two-fold manner – first, it is providing

the required market presence and second, it is bringing more revenue which is required by

the enterprise to further its business.


2. Current Business Environment

The current business environment for The Captain’s Table is not very competitive but is

steadily moving towards it. With the presence of established players like Bisq, Om Sweets and

Café Coffee Day, and also small time bakeries, grocery shops, etc. it is important to capitulate

on the existing image of the brand before it gets diluted. Although The Captain’s Table is not a

big organisation, still a SWOT and Porter’s Five Forces analysis might help in ascertaining the

market in a more comprehensive manner.

SWOT Analysis

Strengths Weaknesses

1. Only shop in the area providing exclusive bakery products

2. Presence in the area from a long time 3. Established customer base 4. Large variety of bakery products

available 5. Provides everyday grocery product

such as breads, buns, etc to retailers such as Spencers which enhances its market presence

1. Inefficient information systems being used which hamper growth

2. Only a single presence in terms of eating joint

3. Mediocre customer service diluting brand image

4. Discouraging sit-and-eat option as the seating area is small, which decreases customer attachment and thus sales

Opportunities Threats

1. Increasing inclination of customers towards baked goods, because of avoidance of oily food due to health concerns

2. Competition at a nascent stage 3. Very few bakeries providing such

variety of products 4. Influx of youth in Gurgaon through

corporate and educational institutions, thus home delivery a good option

1. Slow but steady emergence of competition

2. Established bakery chains from NCR region trying to gain a foothold in the Gurgaon market

3. Grocery and Departmental stores have started stocking bakery products of the organisations like Britannia, etc.


Porter’s Five Forces Analysis

Threat of intense segment rivalry

The bakery market is expanding everyday in the city. With this continuous expansion the established

players are increasing their hold in the market. This is increasing the competition and puts the bakery

under the threat of segment rivalry. Established players such as Om Sweets or Bisq have developed

eating joint model which provides the customers more options. Introduction of newer products is also

difficult.

Threat of new entrants

The threat of new entrants is fairly easy as the market is governed by prices making it easier for

anybody to enter. In the same manner, exit barriers are also absent and anybody can leave without

any resistance from the competition.

Threat of bargaining power of suppliers

As the competition is not severe, thus it also has an effect over the suppliers which are also large in

number and thus possess little bargaining power.

Potential

Entrants

Industry

Competitors

Rivalry among existing firms

Substitutes

Suppliers Buyers

Threat of new entrant

Bargaining power of

customers

Bargaining power of

suppliers

Threat of substitute

product or service

(Medium)

(High)

(Medium)

(Low)


Threat of bargaining power of customers

As there is low brand value for the players, the customers possess high bargaining power. They don’t

have loyalty and base their choice over the prices offered. Absence of switching cost also helps them

to have the specified behaviour.

Threat of substitutes

The market has seen an influx of products such as cakes, muffins, puffs, etc. from big organizations

such as Nestlé, Britannia, Parle, ITC, etc. These substitute products have a better penetration in the

market and pose a decent threat to the bakery business.


3. Challenges

The challenge for Captain’s Table is to maximize profits while maintaining quality and

heightened customer satisfaction. After delving into the possible causes of concerns and

bottlenecks which the enterprise was facing, the following challenges were figured which

collectively formed a hindrance to the profits:

1. Absence of control measures for wastage and pilferage

The Captain’s Table doesn’t have any means to control the wastage and pilferage happening

during the production as well as the selling process. The minimization of the waste is done

through approximate forecast of demand based upon the past sales figures. This method is

crude and doesn’t give the right picture. Thus, there is little or no reduction in the pilferage of

the products.

2. Absence of comprehensive Inventory management systems

As stated earlier, The Captain’s Table deploys crude methods for forecasting future demands.

This has an adverse effect on the inventory management of the enterprise. This also results in

wrong procurement cycle and leads to storage problems as well.

3. Absence of proper systems for accounting and billing functions

The system for cash accounting in The Captain’s Table is manual and is maintained by the

cashier. This system has its drawback in the manner that any anomaly in the accounts is

difficult to identify. Moreover, analyzing the sales data is complicated with manual data input

through this system.

4. Loss of market share because of increasing competition

The increasing competition in the market is diluting the market share of the bakery. The

enterprise is facing competition both from the local players, who are also cashing on the

increase in demand of the bakery products, as well as organized players like Nestlé, Britannia,

Parle, ITC, etc.


4. Organizational Goals

1.1 Methodology

For the purpose of determining the Organizational goals for The Captain’s Table, interview

based discussions were conducted, both with the employer as well as the employees. Based

on their insights about the business and the issues they felt were affecting it, a list of both

Long Term and Short Term goals were deduced.

1.2 Long Term Goals

Goals with a time horizon of more than 5 years were categorized as long term goals. These

were identified after studying the strengths of The Captain’s Table and the opportunity the

market offered.

1. Establish brand “The Captain’s Table”

2. Expand “The Captain’s Table” successfully over the NCR region

1.3 Short Term Goals

Short term goals were those which were identified to have a period of 1-2 years for

accomplishment.

1. Bring down wastage and pilferage to a tenth of what was being produced

currently

2. Incorporate proper inventory management systems to expedite the

procurement process

3. Introduce a comprehensive accounting system which integrates all the revenue

generating units of the enterprise

4. Increase visibility of the enterprise vis-à-vis the competition


5. Strategies and Critical Success Factors

1.1 Methodology

Strategies for the goals identified were worked out based on their analysis both in isolation as

well as collectively.

In terms of isolated viewing, goals were assessed on the requirements which were necessary

for their individual accomplishment. On the contrary, a collective approach was followed so

as to ascertain the strategies that the goals would require with respect to the market and

existing competition.

The Critical Success Factors (CSFs) are the differentiating factors which increase the

probability of the success of a strategy. In the given case, the CSFs were identified in

accordance with the strategies that were to be adopted for the accomplishment of the goals.

1.2 Identified Strategy

LTG1 – Establish brand “The Captain’s Table”

# Strategy Critical Success Factors

1. Increased marketing and advertising efforts

Point of Difference and Point of Parity

Communication Mix

Product Innovation

2. Improved packaging Quality

Creativity

Pricing

3. Increase in number of outlets Ease of availability of space

Collaboration with retailers and grocery stores

Standardized design for eating joints to facilitate quick implementation

LTG2 – Expand “The Captain’s Table” throught the NCR Region


1. Association with Retail Chains

Low price and Better margin

Wide range of products

Efficient delivery

2. Establishing more eating joints

Mapping customer requirement in every region of establishment

Customized ambience in-tune with the customer preference

Focused marketing for every region of establishment

3. Introduction of Street Stalls and Kiosks

Heightened visibility

Increased market penetration


STG1 – Bring down the wastage and pilferage to one-tenth of what was being produced

currently


1. Adoption of robust forecasting methods

Standardized forecast mechanism

Inclusion of factors such as Seasonality

Better forecast figures than previous ones

2. Enhancing efficiency of production cycle

Controlled production

Enhanced supervision at the production level

Deployment of methods such as Kanban, Jidoka, etc.

STG2 – Incorporate proper inventory management systems to expedite the procurement

process


1. Collation of daily raw material usage

Daily material usage figure

Expeditious assignment of raw material to production

2. Working out better deals with suppliers

Assured supply

Cost benefit as compared to the competitors

Assurance of quality

Supply in case of emergency i.e. sudden increase in demand

STG3 – Introduce a comprehensive accounting system which integrates all the revenue

generating units of the enterprise


1. Uniform pricing structure for all products

Ease of management of price

Better management in case of price wars

2. Automated centralized accounting system

Ease in analyzing sales from any sales point

Easier calculation of turnover for any period

Enhanced control over sales-personnel

3. Minimization in sale of loose units Easier to track shop-lifting and theft

4. Usage of bar codes for sale of products to monitor exact sales figure

Exact sales figures

Ease in forecasting sales

Faster execution of sales leading to enhanced customer satisfaction


STG4 – Increase visibility of the enterprise vis-à-vis competition


1. Expediting processes at the shop

Heightened customer satisfaction

Reduction in waiting line

Better process management

2. Employing promotional strategies

Increased customer preference

Better after-image of the brand

Better assessment of customer requirement

3. Collaborating with corporate and other enterprises

First mover advantage

Avenue of steady demand

Enhanced credibility

Better exposure to customer preferences


6. Analysis of Current Information Systems and Information Gaps

1.1 Current Information Systems Assessment

The current information systems used at The Captain’s Table are all manual in nature. These

information systems are updated every day, and the inventory is maintained based on these

entries. There are four categories of information which is maintained under these

information systems, namely:

1. Daily sales figures

2. Raw material stock

3. Finished goods stock

4. Cash balance

1.2 Key Information Required

The current information system of the bakery is complex to maintain and does not have a

standard manner of being collected. Thus, a proper information system becomes the need of

the hour for the enterprise. After analysis of all the CSFs and the current information systems,

following information set would be required.

1. Comprehensive sales data for each day, collated over a month

2. Stock of finished goods every morning with the exact number of units for each

product

3. Stock of raw material consumed over the day/ one manufacturing cycle

4. Average amount of material required for a unit/lot of a particular product

5. Number of personnel at work on a day

6. Number of competitors

1.3 Information Gaps and Automation Required

From the list of current information systems at The Captain’s Table and the required

information set, the existing information gaps can be ascertained.

Key Information Required

Information provided by

current systems

Existing Information Gaps

Automation Required

Comprehensive sales data for each day, collated over a month

Yes

Does not give separate sales figures for the eating joint and the retail outlets

Yes

Stock of finished goods every morning with the exact number of units for each product

Yes Exact number of units not mentioned

Yes

Stock of raw material consumed over the day/ one manufacturing cycle

Yes Data tells overall consumption only

Yes


Average amount of material required for a unit/lot of a particular product

No

No method to put the data; estimated amounts based on experience are used

Yes

Number of personnel at work on a day Yes No standard protocol Yes

Number of competitors No No intention to find Yes

Moreover, automation would also be required for streamlining the accounting methods of

the enterprise.


7. Possible IT Interventions

From the analysis of the information collected from The Captain’s Table, it can be concluded

that the information systems are complex and old, lack in a number of areas and hamper the

vision of the enterprise as a whole. Thus, it becomes the need of the hour to replace them

with efficient IT systems which can answer the requirements of the enterprise

comprehensively, and aid it to achieve its goals.

Following are the possible IT applications which The Captain’s Table should employ, based on

the CSFs and Information Gaps identified:

The Captain’s Table Inventory Management System (TCT IMS)

The TCT IMS would be having the following sub applications:

Raw Material Management System (RMMS)

Finished Goods Record System (FGRS)

Sales Record System (SRS)

Scope This system will, as the name suggests, provide the support for inventory

management.

Business Logic The application will work in three areas – Raw Material Stock, Finished

Goods Stock and Sales Figures. The application will combine the above

stated figures to generate a daily log of the same in a collective manner.

Inputs Daily sales forecast (Initially manual, then automated). Inventory

Information regarding Raw material stock, finished goods stock and sales

figure (amount)

Outputs Daily Inventory report, Wastage report and Cost Analysis

Databases [CRU-]Raw material database, [CRU-]Finished Goods Database, [-R--]Sales

Database

Performance Expected Users

Accounts Manager at all outlets and the central location

The Captain’s Table Customer Relationship Management (TCT CRM)

Scope CRM system will be used to maintain customer database and generate

analysis on customer behavior and preferences.


Business Logic Analysis of customer data can provide rich insight into customer’s

purchasing power, buying preferences, likes and dislikes etc. It

would help to provide customised products and services at

premium to the selected customers.

Special occasions like birthdays, anniversary etc. constitute major

portion of annuals sales. Customer data could be used to pitch

products to the customers and also to forecast sales for a particular

day.

Customer data can be used to maintain customer relations by

contacting through phone calls or SMSs. This would help in

generating repeat business.

Analysis of customer data will help in identifying customer segment

and targeting new customers.

Inputs Customer phone nos., address, personal details, preference etc.

Outputs Customer analysis report (Geography, Income, Age, Frequency

segmentation), Daily notifications for contacting customers

Databases [CRUD] Customer Information Database (Address, Phone no, Preference,

Complains etc.)

The Captain’s Table Forecast Management System (TCT FMS)

Scope This system would generate steady forecasts based on past sales figures

employing a robust forecasting mechanism. The TCT FMS will not only

generate figures as target sales but will also aid in determining the budget

of the enterprise.

Business Logic TCT is in the business of perishable food items. To achieve the target of

cost control it is imperative to have forecasting capability. Historical sales

data, data from point of sales and CRM system will be used in generating

daily and weekly forecasts. The forecasting mechanism can be different

for different sales points, thus giving an all-encompassing forecast.

Inputs Historical sales data, Data from CRM system regarding special occasions


like birthdays, anniversary etc.

Outputs Daily sales forecasts for each outlet

Databases [-R-] Transaction History Database, [CRUD]Forecast Database

The Captain’s Table Accounts Management System (TCT AMS)

Scope This system will provide The Captain’s Table a panoptic view of all the

financial transactions taking place at the retail outlets as well as the eating

joints.

Business Logic All the transactions will be recorded and sales figures compiled on daily

basis. It will connect to TCT IMS and TCT PMS to compile inventory costs

and employee costs. This reports generated from the data will be used for

financial planning and cost control.

Inputs Employee information, payroll information, leaves and advances etc.

Outputs Profit and loss statements, costs and works accounting reports, variance

analysis reports.

Databases [CRU-] Sales, [CRU-] Purchases, [CRU-] Expenses, [--R-] Payroll Database

The Captain’s Table Personnel Management System (TCT PMS)

Scope This application is suggested keeping in mind the vision of The Captain’s

Table to expand and create a brand name in the future. Thus, as the size

of the organization grows, the size of the workforce would also grow with

it. Hence, it is very important to have a system which helps in better

management of the workforce.

Business Logic The TCT PMS will contain the data such as attendance, leave, salary and

wages, incentives, etc. It will also be connected to TCT AMS for accounting

purposes.

Inputs Employee information, payroll information, leaves and advances etc.

Outputs Payroll generation, reports on employee productivity, manpower planning

Databases [CRU-] Employee Database, [CRU-] Payroll Database


8. Prioritization

1.1 Value Analysis

Information System

Sales Improvement

Cost Reduction Planning Facilitation

Overall Impact

Inventory Management

System (TCTIMS)

NA

Customer Relationship Management (TCTCRM)

NA

Forecast Management System (TCTFMS) Account Management System (TCTAMS)

NA

Personnel Management System (TCTPMS)

Size of segment shows relative contribution for a given attribute.


1.2 Readiness Analysis

Information System

People Issues

Data Issues Technology Issues

Other Issues Readiness

Inventory Management

System (TCTIMS)

No dedicated person to account for inventory.

Automating Inventory data collection tough and costly

No issue No previous process to log inventory transactions.

Customer Relationship Management (TCTCRM)

No issue No previous data. Database needs to be built up from scratch.

No issue No issue

Forecast Management System (TCTFMS)

No issue Historical data difficult to obtain intially, to test the forecast models.

Forecast models need to be developed.

No issue

Account Management System (TCTAMS)

Could lead to worker overload

No issue No issue No existing process for cost and work accounting

Personnel Management System (TCTPMS)

Performance tracking could be an issue

Performance Metrics not defined

No issue No issue


1.3 Readiness Value Matrix V

alu

e

Readiness

Customer Relationship Management

Personnel Management System

Inventory Management System

Forecast Management System

Account Management System


9. Implementation Plan


10. Conclusion

The report suggests that the goals suggested by the enterprise can be achieved on

comprehensive implementation of proposed IT led strategies. Moreover, on analysis of the

existing information systems at The Captain’s Table, it was found that they were manual and

inefficient which was becoming a bottleneck in the smooth functioning of the enterprise.

Thus, proposed strategies would be beneficial as they were not only efficient and robust, but

also had the flexibility of incorporating future expansion plans of the bakery.

IT led strategy towards enhanced profits and future expansion for a Local Bakery

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