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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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.
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
The need for ERPReason 1 : Market Competition
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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 ?
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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 ?
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
• 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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
“The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations.”Rakesh Biyani, Director, Pantaloon
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
After a comprehensive evaluation of different options and software companies, the managementat Pantaloon decided to go in for SAP.
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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
After a comprehensive evaluation of different options and software companies, the managementat Pantaloon decided to go in for SAP.
Retail ERP @ Pantaloon Snapshot
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
•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
ERP IN APPAREL & RETAIL INDUSTRY – BY Ruchi Singh
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 & RETAIL INDUSTRY – BY Ruchi Singh
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