Inventory Management Process: Problems in an Indian Convenience Store

Inventory Management Process: Problems in an Indian Convenience Store

Amit Agrahari (Indian Institute of Management, India) and Saket Jhunjhunwala (Accenture, India)
DOI: 10.4018/978-1-4666-2618-8.ch006
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Abstract

This case captures inventory management process in an Indian convenience store. Unlike retail stores in developed countries, Indian convenience stores are a special format of organized retailing, where retailers open multiple smaller stores in a town instead of one big centralised store. An excellent inventory management process is the key to make such stores perform well. This case describes inventory management problems faced by an Indian convenience store chain and asks students to propose solutions to these problems. This case illustrates how processes realities and their IT solutions differ in an emerging economy. Using inventory management process as an example, this teaching case can introduce students to the process and technological realities in an Indian context and differences between India and the West.
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Organisation Background

In India, retail sector has witnessed an unprecedented change and growth in the last 10 years. From small family-owned and unorganized stores to organized and corporate-owned store chains; rise of retail sector in India has been partially fuelled by the rise in middle class population and increase in their purchasing power. With over 15 million retail outlets, India has the highest retail outlets density in the world (Mukherjee & Patel, 2005). Though retail sector is still dominated by traditional mom and pop stores, corporate owned retail chains are fast catching up (Table 1). Multinational corporations such as Wal-Mart, Shoprite, and Tesco are also foraying into Indian retail sector.

Table 1.
Grocery retailers company shares: Percentage value (Euromonitor International, 2009)
Retailers20042005200620072008
Pantaloon Retail India Ltd0.10.20.30.50.9
Spencer's Retail Ltd--0.10.20.7
Subhiksha Trading Services Pvt Ltd0.10.10.10.30.6
Aditya Birla Retail Ltd---0.10.5
Reliance Retail Ltd--0.00.30.5
REI Agro Ltd---0.00.2
Mother Dairy Fruit & Vegetable Ltd0.10.10.10.10.1
Others99.799.799.398.496.4
Total100.0100.0100.0100.0100.0

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