Professional Documents
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INTRODUCTION
garments,
products handmade by
furnishings,
craftspeople
fabrics
across
and
ethnic
rural
India.
Foundation,
New
Delhi,
Fabindia
started
out
from
traditional
techniques,
skills
and
hand-based
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BRIEF HISTORY
By 1965,
1974
1977-Featured
contemporary
designs
to
attract
We
blend
indigenous
craft
techniques
with
control,
access
to
raw
materials
and
production
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5
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Garments
Accessories
Home linen
Home furnishings
Home products
Floor coverings
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Product Selection
Committee (PSC)
Designers
Business Experts
Artisans Microfinance
(AFML)
Employees
10%
49%
15%Social Venture
26%
Craftsmen
Artisans
Weaver
The key
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The
for
aware of
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from an existing
they get
regular orders.
The Fabindia supply chain has moved on from a centralized
warehouse model to a more
the supply chain and incorporate the artisans within the process
in a greater way, fabindia introduced the concept of community
owned companies. The weaver
company i.e. SRC with. At the SRC level the designer steps in to
help artisans produce something relevant to the target market.
The design is then approved by the PSC or the product selection
committee.
The fabric is
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the
artisans
credit and capital that they require. 17 SRCs have been setup in
different parts of the country to deal with suppliers across the
length and breadth of the country. The artisans have a 26% stake
in the SRCs and the rest is owned by the investors and the
fabindia.
Once the order has been received at the SRC warehouses it
becomes a part of the fabindia online
from a
companies. Benefits of
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warehouse in Delhi
SRC
warehouse.
This
allowed
store
managers
to
independently order from each of the SRCs. This would allow for
streamlining of
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artisans. This will lead overall greater order quantities and hence
a greater amount of profits
delivery
times
more
easily
through
centralized
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parameters
were
self-explanatory
from
the
revenue
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Sales
Retail
Wholesale
Institutional Sales
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INVENTORY MANAGEMENT
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15
16
assets
which
firms store
as
inventory
in
products
in
future by
making
certain
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part
of
final
us
have
look
on
Different
Inventory
Management
Inventory
Managemen
t
Physical
Inventory
Management
Logistic
Inventory
Management
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Financial
Inventory
Management
PHYSICAL INVENTORY MANAGEMENT
Meaning:
Keeping of goods is also a type of management. Whenever
requirements comes from the production department, providing of
those required materials in a proper manner & providing those at
the specified period, is the main motto of Physical Inventory
Management.
Benefits
Benefits
Benefits
Benefits
in
in
in
in
Purchasing
Production
Work-in-Process
Sales
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the
various
functional
areas
regarding
the
appropriate
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Under this system, the inventory items are grouped into two
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Meaning:
Recording, maintaining and evaluating of stocks in a value terms
is known as Financial Inventory Management. In other words
valuation of stocks, and controlling of ordering and holding costs
and also maintaining of sufficient valued stocks in Inventory is
known as Financial Inventory Management.Financial Inventory
Management is again divided into three different categories.
1)Based on Valuation
2)Based on Cost Analysis
3)Based on Financial Statement
1) Based on Valuation
There are number of generally accepted methods of determining
the cost of inventories at the close of the accounting period. The
selection of a suitable method assumes significance in view of the
fact that it has a direct bearing on the cost of goods sold and
consequently on profit.
Therefore, the method should be selected in the light of probable
effects on profits over a period of years.
First in First Out (FIFO) Method:
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the
valuation
of
inventory,
according
to
this
selling
price/current
revenues. This
matching
of
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fall
into
two
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categories:
(i)
Ordering
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Meaning of Logistics:
logistics is
making
and
taking
the
permission
for
also
their
main
intention
is to
Organization. But
Inventory
in
Management
fully
is
export
oriented
very important
each
other
who
are staying
in
other
banks
only.
These
banks
are
listed by
RBI is lists
Central
Bank
some banks
for intermediating purpose and every year RBI declare some listed
Banks as a mediator.
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from
and
Home in FabIndia
Percentage of
Business
extracted
from Women,
kids and
Mens in
Garment
Product Line in
FabIndia
Core Apparel Category It includes Printed and Woven Cotton.
It forms 80% of buying.
This inventory process is fully computerized and here paper work
is very less. Only maintaining of documents, which were sent by
suppliers as like challans etc., are only here to maintain as paper
documents.
Otherwise
it is
fully
computerized. Through
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2) Receiving of Products
put
these
details
in
manual
book, this
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of next
month. So
these
products
are kept
in
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and
also
of products. That
notice
is called
to
Suppliers
Rejection
about
Card. In
rejection
this
card it
Fabindia
they
Suppliers. There
purchase
is a reason
products
from multiple
for purchase
products
once. And
the
they
agreement
negotiate
of supplying
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make
the
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They
price
products
only at
once
only
at
that
is
sell
specific products in
specific
Departments,
like
Marketing
Department
.Marketing
Department is one, which takes the orders from its stores. And
this
is
entirely
different
from
Logistic
Department. Logistic
viewed
in
Physical
always
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to the
schedule
supplier will
supply
the
Products.
Yes, Depending on Shorter order cycle Fabindia can hold entire
stock well before order starts and also it can have a full stock at a
time before starting process of selling.
EOQ:
EOQ applicability due to the nature of Business as above said is
not possible but there maximum stock level is 3 months in
advance. Buying is done after each week after checking the
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code called style no. and to replenish that style the style no. and
quantity is fed into their systems.
Reorder Point:
When only the buffer stock is remaining in the stock, the reorder
take place.
Lead Time:
Fabindia purchases Products from multiple supplier and by
on schedule Products basis to supply. So this is also not
applicable in this type of business.
INVENTORY MANAGEMENT FOR AN INDIVIDUAL FABINDIA STORE
WALLET
To understand how an individual store manages its inventory, it is
vital to understand the concept of the 'Wallet' which is unique for
each store. This is the maximum amount of inventory a store is
allowed to own at any given time. The maximum value of the
Wallet is a function of the monthly sales. For example N-14 in New
Delhi, which is FabIndia's largest store, has a wallet size of
1.5 crores (monthly sales) * 3 months = 4.5 crores. That is
N-14 is allowed to hold only 3 months' worth of inventory.
When the store manager places an order to the SRC through the
B2B module the wallet decreases by that amount. As the stock is
sold and invoiced by the store, the wallet opens up and more
stock can be ordered. Seasonal items need to be ordered 3
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how much inventory is required for the rest of the month. He/she
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uses the remaining 30% of the wallet to place the back-up order
on the B2B after checking the availability with the SRC. As the
order is a much smaller one, it is delivered to the Store by the
25th of the same month. The back-up order is only placed in
times when the demand is high and cannot be served by the
initial bulk order.
The dual order system allows for a greater accuracy in ordering as
the demand for the first 15 days is noted and is used to place the
backup order. This system allows the store to reduce overage and
decrease inventory holding costs especially since individual stores
do not have large storage space.
Fabindia has 9 Market Region and each region has a regional
merchandiser, whose basic job is to see the store inventory level
and maintain the minimum level of his/her region. If a store feels
they can sell more of an Item either they can order it through
Fabconnect ERP software or tell the regional merchandiser to
order the same.
If a store has ordered more stock than their wallet they have to
immediately look for other Fabindia stores which require this stock
or can take their excess stock.
Perishable Items are ordered once in a month and always the
expiry date is checked, discounts are put on them when they are
nearing expiry date.
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and transferred out of the store. Fabindia uses abc analysis, 20%
to 30 % of its stock are high value items like Furniture made of
Teak Bed, Sofa Sets. In apparel it carries silk range and sarees in
High value item. In Jewelry also it has 3 segment Anusuya caters
to High value items. A twice a week counting is done foe High
value items.
PREVENTING LOSS OF INVENTORY
Employees working at the store might get tempted to steal the
merchandise.
Let us go through some tips which help to prevent loss of
inventory:
Check the bags of the employees before they leave the store.
Raise an alarm whenever you find someone stealing something.
STRENGHTS
WEAKNESSES
OPPORTUNITIES
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Differentiable products
Brand recognition and loyalty
Diverse product mix
Partnering with suppliers
In-house manufacturing
Price Trends Setter
Different categories of stores
Customer Loyalty
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suppliers
Inconsistent quality of products
Inconsistent service in stores
THREATS
STRENGTHS
The product mix available at Fabindia can be easily differentiated
by the customer. The uniqueness of the fabric or styling has
created a new category as identified by the customer as ethnic
wear. This leads to a very high brand recognition and connects
with the customer value. It has an enviable presence in diverse
product lines as garments, furniture, furnishing and upholstery,
body care, organic foods and the very recently introduced
jewellery line. Due to its variety of stores, it can reach to different
categories of customers.
WEAKNESS
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sales below its potential levels. The sourcing strategy followed for
accepting raw materials is heavily supplier centric. In the past
there have been incidences when due to delay in sending supplies
for winter garments manufacture, inventory was carried over to
the next year and suppliers were not made to share the damage.
It operates through its own stores and that too fed by a
centralized hub model of supply chain management.
OPPORTUNITIES
Merchandising within stores is still in a rudimentary stage. The
shopper navigation can be greatly enhanced by focusing on the
store layout and appropriate merchandising techniques which
succinctly
create
individual
product
areas.
There
is
great
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www.linkedin.com/title/buyer/at-fabindia-overseas-pvt-ltd
http://books.google.co.in/books
www.fabindia.com
www.desai.com/innovationPage
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REFERENCES
applied/research/...FabIndia/.../Default.aspx
Ms. Alpana Pillai Store Manager , TVM Fabindia
Mr. Sandeep Kumar- Store Manager , Koramangala Fabindia
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CONTENTS
INTRODUCTION...........................................................................1
LITERATURE REVIEW...................................................................2
PHILOSOPHY.............................................................................. 3
FABINDIA PRODUCTS..................................................................3
GLOBAL SYNERGIES THROUGH ACQUISITIONS...........................4
THE FABINDIA ECOSYSTEM.........................................................5
FABINDIA SUPPLY CHAIN.............................................................7
USE OF TECHNOLOGY IN FABINDIAS SUPPLY CHAIN...................9
SUPPLY CHAIN OPTIMIZATION:...................................................10
KEY CHALLENGES IN CURRENT SUPPLY CHAIN..........................10
CHANNELS TO INTERNATIONAL MARKETS.................................12
INVENTORY MANAGEMENT........................................................13
PHYSICAL INVENTORY MANAGEMENT........................................16
FINANCIAL INVENTORY MANAGEMENT......................................18
LOGISTICS INVENTORY MANAGEMENT......................................21
INVENTORY MANAGEMENT OF FABINDIA...................................22
LOGISTICS INVENTORY MANAGEMENT......................................26
FINANCIAL INVENTORY MANAGEMENT......................................27
INVENTORY MANAGEMENT FOR AN INDIVIDUAL FABINDIA STORE
................................................................................................. 28
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SWOT ANALYSIS........................................................................31
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REFERENCES............................................................................. 34