ml0008 fall 2010 solutions

8/8/2019 ML0008 FALL 2010 Solutions

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Master of Business Administration- MBA Semester 4-SMUML0008 Mall Management - 2 Credits-Fall 2010

Assignment Set- 1 & Set-2(30 Marks)

Submitted by : L.V.R.SASTRYReg No : 510910051


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Master of Business Administration- MBA Semester 4ML0008 Mall Management

Assignment Set- 1


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Note: Each question carries 10 Marks. Answer all the questions.1. Discuss the favorable factors and the challenges of retail penetration in India?

Sol.Introduction

Retailing involves all activities incidental to selling to ultimate consumer for their personnelfamily and household use. It does this by organizing their availability on a relatively large scaleand supplying them to a customers on arelatively smallscale. Retailer is any person/organizationinstrumental in reaching the goods or merchandise oer services to the end users.Retailer is a mustand cannot be eliminated.The Indian retailing industry is becoming intensely competitive, as more and more payers areVying for the same set of customers. The major retail players are Pantaloon Retail, ShoppersStop, Reliance,etc..,Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant inretailing in India signifies the beginning of retail revolution. India's retail market is expected togrow tremendously in next few years. According to AT Kearney, The Windows of Opportunity

shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006.India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning.India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage.This window of opportunity is useful for executives who plan their market-specific strategies;the four stages or the lifecycle of this industry is as as follows:

Introduction:An introduction is the opening phase of a market and is one that is just entering the GRDI,Global Retail Development Index This index is based on more than 25 macro-economic andretail specific variables.for instance ,the country risk includes parameters like politicalrisk,economic performance,debt indicators,credit ratings,access bank finance and businessrisk.The market attractiveness covers reail sales per capita ,urban population ,laws andregulations and business efficiency.Iin this stage all, which are outside the top 30 markets, falls in this stage. At this stage, retailersshould monitor and performing high-level assessments, they should plan for their entrystrategies. India in the late 1990's is a good example in the opening stage, while in 2006,Kazakhstan is the country in introduction stage.Stategy suggested:A rapid penetration strategy is suggested at this stage i>e low price and high

promotion.

Growth:In growth stage, the market is developing quickly and also ready for modern retailing. Countries,which are in Peaking stage, are India, Ukraine and Vietnam. Retailers entering this stage havethe best chance for long-term success. Retailers at this stage should enter through localrepresentations, sourcing offices and new stores. Wal-Mart success in china in the late 1990's andearly 2000's gives us the importance of committing to a promising high-growth market at righttime.


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Strategy suggested: The strategy of adopting quality and styled products with new models andshift of advertising from product awareness to product preference Eg the big bazaar advt sayssurf exel is cheaper than the market price.The idea behind adopting strategy is to strengthenagainst competitors.

Maturity:In this stage the market is still big and growing, but the space for new entrants will becometighter and retailers should act quickly at this stage because retailers at this stage have limitedtime to explore, and also their margin for error is thin. In general , they should act according tothe established rules and should be open to face the competition from international retailers. Thisstage generally lasts longer than the previous two stages.Strategy suggested: Enter new market segments that is either enter new geographic areas egvishal megha mart has opened stores in smaller cities tier II and III cities

Decline:The window of opportunity is closing fast and modern retail share is reaching 40 to 60 percent.

Though the opportunity is closing the existing retailers can enter with new formats such asdiscount models or non-food formats such as consumer electronics and apparel.Window of opportunity ends for about 5 to 10years before a market enters the closing phase andreaches saturation level. India for example, was in the opening stage in 1995 and entered peakingstage in the year 2003 and reached number 1 rank in2005.Strategy suggested: Identifying weak segments, maintaining investment level selectively.

Unorganized retailing in IndiaIn India, the most of the retail sectoris unorganized. In India, the retail business contributes around 11 percent of GDP. Of this, theorganized retail sector accounts only for about 3 percent share, and the remaining share iscontributed by the unorganized sector. The main challenge facing the organized sector is thecompetition from unorganized sector. Unorganized retailing has been there in India for centuries,theses are named as mom-pop stores. The main advantage in unorganized retailing is consumer familiarity that runs from generation to generation. It is a low cost structure, they are mostlyoperated by owners, has very low real estate and labor costs and has low taxes to pay.Organized retailing in IndiaIn late 1990's the retail sector has witnessed a level of transformation. Retailing is being

perceived as a beginner and as an attractive commercial business for organized business i.e. the pure retailer is starting to emerge now. Organized retail business in India is very small but hastremendous scope. The total in 2005 stood at $225 billion, accounting for about 11% of GDP. Inthis total market, the organized retail accounts for only $8 billion of total revenue. According toA T Kearney, the organized retailing is expected to be more than $23 billion revenue by 2010.In organized retailing will grow faster than unorganized sector and the growth speed will beresponsible for its high market share, which is expected to be $ 17 billion by 2010-11.Retailing will show good prospects in cities like Mumbai, Delhi, Chennai, kolkata, Banglore andKanpur. After Dubai, Singapore and Hong Kong, In India Delhi will be the next big retaildestination, According to Confederation of Indian Industries whose findings have shown thatDelhi has the good resources and good conditions for the retail sector. Out of the total earnings
http://www.articlesbase.com/publishing-articles/retail-industry-in-indiachallenges-opportunties-and-strategies-158550.htmlhttp://www.articlesbase.com/publishing-articles/retail-industry-in-indiachallenges-opportunties-and-strategies-158550.html


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of the Government of Delhi Rs 11,000 crore, Rs 6,500 crore is achieved from the retail sector.

- Share of Organised Retail 1999 2002 2005Total Retail (in billion INR) 7000 8250 10000Organized Retail (in billion INR) 50 150 350

% Share of Organized Retail 0.70% 1.80% 3.5%The organized sector is expected to grow faster than GDP growth in next few years driven byfavorable demographic patterns, changing lifestyles, and strong income growth. This organizedretail sector mix includes supermarkets, hypermarkets discounted stores and specialty stores,departmental stores. For example, Spencer network has 69 stores, which includes seven Spencer hypermarkets, three Spencer super markets and 49 Spencer Dailys. Now the company is

planning to open 20 stores in 10 cities in six months. The top 10 retailers account only for 2% of total market, today modern retailing is expected to enter a boom phase, which has major playersand these players might capture 10% of total market, within next five years. The retail sales inIndia for future are shown below (data from 2005-2008 is based on estimates):

PRESENT INDIAN SCENARIO* Unorganized market: Rs. 583,000 crores* Organized market: Rs.5, 000 crores* 5X growth in organized retailing between 2000-2005* Over 4,000 new modern Outlets in the last 3 years* Over 5,000,000 sq. ft. of mall space under development* The top 3 modern retailers control over 750,000 sq. ft. of retail space* Over 400,000 shoppers walk through their doors every week Growth drivers in India for retail sector Rising incomes and improvements in infrastructure are enlarging consumer markets andaccelerating the convergence of consumer tastes. Liberalization of the Indian economy Increase in spending Percapita Income. Advent of dual income families also helps in the growth of retail sector. Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. Consumer preference for shopping in new environs The Internet revolution is making the Indian consumer more accessible to the growinginfluences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping increating awareness about global products for local markets. About 47% of India's population is under the age of 20; and this will increase to 55% by 2015.This young population, which is technology-savvy, watch more than 50 TV satellite channels,and display the highest propensity to spend, will immensely contribute to the growth of the retailsector in the country. Availability of quality real estate and mall management practices Foreign companies' attraction to India is the billion-plus population.Employment opportunities in retail sector in IndiaIndia's retail industry is the second largest sector, after agriculture, which provides employment.According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), theretail sector will create 50,000 jobs in next few years.


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Retail companies are starting retail manamgent courses in partnership with managementinstitutes, roping in talent from other sectors and developing comprehensive career growth andloyalty plans for existing employees.Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and ebonyare virtually on their toes.

Consider the plans of largest player, The Pantaloon Retail India Ltd, the company has developeda comprehensive strategy, where in it expects that in 2years, it will not recruit any new managersfrom outside. "The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educationalInstitute to run retail courses across the entire chain. The company has tied up with 11-B schoolsincluding K J Somaiya , Welinkars, Narsee Monjre and IISWBM. "The students joins the courseand they are given an appointment letter by Pantaloon to become employees" said Mr. Jog,Pantaloon. Pantaloon is also planning to tie up with Ahmedabad-based National Institute of Design to start a course in visual merchandising. "The apex body of Indian organized retailers,Retailers Association of India( RAI) is also lending help hand to tide over the shortage of employees in organized retail sector.

Trent has also started in-house learning programmes and now goes to under graduate colleges torecruit students.Since, the job market is hugely receptive to this with more and more business schools focusingon the sector and large retailers setting up retail academics.Challenges of Retailing in IndiaIn India the Retailing industry has a long way to go,and to become a truly flourishing industry,retailing needs to cross the following hurdles:* The first challenge facing the organized retail sector is the competition from unorganizedsector.* In retail sector, Automatic approval is not allowed for foreign investment.* Taxation, which favors small retail businesses.* Developed supply chain and integrated IT management is absent in retail sector.* Lack of trained work force.* Low skill level for retailing management.* Intrinsic complexity of retailing- rapid price changes, threat of product obsolescence and lowmargins.* Organized retail sector has to pay huge taxes, which is negligible for small retail business.*Cost of business operations is very high in India.

ConclusionMany agencies have estimated differently about the size of organized retail market in 2010. Theone thing that is common amongst these estimates is that Indian organized retail market will bevery big in 2010. The status of the retail industry will depend mostly on external factors likeGovernment regulations and policies and real estate prices, besides the activities of retailers anddemands of the customers also show impact on retail industry.As the retail market place changes shape and competition increases, the potential for improvingretail productivity and cutting costs is likely to decrease. Therefore it is important for retailers tosecure a distinctive position in the market place based on values relationships or experience.Finally it is important to note that these strategies are not strictly independent of each other;


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value is function of not just price quality and service but can also be enhanced by personalizationand offering a memorable experience

2. What do you mean by Mall management? Describe the mall managementfunctionality?Sol.The Meaning of Mall Management systemit deals with the entire supply-demand pattern of an item through all levels of the hierarchyMall Management Functionality1 The Mall Management System and Action Messaging

Action Messaging Order tracking, with its simultaneous creation of action messages (AM), is not a part of theMall Management system. This feature interlinks, in real-time, the requirements and thequantities that could cover them, whenever a new requirement or replenishment order is createdor changed. If, for example, the user enters or changes a sales order, order tracking will instantly search for an appropriate supply to cover the demand. This could be from inventory or an expectedreplenishment order (such as a purchase or production order). When a supply source is found, alink is created between the demand and the supply. If all of the demand cannot be covered, order tracking will create an action message suggesting what the user could do to address the situation. AM are stored in a separate table. The user can retrieve and view them in the Mall Managementworksheet by running the Get Action Messages batch job. AM offers a quick response but less comprehensive plan than the Mall Management system.Differentiating between Mall Management and Action MessagingAt a quick glance, it may be difficult to differentiate between Mall Management and actionmessaging. Both features display their output in the Mall Management worksheet. The output suggested actions for the user to take is similar but the way this output is produced differs. The Mall Management system deals with the entire supply-demand pattern of an item throughall levels of the hierarchy, whereas order tracking only addresses the situation of the order thatactivated it. When balancing demand and supply, the Mall Management system creates links in a user-activated batch mode, whereas order tracking creates the links automatically and on the flywhenever the user enters a demand or a supply in the program (for example, a sales or purchaseorder).Order tracking establishes links between demand and supply as data is entered, on a first-come

basis. This may lead to some disorder in priorities. For example, a sales order entered first but
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with a due date next month may be linked to the supply in inventory, while the next sales order due tomorrow may cause an action message to create a new purchase order to cover it.The Mall Management system, on the other hand, deals with all demand and supply orders for a

particular item, in prioritized order according to due date. It deletes all links that were createddynamically and reestablishes them according to due date priority. When the Mall Management

system has run, it has solved all imbalances between demand and supply. No action messagesremain in the Action Message Entry table, as they have been replaced by the suggestions in theMall Management worksheet.

2 Concepts in Brief The overall problem that the Mall Management system should resolve is to suggest whichactions the user could take to ensure that customer demand is met. It can be a cumbersome task when working with many items. This task increases to a staggering level when production isincluded due to derived demand that has spread down through the BOM hierarchy.The Mall Management system assists the user by performing the extensive but rather straightforward calculations of a plan. The user can then concentrate on solving the more

difficult problems, such as when things differ from normal.The Mall Management system is driven by anticipated and actual customer demand such asforecast and sales orders. Running the Mall Management calculation will result in the programsuggesting specific actions for the user to take concerning possible replenishment from vendors,transfers between warehouses, or production. These suggested actions could be to create newreplenishment orders (purchase, for example). If replenishment orders already exist, thesuggested actions could be to increase or expedite the orders to meet the changes in demand.Another goal of the Mall Management system is to ensure that the inventory does not growunnecessarily. In the case of decreasing demand, the Mall Management system will suggest thatthe user postpone, decrease in quantity or cancel existing replenishment orders.Parameters that the user sets for an item or a group of items control which actions the MallManagement system will suggest in the various situations.Reservations Are Not ConsideredThe program does not include any reserved quantities in the Mall Management calculation. Takethe example of a sales order that has been totally or partially reserved against the quantity oninventory. The reserved quantity in inventory cannot be used to cover other demand. Also, sincethe sales order was reserved manually, the Mall Management does not include this requirement,and its corresponding fulfillment, in its calculation.The Mall Management system prioritizes according to shipment date since that is the best way toensure the lowest possible inventory. Manual reservations tend to prioritize according to order entry date.Forecast and Blanket OrdersForecast and blanket orders both represent anticipated demand. The blanket order, which coversa customers intended purchases over a specific period of time, acts to lessen the uncertainty of the overall forecast. The blanket order is a customer-specific forecast on top of the unspecifiedforecast or vice versa.Order TrackingOrder tracking can be considered as a tool that assists the planner in assessing whether or not toaccept replenishment suggestions. From the supply side, a planner can see which requirement


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has given rise to the replenishment and from the demand side, which replenishment should cover the requirement.Order tracking links order network entities. Examples of order network entities are sales orders,item ledger entries, purchase orders and anticipated or realized inventory transactions. Forecastor safety stock quantities are not considered order network entities, and are not included in order

tracking. The reorder point also represents some sort of forecast, so it is not included either.Multi-locationsCompanies that operate at more than one location may need to plan for each locationindividually. For example, an items safety stock level, as well as its method of replenishment,may differ from one location to another. In this case, the Mall Management parameters must bespecified per item and also per location.A stock keeping unit can be regarded as an item at a specific location. If the user has not defineda stock keeping unit for that location, the program will default to the parameters that have beenset on the item card. The program calculates a plan for active locations only where there isexisting demand or supply for the given item.Which Items Should Be Planned?

Basically, all items should be planned for in one way or another. In reality, however, there isno reason to calculate a plan for an item unless there has been a change in the demand or supply pattern since the last time a plan was calculated.If the user has entered a new sales order or changed an existing one, there is reason to recalculatethe plan. Other reasons include a change in forecast or the desired safety stock quantity.Changing a bill-of-material by adding or removing a component would most likely indicate achange, but for the component item only.In the case of multi-locations, the assignment takes place at the level of item per locationcombination. If, for example, a sales order has been created at one location only, the programwill assign the item at that specific location for Mall Management.The reason for selecting items for Mall Management is purely a matter of system performance. If no change in an items demand-supply pattern has occurred, the Mall Management system willnot suggest any actions to be taken. However, the program would have to perform thecalculations anyway in order to find out, and that would drain system resources.The Mall Management options are: Regenerative plan: calculate all selected items, whether it is necessary or not Net change plan: calculate only those selected items that have had some change in their demand-supply pattern and, therefore, have been assigned for Mall ManagementIn addition to these considerations, the Mall Management system only plans for those items thatthe user has equipped with appropriate Mall Management parameters. Otherwise, it is assumedthat the user will plan the items manually.Which Locations and Variants Should Be Planned?In principle, any item can be handled at any location, but the programs approach to the locationconcept is quite strict. For example, a sales order at one location cannot just be fulfilled by somequantity on stock at another location. The quantity on stock must first be transferred to thelocation specified on the sales order.The bin code, despite its name, acts more like a sub-location than just a shelf in a warehouse.For example, a sales order cannot be covered by a bin quantity within a location. In version 3.x,the original bin concept has been suppressed as part of an overall development of a bin conceptthat is more warehouse-focused. The program also treats the variant code in a similar way. As


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with location and bin code, the variant code is just another dimension on a sales order line,inventory ledger entry, and so on.The Mall Management system works accordingly. It calculates a plan for each combination of variant and location (in version 2.60, bin as well) as if the combination were a separate itemnumber. Instead of calculating any theoretical combination of variant, location and bin, the

program calculates only those combinations that actually exist in the database.

3 Basic Solution ConceptsTo understand how the Mall Management system works from a technical point of view, it isnecessary to recall the prioritized goals of the Mall Management system, the most important of which are to ensure that:I. Any demand will be met by sufficient supply.II. Any supply serves a purpose.In other words, the objective of the Mall Management mechanism is to counterbalance thedemand and supply of an item to ensure that supply events will match each instance of demandin an optimal way and as defined by the Mall Management parameters.

Program OverviewThe ensuing paragraphs outline a review of various Mall Management programmes.Lot and Serial NumberIn some respects, lot and serial number represent two more dimensions on the item. However,the Mall Management system does not include them in its calculations. If the user wants to use aspecific lot number for a production order component, he will have to reserve the lot.Mall Management Parameters, Locations and VariantsThe Mall Management parameters control when, how much, and how to replenish. Details aboutusing the Mall Management parameters can be found in Appendices B and C.This can have some disadvantages for companies that use variants or multiple locations. For example, the safety stock quantity, reorder point and so on, will be the same for all variants of anitem.Another issue arises when a new item is created, and the user specifies a reorder point for theitem. Which location should the replenishment order be placed at if no sales orders have beenentered yet? The answer is a compromise: the order will be placed at a location that the user specifies in the manufacturing setup.The Mall Management parameters can be linked to any combination of item, variant andlocation. The user can create stock-keeping units for each combination, as needed, and specifyindividual parameters for it.Demand and SupplyDemand is the common word used for any kind of gross requirement such as a sales order,service order, component need from a production order, outbound transfer, blanket order or forecast. In addition to these, the program allows some other technical types of demandsuch asa negative production or purchase order, negative inventory and purchase return.Supply is the common word used for any kind of replenishment such as inventory, a purchaseorder, production order or inbound transfer. Correspondingly, there can be a negative sales or service order, negative component need or sales return all of which in some way also representsupply.To sort out the many sources of demand and supply, the Mall Management system organizesthem on two time-lines called inventory profiles. One represents demand events and the other


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supply events. Thus, a demand or supply represents one event in the relevant inventory profile.Each event represents one order network entity, for example, a sales order line, an item ledger entry or a production order line.Loading the Demand into the Inventory ProfileThe normal types of requirements are loaded into the inventory profile type-by-type and record-

by-record. A requirement could also be negative (the program does not prevent that). This meansthat it should actually be considered as a supply but, unlike the normal types of supply, this isregarded as the type of supply which is fixed the Mall Management system can take it intoaccount, but it does not suggest any changes to it.Besides the normal requirements, the Mall Management system deals with two specialties: Safety stock Production order componentsIn practice the safety stock can be used to cover requirements if needed, but in theory, safetystock is not considered a source of supply in the Mall Management calculation. In fact, the safetystock should remain untouched, and the Mall Management should ensure that it is alsoreplenished, if necessary. Consequently, the Mall Management system enters the safety stock

quantity into the demand profile as a special requirement (at the starting date of the period).When handling production orders, the Mall Management system must monitor the componentlines, which represent requirements, before loading them into the demand profile. Componentlines that result from an amended production order will replace those of the original order. In thisway, the Mall Management system ensures that the component lines are not duplicated.Consuming the ForecastA forecast expresses anticipated future demand. As actual demand is entered, typically as salesorders, it consumes the forecast. The forecast itself is not actually reduced by sales orders; itremains the same. However, the forecast quantities used in the Mall Management calculation arereduced (by the sales order quantities) before the remaining quantity, if any, enters the demandinventory profile. When the Mall Management system examines actual sales during a period,

both open sales orders and item ledger entries from sales are included unless they are derivedfrom a blanket order.It is a prerequisite that the user defines a valid forecast period. The date on the forecastedquantity defines the start, and the date on the next forecast defines the end of that period. Theforecast for periods prior to the Mall Management period is not of interest, regardless of whether it was consumed or not. The first forecast figure of interest is the one on or the closest one prior to the start of the Mall Management period.The forecast can be for either independent demand, like sales orders, or for dependent demand,like production order components (module-forecast). An item can have both types of forecast.During Mall Management, the consumption takes place separately, first for independent demandand then for dependent demand.Consuming Blanket OrdersAs with the (unspecified) forecast, actual sales should consume the anticipated demand, and theremaining quantity should enter the demand inventory profile. Again, the consumption does notactually reduce the blanket order.The Mall Management calculation considers open sales orders linked to the specific blanketorder line, but it does not consider any valid time period. Nor does it consider posted orders,since the posting procedure has already reduced the outstanding blanket order quantity.Loading the Supply into the Inventory Profile


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The normal types of replenishment orders and inventory are as with requirements loaded intothe inventory profile, type-by-type and record-by-record. Furthermore, a replenishment order or an item ledger entry (inventory) might be negative (the program does not prevent that). Thismeans that it should actually be considered as a demand and therefore, out of scope for anysuggested action.

In general, the Mall Management system considers all replenishment orders as subject to changein its objective to fulfill requirements. The Mall Management system does not analyze whichorders can be changed and which should be protected except in the case of a transfer order The program considers a released production order to be started if the user has posted any timeor consumption. In that case, the Mall Management system takes it for granted that it is too lateto suggest any changes.The transfer order is considered a short-term document that the user creates close to itsexecution. Therefore, the Mall Management system will not suggest any changes for that either.Separating the DimensionsThe plan must be calculated per combination of the item dimensions such as variant andlocation. However, there is no reason to calculate any theoretical combination. Only those

combinations that carry a demand and/or supply need to be calculated.The Mall Management system controls that by running through the inventory profile. When anew combination is found, the program creates an internal control record that holds the actualcombination information. These records are used as an outer Mall Management loop. In thisouter loop, the program retrieves the first or next control record and according to thiscombination of dimensions, sets filters for the inner Mall Management loop. In this inner loop,the program evaluates and adjusts the demand-supply situation.In other words, any combination of variant, location and bin will carry the same MallManagement parameters as those defined at the item level. However, the item master data isextended by the stock keeping unit (SKU), on which individual Mall Management parameters

per variant/location can be defined. So the program inserts the SKU as the control record, or outer loop. In this way, the proper Mall Management parameters based on combination of variantand location are in place, and the program can proceed to the inner loop.

Note however, that the user need not enter a SKU record when entering demand and/or supplyfor a particular combination of variant and location. Thus, if an SKU does not exist for a givencombination, the program creates its own temporary SKU record based on the item data.Balancing/Managing Supply EventsThe core of the Mall Management system involves balancing demand and supply by means of suggesting user actions to revise the supply events in the case of imbalance. This takes place per combination of variant and location. Imagine that each inventory profile contains a string of demand events (sorted by date) and a corresponding string of supply events. Each event refers

back to its source type and identification. The rules for counterbalancing the item arestraightforward. Four instances of matching demand and supply can occur at any point of time inthe process:1. No demand or supply exists for the item => the Mall Management has finished (or should notstart).2. Demand exists but there is no supply => supply should be suggested.3. Supply exists but there is no demand for it => supply should be cancelled.4. Both demand and supply exist => questions should be asked and answered before we canensure that demand will be met and supply is sufficient.


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If the timing of the supply is not suitable, perhaps the supply order can be rescheduled:a. If the supply is placed earlier than the demand, perhaps it could be rescheduled out so thatinventory is as low as possible, but we can use any possible surplus anyway.

b. If the supply happens to be later than the demand, perhaps it can be rescheduled in. Otherwise,the Mall Management system should create a suggestion for some new supply.

c. If the supply meets the demand on the date, the Mall Management system can proceed toinvestigate whether the quantity of the supply can cover the demand.Once the timing is in place, the adequate quantity to be supplied can be calculated:a. If the supply quantity is less than the demand, it is possible that the supply quantity could beincreased (or possibly not, due to a maximum lot size).

b. If the supply quantity is more than the demand, it is possible that the supply quantity could bedecreased (or possibly not, due to a minimum lot size).At this point, either of two situations exists:a. The current demand can be covered, in which case it can be closed and Mall Management for the next demand can start.

b. The supply has reached its maximum, leaving some of the demand quantity uncovered. In this

case, the Mall Management system can close the current supply and proceed to the next one.Then the procedure starts all over with the next demand and the current supply or vice versa. Thecurrent supply might be able to cover (more or less) this next demand as well, or the currentdemand has not yet been fully covered.Rules Concerning Actions for Supply EventsWhen the program performs a top-down calculation of a plan in which supply shall meetdemand, the demand is taken as given it lies outside the control of the Mall Managementsystem. However, the supply side can be managed. Therefore, the Mall Management system willsuggest user actions to create new replenishment orders, reschedule existing ones and/or changeorder quantity. In the case of an existing replenishment order becoming superfluous, the MallManagement system will suggest that the user cancel it.If a user wants to protect an existing replenishment order from the suggestions for change, he canstate that it has no Mall Management flexibility. Then, excess supply from that order will beused to cover demand, but no action will be suggested whatsoever.In general though, all supply has a Mall Management flexibility that is limited by the conditionsof each of the suggested actions:1. Reschedule out an existing supply can, in principle, be scheduled out to meet the demanddue date unless: It represents inventory (always on day zero). It is linked directly (order-to-order link) to some other demand. It lies outside the reschedule window defined by the Reorder Cycle. There is an even closer supply that could be used.Finally, rescheduling could be ruled out because: The supply has already been tied up to another demand on a previous date. The rescheduling is so minimal that the user has defined it as negligible.2. Reschedule in an existing supply can be scheduled in unless: It is linked directly to some other demand. It lies outside the reschedule window defined by the Reorder Cycle.When using a reorder point policy of Mall Management for an item, the supply can always bescheduled in if necessary. This is the nature of the forward-scheduled reorder point


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replenishment orders. The Mall Management system would not suggest decrease/cancel anexisting reorder-point order and then creates a new one.3. Increase quantity the quantity of a replenishment order can, in most cases; be increased tomeet the demand. The exceptions are when: The supply is linked directly to some other demand.

It is a reorder point that has caused the situationNote: According to these rules, even though it is possible to increase the supply, it maynonetheless, be limited due to a defined maximum order quantity.4. Decrease quantity if the current existing supply has a surplus quantity compared to thecurrent demand, it can be decreased to meet the demand unless: The rescheduling is so minimal that the user has defined it as negligible.Note: Even though the quantity could be reduced in principle, there may still be some surpluscompared to the demand due to a defined minimum order quantity or order multiple.5. Cancel supply as a special incident of the decrease quantity action, the supply could becancelled if it has been decreased to zero.6. New replenishment order if no supply exists beforehand, or an existing one cannot be

manipulated to meet the necessary quantity on the demanded due date, a new replenishmentorder is suggested.Determining the Supply QuantityMall Management parameters, which are set by the user, control the suggested quantity for eachsupply event. When the Mall Management system calculates the quantity for a newreplenishment order or the changed quantity on an existing supply order, the suggested quantitymay turn out to be different from what is actually required.In the case of maximum inventory or fixed quantity, the suggested quantity may be increasedto meet the fixed quantity or the maximum inventory that the user has defined. In the case of areorder-point policy, the quantity may be increased at least to meet the reorder point.Finally, the suggested quantity may be modified in this sequence:1. Down to the maximum order quantity (if any).2. Up to the minimum order quantity.3. Up to meet the nearest order multiple. (In case of erroneous settings, this may violate themaximum order quantity.)Closing Demand and SupplyWhen the balancing exercises (described in 0 above) have been performed, there are three

possible ending situations:1. The required quantity and date of the demand event have been met and the Mall Managementfor them can be closed. The supply event is still open and may be able to cover the next demandevent as well, so the balancing act can start over with the current supply and the next demand.2. The supply event cannot be revised to cover all of the demand. The demand event is still open,with some uncovered quantity that may be covered by the next supply event. Thus the currentsupply event is closed, so the balancing act can start over with the current demand and the nextsupply event.3. All of the demand has been covered; there is no subsequent demand (or there has been nodemand at all). If there is any surplus supply, it may be decreased (or cancelled) and then closed.It is possible that additional supply events exist further along in the chain, and they should also

be cancelled.


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If an action has been suggested to revise a supply event, a corresponding Mall Management linewill be created to communicate the suggestion to the user.Finally, the program will create an order track between the supply and the demand.Creating the Mall Management Line (Suggested Action)If any action new, reschedule, change quantity or cancel has been suggested to revise the

supply event, the Mall Management system creates a Mall Management line in the MallManagement worksheet (depending on where the Mall Management calculation was startedfrom).Due to order tracking, the Mall Management line is created not just when the supply event isclosed, but also if the demand event is closed even though the supply event is still open andmay be subject to additional changes when the next demand event is processed. This means thatwhen first created, the Mall Management line may be changed again later on.To minimize database access when handling production orders, the Mall Management line can

be maintained in three levels:1. Create just the Mall Management line with the current due date and quantity but without therouting and components.

2. Include routing: the planned route is laid out including calculation of starting and ending datesand times. This is quite demanding in terms of database accesses. In order to determine theending and due dates, it may be necessary to calculate this even if the supply event has not beenclosed (in the case of forward scheduling).3. Include BOM explosion: this can always wait until just before the supply event will be closed.The program always aims to perform the least demanding maintenance level.Order TrackingWith regard to order tracking, it is important to mention that the Mall Management systemrearranges tracking for the relevant item/variant/location combinations regardless of whether action messages have been suggested.There are two reasons for this:I. The Mall Management system should be able to justify its suggestions; that all requirementshave been covered, and that no replenishment orders are superfluous. (The latter is true onlyregarding real requirements the tracking does not show the reason if the replenishment order ismeant to cover forecast.)II. Dynamically created tracking needs to be rebalanced from time to time.Over time, order tracking may get somewhat out of balance since it does not rearrange the entiretracking network for any demand or supply event. Take for example:1. An item with a lead time of 7 days, 12 pieces on inventory.2. A sales order of 9 pieces, created on day 1 to be shipped on day 10, has been dynamicallytracked to inventory.3. The next sales order of 11 pieces, created on day 2 to be shipped on day 5, will cause an actionmessage that a purchase order of 8 pieces, due on day 5, should be created that would be inconflict with the lead time of 7 days.Actually, there is no problem when the Mall Management system has recalculated the trackingnetwork:1. The second sales order, of 11 pieces, due on day 5, will be fully tracked to the inventory.2. The first sales order, of 9 pieces, due on day 10, will be tracked by 1 piece to the inventory.3. The Mall Management system will still suggest a purchase order of 8 pieces, but due on day10 and decided on day 3.


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Before balancing supply by demand, the program deletes all existing order tracking. Then duringthe balancing act, precisely when a demand or supply is being closed, it establishes new tracking

between the demand and supply events.This is straightforward as long as the tracking is just between sales orders, purchase orders, itemledger entries and similar existing order-network entities. It becomes more complicated when

some action regarding changing existing replenishment is suggested.In that case, we have a situation like this:- Demand sales order or similar there is no problem.+ Original supply purchase or production order in its original (unchanged) state. Mall Management line suggested action carrying the difference between the original supplyand the new suggested supply.Imagine this situation: A sales order of 17 pieces An original purchase order of 15 pieces

A Mall Management line suggesting the action of changing the purchase order by +2, from 15to 17.The tracking would look like this:If the sales order had been reduced by 2, to 13, the situation would look like this:

If the user does not accept the suggested actions and deletes the Mall Management lines, the program attempts to return to the former tracking picture though reorganized. (This will alwayswork if the user has defined order tracking for the item. If order tracking has not been selected, itwill still work in most cases.)The Mall Management engine can be set up (in the Calculate Plan report) to implement the order tracking policy in two different ways: Respect Item Card: to have order tracking depend on the selected order tracking policy of theindividual items taking part in the Mall Management run. Apply to All Items: to use full order tracking (Tracking & Action Msg.) for all items taking partin the Mall Management run.

4 Additional Solution Concepts
http://resources.smude.edu.in/slm/wp-content/uploads/2009/06/clip-image00681.jpghttp://resources.smude.edu.in/slm/wp-content/uploads/2009/06/clip-image004115.jpg


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In addition to the general balancing of supply and demand as described, the Mall Managementsystem must also deal with two more basic replenishment methods: Ordering when passing below a defined reorder point Ordering in the make-to-order environmentDespite the fact that they are simpler, they must coexist with the step-by-step balancing and

tracking, which makes the Mall Management system appear more complicated.

Handling a Reorder PointA reorder point represents demand during lead time. When the projected available inventory

passes below the inventory level defined by the reorder point, it is time to order more quantity.Meanwhile, the inventory is expected to decrease gradually and reach zero (or the safety stock level) until the replenishment eventually arrives. This is the theory presented in any textbook on the subject.Accordingly, the Mall Management system will create a suggestion for a forward-scheduledreplenishment order at that point when the projected available inventory passes below the reorder

point, but only if this occurs after the start of the Mall Management period. The MallManagement system should not suggest new reorder-point orders for past periods.This complicates the Mall Management system, because in addition to the process of matchingand manipulating supply against demand, the Mall Management system must also monitor thecurrent projected available inventory.In this connection, the available inventory does not include safety stock (or reservations). It ismonitored when the projected inventory changes and that can be detected when closing demandor supply.To deal with a situation where a reorder point has been defined but no demand or supply exists,or inventory is already below the reorder point at the start of the Mall Management period, aspecial reorder point demand is inserted into the demand profile at the starting date of the MallManagement period. This serves as a trigger and, to a certain extent, is treated like any other demand.Handling Coupled Demand and Supply (Make-to-Order)In a make-to-order environment, it is likely that a user will make some manual adjustments to thereplenishment order. The program should retain this customized information and does so bycreating an order-to-order link (a soft reservation), which acts as a preliminary connection

between the supply (a replenishment order or inventory) and the demand that it is going to fulfil.The program makes these order-to-order links in the following cases: A production order created from a sales order. A production or purchase order created through the Mall Management system when thereordering policy has been defined as Order. Multi-level production orders where one or more components of a production order aresupplied from different production order lines within the same production order. This can cover several levels of the BOM structure and happens if both the parent item and the child have themanufacturing policy of Make-to-Order.In these cases, it is assumed that the relevant purchase or production order line is meant to cover a specific requirement and no other. This may be due to specific physical conditions or proper cost application. When a supply quantity enters the inventory, it is still reserved for its intended


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purpose. When fulfilling the requirement from inventory, the relevant inventory entries will beused. The reservation system and the common principles of item application ensure this.The reservation and order tracking system has been designed to connect individual sources of demand and supply, so it is used here for the same purpose. An order-to-order link will ensurethat customized information is transferred to the rescheduled or changed replenishment or

requirement.Unlike manually created reservations, an order-to-order link can always be deleted and created by the program when it is appropriate. Order-to-order links are more flexible than both manualreservations and tracking. Whereas the normal tracking or reservation will be broken if asituation becomes impossible (for example, because the user has moved the requirement to a dateearlier than the supply), the order-to-order link will remain.When Mall Management, a supply should not be used for any other requirement than it wasoriginally intended for, and a demand should not be covered by any other random supply, even if

in its present situation it is available in time and quantity. This would break the rules of thecommon balancing of supply to meet the demand and, consequently, complicate the balancingalgorithm described above.

A Before comparing demand/supply, the Mall Management system must ensure that neither has previously been linked to another supply/demand.B If they happen to be linked to each other, the normal sequence can continue. However, if oneis linked (it could also be both) to another supply/demand, the Mall Management system:a Intermits the common balancing act,

b Closes the link in a closed loop, balancing the linked subject with all other subjects belongingto that link,c And eventually, returns to the common balancing path to deal with all the other demand andsupply events.

5 Basic Technical SolutionThe program consists of some main procedures or functions. Following are some remarks tosupplement the AL code in the Mall Management code unit.The Main ProgramCalculate Plan from Worksheet This function controls all the other functions below. You could say that it describes the MallManagement logic at the highest level. Note that the local inventory profile is a temporary record

for performance reasons. Due to the merge of demand and supply events, it has to be defined asa record array of 2.Demand to Inv Profile All demand events from order network entities (sales orders, and so on) are inserted into theinventory profile. This information is transferred to the inventory profile from the varioussources by corresponding functions on the Inventory Profile table. Note that before inserting a production order component, the program checks whether thesource production orders is already included in the requisition line. If so, the Mall Managementcomponents belonging to that line will replace any corresponding production order componentlines.Forecast Consumption The forecast period is defined by the dates related to the forecast, which the user enters. Notethat there may be several forecast records on a given date because each forecast record contains


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the difference between what was entered last time and the new entry. Although a forecast recordexists on a given date, the forecast (sum) could be zero if a user enters zero without first deletingthe existing records. A forecast of zero does not participate in defining the forecast period. Actual sales offset or consume the forecast. This goes for open sales orders as well as opencomponent requirements; both will be present in the inventory profile. This also applies to

related item ledger entries that are posted within the forecast period.Blanket Order Consumption Blanket orders are included in the Mall Management system starting with version 3.x. Quantity on sales orders that are related to a blanket order will offset the outstanding blanketorder quantity. (When sales orders are shipped, the shipped and outstanding quantities of the

blanket order are updated). If there is a remaining open quantity that is related to the blanketorder line, a corresponding demand event is inserted in the inventory profile.Supply to Inv Profile All supply events from order network entities (item ledger entries, purchase orders, and so on)are inserted into the inventory profile. This information is transferred to the inventory profilefrom the various sources by corresponding functions on the Inventory Profile table.

Note that the issue of Mall Management flexibility is handled in this function. The user candefine the Mall Management flexibility of an item. In some cases however, the system definesnon-flexibility. This could be if a quantity has already been received against the order, or if a

production order has been started (consumption has been recorded). If it is appropriate to applyother rules, it can quite easily be done here.Find Combination At this point, all the inventory profile records related to demand and supply events have beenlined up. This function finds all existing combinations of variant and location (plus bin in version2.60), and creates the control records used by the outer loop of the Mall Management to separatedemand and the corresponding supply according to item dimensions.Plan Item This is the central logic of the Mall Management. It runs in an outer loop of all combinations of variants, locations and in version 2.60 bins aswell. The outer loop set filters for the inner loop. The inner loop performs the counterbalancing analysis and activities. It is controlled by the

basic current state of the demand-supply pattern: Start Over (at next demand or/and supply) Match Dates (and try to balance the dates) Match Qty (and try to balance the quantity) Create Supply (in case of imbalance) Reduce Supply (in case of imbalance) Close Demand (and retrieve the next demand) Close Supply (and retrieve the next supply) These regular states are infiltrated by the states necessary to deal with the order-to-ordersituations: Match Types (to see whether one or both are linked to a special purpose) Match Link (to one that has the same purpose) Close Link (to make a local balance within the same purpose)The code on each state is quite self-explanatory, and the conditions for which the program shouldtake the next step are clear. In order to make the program more readable and customizable, the


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procedures for rescheduling, changing quantity, and so on, have been established as separatefunctions. These are foreseen to be subjects of customizations and are explained below.However, the code on the closing steps is a bit more complicated. At this point, it is interesting toanalyze the projected inventory level in relation to the reorder point, and to maintain the quantityon hand. The handling of the quantity on hand may seem more complicated than necessary, but

treating it record-by-record makes it possible to maintain the order tracking. The programmaintains the order tracking at this pointjust before moving on to the next demand or supply.

Central Supporting FunctionsCheck Schedule Out checks the conditions. It reschedules out and returns true if all conditionscan be met: Rescheduling a supply out in time should not occur for inventory on hand (no due date), or if the supply has been marked for no Mall Management flexibility. Rescheduling due to the pseudo reorder-point demand follows its own set of rules and istherefore, terminated here. This type of demand, which is placed on the starting date of the MallManagement period, should normally not touch supply that is placed earlier than the Mall

Management period. The demand asking for a reschedule-out should not be linked to some other supply. The supply should lie within the time frame defined by the reorder cycle. This is an arbitrarycondition, and it can quite easily be changed. The possibility of enabling cascade effect shouldhowever, be evaluated. If some other supply exists between the supply and demand in question, the supply in questionshould not be rescheduled out. In so doing, it would overtake the next supply (it should bereduced or cancelled instead).Schedule Out reschedules the supply out within certain limits: The supply might cover several demands. In this case, it carries a fixed date that is equal tothe due date of the first demand that it covers. The fixed date is set when closing the demand andduring the reschedule activities. If the demand is the pseudo reorder-point demand, the system will try to schedule forward. The rescheduling should exceed the dampener time that is defined in the setup. The multi-level production order will however, ignore the dampener for its lower-level production order lines.Schedule forward tries to schedule forward from the given starting date. Before doing so, thesystem must ensure that the routing has been laid out (for a produced item). When forwardscheduling, the supply does not necessarily serve any particular demand, so the fixed date must

be maintained in order to prevent the supply being scheduled even further out at a later point of time.Check Schedule In reschedules in and returns true if all conditions can be met: Rescheduling a supply should not happen if the supply has been marked for no MallManagement flexibility. The demand asking for a reschedule-in should not be linked to some other supply. The supply should lie within the time frame defined by the reorder cycle. This is an arbitrarycondition, and it can quite easily be changed. The possibility of enabling cascade effect shouldhowever, be evaluated. When using a reorder-point Mall Management policy, the order can always be scheduled in aslong as it is not prevented by one of the above conditions.


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In other cases, the reorder cycle acts to limit the time frame for rescheduling. This is still quitearbitrary and can be changed.Schedule In simply moves the due date of the supply to meet the due date of the demand. Thereorder point situation that deals with forward-scheduled orders needs however, other treatment.If the starting date falls after the demand due date, the supply is scheduled forward; otherwise, it

is okay as it is.Check Increase Qty increases the quantity of the supply to meet the demand, and returns true if the demand in question has been covered. The conditions are: The supply has Mall Management flexibility. The demand to be covered is not linked to some other supply. The demand should not be the pseudo reorder-point demand, as this only has the purpose of ensuring that the system evaluates the inventory at the start of the Mall Management period.Increase Qty calculates the new quantity based on the required additional quantity, within thelimits defined by the Mall Management parameters. Note that this could result in the quantity not

being increased at all (it could be limited by a maximum order quantity).Decrease Qty attempts to reduce the supply to just meet the demand, in which case it will return

true. In other words, it will return false if excess supply still exists. The following conditions andmodifiers are: The supply has Mall Management flexibility. The quantity to decrease should exceed the dampener quantity defined in the setup, incombination with the lot size for the item. The multi-level production order will however, ignorethe dampener for its lower-level production order lines. The quantity to decrease should not exceed the free quantity. This means that it should notexceed the untracked quantity, and it should not violate the minimum quantity (there could be adifference due to the order-sizing parameters and a reorder point replenishment policy). When calculating the new order quantity, the order modifiers may cause a surplus.Create Supply simply inserts a new supply record into the inventory profile.Create Supply Forward is used with a reorder point replenishment policy. The functioninvestigates to what degree existing supply, within the lead time, already covers the need. Thedecision rules are: If a future supply exists, it can be rescheduled in unless it has no Mall Management flexibility,or it is linked to another specific demand (but without regard for any limit due to the reorder cycle). While looking for this future supply, all other supply quantities will be taken into considerationas long as the due date falls within the lead time (and unless it is linked to some other demand).Actually, it is the start date that is used; if the supply was started before the reorder point wascrossed, it should arrive within the lead time. As soon as the first flexible supply is found, the investigation stops. If no flexible supply is found, and the needed quantity has not been covered, a new supply will

be created instead. The flexible supply (the first existing or new one) will then be forward scheduled from the datewhen the reorder point was crossed. Theoretically, this algorithm might not be 100% correct. However, it should give full coveragein all the situations that are found in practice.Central Utilities


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Calculate Reorder Qty calculates and returns the suggested reorder quantity according to therequirement and the lot sizing Mall Management parameters. It is called along with a parameter,

Needed Qty, which tells how far below the safety stock level the projected inventory is. It checkson the reorder point policy, which may add a base quantity that equalizes the difference betweenthe reorder point level and the safety stock level.

Adjust Reorder Qty handles the order quantity modifiers.

Adjusting FunctionalityThe way the Mall Management system is structured makes it quite easy to add to the program or change the way that Mall Management suggestions are calculated. The following sectionillustrates different types of changes by using brief examples.Adding a New Type of DemandIf you have added a new type of demand, for example an internal project order, you must decidewhether:

This type of demand is part of a forecast. It should be tracked (order tracking). It is necessary to create a new record for the purpose, or could you suffice with using anexisting record, for example a sales line?To establish order tracking for new type of demand, it is recommended that investigation is heldwhether an existing demand-type record could be used as a base.Introducing a Time Fence for ChangesDefine the time fence in the setup, on the item, or easier yet: as a new date parameter on the MallManagement batch jobs.Check on this parameter when loading supply into the inventory profile Set the MallManagement flexibility accordingly.Controlling the Reschedule Time Frame (to use something other than the reorder cycle)Changes can be made in function Check Schedule Out and/or function Check Schedule In.However, the customer would have to define or agree on the rules for the change. There caneasily be different rules for schedule-out and schedule-in. The rules should consider both the risk of increasing the inventory and the risk of introducing a cascade effect.Adjusting the Definition of the Reorder Point

Normally, the reorder point equals the expected demand during the expected lead time. Thus, thereordered quantity should never be less than the span between the reorder point level and thesafety stock level. However, if it is appropriate to deviate from this principle and for example,work with a reorder point that is higher than the demand during lead time, it is quite simple to dothat.The reorder quantity should be defined for the item as a fixed quantity, for example.Then for items carrying a fixed reorder quantity, the base reorder quantity could change in thefunction Calculate Reorder Qty, so it does not involve the reorder point.


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3. Write a short note on(a) strategy in retail managementSol.Strategy in Retail SectorValue is the key term in business marketing.

Profitable growth is founded on the ability to deliver value that customers can only get at acompetitive advantage.A problem: Over time we have trained both our customers and our sales force to ignore valueand buy only on price.Best practices for the customers Understand how the products and services that you sell generate value for customers (revenuesor cost savings), noting particularly the differences between the value delivered by you and bythe competition. Sale value delivered, not features and grow markets, by educating more customers on the valuethat you deliver. Segment the market for pricing by offering different product/service bundles at different price

levels to reflect differences in the value that are delivered.Best practices for competition Identify current/potential competitive advantages and capabilities that leverage thoseadvantages. Target customers that best value your capabilities and focus resource investments to thosecustomers for profitable growth. Anticipate and plan for changes in competitor and customer behaviour that could threaten thecompetitive position in target segments. Collect and communicate competitive information to allow management of competitive threatsand minimise the impact of competitive confrontations. Evaluate your competitive success by the ability to grow profits, not market share.Economic value estimation (EVE) Determine the price of the competitive alternative. Determine the money value to customer of products unique benefits. Subtract the cost the customer incurs with using the product. The net figure is the total economic value of your product.Implement fences into the product offering that allow the customer to pay a higher/lower pricefor the product depending upon the amount of value contained in the product. Adding fences

produces a more durable segmentation of customers.


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2. Strategy formulation segmentation, targeting and positioning for growth Segmentation Different customers have different needs and respond to different value propositions. Customers need to be segmented depending upon the value they demand from the offering. In business markets, segmentation may deal with much smaller customer populations. A

segment may be as small as an individual customer or firm.Targeting Once a segment is identified, how do we allocate finite resources to produce optimal

profitability in business markets? Business marketers must set priorities for assigning sales, resources and developing distributionchannels.Applying choice model in customer targetingSegment on the basis of probability of choice: Loyal to us; Loyal to a competitor; and Switchables: loseable / winable customers.

Positioning Positioning involves designing an offering so that market segment buyers perceive it in adistinct and valued way relative to competition. A well conceived and executed positioning associated with a brand name over time can buildstrong brand equity.Positioning can be achieved in three general ways: Uniqueness the only offering with X; Differences how the offering is different (direct or implied comparison) on Y fromcompetition; and Similarities comparison to leading competitor or other points of reference.Integrated market communications (IMC): Customer-focused; it starts with the audience; Strategic management of lT and st goals; A phased array of communications activities; To produce specific behaviours, for instance, buy or pre-buy; Among specific groups of individuals; and To achieve desired business results (predictable ROI). Integrated Market Communications (IMC) is a strategic business process used to plan,develop, execute and evaluate coordinated, measurable persuasive brand communications

programs over time with consumers, customers, prospects employees, associates and other targeted, relevant internal and external audiences. The goal is to generate both ST financial returns and build LT brand and shareholder value.IMC eight-step planning framework Focus on target audience. Have a deep understanding of: Building a unique value proposition (UVP); Establishing communications objectives; Building a behavioural timeline; Selecting and orchestrating media; Developing message/ creative approach; Executing a plan/budget; and


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Measuring results.New offering development Clarify your business growth strategy. Are your offerings existing/new? Are your customersexisting/new? A new offering could be a new product, a new service, a new process or a hybrid of all these.

A new offering takes various forms: idea, concept, prototype, final offering or a marketingcampaign to launch a new product.Growth Opportunities A new offering to a customer does not necessarily mean that it represents a growth opportunityfor the business. New offering growth opportunities must be validated with market analysis. A business growth opportunity is a market of sufficient size and growth potential to sustain a

profitable marketing program over a planning horizon.Market opportunity analysis Define the relevant market. Understand consumer and stakeholder needs and value.

Market segment to increase new product acceptance. Formulate market metrics. Develop market opportunity sizing model.Market attractiveness criteria Market opportunity Customer acceptance Competitiveness Stakeholders EnvironmentPrepare organization for growth Conduct organisational audit of capabilities and competencies. Recognise threats and opportunities for new offering success. Assign and support new offering champions (leaders) and teams. Design a new product development (NPD) process to fit your organisation.

3 Corporate strategy a check list of areas for Strategy FormulationSupply chain strategy Manufacturing strategyCustomer relationship strategy Corporate planningAlliance managementCorporate governanceBusiness performance managementExternal market analysisOrganizational and process designLegal, tax and regulatory complianceTreasury and risk managementFinancial accounting and reportingIndirect procurement Facilities and equip. managementResource developmentHR administrationIT systems and operations


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Inventory planningDistribution oversightDistribution center operationsTransportation resourcesEn route inventory management

Supplier relationship managementManufacturing oversightSupplier controlProduct/component manufacturingAssemble/package productsPlant inventory managementManufacturing procurementCustomer relationship planningAssessing customer satisfactionCustomer insightsValue-added services

Customer account servicingMall marketing executionIn-store inventory managementCustomer directoryCategory/brand strategyCategory/brand planningBrand P&L managementMatching supply and demandMarketing development and effectivenessConcept/product testingProduct developmentProduct managementMarketing executionConsumer serviceProduct directoryConsumer relationshipCustomer relationshipManufacturingInventory and distributionBusiness administrationDirect ControlExecuteProduction/materials development and planningOutbound transportationInbound transportationAccount managementProduct ideation

Network and asset configuration

4 Strategy Manager within a Mall


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A key member of any Business House would be a Strategy Manager who would virtually become a key Performance Driver with the following Principal Accountabilities:1. To develop and implement policies strategies and plans to encourage and enable the Mall tomaximise opportunities for growth.2. Encourage the Mall to find new Customers and penetrate new areas.

3. To identify key issues that impact on the competitiveness and productivity of the Mall anddevelop a strategy and action plan to ensure the continued success and development in order tomaintain the Localitys economic prosperity;4. Develop an understanding of industry pricing strategies and relative pricing issues to developand advise government policy in relation to perceived relative pricing issues;5. To undertake research and analysis and advise on government strategy, explicit or implied,and its effects on the industry in the past, present and future;6. To advise on developments in the wider environment and the effects of such developments,which have an impact on the Mall, such as globalisation, strategy in other jurisdictions, etc;7. To advise on the nature of competition in the industry and the effects of a change in marketstructure if the nature of competition alters as a result of government action;

8. To advise on the economics and industry structure of the industry covering the whole supplychain and including the effects on the customer as end user 9. To develop an understanding of the regulatory burden faced by Malls and to seek to reduce theimpact of regulation through coordinated government action;10. To advise on the extent to which leakage is an issue for the Economy and the extent to whichstrategies can recapture off Locality spend.11. To act as adviser on matters related to the development of the fulfilment segment of theindustry12. To identify and facilitate the removal of barriers, where appropriate, to market entry and or market restructuring;13. To act as a link between government and the Mall engaging the industrys support for government policy relating to it and listening to the industrys views to shape the development of

policy in the public interest. Identifying and implementing a methodology to obtain views whichare representative of the industrys stakeholders.The Mall Strategy Manager is normally engaged in the following projects:Overseeing the implementation of the Mall framework: The Framework sets out guidelinesfor additional Mall space and there is a need to see that the objectives of the framework aredelivered in a balanced way having regard to planning considerations, the view that the Localitywould benefit from additional competition in the convenience sector and ensuring that the towncore remains vibrant as a Mall centre. A key part of this role is to work with planning andexisting and new businesses to ensure that the frameworks objectives are delivered. Business plan objectives include developing a policy for duty free and tax free shopping. Benchmarking environment to identify gaps and encourage employees to fulfil gaps in

provision. Work with wholesale and supply industry to identify and where possible address barriers togrowth and productivity Work with town Malls on the regeneration agenda and Waterfront impacts. Create a town Mallfocus group and facilitate the development of a brand identity for the environment;Context


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There will be a high level of contact with industry representatives and politicians as governmentsunderstanding of the industry and strategy in relation to it is developed. There is likely to be a

business development role which is about challenging industry perceptions that it is a reactive provider of goods in line with the economic cycle to one which actively seeks to grow itsmarkets and to improve productivity.

Primary LinkagesMall linkages are pervasive and include economy wide effects such as those on primary production, tourism, and the consumer. The sector is also affected by a number of governmentfunctions including Planning, Regulation of Undertakings, Employment Policy and Law;consumer regulation, competition policy etc. There is a need for the sectors health to beconsidered in a joined up way.Knowledge and Experience requiredGiven the importance of this role to the achievement of the States policy on economic growth,the manager will have Experience in a business or Mall environment, ideally at management level, including thedevelopment and implementation of business strategy;

Highly-developed skills and experience in project management, business analysis, andinformation systems. Strong analytical and conceptual skills with highly developed, confident presentationaltechniques; Excellent communication, facilitation and influencing skills and ideally experience of dealingwith the media and press

(b) good supply chain practices. Fall 2010Sol.Good Supply Chain PracticesIn good supply chain practices, errors and discrepancies are rooted out as early as possible andcorrected to ensure the rest of the supply chain is not interrupted. For example, when amanufacturer short-ships a purchase order, this causes errors and discrepancies in the customersreceiving system, warehouse management system, sales forecast / allocation system, andaccounting system. As such, people must be involved in correcting the errors caused in each of these systems, driving up the cost of doing business and creating inefficiencies and shortages.Conversely, the customer should work with their suppliers to provide forecasts that are accuratehopefully to the point of being qualified as blanket purchase orders, and provide sufficient lead-time to the manufacturer to make and ship the goods within the manufacturers capacity.However, the manufacturer must work with their own supply chain partners the manufacturersraw material and component suppliers to ensure sufficient quantities of quality materials and

parts are available to meet the manufacturing schedule. Any broken link the in the supply chaincauses disruptions throughout the rest of the chain!The earlier in the supply chain errors and problems are caught and corrected, the smoother andmore efficient the whole supply chain will be, and this will lead to better relationships betweenmanufacturers and their customers. The end result is that consumers will have readily availablethe goods they desire to purchase when they walk into a Mall store or shop online.Prior to SCM TestingThe manufacturer and the customer will verify the sending and receiving, and use of, theelectronic documents provided by the SCM.


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For example, one customer may require a purchase order acknowledgement for each purchaseorder sent to the manufacturer. Another customer, however, may not wish to receive purchaseorder acknowledgements. Further, a purchase order acknowledgement may only be required by acustomer for each purchase order change the customer sends.In another example, the customer may require the advance ship notice to be sent no later than 4

hours after the truck has left the manufacturer. This will help to ensure the customer receives theadvance ship notice in enough time to process the information well before the goods actuallyreach the customers distribution center or store.Therefore, prior to testing, the manufacturer and customer must both agree as to the use of, andwhen to use, each electronic document supported by the SCM. These guidelines should bedocumented and included as part of this documentation.Data Entry and Data ValidityThe SCM does not validate data during entry aside from certain data field formats (i.e. dates) andspecific data fields that are dependent upon one another as determined by their use anddefinition.The SCM therefore does not, and cannot, correct data entry errors. If a purchase order number is

entered incorrectly, the SCM has no way of knowing this. If an item code is entered incorrectly,the manufacturer may ship the wrong item or will note an item code that makes no sense andcontact the customer. If the item quantity is entered incorrectly, the customer may end up with ashipment of 100 items, not the desired 10 items.It is critically important that personnel at both the manufacturer and the customer be dedicated toensuring 100% error-free data entry when using the SCM.


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Master Of Business Administration-MBA 4 th SemesterML0008-Mall management

Assignment Set-2


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Note: Each question carries 10 Marks. Answer all the questions.1. Discuss the importance of mall location & mall Layout in mall management. Write abrief note on Plant location methodology & basic layout formats.Sol.

Mall Location Various Plant Location Methods & Competitive Imperatives Impacting Location The need to produce close to the customer due to time-based competition, trade agreements,and shipping costs The need to locate near the appropriate labor pool to take advantage of low wage costs and/or high technical skills1 Issues in Mall Location Proximity to Customers Business Climate Total Costs Infrastructure Quality of Labor Suppliers Other Facilities Free Trade Zones Political Risk Government Barriers Trading Blocs Environmental Regulation Host Community Competitive Advantage

2 Plant Location Methodology: Factor Rating Method ExamplePlant Location Methodology: Transportation Method of Linear Programming Transportation method of linear programming seeks to minimize costs of shipping n units to mdestinations or its seeks to maximize profit of shipping n units to m destinationsPlant Location Methodology: Centroid Method The centroid method is used for locating single facilities that considers existing facilities, thedistances between them, and the volumes of goods to be shipped between them


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This methodology involves formulas used to compute the coordinates of the two-dimensional point that meets the distance and volume criteria stated above Centroid method example

Several automobile showrooms are located according to the following grid which representscoordinate locations for each showroom

Determining Existing Mall Coordinates Determining the Coordinates of the New MallFacilities Location Growing importance Factors promoting globalization of operations Regulatory & economic reforms Factor Cost Advantages Expanding markets in developing countries Location issues have become more prominent in recent years due to globalization Location decision pertains to the choice of appropriate geographical site for locatingmanufacturing & service facilities of an organizationLocation Planning Methods

One Mall Multiple Candidates Location factor rating Centre of Gravity Method Load Distance Method Multiple Mall Multiple Candidates Transportation ModelLocation factor ratingSteps Identify and list down all the relevant factors for the location decision Establish the relative importance of each factor in the final decision Rate the performance of each candidate location using a rating mechanism Compute a total score for each location based on its performance against each factor and rank them in the decreasing order of the scoreExample A manufacturer of garments is actively considering five alternative locations for setting up itsfactory. The locations vary in terms of the advantages that it provides to the firm. Hence the firmrequires a method of identifying the most appropriate location. Based on a survey of its senior executives the firm has arrived at six factors to be considered for final site selection. The ratingsof each factor on a scale of 1 to 100 provide this information. Further, based some detailedanalysis of both the qualitative and quantitative data available for each of the location, the ratingfor the locations against each factor has also been arrived at (on a scale of 0 to 100). Using thisinformation obtain a ranking of the alternative locations.SolutionCentre of Gravity Method All the demand points (or the supply points, if raw material is supplied from several locations)are represented in a Cartesian coordinate system Each demand (or the supply point) will also have weight indicating the quantum of shipment Therefore it is possible to identify the centre of gravity of the various demand (or supply) pointsOther issues in location planning


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Recent trends in the international markets point to a shift towards fewer facilities that couldserve markets worldwide Example HP Desk Jet Printer, Dell PC These developments point to two areas which could affect the location planning problem verysignificantly

Availability of good transportation infrastructure Use of Internet and IT infrastructure Location planning in the overall context of just-in-time manufacturing philosophy (supplierslocated in the vicinity (20 40 Km radius) of the manufacturer) Service quality depends on responsiveness of service delivery system. Locating service outlets,close to the demand point is an important requirement in a service system

Facilities Location Location issues have become more prominent in recent years on account of globalization of markets

Multi-national Corporations have more opportunities to identify candidate locations for their manufacturing facilities. Factor cost advantages and expanding market in developing countries have made these nationsattractive for locating new facilities Simple qualitative methods are useful for quickly screening an initial set of candidates andnarrowing down the choice to one or two Load-Distance method and centre of gravity method helps evaluate the suitability of candidatesolutions from a perspective of distance and quantum of items to be transported between alocation and the demand points Transportation method helps in optimally identifying a set of k locations out of n candidatesolutions Availability of good transport infrastructure and recent developments in the Internet technologysuggests that it is possible to have fewer locations and still provide better customer service Location decisions in service systems must address the requirement of speed of responsiveness.Therefore locating service outlets as close to the demand points may be highly desirable inservice systems

Mall Layout DefinedMall layout can be defined as the process by which the placement of departments, workgroupswithin departments, workstations, machines, and stock-holding points within a Mall aredetermined.1 Inputs required:

Specification of objectives of the system in terms of output and flexibility Estimation of product or service demand on the system Processing requirements in terms of number of operations and amount of flow betweendepartments and work centers

Space requirements for the elements in the layout Space availability within the Mall itself Basic Layout Formats Process Layout (also called job-shop or functional layout )


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Product Layout (also called flow-shop layout ) Group Technology ( Cellular ) Layout Fixed-Position LayoutProcess Layout: Interdepartmental Flow Given

The flow (number of moves) to and from all departments The cost of moving from one department to another The existing or planned physical layout of the plant Determine

ml0008 fall 2010 solutions

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