GST impact: Shoppers Stop breaks down silos

The new inventory management system has reduced downtime at distribution centres
With India adopting the goods and services tax (GST), a number of organisations have taken the lead in upgrading their business processes and invested heavily in the back end and technology infrastructure to ensure a smooth transition to the new indirect tax regime. Among retailers, Shoppers Stop has been quick to seize the opportunity and has leveraged the GST roll-out to overcome silos by adopting a unified inventory view across its warehouses.

Shoppers Stop has deployed the JDA Warehouse Management Solution (WMS) to help it fulfil its omni-channel vision of achieving 20 per cent digitally-influenced sales by 2020. The fashion retailer has 80 stores across India and an online shopping store. These stores are served by four regional warehouses — in Mumbai, Bengaluru, Kolkata and Delhi. With the upgraded WMS, Shoppers Stop aims to increase its order accuracy and enable two different fulfilment strategies for online customers and store orders from the same warehouse.

Inventory visibility and promise to fulfil is key in retail. With the old WMS, inventory visibility was a challenge for the retailer during various stages of processing in the system.

“With the deployment of JDA WMS solution, inventory movements within the warehouse and yard are transparent. While at an operational level it allows the distribution centre (DC) team to manage workforce more effectively, from a customer fulfilment point of view it enables us to promise an order even before it appears in the stock on hand of the system,” says Govind Shrikhande, customer care associate and MD, Shoppers Stop Limited.

A positive result of scaling of operation, after the deployment of the new WMS, has come in the form of increase in pre-GST inventory receipts. Shoppers Stop’s average receipts had been around 60,000 per day. However, in the last four days of June, it received 148,000 receipts daily using the same technical and human resource infrastructure. This is purely a horizontal scaling of the operations.

According to N Srinivas, MD, industrial services, JLL India, a robust unified inventory management (UIM) is crucial for retailers in maximising productivity and lowering costs. It assists warehouses by keeping tabs on storage, vendor details and procurement and sales timelines. The UIM system helps retailers maintain an ideal balance of inventory. In addition, an advanced system will automatically arrange for items to be shifted between warehouse and showroom.

Another key aspect for inventory management in the new WMS is that it has eliminated downtime which DCs needed to perform PICS (ongoing stocktake). There are departments for which PICS took half a day to three days. Until its completion, the retailer had to stop entire put-away and picking operations. This resulted in non-availability of inventory for end customers leading to loss of sales. But with the upgraded WMS, DCs no longer experience downtime  since PICS is online enabled by Wi-Fi and radio frequency-based scanners. As a result, the retailer claims to have achieved 100 per cent systemised put-away leading to 30 per cent increase in order picking. Also, previously, the warehouse user decided where to put away stocks. It meant the location choice was as good or bad as the person operating on the day. In the new scheme of things, the system guides the user to go and place a particular unit into a specific location and mandates a scan to confirm it has happened. This ensures the physical unit is on the shelf as visible in the system. Fast-moving items are given nearer shelves so the picker does not spend more time finding a product for processing an order.

Besides, traditionally at the retailer’s warehouse and store operations, orders are managed by the department concerned. This means that one store order will have products for only one department. Online orders are usually small in quantity — one or two units from different departments. If the staff were to use the same picking strategy as that of store orders, the picker will have to cover a much larger area (two departments in this case) to retrieve the items. In the online picking strategy that Shoppers Stop now implements, there is an order consolidation zone where pickers pick from different departments and put them into a system directed mailbox location for consolidation. Once all items of an order are consolidated, the order is shown ready for dispatch.

“By doing this, we have avoided having a dedicated team for online picking. The same picking team manages both the large store orders and single piece e-commerce customer orders,” says Shrikhande.

With WMS in place, the DC staff is no longer tied down to routine tasks such as manual checking and rechecking of stock. This has allowed Shoppers Stop to separate warehouse operations into multiple shifts. Since the warehouse now operates in two shifts, the daily replenishment cycles (from warehouse to store) has also come down significantly. The retailer is piloting initiatives in which the stocks sold in store by 6 pm can be replenished to the store the next day before it opens for shoppers.

Efficiency Switch
  • Shoppers Stop has deployed the JDA Warehouse Management Solution to help fulfil its omni-channel vision of 20 per cent digitally-influenced sales
  • It aims to increase order accuracy and enable two different fulfilment strategies for online customers and store orders from the same warehouse
  • The retailer claims to have achieved 100 per cent systemised put-away leading to 30 per cent hike in order picking