AN APPROACH TO STANDARDISE THE
MERCHANDISING PROCESS OF AN
ONLINE APPAREL BRAND
A dissertation submitted in partial fulfilment of
the requirement for the award of Degree in
Bachelor of Fashion Technology
(Apparel Production)
Submitted By
PUSKAR KUMAR SINGH
(B.F.Tech 2011-15)
Under the Guidance of
RANJAN KUMAR SAHA
Associate Professor
Department of Fashion Technology
National Institute of Fashion Technology, Mumbai
MAY, 2015
ABSTRACT
The Indian online apparel market has become more competitive these days and the
competition is getting more and tougher with every single day passing.
This project is designed to understand the merchandising process of an online
apparel brand and suggest ways to standardise it so that the problems like
merchandise stock outs and late response time, and eventually, the percentage of
order cancellations and return to origin (RTO) orders can be minimised.
The objective of this project is to understand the root causes of merchandise stock
outs and to suggest measures to avoid such situations and standardise the
processes in order to eliminate or minimise such situations. A detailed study of the
entire process and work flow has been done and data at every step has been
analysed to find out the root cause of the stock outs and the same was rectified
using various tools and techniques like optimizing the process at every stage and
removing non-valuable added activities and utilizing the available resources
effectively and efficiently.
Keywords: Merchandising, online brand, sales forecasting, inventory management.
i
CERTIFICATE
This is to certify that this Project Report titled “AN APPROACH TO STANDARDISE
THE MERCHANDISING PROCESS OF AN ONLINE APPAREL BRAND” is based
on my, Puskar Kumar Singh’s original research work, conducted under the
guidance of Mr. Ranjan Kumar Saha towards partial fulfilment of the requirement for
award of the Bachelor’s Degree in Fashion Technology (Apparel Production), of the
National Institute of Fashion Technology, Mumbai.
No part of this work has been copied from any other source. Material, wherever
borrowed has been duly acknowledged.
Signature
Puskar Kumar Singh
Signature
Mr. Ranjan Kumar Saha (Faculty Mentor)
ii
ACKNOWLEDGEMENTS
I wish to express my gratitude to everybody who has assisted in learning processes
during this graduation project.
I wish to thank Bewakoof Brands Pvt. Ltd., Ghatkopar, Mumbai for providing me a
great opportunity to do my graduation project with them. I would like to thank Mr.
Sumit Kumar, Merchandiser, Bewakoof Brands Pvt. Ltd. for guiding me in the course
of this project.
Also, I wish to thank Mr. Siddharth Munot, founder of Bewakoof.com, for his
immense support and motivation throughout my graduation project.
I would like to thank my faculty mentor Mr. Ranjan Kumar Saha, Associate
Professor, Centre Co-ordinator, Department of Fashion Technology, Mumbai for his
expert guidance during the project.
I wish to thank Ms. Nilima Rani Singh, Director, NIFT, Mumbai for providing me with
resources I needed to finish my graduation project.
I would like to thank Mr. Anurag Ranjan (Merchandiser, Bewakoof.com), Mr. Ayush
Chandak (Merchandiser, Bewakoof.com), Mr. Amber Mani (Sampling Manager,
Bewakoof.com), Mr. Vivek Yadav (Operations, Bewakoof.com), Mr. Gourav Agarwal
(Operations, Bewakoof.com), Mr. Savio (Manager, Logistics and Customer Care)
and Mr. Altamash Siddiqui (Manager, Logistics and Customer Care) for their help
and support in my project.
I would like to thank all the faculties and staff of Department of Fashion Technology,
NIFT Mumbai for their support and guidance.
Lastly, I would like to thank my family for encouraging me at every step.
iii
INDEX
ABSTRACT…………………………………………………………………………………(i)
CERTIFICATE……………………………………………………………………………..(ii)
ACKNOWLEDGEMENTS……………………………………………………………….(iii)
1 Introduction……………………………………………………………………………..1
1.1 Project…………………………………………………………………………..2
1.1.1 Background…………………………………………………………2
1.1.2 Problem Statement………………………………………………...2
1.1.3 Objectives……………………………………………………………3
2
Literature Review……………………………………………………………………..4
2.1 E-commerce…………………………………………………………………….5
2.1.1 E-commerce Models……………………………………………….5
2.1.2 Advantages and Disadvantages of E-commerce………………..6
2.1.3 E-commerce in India………………………………………………...7
2.1.4 Online Apparel Brands in India…………………………………….7
2.2 Merchandising…………………………………………………………………10
2.2.1 Need of Merchandising……………………………………………10
2.2.2 Role of a Merchandiser……………………………………………11
2.2.3 Major Documents created by Merchandiser…………………….17
2.2.4 Time and Action Calendar………………………………………...18
2.3 Fashion Forecasting…………………………………………………………..20
2.4 Case Study: Zara’s Agile Supply Chain……………………………………..21
2.4.1 Product Organisation and Design………………………………..21
2.4.2 Procurement………………………………………………………..22
2.4.3 Production…………………………………………………………..23
2.4.4 Product Distribution……………………………………………......23
2.4.5 Sales and Feedback……………………………………………….24
3 Research Methodology………………………………………………………………..26
iv
4 Data Collection and Analysis……………………………………………………….28
4.1 Primary Data Collection……………………………………………………..29
4.2 Primary Data Analysis……………………………………………………….30
4.2.1 Purchase Order Data Analysis……………………………………30
4.2.2 Sales Data Analysis………………………………………………..32
4.2.3 Shipping Data Analysis…………………………………………….33
5 Solutions and Implementations……………………………………………………..37
5.1 Planning………………………………………………………………………..38
5.2 Trims Management……………………………………………………………40
5.3 Print Planning…………………………………………………………………..47
6 Results……………………………………………………………………………………50
6.1 Purchase Order Data Analysis……………………………………………….51
6.2 Sales Data Analysis…………………………………………………………...53
6.3 Shipping Data Analysis……………………………………………………….54
7 Conclusion………………………………………………………………………………55
8 Bibliography…………………………………………………………………………….57
8 References………………………………………………………………………………58
9 Annexures……………………………………………………………………………….60
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LIST OF FIGURES
Fig. 2.1 Types of Merchandisers………………………………………………………..12
Fig. 4.1 Difference Between Actual Due Dates and Delivery Dates of Purchase
Orders in the Month of January 2015…………………………………………………..30
Fig. 4.2 Difference Between Actual Due Dates and Delivery Dates of Purchase
Orders in the Month of February 2015…………………………………………………..31
Fig. 4.3 Reasons for Order Cancellations……………………………………………….33
Fig. 4.4 Orders Despatched in January 2015…………………………………………..34
Fig. 4.5 Orders Despatched in February 2015………………………………………….35
Fig. 5.1 Data Sheet for Buffer Stock……………………………………………………..40
Fig. 5.2 E-Mail to the Merchandisers…………………………………………………….41
Fig. 5.3 Trim Data Sheet…………………………………………………………………..45
Fig. 5.4 Sales Data Sheet…………………………………………………………………48
Fig. 5.5 Inventory Data Sheet…………………………………………………………….49
Fig. 5.6 Plan Sheet………………………………………………………………………...49
Fig. 6.1 Difference Between Actual Due Dates and Delivery Dates of Purchase
Orders in the Month of March 2015……………………………………………………...51
Fig. 6.2 Difference Between Actual Due Dates and Delivery Dates of Purchase
Orders in the Month of April 2015………………………………………………………..52
Fig. 6.3 Orders Despatched in March 2015……………………………………………..54
vi
AN APPROACH TO STANDARDISE
THE MERCHANDISING PROCESS OF
AN ONLINE APPAREL BRAND
PUSKAR KUMAR SINGH
DEPARTMENT OF FASHION TECHNOLOGY
NATIONAL INSTITUTE OF FASHION TECHNOLOGY,
MUMBAI
MAY, 2015
CHAPTER 1:
INTRODUCTION
1
1.1 PROJECT
1.1.1 Background:
There is a boom in India‟s economy with e-commerce continuing to increase its
share in the market. With the increasing availability of internet services through
various platforms, the e-commerce sector in India has a very good potential in the
near future.
In 2013, the e-retail market in India was worth US$ 2.3 billion. India has close to 10
million online shoppers and is growing at an estimated compound annual growth rate
of 30% whereas the global growth rate is 8–10%. (Shrivastava 2006) Electronics and
Apparel are the biggest categories in terms of sales. According to Forrester, the ecommerce market in India is set to grow the fastest within the Asia-Pacific Region at
a CAGR of over 57% between 2012–16. (Wigder 2011)
In the last decade, the competition on the internet increased manifolds. Large
players have come into the booming Indian e-commerce platform. Flipkart,
Amazon.com, Snapdeal, Jabong etc. are the key players and trend-setters for the
various start-ups. As the competition has now become very stiff, the companies are
struggling for more and more agility and speed in procurement and delivery.
With the advancements in communication and information technology, companies,
now, are able to keep low inventories, still catering very smoothly. Low inventory
levels help in reduction of costs of inventory and also, lower capital investment on
stake. In order to keep low inventory, the replenishment cycles need to be short and
frequent. The lower the replenishment cycles, the lower would be the level of
inventory.
1.1.2 Problem Statement:
In an ever-increasing competition in the e-commerce apparel market, companies are
struggling to keep the inventory levels low to lower the inventory costs and
investment on goods, still catering the orders on time. At bewakoof.com, the
company keeps the inventories as low as possible with the help of just 3 week
2
forecasting and inventory. But, the company frequently faces the problems of late
replenishments and as a result, frequent instances of out of stock as a result of nonstandardization of the procedures. Because of these problems, the response time for
the orders increases and also, there are a huge percentage of order cancellations.
So, the company intends to improve its forecasting and follow-up procedures to
avoid out of stock situations and check the advancements of the orders given to the
suppliers.
1.1.3 Objectives:
The aim of the project is to achieve standards in the merchandising process in the
company.
The sub-objectives of the project are as follows:

To improve the forecasting of the stock required.

To improve the follow-up procedures to keep track of the orders.
3
CHAPTER 2:
LITERATURE REVIEW
4
2.1 E-COMMERCE
E-commerce can be defined as a modern business methodology that addresses the
needs of organizations, merchants, and consumers to cut costs while improving the
quality of goods and services and the increasing speed of service delivery, by using
Internet. (e-commercesite.wordpress.com 2008)
The history of e-commerce can be traced back in 1979, when Michael Aldrich, an
English entrepreneur and inventor, demonstrated first ever online shopping system.
(Wikipedia 2015) Since then, it has now grown into an economic giant with a huge
potential customer base as 28.7% of world population has direct access to internet
as in 2010. (Mirescu 2011)
2.1.1 E-commerce Models:
The main concepts related to e-commerce which form the basis of business
organization are mainly the business-to-business and business-to-consumer
categories. The following terms describe in detail about the main participants in an ecommerce transaction and who are the ultimate beneficiaries. (Mirescu 2011)

Business to Business (B2B): Business-to-business (B2B) is currently
perceived as the most important segment of ecommerce, representing
transactions and supply of goods and services between companies
(manufacturers, suppliers, distributors, retailers, etc.) in order to obtain the
final economic assets. The main components of this concept are einfrastructure which ensures the minimum requirements related to logistics
and operating software and e-markets, or websites that function as virtual
meeting places where buyers interact with the bidders.

Business to Consumer (B2C): Business-to-consumer (B2C) is the second
element of e-commerce, being centred around the mechanisms able to satisfy
the consumers' interests (sale/purchase of goods and services, information,
etc.) through trade between producers and buyers. The main markets are the
e-retail and e-banking (online financial instruments designed for personal
finance management) platforms.

Business to Government or Government to Business (B2G or G2B):
Business-to-government and government-to-business (B2G/G2B) represents
5
the ways in which commercial transactions take place between companies
and public sector.

Consumer to Consumer (C2C): Consumer-to-consumer (C2C) is the type of
trade between buyers and individuals. One of the best examples is eBay with
their
e-auctioning
system.
2.1.2 Advantages and Disadvantages of e-commerce (triua.com 2014):
The major advantages of e-commerce are as follows:

Economy benefit: E-commerce allows making transaction without any needs
on stores and infrastructure investment. Companies only need well-built
website and customer service.

Cost effective: The entire financial transactions will eventually become
electronic, so sooner conversion is going to be lower on cost. It makes every
transaction through e-commerce payment a lot cheaper.

Higher margin: E-commerce also enables us to move better with higher
margin for more business safety. Higher margin also means business with
more control as well as flexibility.

Better productivity: Productivity here means productivity for both companies
and customers. People like to find answers online because it is faster and
cheaper, and it costs a lot cheaper expense as well for the company.

Quick comparison: E-commerce also enables to compare price among several
providers. In the end, it leads to smart shopping. People can save more
money while they shop.
The disadvantages are as follows:

Security: Customers need to be confident and trust the provider of payment
method. Sometimes, people can be tricked. Examining on integrity and
reputation of the web stores is necessary before buying.

Scalability of system: A company definitely needs a well-developed website to
support numbers of customers at a time.

Integrity of data and system: Customers need secure access all the time. In
addition to it, protection to data is also essential.
6

Products people: People who prefer and focus on product will not buy online.
They will want to feel, try, and sit on their new couch and bed.

Customer service and relations problems: They sometimes forget how
essential to build loyal relationship with customers. Without loyalty from
customers, they will not survive the business.
Though there are some disadvantages in the e-commerce which are not answered
yet, such as the case of unavailability of sources to provide feel or touch of the
products, there are more strong advantages. E-commerce provides customers with
options, speed and a good way to compare between products and service providers.
E-commerce is good for both, the businesses and the customers as it saves time
and money of both the parties.
2.1.3 E-commerce in India:
In the last decade, the internet penetration into the population of India has helped ecommerce to get a stage to expand. Over the past few years, the section has grown
by almost 35% CAGR from 3.8 billion USD in 2009 to 12.6 billion USD in 2013.
Online travel dominates the sector with 70% market share; however, e-retail has
become the fastest growing segment increasing its share from 10% in 2009 to 18%
in 2013. Calculations based on industry benchmarks estimate that the number of
parcel check-outs in e-commerce portals exceeded 100 million in 2013. Projections
state that if this robust growth is continued, then the e-retail market would be
grossing 20 billion USD in 2017-2020. (pwc 2014)
2.1.4 Online Apparel Brands in India
Apparel e-tailing has experienced significant growth across the country due to
increasing time-poverty, changing lifestyles, convenience and flexibility of shopping
from home and option of free home delivery (in most cases). Factors such as
dramatic increase in penetration of IT devices and communication solutions
(especially tablets, broadband and smart-telephony), and emergence of exciting new
“virtual reality” technologies are contributing to the expansion of apparel e-tailing.
Convenience in terms of ease and time, information, decision-making, transactions
and flexibility has been a major factor influencing adoption of e-commerce. These
factors to a large extent also play out for apparel e-tailing. (Bisen and Jhulka 2013)
7
In the last two years, the $130 million apparel e-retailing space has attracted
investments worth $70 million i.e. 40% of the total funding Indian e-retailers bagged
during the period. In fact, the recent inflow of private investment into many garment
start-ups is an indication that the apparel e-tailing platform is reaching a tipping point
fast. Many firms have invested between $5 million and $52 million in portals like
Letsbuy.com, Flipkart.com, FashionAndYou.com, Yebhi.com, and Snapdeal.com.
(Bisen and Jhulka 2013)
Among big cities, consumers in Mumbai topped the numbers of online shoppers,
followed by Ahmedabad and Delhi. However, shopping on the net is gaining traction
with consumers beyond metros and Tier I cities as well and gaining momentum
across the country.(Bisen and Jhulka 2013)
Online apparel brands have taken three distinct routes as the market grows:

Multi-brand route: Few players have cashed in on early-bird benefits and
captured a significant online market share. Myntra.com – an online fashion
store for women and men launched in 2007; Yebhi.com (Big Shoe Bazaar
India Pvt Ltd) launched in 2008, is the fastest growing company in lifestyle
category in India; Futurebazaar.com – an online retailer which caters to the
fashion and apparel category, launched in 2007.

Apparel Brands going online: - Brands like Zodiac, Madame, Fabindia,
Mustard and La Senza, to name a few, have made their products available
online.

Niche routes: Many e-retailers are entering into niche segments to cash in on
these untapped categories. Strapsandstrings.com, promoted as India‟s first
online lingerie shopping boutique, offers Indian women the opportunity to
shop for international lingerie brands. Learning from the international success
of Diapers.com, a number of baby products (including apparel) focussed
ventures
like
BabyOye.com,
FirstCry.com,
HushBabies.com
and
LittleHood.com have emerged in the country.
Now-a-days, online apparel brands are getting more and more agile with the
advancements in information technology. The new features like in a day shipment
8
guarantee, personalisation etc. is adding to the long list of advantages of online
shopping.
9
2.2 MERCHANDISING
Merchandising is a process of buying and selling of goods; in the case of garment
industry, the goods are textiles, garments and related trims and accessories. In other
words, merchandising denotes all the planned activities to make the merchandise
available taking into consideration the 5Rs (Raaz 2012):

Right Place: the merchandise should be at the right place where it is intended
to be.

Right Quality: It should be complaint with the quality standards.

Right Quantity: To dispatch right quantity of product what buyer/customer
ordered.

Right Cost: the cost of the merchandise should be such that the
buyer/customer is willing to pay for.

Right Time: No one wants to wait. Keeping delivery schedule on time is very
mandatory.
2.2.1 Need of Merchandising:
The concept of the term “Merchandising” can be traced back to the early historic
period after the emergence of the trade between kingdoms. But during those days
the meaning of the term merchandising was confined merely to exchange of
materials or commodities which were availed from nature or produced from nature
and they were not manufactured for specific purpose or specific customers. The term
“Merchandising” got its significance after the industrial revolution that emerged
during the 20th century after World War 2 and particularly during the period when
there was a dramatic shift from Custom Made Tailoring to Ready Made Garments.
(Khandalkar 2013)
The period between 1960 and the early 2000 saw dramatic changes in the structure,
focus and content of apparel companies particularly in U.S. During 1970‟s there was
a remarkable growth in the apparel industry which continued through the 1980s and
1990s. United States played a major role in the evaluation of merchandising in
apparel industry. (Khandalkar 2013)
10
The necessity of merchandising lies essentially due to the following factors
(Khandalkar 2013):

Dramatic growth in the apparel sector

Complicated raw materials & processes

Complex network of suppliers and buyers

Advent of new styles

Reduced Product Life Cycles

Textile innovations

Computer applications

Global transition
To achieve this level of control while developing, executing and delivering a product
line that meet the rapidly changing needs of target market, it requires a dedicated
management profession as merchandising.
2.2.2 Role of a Merchandiser
Merchandising department is a linking device of all. The job of a merchandiser is to
co-ordinate with the entire department in the office as well as the customers. The
merchandiser is the one who creates a good relationship in between the supplier &
buyer. (Khandalkar 2013)
The Merchandiser usually works with all departments in a company--- management,
design, sourcing, production and sales to make sure the finished product is executed
correctly and on time. The merchandiser should have enough knowledge for
determining the target population, researching the market for current trends and
predicting future trends. Merchandisers work with management and sales
department to develop a line plan and makes sales projections for each season. The
merchandising department also supervises the creation of salesman samples,
swatch booklets, colour cards etc. In few companies the Merchandiser is required to
give presentations to the sales force to familiarize them with the concepts of the line
to help them pitch to retailers. In a large company a merchandiser or design director
will head up this area with the help of one or more assistants. In a small company,
the owner or designer will see to these responsibilities. (Mazumder 2012)
11
Generally, following are the responsibilities of merchandisers in garment industry
(Khandalkar 2013)
Internal & external communication

Sampling

Lab dips

Accessories & trims

Preparing internal order sheets

Preparing purchase orders

Advising and assisting production

Advising quality department about quality level

Mediating production and quality departments

Giving shipping instructions and following shipping

Helping documentation department

Taking responsibility for inspections

Following shipment
Though, the role of a merchandiser largely depends upon the type of merchandiser
he/she is.
Types of
Merchandisers
Fashion
Merchandiser
Production/
Export
Merchandiser
Retail
Merchandiser
Fig. 2.1 Types of Merchandisers

Fashion Merchandiser: Fashion merchandiser is the person who is
responsible for the promotion of apparel sales and involves in all of the tasks
necessary to deliver the clothing requests and meet the needs of potential
customers and designers. Fashion merchandising involves developing
12
campaigns, displays and advertisements, directing manufacturing and
marketing as well as creating sales strategies for the fashion industry or the
retail environment. (Rangel 2011)
Steps involved in Fashion Merchandising (Khandalkar 2013):
o Fashion Forecasting: Forecasting is necessary as the merchandiser
should know what and how much to produce/source to get customers
and eventually, profit. Generally fashion prediction is done by the
fashion direction in case of big organizations and by owner himself in
case of small organizations.
o Design Development: The design is developed based on themes
using the elements of design such as color, texture, line, shape and
fabrication and adopting the principle of fashion such as proportion,
balance, rhythm, emphasis and harmony. Design development is
mainly done on the requirement of number of lines and groups that are
going to be offered by the company for the particular season.
o Sample Planning: The collection of design created by the designers,
the design which are having good potential are selected and taken for
sample development.
o Product Specification: A product specification will guide the
production department to develop and plan their merchandising and
production planning and organize everything for effective and efficient
production of the merchandise.
o Merchandise Planning: a fashion merchandising plan or policy is a
long
range standard for fashion buying and selling as well as for
related activities like sales promotion. Normally, merchandising plans
are planned several months before the selling season.
o Assortment planning: A merchandise assortment is a collection of
various types, quantities and price of related merchandise usually
grouped under one classification within a department. A good
assortment keeping will appeal a particular group of customers.
o Buying: It is a very crucial activity of the fashion merchandising
because this is the actual process of manufacturing the good and
13
bringing them for the sales at retail stores. A buyer‟s responsibilities
include both the buying and selling aspects of retailing.

Production/Export Merchandiser: Apparel export merchandising may be
defined as „all the planning & activities involved right from the buyer
communication & order receiving till the execution or shipment of the order by
fulfilling the following factors (Six Rights) (Khandalkar 2013):
o Right Merchandise: Retailers must fill their shelves with the
merchandise that customer wants.
o Right Place: the merchandise should be in its right place when the
customer needs it.
o Right Time: Much merchandise is seasonal in nature and must be on
hand when it is most needed.
o Right Quantity: A profitable balance between volume of sales and
amount of inventory is the desired goal.
o Right Price: Merchandise must arrive at a price that is high enough to
give the store profit and yet low enough to meet the competition and
customers‟ expectations and for which the customer is willing to pay.
o Right Promotion: Right balance between the investment and the appeal
created for the customers.
The successful execution of any garment export order depends on the work
performance of a merchandiser. Merchandiser is the person who plans and
coordinates all the activities right from the order procuring till the shipment of
the order. A merchandiser should have the comprehensive knowledge of his
work procedures and responsibilities so that he could perform his job
efficiently and effectively. (Khandalkar 2013)
In an apparel production unit, the merchandiser has to perform following
functions (Khandalkar 2013):
o Communication: It is one of the foremost functions of merchandiser
because the merchandiser has to communicate with different levels of
people in buying houses and the industry in his day to day activities.
14
o Planning and Programming: A merchandiser has to check the order
requirement, planning for the given order, programming for various
activities and proper allocation of work.
o Follow-ups: It includes sending of samples at various stages of order,
and communicating on a regular basis with buyers for sample and
other approvals.
o Decision making: A merchandiser has to make several decisions
during the order processing like giving approvals for fabrics, color,
design, accessories, and packing, selection of suppliers and vendors,
selection of buyers, sometimes time extensions for order shipment.
o Sourcing and Purchasing: A merchandiser may have to do sourcing
and purchasing for raw materials and accessories, suppliers and
vendors, new designs, new buyers.
o Controlling: This is a crucial activity for any merchandiser. A
merchandiser has to make sure that all the activities are carried out as
per the planning and even if there is any deviation, he/she should make
the alternatives measures.
o Co-ordination: Merchandiser has to coordinate in such way to reduce
the uncertainties and difficulties and if there is a problem, the
merchandiser is responsible for completion of the task successfully in
the given period. Both the controlling and coordinating activities
complement each other and a merchandiser has to adopt the both
accordingly.
o Negotiation: It is the activity of convincing, compromising and
cooperation which would benefit the both parties involved in the
negotiation.
o Costing: It is the process of estimating the expenditure of a given
product and the subsequent price. It is another crucial function
because mostly order conformation depends on the price offered to the
buyers. The merchandiser should know the current prices and rates of
various products and processes to do the accurate costing.
o Meeting: There are two types of meetings in which a merchandiser
has to be involved. First, a merchandiser has to conduct the meeting
15
with the concerned department in-charges to discuss about the
proceedings and the status of the running order. In second type, a
merchandiser has to attend the meeting with the superiors or buyers or
business people in giving reporting or participation or discussion.
o Forecasting: Forecasting is the activity of predicting the future
happenings or problems. A merchandiser has to predict the future
uncertainties in the current order or industry so that alternative actions
or corrective measures can be taken in advance. This also includes
giving suggestion or ideas about new technologies or new products or
latest industry trends.

Retail Merchandiser: Retail merchandising is the process used in order to
conduct retail sales. As part of the process, the merchandiser pays close
attention to the types of products offered for sale, how to best present those
products to consumers, and determining what a reasonable retail price is for
each unit sold. (Tatum 2015)
Functions of a retail merchandiser are as follows (Khandalkar 2013):
o Analysing the local customers: Sales in a particular store will be
determined by several factors. A retailer must consider these factors:

The geographical location of the store

The population content of the area

The social activities that the area offers

The economic conditions and level of the local population

The fashion influences of the particular population
o Selecting a fashion image: Every retail store has a retail image in the
mind of customer irrelevant of the store want to have it or not. A retail
merchandiser should make use of this fact by creating his own store‟s
image which would attract the customers. The type of fashion image
they want to have depends on the type of target customer the store
want to attract.
o Buying the merchandise: Buying fashion merchandise for a retail
store is not an easy job. It requires a lot of planning for budget,
16
selection of merchandise, selection of suppliers. Also, it is important to
decide on the quality of the goods to be ordered.
o Receiving and stocking the merchandise: When the ordered goods
arrive at the stores, it should be checked carefully for the quantities
against the shipping invoice or packing list sent by the supplier. The
quantity of the goods received should be checked before they are sent
for display or for selling. After the goods are received and checked,
then it should be marked or tagged and kept in stock for sales.
o Display: The way in which the merchandise is displayed is very
important for sales. Good display always enhances the sales of the
store and a poor display may slow the sale of good merchandise. The
store‟s image is based on the principle of use of space for display.
o Sales promotion: Sales promotion is very much important to the
successful sale of merchandise. Sales promotion refers to promotion of
sale of merchandise, services or ideas. It includes activities like
advertising, publicity, visual displays, fashion shows, special events,
personal selling etc.
o Sales evaluation: Once the selling season is over, the next thing a
store has to do is evaluate the sales of the season. This include
analysing the sales by product wise, style wise, size and color wise,
unsold items, fast sold goods, price line wise etc.
2.2.3 Major Documents created by Merchandisers:
Merchandising is a very diverse process. A merchandiser has to look after a variety
of matters and has to co-ordinate with a number of people. In this process of controls
and co-ordinations, there are some of the documents which a merchandiser has to
draft and share with concerned people to get or deliver the orders on time and as
required. The important documents that a merchandiser has to draft are as follows:

Purchase order: A purchase order (PO) is a commercial document issued by
a buyer to a seller, indicating types, quantities, and agreed prices for products
or services the seller will provide to the buyer. (UBC 2015) When a seller
(supplier) accepts a purchase order, a legally binding contract is formed
between the two parties. In addition, the buyer should always clearly and
17
explicitly communicate their requests to the seller so there is no confusion
when the purchase order is received. (Loi 2013)

Bill of material: A Bill of Materials (BOM) is a list of inputs that go into the
product. It generally includes product code, product description, vendor,
cuttable width, size (buttons) or length (zippers), test results, estimated/actual
yield and required processing (Fasanella 2009). A bill of material is necessary
as it states exactly what components are to be added.

Tech pack: A tech pack is all the instructions a factory needs to create a
design. (Matsumoto 2013) It is a set of design or style sheets which contain all
the necessary specifications to construct a garment or a sewn product for
prototype or production purposes. At a minimum each tech pack should have
the style number, season, size range, block number, specs, flat sketch,
fabrics, and color per style. These documents are generated and completed
by the technical designer and finalized with merchandisers.

Order status report: Order status reports are maintained by merchandisers in
order to track any specific order on any given time. It helps in analysing if an
order is running on time or delayed and eventually, helps in maintaining
schedule.
2.2.4 Time and Action Calendar (TNA):
A Time and Action calendar is a calendar which shows the ideal date/ time period
within which the major activities or tasks are supposed to occur against a scheduled
delivery window. (Kothari 2013) It is a regular review system to track progress of the
project(s). A smart merchandiser maintains critical path to identify the critical tasks,
which if not attended to could impact delivery schedules for his styles. (Islam 2013)
Structure of the TNA: Merchandisers, normally, use spread sheet to prepare TNA.
The first column generally consists of major events which are going to occur during
an order completion time, the next column displays exact dates or time frames in
which the events are going to occur to complete the order on time. In order to make
TNA, some information is very important (Kothari 2013):

Process flow of an order with the list of task which need to be performed

Production capacity of cutting, sewing, washing and finishing
18

For sewing - batch wise and product wise capacity (production per day per
batch)

Lead time of activities, e.g. raw material lead time, sampling lead time, etc.

Shipment date or planned ex-factory date
Factors need to be considered while preparing TNA (Kothari 2013):

Production capacity of plant

Style type of merchandise

Festivals of manufacturing country

Holidays

Shipment details

Festivals of country from where raw material is imported

Logistics facilities

Lead time estimated by buyer

Style complications

Fabric and trims manufacturing complications

Buffer required from each department

Political stability of the country

Flexibility of freight forwarder

Response time from buyer at different stages

Lead times of various activities like L/C payment, custom clearance, etc

Cut off dates for shipments
On the buyer side, if the buyer is working on CMT, TNA would consist of the same,
some of the information may be added, such as shipment in-house date and
checking and stock-up.
19
2.3 FASHION FORECASTING
Fashion forecasting is the prediction of mood, behaviour and buying habits of the
consumer. Forecasting the future demand for particular styles, fabrics and color is an
important aspect of the fashion industry. Fashion forecasting combines theories of
fashion changes with the process of organizing and analysing the information and
synthesizing the data into actionable forecasts. Forecasting provides a way for
executives to expand their thinking about changes, through anticipating the future,
and projecting the likely outcomes. (Dhanapal and Anita 2011)
Long term forecasting (over 2 years ahead) is used by executives for corporate
planning purposes. It is also used for marketing managers to position products in the
marketplace in relationship to competition. (Dhanapal and Anita 2011)
Short term forecasting is used by product developers, merchandisers and production
managers to give style direction and shape collections. For short term forecasting
most apparel companies subscribe to one or more services, whose job is to scan the
market and report on the developments in color, textiles and style directions.
(Dhanapal and Anita 2011)
Fashion forecasting is the prediction of mood, behaviour and buying habits of the
consumer. It is no longer a question of identifying to customers by age, geography or
income, but looking into how and why they buy, based on their mood, beliefs and the
occasion. (Kumar 2015)
20
2.4 CASE STUDY: ZARA’S AGILE SUPPLY CHAIN
Zara is a fashion label and fashion chain stores established in 1975 by the Spanish
group Inditex owned by Amancio Ortega. Next to Zara, the rest of the labels the
groups own are Bershka, Massimo Dutti, Pull and Bear, Stradivarius, Oysho, Zara
Home, Zara kinds and Uterque. During the last two decades Zara tripled its profit
and stores and nowadays is ranked the third biggest retailer world-wide. It has 3000
in-house designers located in its headquarter in the region of A Coruña, Spain, who
design over 40,000 items per year among which only 10,000 are selected for
production. Opposite to its competitors, more than 50% of its production is in Europe
and not in Asia or South America. (Zhelyazkov 2010)
2.4.1 Product organization and design
The majority of Zara's items are imitations of high-end brands. Zara‟s designers do
not work for product innovation, but for reorganizing fashion elements of the existed
products on their purpose, transferring them into new kinds of products. They work to
interpret the fashion instead of creating fashion. (Zhang 2008)
The samples are collected from various sources, like pret-a-porters, haut couture
(Dutta 2002), moulded with what is happening on the street, in clubs, lifestyle
hotspots and fashion “flash points”. They never work on trend prediction like others
which is done 12 months prior to the actual sales (Barnes and Greenwood 2006).
The only place where Zara is predicting heavily is ordering its fabrics. Fabrics are
considered raw materials and need to be present before the season starts due to
long lead times. Anyhow, there is still efficiency applied in this process. The fabrics
are ordered uncoloured and this gives flexibility to change the color depending on
the trends. Majority of stock is held as “work-in-process” awaiting configuration
instructions.
Zara is balancing its in-house and outsourcing activities. For example heavy labour
tasks like sewing and colouring are outsourced to companies close to its
headquarter (Dutta 2002). On the other hand activities like design, prototyping and
computer aided fabric cuts are held in-house to help agility. After clothes are
assembled and return from the sewing factories, they are distributed to Zara's stores.
To ensure that each order could arrive at destination punctually, laser barcode
21
scanners, which are able to pick and sort over 80,000 pieces of clothes with an error
rate of less than 0.5%, are used in sorting the finished products (Zhang 2008).
2.4.2 Procurement
Every requires purchasing supplies, perhaps as raw materials, components, subassemblies, spares, equipment, services and consumables. The procurement of
these is either buying or leasing them.
Procurement interacts with every single unit in the organization, going from
marketing and sales to engineering, design and manufacturing, therefore is
important for the organization.
Procurement is important for the company for a number of reasons:

Materials change - The global markets and agile supply can provide various
materials very briefly on different price. This affects directly the final product,
making it more competitive, possibly cheaper and more appealing to the
customers.

Customer demand - Lately there is a growth in product mix, while shortening
products life cycle. A good example is Zara designs, they produce small
quantities and wide variety, that way updating the shop outlook every week
and cutting down on promotions and reductions.

Price variation - The new technologies allow a product price to change couple
of times a day, depending on supply and demand. The same technologies
allow monitoring that process.

Procurement is value adding process and not a cost centre.

Manufacturing - It is important for the manufacturing materials to be delivered
on time, with the correct quality, to the correct place, in correct condition and
at the right total cost.
Procurement has direct connection with company profit. Every penny saved in
purchasing is a profit, while every sale brings cost of sales. In fast fashion,
purchasing activities play a critical role through supplier selection and product
decision-making, and indeed, buying is arguably changing from purely operational to
much more strategic (Bruce and Daly 2006)
22
2.4.3 Production
Supply Chain Operations (SCO) manages three clear aspects: maximize resource
used, minimize inventory and lead times. Those three directly affect pricing,
customer satisfaction, and overall business values like profit, turnover, sales, etc.
(Bititci 2010).
Zara is producing fashion outfits; this has low complex, but high uncertainty. Cai-feng
(2009) argues that uncertainty is also a characteristic of competition among
organizations and will increase due to a combination of factors in future supply chain
environment. However, Zara is minimizing its uncertainty by focusing on a limited
range of products and basic shapes, so that it deals with a rather narrow product
range. In that case even if a product does not sell well, a small number has been
shipped and it is going to be markdown and replaced with new one shortly. Fast
fashion does not apply to the whole range in stores, and as much as 80 per cent of
goods may be core and basic lines, with fast fashion accounting for up to 20 per cent
(Bruce and Daly 2006). Zara does not do different; it also has its runners and
repeaters. The Zara basic label is daily commodities with no shelf life, e.g.
underwear, basic t-shirts, socks, etc. and is mainly produced in China, which
presume cheaper production and longer lead times. On the other hand the high-end
trendy Zara labels like Zara RTF, mainly consisting of up-to-date fashion outfits are
produced in Portugal and Spain, meaning higher production cost and shorter lead
times, but helping fast reaction on demand.
2.4.4 Product distribution
Agile Supply Chain (ASC) is capable of responding faster to the changeable
demand. This new addition changes the business to enhance competition on time by
efficient supply chain. There are various ways the business can influence the SC.
Delivery time influences the company image. Lack of company‟s product on the
shelf, turns the customer to competitor's product and around 20% never come back.
In other words, short delivery times can increase market (Bititci 2010).
Zara is considered to be the pioneer in fast fashion, with its twice a week supply to
its stores with new fashion items. For comparison, the usual times are from six to
nine months (Bruce and Daly 2006) for Far East clothing industry, 4 months for an
23
international brand and only a week for Zara (Zhang 2008). This way Zara can react
immediately on demand changes and even if an item is not saleable, there are small
numbers of it in a store. The new items in store keep people coming back every
week and find new goods to buy. It helps to keep the stores “fresh” and minimize the
risk of wrong forecasting (Dutta 2002).
ASC is critical for the fashion business success. In order to manage supply chain
correctly retailers should take into consideration all possible variables. Those can be:
weather conditions, specific customer requirements, shelf life, raw materials supply
lead times, sales forecasts, market specific requirements, etc. (Bititci 2010).
Zara's success is due to many reasons, e.g. efficient supply chain, efficient
organization management, and one of the most important customer orientations..
Another important aspect is that rapid turnover, eliminates working capital needs,
consequently number of short term loans is decreased. In that sense, the efficiency
of Zara originates from a small scale in operation, small batch of production and
transportation, many times of distribution in small quantities. If order is big, inventory
increases and the ability to comply with customer demand decreases (Zhang 2008).
2.4.5 Sales and Feedback
An early and constant communication between customer and supplier can ensure a
better SCM. Another rule is if customer treats his suppliers well, inform them, being
involved with their process, it is likely that fewer issues rise and usually is a
guarantee for a long time partnership. These facts are well known by Zara and used
in its daily operations. Zara‟s designers gather data on sales and inventory from
each of its stores on a daily basis and use this to understand the situation. This
process is named Shared Situation Awareness. It consists of three steps: observe
the raw data, making sense of raw data and testing hypotheses (Sull and Turconi
2008).
The raw data comes from quantitative and qualitative approaches. Sales and
replenishment reports are examined hourly by the Zara‟s store managers. On the
other hand store managers order items themselves instead of relying on what has
being sent from the headquarters. The accuracy of their forecasting affects their
24
compensation, which makes them more responsible. Part of the qualitative data
gathering is direct customer feedback given to shop assistants daily. Another one is
after shop closes, the store manager and assistants turn to a recovery team and try
to recall what happen during this day, as well as sort out tried, but unsold items in
fitting rooms and try to find a pattern, which can be fed to the design team.
The gathered raw data is analysed in Zara's headquarter, where design team, fast
prototyping team, market specialists and buyers sit together in tightly coupled teams.
The discussions are located in three halls with open layouts: one for man, woman
and children clothes. Based on feedback new designs are made, prototyped and
rated by the team. Depending on the outcome, there are towed away or sent to store
to test if customers will buy them.
25
CHAPTER 3:
RESEARCH METHODOLOGY
26
The following is the step-wise process followed for the project:

Introduction to the company and topic finalisation.

Thorough analysis of the working of the company: The project started with the
thorough analysis and understanding about the working of the company; the
processes and process flow in the company. Each and every process was
studied and understood.

Literature review: The secondary data was collected with the help of review of
available literature online on the internet and offline, in magazines, journals,
books, etc. this provided the basic understanding of the project and means
and methods to execute the final implementations.

Detailed analysis of the role of the merchandisers in the company and the
merchandising process: The role of merchandisers in the company was
studied in detail. Their work and processes was analysed rigorously and
understood.

Data collection and analysis: Primary data on Purchase Orders, order
completion, late responses and order cancellations due to unavailability of
stock, information about forecasting and planning method and schedule were
taken and analysed. The data which was analysed was from 2 months; i.e.
January 2015 and February 2015.

Identification of loop-holes in the process: After the analysis of the data, it was
found that some of the processes in the process-flow are creating problems in
the product procurement and response time and can be changed or optimised
for better results

Setting up standards for the processes and means to sustain them: the
standard procedures for the processes were created which the merchandisers
have to follow.

Final Implementation of the changes.

Review of change in data and final results: After changes in processes and
final implementations, the data from March 2015 was reviewed for the change
in results.
27
CHAPTER 4:
DATA
COLLECTION
ANALYSIS
28
AND
4.1 PRIMARY DATA COLLECTION
The primary data was collected from various sources:

Purchase Order: The purchase orders issued during the months of January,
February and March 2015 were studied.
The PO Data contains:
o PO Number
o Vendor Name
o PO Date
o Due Date

Data from “The Sheet”: The sheet has the record of every order received.
The Sheet contains:
o PO Number
o Vendor Name
o Date on which shipment was received
o Details of the Shipment

Sales Data: Sales data of the months of January and February 2015 were
studied.
Sales Data contains:
o Sales Quantity
o RTO (Return to Origin) percentage per month
o Order Cancellation percentage per month

Shipping Data: Shipping data of the months of January And February 2015
were studied.
Shipping data contains:
o Order id
o Date of Order
o Date or shipment
29
4.2 PRIMARY DATA ANALYSIS
4.2.1 Purchase Order Data Analysis
Purchase orders are issued by the company to the vendors for the procurement of
the products as specified. A due date is given to the vendors on or before which they
need to deliver the shipment to the company.
January 2015
Total no. of Purchase Orders generated: 67
Total no. of shipments received on or before due date: 13
Percentage of shipments received on or before due date: 19.4%
Fig. 4.1 DIFFERENCE BETWEEN ACTUAL DUE DATES AND DELIVERY DATES OF PURCHASE ORDERS IN
THE MONTH OF JANUARY 2015
30
February 2015
Total no. of Purchase Orders generated: 68
Total no. of shipments received on or before due date: 24
Percentage of shipments received on or before due date: 35.29%
Fig. 4.2 DIFFERENCE BETWEEN ACTUAL DUE DATES AND DELIVERY DATES OF PURCHASE ORDERS IN
THE MONTH OF FEBRUARY 2015
The percentage of orders received on time is very low and most of the shipments get
delayed.
Also, the graphs above show that there are huge differences between the due dates
and delivery dates of the purchase orders. Some shipments even got delayed more
than a month.
The major reasons for the delay in the shipments are as follows:

Unavailability or shortage of trims with the vendors which result in halt in
production.

Delay in delivering fabric on time to the vendors.
31

Unavailability of vehicle when needed.

Issues with the construction of the garments causing delay in production.
4.2.2 Sales Data Analysis
The sales data of the months January 2015 and February 2015 is analysed to find
out the following:

Order cancellations and the reasons

RTO (return to origin) of the shipment and the reasons
January 2015
Percentage of order cancellations out of total orders: 9%
Percentage of RTO out of total orders: 10%
February 2015
Percentage of order cancellations out of total orders: 8.25%
Percentage of RTO out of total orders: 9.09%
Reasons for order cancellations
Following are the major reasons for order cancellations:

Because of delay, customer cancelled the order (68%)

Double order (6%)

Wrong number (6%)

Fake order (6%)

New order placed (5%)

No reply within 7 days, hence, order cancelled (4%)

Out of station (4%)

Cancellation on call (1%)
32
Fig. 4.3 REASONS FOR ORDER CANCELLATIONS
4.2.3 Shipping Data Analysis
Shipping data is analysed to figure out the time taken for the shipments to leave the
facility after the orders have been placed. The company, according to its standards,
any order which takes more than 2 days to get despatched is termed as late
despatch.
The analysis of this data is important to know the deviation of the shipments in
getting despatched from the ideal time of maximum 2 days.
Shipping data of January 2015 and February 2015 is analysed to derive outcomes.
33
January 2015
Total orders despatched in January 2015: 15784
Orders despatched on time (0-2 days): 9196
Orders despatched late (3-5 days): 4222
Orders despatched very late (more than 5 days): 2366
Fig. 4.4 ORDERS DESPATCHED IN JANUARY 2015
34
February 2015
Total orders despatched in February 2015: 19189
Orders despatched on time (0-2 days): 6919
Orders despatched late (3-5 days): 7321
Orders despatched very late (more than 5 days): 4949
Fig. 4.5 ORDERS DESPATCHED IN FEBRUARY 2015
35
From the data of the two months, it can be observed that the shipments are getting
delayed and because of which there is a very high percentage of order cancellation.
The major reasons for the delay in shipments are as follows:

Unavailability of stock

Improper planning for printing on the garments
36
CHAPTER 5:
SOLUTIONS
AND
IMPLEMENTATIONS
37
5.1 PLANNING
The company had three models of inventory and each had different characteristics.

Unlimited model: Unlimited model is never out of stock model. Product falling
under this model never goes out of stock. Customers can order products
falling under this model even if they are not in stock in the warehouse. Mostly,
the products which are best-selling are put under this model of inventory.

Color model: Color model product goes out of stock as soon as the stock of
that product finishes. Generally when the new color in any product is launched
then that product comes under this model. The main characteristics of this
model is that as soon as stock of any color of product finishes, all the design
in that color goes out of stock. Stock of this product is updated in the admin
panel and as per the order the stock is deducted from the panel manually.

Inventory model: Inventory model product goes out of stock as soon as the
stock of that product finishes. Inventory model product does not require any
further processing in-house like printing. They are just packed and stocked up
in the warehouse.
Problems:

Planning issue is the major issue which causes delay in the entire process.
There was defined buffer stock for the products (not all the products, only
those products which were best-selling), for example 200 t-shirts of medium
size in color white. The problem is that though the buffers were set, there was
no use of them, the products were ordered only when they reached near 0 or
0. This was because there was no way to keep track of the product being sold
out. The only way was to manually look at the stock levels and decide what to
order when.

Moreover, unlimited model of inventory caused a serious problem to the
planning of the stocks required. The problem with the unlimited model was
that orders could be placed even if there was not a single stock quantity,
which was its characteristic property. So, during planning, merchandisers had
38
no idea when a product was going to overshoot the predictions and there
were frequent instances of products being out of stock from the inventory and
the orders being delayed because of the time taken to procure the product.
Solution 1:

Every product must have buffer level according to the order.

The products should be ordered as soon as they reach their specified buffer
level.

There was a need of a system which eliminates the need to manually look for
the products which was going to be out of stock because many products are
skipped by mistake in the process.
Solution 2:

Unlimited model should be discontinued as it creates problems in the planning
process and is responsible for the orders getting late.

The alternate way is to plan for every product according to the past sales data
instead of keeping a room for such out of stock situations.
Implementations:

Buffer Stock Update
The idea is to design a system which automatically informs the merchandisers about
the low levels of inventory so that they can work accordingly and order the products
before they get out of stock.
A data sheet is prepared to keep track of the stock of all the products. The sheet
would help in keeping track of the quantities of various products and deciding their
buffer quantities.
The data sheet contains:

Product category

Product color

Product size

OK quantity (available quantity)
39

Trigger quantity (buffer) at Bhiwandi (warehouse)

Trigger quantity (buffer) at Ghatkopar (head-office)
Fig. 5.1 DATA SHEET FOR BUFFER STOCK
The buffer quantities are of two types:

Buffer quantity for warehouse: This is for the merchandisers and other people
who are responsible for production and the stocks to replenish at time.
This buffer quantity is decided on the sales data of last 4 weeks individually.
The week sales which is highest of all the 4 is taken and is multiplied by 4 to
take into consideration the maximum possible sales in the next 4 weeks.
The data extracted is set as buffer for that product.

Buffer quantity for head-office: This quantity is smaller than the above and is
there for the information of the officials in the head-office if any product nears
a very low stock.
This buffer quantity can be fed manually. A small buffer quantity is decided
based on the priority of the product and recorded in the data sheet.
40
The data in the sheet is refreshed on a daily basis automatically through the admin
data panel of the company.
For the merchandisers to know the products which are below buffer levels, an autogenerated e-mail is sent keeping which contains the following product description:

Product category

Product color

Product size

Available quantity

Buffer quantity
The data in the e-mail contains all the products which are below buffer quantity and
is used by the merchandisers to plan for the production accordingly.
Fig. 5.2 E-MAIL TO THE MERCHANDISERS

Discontinuation Of Unlimited Model:
The aim of unlimited model was to avoid hindrance to the product sales due to its
unavailability. The unlimited model creates problems with the planning of the
products as it allows customers to order products even when they are not in the
inventory.
41
The unavoidable instances of the sales shoot up make it very difficult to source the
products and despatch the shipment on time. This results in huge delays in
completion of the orders.
Hence, the model is discontinued and there are just two models; inventory model
and color model.
The discontinuation of the unlimited model meant that there is a need for a
standardised planning formula which works with all the product categories; inventory
model and color model both.
To keep an inventory of 2 weeks, the formula for forecasting is as follows:
2 Week Forecast = (Sales record – OK Stock + Pending List) * X
Where, Sales record = {Sales (Week 1 + Week 2 + Week 3 + Week 4) / 4} * 2
OK stock = Available stock of the product
Pending List = Total pending orders
X = Co-efficient of multiplication which is based on the chances of growth or
depletion in sales. >1 when sales growth is expected, <1 when sales depletion is
expected.
The above formula considers the sales boom and so, minimises the chances of
product being out of stock.
42
5.2 TRIMS MANAGEMENT
The company provides fabric and trims to the vendors for production as it works on
CMT basis. The trims are sent to the vendors on the basis of the Purchase Order of
the garments.
Problems:

Many-a-times, it was observed that the trims are out of stock in the inventory
and the production going on with the vendors stop because of the
unavailability of trims in the company.

The trim store was not organised, the trims were scattered in the cardboard
boxes on the ground and it took very long time to search for a particular trim.

The main problem was that the trims were not accounted anywhere in any
means in the company. There was no account in the company about how
much trim is going to the vendor against a particular Purchase Order.

Responsibility of trims was not defined. No guidelines were there for taking
out the trims from the trim store.

No standard names are given to the trims to avoid confusion among
employees and vendors. This results in wrong trim being ordered or supplied.
Solution:

Trim store should be organised in order for ease of operations. An organised
store helps in keeping track of the available trims. Ease in locating the trims
helps save time and avoids confusion about the unavailability of a particular
trim.

There should be a standardised procedure for trim management; taking out
and stocking up the trims.

Inventory level management is necessary in order to keep track of the trims
and order the required on time.

Proper nomenclature of the trims is must to avoid the confusions while dealing
with the vendors.
43
Implementation:

Trim Inventory management
For proper management of trims, a trim inventory management system is must. The
following are the implementations done:

Standardised naming to the trims: the trims used did not have any standard
names and this led to mistakes which can be avoided easily by standardising
the names.
The trims present were sorted and named accordingly.
The naming depended upon the following criteria:
o
o
Type of trim
Placement in the garment
Also, trims were given codes based on their categories and names. This is
done to avoid the confusion based on names. The codes are unique and each
code defines a single trim. The uses of codes are as follows:
o For better communication inside and outside the company.
o To deal with vendors in order to avoid confusion during production
process.
Nomenclature of code is as follows:
TRIM TYPE (HERE-SL REPRESENTS
“SIZE LABEL”)
BEWAKOOF.COM IDENTIFICATION
CODE
BKF-SL-01-M
IDENTIFICATION NUMBER FOR TRIM
TYPE (HERE- 01 REPRESENTS
ALPHABETIC SIZE LABEL
44
SIZE CODE (HERE- M REPRESENTS
MEDIUM)

Segregation of trims: all the trims are segregated and kept on racks which are
marked with their codes and names in the same order as the nomenclature.

Data sheet for inventory update: a data sheet is created for the updating the
trim inventory levels. The data sheet consists of the following:
o Trim code: the code given to each particular trim.
o Trim type: name of the type of the trim.
o Trim name: standard name of the trim.
o Inventory: inventory level of the available trims.
o Unit: the means of measure the quantity. Example: pieces, rolls etc.
o Products: the products in which the trims are required.
Fig. 5.3 TRIM DATA SHEET

Trim register: trim register is used for the primary record the issuance or stock
up of trims. The register is filled by the person who is taking the trim out or
keeping it inside the inventory.
The format of the issue register is:
ISSUE REGISTER
SRL.
TRIM
NO.
DATE CODE
PO
TRIM NAME NO.
45
VENDOR QUANTITY SIGN WHEN UPDATED
The format of the stock up register is:
ENTRY REGISTER
SRL.
NO.
DATE SUPPLIER

CHALLAN
NO.
TRIM
CODE
TRIM
NAME
SIGN
QUANTITY UPDATED
WHEN
Procedure for record keeping: the record keeping process is as follows:
PRIMARY
UPDATE
GATE PASS
AND CHALLAN
FINAL UPDATE
• As soon as a trim is issued or stocked up by any employee, he/she fills
the primary format in the trim register.
• He/she is then required to take the issued trims along with the PO
details to the office clerk who issues gate passes and challan.
• She matckes the trim quantity with the purchase order quantity and
issues gate pass and challan of the trims and signs on the issue register.
• The clerk updates the data sheet.
• As the data sheet is shard with the merchandisers, they have an update
of the trims present.
46
5.3 PRINT PLANNING
Print planning is important in the company as the printing of the products like printed
t-shirts, boxers and fleece shorts is done in-house. There are 3 printing machines on
which printing is done on the daily basis.
T-shirts are more in number in the online orders, so t-shirt printing is done on a
regular basis.
Boxers and fleece shorts are printed after intervals.
Problems:

There is no schedule for the printing of boxers and fleece shorts. The printing
plates in the machines need to be changed for printing the boxers and fleece
shorts and it takes a lot of time. So, they are printed 2-3 times in a week. This
results in long order list and delay in orders. Hence, orders get delayed
because of printing delays.

Boxers were printed on the basis of pending lists, so, adding the fact that the
boxers not printed regularly, the orders get delayed.
Solution:

A standard process for printing the boxers is needed.

Since, the boxers cannot be printed daily, there need to be some method by
which delays in the order completion can be minimised or avoided.
Implementation:

Percentage of boxers and fleece shorts in total order of printed t-shirts, boxers
and fleece shorts: 27%

Total number of working days= 6

Total no. of days required to print the total order of boxers and fleece shorts=
1.62

Hence, 2 days are required to print the order of boxers and fleece shorts.
Tuesday and Friday are decided to print every week.
47

The delays in order completion can be avoided by printing in advance. But,
the company policy states that inventory more than 3 week must not be kept
in the warehouse.

A formula for printing boxers is as follows:
Boxer printing = Sales Data + Pending List – Current Stock Quantity
Where, Sales Data= higher sales value between past two week sales
Pending List= Pending online orders
Current Stock Quantity= available printed stock quantity

The excel data sheet consists of following data:
o Sales data of past 2 weeks: this sheet consists of sales data of past 2
weeks from which the higher sales value is extracted.
o Inventory data: Inventory data consists of update about the printed
stock quantity in the inventory.
o OK Stock data: this data is required just to cross-check if the print
quantity is available in the stock.
o Print plan sheet: this sheet uses formulae to determine the print
quantity.
o Final plan sheet: the final plan sheet aggregates all the print data and a
final plan is generated.
Fig. 5.4 SALES DATA
48
Fig. 5.5 INVENTORY DATA
Fig. 5.6 PLAN SHEET
49
CHAPTER 6:
RESULT
50
6.1 PURCHASE ORDER DATA ANALYSIS
Trim mis-management was mainly responsible for the delays in production. After the
trim inventory management is introduced, the purchase order data of March 2015
and April 2015 are reviewed.
March 2015
Total no. of Purchase Orders generated: 67
Total no. of shipments received on or before due date: 35
Percentage of shipments received on or before due date: 52.23%
Fig. 6.1 DIFFERENCE BETWEEN ACTUAL DUE DATES AND DELIVERY DATES OF PURCHASE ORDERS IN
THE MONTH OF MARCH 2015
51
April 2015
Total no. of Purchase Orders generated: 23
Total no. of shipments received on or before due date: 12
Percentage of shipments received on or before due date: 52.17%
Fig. 6.2 DIFFERENCE BETWEEN ACTUAL DUE DATES AND DELIVERY DATES OF PURCHASE ORDERS IN
THE MONTH OF APRIL 2015
52
6.2 SALES DATA ANALYSIS
The sales data of the months March 2015 is analysed to find out the following:

Order cancellations and the reasons

RTO (return to origin) of the shipment and the reasons
March 2015
Percentage of order cancellations out of total orders: 7.42%
Percentage of RTO out of total orders: 8.38%
Difference from the data of January and February 2015
Percentage of order cancellations out of total orders: 1.42%
Percentage of RTO out of total orders: 0.62%
53
6.3 SHIPPING DATA ANALYSIS
March 2015
Total orders despatched in March 2015: 20172
Orders despatched on time (0-2 days): 9462
Orders despatched late (3-5 days): 8497
Orders despatched very late (more than 5 days): 2213
Fig. 6.3 ORDERS DESPATCHED IN MARCH 2015
Difference from the average data of January and February 2015
Orders despatched on time (0-2 days): 1404
Orders despatched late (3-5 days): 2725
Orders despatched very late (more than 5 days): -1444
54
CHAPTER 7:
CONCLUSION
55
7.1 CONCLUSION
This project is my endeavour towards standardisation of the processes in
merchandising for reducing the response time in merchandise delivery to customers.
While doing this project I gained a first-hand experience of how online apparel retail
value chain works, I got to learn the finer aspects and intricacies of the business in a
challenging industrial set up.
During our project I worked on the almost every aspect of the online apparel
business which provided me with an invaluable learning and experience.
Percentage of shipments received on time increased by 15% in the months of March
and April 2015.
Cancelled Order Percentage was reduced by 1.42%.
RTO was reduced by 0.62%.
Time taken to despatch the orders was reduced and late despatch of orders was
less after completion of the project.
56
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CHAPTER 9:
ANNEXURES
60