Enterprise

Resource Planning
in Apparel and
Retail Industry
 What is ERP ?
AN ENTERPRISE IS A GROUP OF PEOPLE WITH A COMMON
GOAL, WHICH HAS SOME KEY FUNCTIONS AND RESOURCES AT
ITS DISPOSAL TO ACHIEVE THAT GOAL. So ERP is a method of
effective planning of all the resources in an organization.

ERP is a company-wide computer software system used to

manage and integrate the data and processes of an organization
into one single system.

An ERP system typically has modular hardware and software

units and "services" that communicate on a local area network

In order for a software system to be considered ERP, it must

provide an organization with functionality for two or more
system and integrate them into one unified database
Integration is Key to
ERP
Integration is an extremely important part to ERP's.

ERP's main goal is to integrate data and processes from all

areas of an organization and unify it for easy access and work
flow.

ERP's usually accomplish integration by creating one single

database that employs multiple software modules providing
different areas of an organization with various business
function.
Implementation
It takes lots of planning , consulting and in most cases
3 months to 1 year

Implementing an ERP system will ultimately require

significant changes on staff and work practices .

Usually organizations use ERP vendors or consulting

companies to implement their customized ERP system . There
are three types of professional services that are provided
when implementing an ERP system are :
2 . Consulting Services - are usually responsible for the
initial stages of ERP implementation by imparting
product training , workflow etc
3 . Customization Services - work by extending the use of
the new ERP system or changing its use by creating
customized interfaces and / or underlying application
code .
4 . Support Services - include both support and maintenance
of ERP systems . Eg trouble shooting and assistance with
ERP issues .
 " Core system "
Customization vs
Configuration
Increasingly, ERP vendors have tried to reduce the need for
customization by providing built-in "configuration" tools to
address most customers' needs
Key differences between customization and configuration include:

Customization is always optional, whereas some degree of

configuration is must before the software will work at all.

Configuration is available to all customers, whereas

customization allows individual customer to implement
"market-beating" processes.
 Configuration changes tend to be recorded as entries in
vendor-supplied data tables, whereas customization usually
requires some element of programming and/or changes to
table structures or views.
The effect of configuration changes on the performance of the
system is relatively predictable and is largely the responsibility
of the ERP vendor. The effect of customization is unpredictable
and may require time-consuming stress testing by the
implementation team.
 Extension
"Extension" refers to ways that the delivered ERP
environment can be extended with third-party programs.

It is technically easy to expose most ERP transactions to

outside programs
Scenarios to do with archiving, reporting and republishing
(these are easiest to achieve, because they mainly address
static data)
Transactional data capture scenarios, e.g. using scanners,
tills or RFIDs, are relatively easy (because they touch existing
data)
ERP in Apparel
Industry
FABRIC MODULE:
This module includes production, commercial as well as quality details.
Production details may include productions at Winding , Sizing ,
Loom , finishing stages .
Technical specification and quality may include various
specifications such as Fabric specification , Size beam
specification .
Yarn count for warp and weft , Reed count , Ends and picks per
inch , Process specification at winding , Pre - beaming specification ,
Process details and quality may include various parameter like
Control of weight ( spools & cops ), Number of knots , Sizing takeup ,
fabric width , Ends and picks , Fabric faults .

MARKETING WING: This module deals with the Store section and requires
various parameters such as the stock, MRP, etc.
 FINANCE WING: As the name suggests, it deals with H.R. Cell and
includes various parameters such as Database on HR, Performance Rating,
HR Allocation, Selection & Recruitment, Training to all and also Absenteeism.

QUALITY ASSURANCE WING: In this module, SQC, IE Cell is included.
The various parameters are Databank, Control Charts, Sampling Plan, Cost,
Waste Realization, and Maintenance Schedule.

 Supplier developer module : would be useful in proper selection of

suppliers, which can focus on quality, cost and delivery aspects of supplier.
 Capacity management system can bring down the delivery time for
execution of the order and improve customer satisfaction.
 Benefits of ERP in
Apparel Industry
Supplier benefit Management Employee benefit Customer benefit
benefit

Information in time Cost savings, Satisfaction in Good services.

about material to improvement in working and Good quality at
be provided. savings. Good achieving goals cheaper price.
customer with good team
relationships. work.
Cost savings: Company losses 2% of its sales value in discounts, which are the
result of surplus production, implementing quality management system can help to
bring down excess production

Supplier developer module would be useful in proper selection of suppliers,

which can focus on quality, cost and delivery aspects of supplier.

Reduction in cycle time:Sincesuch allocations are useful for making

planned deliveries
Improvement in sales: 75 % customers place repeat orders. Three factors-price,
order and delivery affect orders. Integrated system will definitely be useful on this
account.
Customer satisfaction: Current system is ineffective in tracking
problems related to customers. Capacity planning for received order
also falls in average category. Efficient capacity management system
can bring down the delivery time for execution of the order and
improve customer satisfaction.

Reduction in machinery downtime: 5 % machinery downtime is

attributed to non-availability of raw material in the stores. Prompt
communication coupled with effective supplier selection module and
planning system would be useful in bringing down the machinery
downtime.
ERP in Retail Industry
 Contemporary
Challenges to the
Retail industry
In the current business environment, the retail industry faces two
major challenges

 Market competition - This calls for a proactive approach on the

part of the retail organization to sense the specific requirements of
the consumer before other competitors and respond to them in
real-time ensuring customer satisfaction in the process.

 Regulatory pressures - In order to meet the regulatory
standards, the retailers require an enterprise wide process visibility,
data access and near-instant performance reporting

A combination of flexibility, process efficiency, reliable

information and responsiveness is critical to a retail
business and ERP packages have been introduced to tackle
the elimination of IT complexity albeit with some
implementation challenges to the line of business and IT
management staff.
Problems with Enterprise
Applications in the
Retail sector
Major problem areas in the existing enterprise applications in
Retail include:

•Outdated architecture – Most of the legacy enterprise

applications in retail have an outdated architecture that is
inflexible and rigid. The lack of flexibility prevents the legacy
software to be used with the contemporary products available in
the market that may add muscle to the retail operations.
•
•Limited scope – Most of the legacy systems were designed to
take care of specific problems tasks and as a result, lacked an
enterprise wide approach to the problem solving process. This
makes such systems unsuitable for use in the contemporary
business environment that is highly competitive in nature. Modern
businesses require an enterprise wide approach to retail
management process and legacy systems fall short of such a
requirement.
•High maintenance costs – Legacy information systems are costly to
maintain. The cost component is high because such systems are no
longer used in the industry and require specialized personnel for
maintenance purposes. Moreover, the maintenance cost of legacy
systems keeps on increasing with the passage of time. The older an
information system is, the higher are its associated maintenance costs to
be borne by the retail business.
•
•Integration and scalability problems – Legacy software does not
allow addition and integration of new applications. This prevents such
systems from scaling up or integrating with similar systems used by the
associates or business partners. Such integration and scalability problems
tend to multiply as the size and scope of retail operations increases.
•
•Increased risk to the business – A combination of old and new
information systems makes the whole system susceptible to failure or
crash. The heterogeneity in the system is the primary cause of risk. The
solution lies in a close knit, homogeneous information system that can
integrate seamlessly with other such systems in real time while imparting
the much-needed stability to the whole system.
 
Advantages of Using a
Retail ERP Suite
Primary advantages :
•Retail specific components – Unlike a general ERP package,
retail ERP suite offers retail centric components that are customized
to meet the specific requirements of a retail organization in an
effective and efficient manner.
•
•Segment specific expandability option –A retail ERP package
has provisions to meet the varying needs of the different segments
within the retail sector.
 
•Support for the store system– offers support for the store
systems that form the pivot of a retail business. The critical
functions include keeping track of the inventory, ordering and
replenishment, loss prevention and task management. Secondary
advantages:
 
•Secondary advantages
•
•Configuration and scalability – A good retail ERP system allows a high
degree of customization and is easily scalable to attune itself to the size of
the organization and its level and scope of operations.
•
•Phased implementation support – Allows the software package to be
implemented in a step-by-step incremental manner rather than in one go.
This makes the transition to an ERP package a lot easier and allows the
users to acclimatize themselves to an ERP package
 
•Support for advanced functionality –Provide support for advanced
functionalities that is helpful in the decision making process such as
formulating pricing strategies, merchandise planning, inventory
optimization and store execution. The top management uses this feature
to set the benchmarks and achieve the desired results.
•
•Workflow automation and enterprise process management –To
make the workflow smooth and seamless across the entire enterprise.
This allows the management to monitor and keep track of the workflow
and removal of any inconsistencies in the business process.
 SWOT Analysis of Retail ERP
Systems
STRENGTHS WEAKNESS

Provides an enterprise wide view of Expensive to procure

the workflow
Requires significant employee training
Allows integration with systems of
associates and business partners Compatibility issues with other/legacy
systems
Helps in routine decision making
Security concerns
Allows streamlining of business
processes
  

OPPORTUNITIES THREATS

Booming retail sector in the Opposition to globalization and

emerging global markets transnational movement of
goods
The retail sector is overlooked by
the major ERP solution providers Increasing complexity of such
systems

High efficiencies becoming Divided opinion over the Return-

critical in the retail sector due to On-Investment (ROI) from such
the cut-throat competition and tools
paper-thin margins
Security concerns regarding
sharing of data over a network
 Main Components of
Retail ERP System
1.Merchandise management –
§Supports the merchandise management operations undertaken by the
retailers.
§This component includes activities such as

the setting up, maintenance and management of the retail outlet
keeping track of the prices of the items, inventory, and the different
vendors etc.
acting as a bridge between the different retail applications supported
by the retail ERP suite aimed at facilitating more efficient retail
operations.
2 Store operations –

This element of the ERP system takes care of all the

operations related to the store management function.

The store operations are central to a retail chain since the
retailers keep the majority of their inventory at the stores.

The store operations component includes the store specific
inventory management, sales audit, returns management,
perishables management and the labor management. The
store operations component can also include the customer
management and the associated promotion execution
systems.
3. Retail planning

This element of the ERP system allows the retailers to undertake the
planning activities at a large as well as a small scale as per the need of the
situation.
It focuses on the different strategies to be employed in order to help the
retail store in increasing the sales of the merchandise. The retail-planning
component focuses on achieving the economies of scale and attaining the
desired efficiencies by increasing the merchandise sales at the retail chain.

4. Supply chain planning and execution

It provides support to the internal as well as the external supply chain
process. It covers both the planning and the execution part of the
supply chain management in retail. Supply chain forms the backbone of
the retail operations. The supply chain represents the flow of
information, finances, and materials as they move in a process from
the supplier to the wholesaler to the retailer and finally to the end-user
or the consumer of merchandise
5. Store operations
This element of the ERP system takes care of all the operations related to the
store management function.
The store operations are central to a retail chain since the retailers keep the
majority of their inventory at the stores.

6. Corporate administration – This component aims to

serve the information needs of the administration and usually includes the
process management and compliance reports required by the top
management for the decision-making purposes.
 ERP Market Share
E R P M a rk e t S h a re

SAP

O ra c le A p p lic a t io n s
29%
Th e S a g e G ro u p
47%

M ic ro s o ft D y n a m ic s
10%
E R P S y s te m s in th e E v a lu a tio n L is t o f E n te rp ri
3% 4% 7% S S A G lo b a l
Te c h n o lo g ie s
60
O t h e rs
50
40
30
20
10
0
M ic ro s o ft S1
O ra c le
SAP
G eac
In fo r
usiness Implications
•Graphical User Interface (GUI) support – critical to make the retail
ERP systems popular with the non-technical users.
 
•Allows optimum utilization of the resources –subsequently
translates into reduced costs and correspondingly high profits.
 
•Reduction in the overhead and Inventory –thereby reducing the
unnecessary costs to the company.
 
•Timely responsiveness –thereby extend timely response to any
customer demands.
  
•Integrated work environment –that can be easily monitored and
managed.
 
Knowledge transfer between industries –facilitates transfer of
knowledge between related industries and stimulates innovation and
subsequent growth
  
 

List of ERP packages

•ERP Packages for Retail
•
•SAP for RETAIL from SAP
•Oracle Retail Merchandising System (ORMS) from Oracle
•Portfolio Retail Merchandising System (PMM) from JDA Software
•RETAILIX HQ from Retailix
•VISION MERCHANDISING SUITE from Jesta I.S.
•Sage Pro ERP from SAGE Group

•ERP Packages in Apparel Industry

•
•STAGE – ‘The ERP’ of ECO TECH,
WinFash from Sierra Micro Systems
Enterprise + ebusiness Software - Textile &
HomefashionsSystems from Jomar SoftCorp
ALGOERP Release P3 [Apparel & Home Textile Manufacturing
Planning & Control] from Algorithm Consulting
Web-Vision (Garment Management Software) from Elite
Consulting -
•
Advantages of ERP
Systems
•The ability to streamline different processes and workflows
•
•The ability to easily share data across various departments in
an organization
•
•Improved efficiency and productivity levels thus lower costs
•
•Better tracking and forecasting
•
•Improved customer service

•Eliminates the problem of synchronizing changes between

multiple systems
•
•Permits control of cross functional business processes
Disadvantages
•Customization in many situations is limited

•ERP systems can be cost prohibitive to install and run

•
•ERP's may be too rigid for specific organizations that are
either new or want to move in a new direction in the near
future.
•
•Re-engineering of business processes to fit the "industry
standard" prescribed by the ERP system may lead to a loss
of competitive advantage.
•
•Resistance in sharing sensitive internal information
between departments can reduce the effectiveness of the
software.
 Thank you
Presented to Presented by
Ms Rashmi Gulati Pankhuri Pal
M/MFM/09/19

National Institute Of Fashion Technology, Mumbai