The Evolution of Inventory Management....

The Evolution of Inventory
Management..and short

1. The Evolution of Inventory
Management
This presentation explores the shift from traditional inventory models. It
examines how modern retailers like Pantaloon challenge conventional
methods. We'll delve into the complexities of today's inventory strategies. The
focus is on adapting to new retail dynamics.
by Saurabh & Sunit

2. Understanding the Economic Order Quantity (EOQ)
Model
EOQ Model Basics
The Economic Order Quantity (EOQ) model, developed in 1913,
minimizes inventory costs. It calculates the optimal order
quantity, considering demand, ordering costs, and lead times.
Key Assumptions
•Constant demand
•Fixed ordering costs
•Predictable lead times

3. Limitations of the Traditional
EOQ Model
Static Conditions
EOQ assumes static market conditions.
Ignores Volatility
It ignores demand volatility.
Fails to Account For
•Seasonal variations
•Rapid market changes
•Supply chain complexities

4. Pantaloon: Disrupting Traditional
Inventory Management
Innovative Approach
Kishore Biyani's approach revolutionized retail.
Decentralized Strategy
Pantaloon used a decentralized distribution strategy.
Local Nuances
They focused on local market understanding.
Adapted to Diversity
Pantaloon adapted to India's diverse consumer landscape.

5. ABC Inventory Classification in Modern Retail
Strategic Importance 1 Value Differentiation
2
Dynamic Approach
3
Targeted Strategies
4
ABC classification categorizes inventory by strategic importance. It differentiates high-value items from low-value ones. This dynamic
approach enables targeted strategies for inventory management.

6. Lead Time Optimization: Zara's
Benchmark
15
Day lead Time
Zara achieves a 15-day lead time, setting an industry benchmark.
90-120
Day Lead Time
Compared to traditional 90-120 day cycles.
Just-in-time inventory management allows a rapid response to market trends. This
minimizes excess stock and obsolescence.

7. Challenges for Local Small Retailers
1
Organized retail
2
Limited resources
3
Agile strategies
Local retailers face challenges competing with large organized retail chains. They have limited resources for advanced inventory
systems. They need agile, cost-effective strategies.

8. Strategies for Small Retailers'
Survival
Niche Focus Personalized
Service
Flexible Inventory
Data Analytics
Small retailers can focus on niche products and personalized customer
service. They should use flexible inventory management. Also, leverage
technology and data analytics.

9. Future of Inventory Management
AI-Driven Forecasting
AI enables accurate demand
forecasting.
Real-Time Tracking
Real-time inventory tracking
improves efficiency.
Integrated Solutions
Integrated supply chain
solutions streamline
operations.
Predictive Analytics
Predictive analytics replaces
static models.

10. Conclusion: Adapting to
Retail's New Paradigm
Beyond Traditional EOQ Continuous Learning
Customer-Centric Strategies
Modern retail requires embracing complexity and continuous learning.
Implement customer-centric inventory strategies. Balance cost efficiency with
market responsiveness.