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TRAINING
REPORT
Submitted by:
Arun Kumar Singh
DOJ- 15 Nov, 2012
Contents
1. Company structure and working culture
2. E-commerce
3. : Category culture and sourcing team
4. General Skills
5. Sourcing workflow
6. Inventory model
7. Category Process-1
8. Re-ordering Algo
9. Category Process-2
10. Damaged Good Process
11. PP Process-1
12. Excel Skills
13. PP Process-2
14. Finance Terms and Tax Calculation-1
15. Business Development
16. Finance Terms and Tax Calculation-2
17. Operation Workflow
This is my first day in the office and after the formality of filling form for opening bank account,
I attend two important sessions. One was about the training process, report and work culture and
in another session I came to know about e-commerce.
Session 1: Training Program Detail
In first session, I was told about the training process which includes assignments, daily EOD
reports, final training report, seminar, and viva and about the company and work culture of
Fashion and You. First session was given by Mr. Vibhore
Mr. Deepak
1. About the training:
The training will be of 10 days. In training period I have to be very attentive about what is told to
me. The deliverables covered in our training are
Assignments
Reports
Tests
Presentation
Assignments:
I have to submit two assignments. One is given to me today which is comparison based
assignment. I have two compare four e-retail companies which are as follows
Reports:
I have to submit two reports. One is EOD Report which includes the detail of the sessions given
till the end of the day. Second is the Final Training Report which is to be submitted at the last
day of the training.
Tests:
I have to give two tests. One is Excel Test in which we have to prepare a excel sheet on MS
Excel. In the second test, at the end of training we have to give a written test what we are told.
Presentations:
I have to give a Final Training Presentation which will be in front of my Category Manager
and Mentor. This presentation is very important for me. I have to make it carefully as there will
cross sections on it. The PPT should be crisp and clear and it need no beautification.
I have to participate in Mid training Discussion. It will be basically a viva with Category
Manager and I have to take time for my viva on day 5.
2. Company Introduction:
Fashion and you is an event based e-commerce company. It provides mainly ladies product like
apparel, cosmetics etc. It has products for mens, kids and for wedding ceremonies too.
The company is registered as Goldsquare Sales Pvt. Ltd. And company website is
FashionAndYou.com. It acquired Urbantouch in Aug 2012.
Departments of the Company:
Category Team: This team manages the relation with the supplier, it will manage the
category of inventory, sourcing of inventory and its price is also decided by this team.
Catalogue Team: It prepares catalogue for products, its photo shoot.
Operation Team: It consists of many teams. One is Inventory Team which maintains
inventories in the ware house. There is Procurement team which receives the products
from the suppliers. Operation Team has a PP Team which deals with the PP brands and
one is Logistic Team which manages the packaging, dispatch and tracking of products.
HR Team: It is responsible for the recruitments in the company and manages man
power.
Finance Team: It deals with all the finance matter with the help of category team.
CS Team: CS team gives information and solves queries of the customers.
Marketing Team: This team decides the merchandise of the products. It decides the ads
for the sites like Google, face book etc.
Facility Team
Tech Team
PM Team
3. Work culture:
In this session, I was told to follow some ground rules which are necessary for my own growth in
the company, I was told the culture of company which is- Performance- driven and lastly about
some norms of working culture.
Ground Rules:
Sincerity I have to be formal about the assignment and if I make any mistake it should
not be repeated.
Ownership - It means once any assignment is allotted to me its my own responsibility to
take it seriously and need not to wait for anyone to follow me.
Transparency If I had made any mistake I should accept it and I should not blame other
for the same.
Openness to feedback It means I can give my feedback and ideas at any level of the
company.
Session 2: E-Commerce
E-commerce is buying and selling of the products through electronic media. E-commerce can be
of three types according to category of the products, models of the products and interaction with
the vendors. If we have good interaction with the vendor for any particular product we can think
of its online business.
Services of e-commerce:
It is an emerging business which facilitates the customer to buys his product by ordering it online
from his home. It reduces the offline store transport charge and the main service of e-commerce
is it reduces the time of customer if he hasnt any urgency.
Advantages:
Disadvantages:
New brands
Existing brands
New brands:
First of all we will try to understand the market condition of that brand, identify the suppliers in
the market and contact them. Then we will try to negotiate them and after confirming everything
place the first order and then second order or subsequent orders.
Existing brands:
If we are going to source for a existing brand we will follow these steps
PO making
PO formalizing
Receiving
Return 7 payments
Payment reconcilement(SOR)
Stock correction
Outright Purpose
SOR(Sale-Or-Return)
Post Procurement(PP)
Drop Shipping
SOR Model:
This model is same as outright model as the product is procured in warehouse and orders placed
by customers are delivered by the retailer. This model is different from outright as the payment in
this model is made only for the products sold and remain goods are returned to the supplier.
PP Model:
In this model the product is procured at the time when order is placed. The runner is send to the
supplier when any order is placed. This is also known as real time procurement model. In this
retailer need not to invest money on procurement.
Drop Shipping Model:
In this model the details of the order is passed to the supplier and the supplier delivers the
product directly to the customer. So the products need not to be stored or procured at the
warehouse of retailer. The commission is received by the retailer.
There are two more terms used by the supplier which areConsignment Model:
It is same as the SOR Model. The only difference is that the inventory is purchased in SOR and
payment is made later and in consignment supplier inventory is kept in the warehouse and sold.
In SOR retailer pays the sales tax but in consignment supplier pays the sales tax.
Virtual Inventory model:
In virtual inventory model the product is not present with the retailer but is represented in
system. The PP and Drop shipping are mainly in this model.
When to choose which model:
Outright model when supplier is not ready for PP or SOR and inventory is costly.
SOR - If PP is difficult and supplier is not near by the retailer.
PP - Its preferable if the supplier is not far away from the retailer and inventory is of high risk.
Drop Shipping Retailer mostly does not prefer this model.
Form-38
Receiving
Label Sheet
Returns
Payments Outright
Payment SOR
Catalogue Filling
UT WebIssues
Stock Correction
Catalogue
Finance
CS
Ops
Out of these processes three is covered in this session which are PO making and
formalizing, form 38, and receiving.
One important thing is that we have to intend to learning rather to memorize it. We
should understand these processes as it may change with time.
PO making and formalizing:
Purchase Order is formal intend to buy the product. It is created depending on the sale
performance and re-ordering algo.
In PO making we first check the re-ordering list and select the relevant products according to the
brand, category and its enabled or not. Then make a re-ordering list and copy that relevant
product in it. We have to check the system for quantity available and orders in transit. We
generate the formula and mention comment for the change in product number and send it for the
approval to CM.
In formalization of PO, the naming convention used is
Category PO - <brand name> - <date>
The email is mailed to the following link as
To: Category-Approval-Purchase-Orders@urbantouch.com
The email body of purchase order should be decided according to the type of PO either it is
raised first time or it is either a regular PO.
Email body of PO for new brand:
Please find attached the PO of <Brand>. This is a New Brand in << Category >> (mention the
name of respective category). Attached are the Vendor Details (either through VRF or in the mail
body).
Current PO:
It contains the complete details of the present PO as it shows the total MRP, total units ordered,
total SKUs ordered and New SKUs.
Email body of PO for old brand:
For the old brand the PO mail body contains the purchase order, the current PO information is
same as new brand, sheets are checked for revert and the last PO data information is collected. It
includes the SKU ordered, no. of units, last PO date, fulfillment rate etc. The data according to
the MRP is also collected.
Approval of Data:
Firstly PO is approved by category manager than its send and the formalized PO is received in
same thread in the form of pdf.
Sending PO to supplier:
Bcc: category-external-purchase-orders@urbantouch.com
Brand
Supplier Name (Ensure that this is correct since this will be used for
validation later)
Inspection Period
Then we send PO to Supplier, and after sending PO we have to perform some tasks as
Send label sheet to the PT of the expected stock as soon as the PO is sent to
supplier
Form 38:
Form-38 (Or Road Permit Or ST-38) is a legal document which needs to be present with the
stock as per Government regulation (To enable Government to be aware of high value
transactions) while Stock crosses a state border or Stock being transported is worth equal to or
more than Rs. 25,000 according to the Invoice Value (tax included).
Debit note:
A financial document to account for a component in invoice which is not paid for. Needed by
both parties to match the account books.
This always holds true
Debit Note = Invoice Stock accepted
It is the most critical aspect of sourcing as it involves direct financial implications to business.
Reordering Algorithm is the formulae to ensure number of units for each design is ordered taking
in to account all important factors.
Factors to consider reordering algo:
Current-Stock
Notify Me Requests
MRP
Ordering Factor
Lead Time
Best Sellers
SKUs to kill
Inventory Model*
If Days Live >= 10(data sufficient here so consider minimum inventory risk)
If 250<=SPL<500, RF = 25 days
Check Best-Sellers
Mapping is done to make each and every product of different brands, color, and size unique. There should
not be any clash between any SKU ids.
Label sheet:
It is generated to create uniqueness to each unit of products. It is used to match the supplier code and
SKU generated internally by us.
The label is pasted on product if product does not contain our SKU id.
We will generate label sheet if product code by supplier is not unique.
Cataloguing:
Catalogue is generated by the team for each unique SKU id. One unit of same SKU is sent to catalogue
team and updated by him, and then it returns the product to inventory. CT team send the sample request if
catalogue team need any sample to generate the catalogue of any product. This request is made prior to
receiving of the inventory. As the product is received in warehouse the inventory team send sample to CL
and inform for the same to CT if product returns to inventory.
Returns:
Return sheet is generated based on three sources which are according to the receiving, SOR and damages.
The products reached at the inventory from supplier are received and factual and detailed receiving is
made. The products damaged are sent to supplier with the debit note and GRN is generated and send to
the finance team. The return sheet here generated is send to supplier.
In SOR return, the product remained after the SOR period is return to the supplier.
Payments:
Outright payment In outright model when the product is received at inventory factual receiving is
done by PR. They send invoice and form 38 to the sourcing associate. After the detailed receiving they
generate the GRN and send it to the category team along with the original invoice. The payment is made
according to the GRN by the finance department.
The original invoice submitted to the finance has the following format. It contains the PO number, invoice
number, supplier number, date, CM name, and priority. The priority is decided according to product and is
of different types.
SOR Payment - The SOR payment is same as the outright payment for the initial steps and at the time of
reconciliation SOR form is filled and sends to finance team at finance-requestlist@urbantouch.com.
Catalogue filling:
It is a Google doc shared by the catalogue team to fill by category if any new SKU is added. The
information given in form will beCategory of the product and sub category
Company discount if given by company
Special discount if any or MRP if there is no discount
VAT rate
Composition of the product
UT Web Issues:
It is a request raised to the catalogue team regarding any change in product on website. It can be raised by
anyone who has the login id and password of web issues link.
To raising a web issue anyone having login id and password can login and click on tab ad hoc and then
add issue and a new tab will open where we can add issues and can write the type as image change, price
upload etc. anyone from the catalogue team can take the issues and solve it.
Stock correction:
Stock correction is the number of the product reduced from the inventory to reduce the risk for slow
moving goods. It totally depends on the negotiation with the customer.
The process followed to correct the stock involves the negotiation with the supplier. The stock to be return
to the supplier is decided by the stock correction algo sheet.
Departmental Handshakes:
We always Cc all the inter-departmental mail to category mailing list. The category team interact the
catalogue team, finance team, CS team and some teams of OPS team. The ops team consists of the
detailed receiving, inventory, fulfillment, logistics, and post-procurement.
Types of damages:
There are many types of damages which occur in inventory. Some of them are MRP change,
loose cap of products, scratch on the product, and loss of mfg. or expiry date on the product, in
handling, storage, leakage etc.
The decision made for the process of damaged goods is first we prefer to send it back to the
supplier, if not possible to send back the CT team analyze the good and decide whether it can be
send back to the system for sale or not. Than we go liquidation, marketing of product and in last
case if the product is profitable to left with customer we left it and it is called write off.
Execution:
It is about how to execute the damaged product according to the damage type. Every decision
made for the damaged goods has some execution process. The execution of return to system is
done according to decision made by sourcing associate that the product can be sold to customer
or not and what is the condition of goods. In liquidation process, the damaged goods are sold by
giving some discount or margin on it.
Analysis:
Analysis is to inspect the data for the damaged products available and find whether there is any
common trend of damage in product or it randomly damages. This damaged data is collected
from two sources that are
Complains made by the customers in CS team
Damages from inventory
Thus according to the data available and our analysis if it is found that the frequently damaged
goods can be cured, we cure them and sold them.
Products are matched with the PR sheet by the PP team and handover to the fulfillment.
Fulfillment checked quality of product and send to logistic to dispatch.
average, left, right etc. we are informed about the sorting of the cells and how to filter them,
formatting of the excel sheet, and about the Vlookup.
Excel basics:
In basics of the Excel we are told about the use of the handle and the dollar. Handle is used to
implement the formula to each cell of that particular column and dollar makes the content of any
cells constant.
Filtering and sorting:
The "Filter" function allows us to filter through column and row data to locate specific
spreadsheet information. Filtering allows the user to customize how the spreadsheet data is
viewed on screen.
Sorting allows us to sort data based on multiple cells, and in ascending or descending order.
Format painter:
Format Painter is used to quickly copy formatting from one part of a sheet to another, or to
another sheet in the same workbook.
To have a good command on excel we need to practice more and more because practice makes a
man perfect.
When the session starts, I saw the format of the PR sheet. As told previously, PR sheet is used to
mention the SKUs to procure from the supplier. In PR sheet the mentioned data are SKU id,
request id, vendor id, order number, number of quantity, and the MRP of the product. PR is send
to the supplier with the runner. The supplier authorizes the PR sheet by stamp and signature. One
copy is left with him and another is given to PP team when the product is received in warehouse.
Digitizing data:
Runner come back with the PR sheet, goods and may be with the invoice sometimes. Then the
PP team makes the factual and detailed receiving of product and if the product is damaged they
mention in the PR sheet. The PP team mentions the status of the SKU in the PP console as
Product is Received
Product is Carryover as not received
Received damaged closed
Received damaged carryover
Not received closed
Cancelled
Margin is basically the difference between the MRP and buying price of the retailer. Margin is
always on MRP, not on selling price.
MRP is of two types. One is fixed MRP and other is flexible MRP.
Fixed MRP is printed on the product always whereas flexible MRP is the transfer price for the
retailer.
Mark up margin is used with the unit price i.e. if supplier is saying that there is a margin of 20%
in markup on any product then it means that he will give 20% on unit price of product, whereas
in markdown it will directly be given on MRP.
Now suppose MRP of any product and margin percent is given then its unit price will be
MRP = 100
Margin = 20%
Then unit price (UP) in MU
If UP is x then
x + 20% of x = 100
x =100/1.20 = 83.33
Whereas in MD
UP = 100 20% of 100 = 80
So, we always prefer MD in margin as we have seen in above example.
Relation between MU and MD:
If MD is given then we can calculate MU
If MD = 20%
Then, MU =?
If MRP = 100 then in MD margin will be 20
So for MU margin is 20 i.e. UP are 80 then MU% is given as
80 + MU % of 80 = 100
MU/100 * 80 = 20
MU = 20*100/80 = 25%
So, MU% will always be more than MD% for the same margin.
Terminology:
Unit price (UP), Landing Price (LP) and Transfer Price (TP) are basically same and these are
the amount we pay to the supplier.
UP doesnt contain tax, LP contains tax whereas TP can may contain tax may not.
MRP vs. SP:
MRP = 200
SP = 180
Tax rate = 5%
Margin MD = 40%
Then LP & tax =?
LP = 200 40% of 200 = 120
Tax = 180/1.05*0.05 =8.57%
3. Value Added Tax (VAT):
VAT it is given to the state government. It is handled always with Input Tax Credit(ITC).
CST It is given to the central government for any transaction between the states.
VAT rate = CST Rate = Tax rate for a particular state. VAT and CST Rate remains same, only
name and Govt. which receives it changes.
CST and C form will be covered in the next session of tax calculation session.
When the deal is closed and order is placed we fill this form which helps us know the tasks to be
performed from supplier end and from our end. It is an excel sheet. This sheet is category
specific and differs from category to category.
4. Brand tracker:
It is filled for all the brands and gives a track of orders placed of every brand. It contains
information about date of order, expected date of delivery, no. of SKUs ordered, and no. of units
ordered. This helps us track the information when and how much goods will reach the
warehouse.
Today I also practice some function of the excel and learn how to use them.
reduction of the tax rate should go to the buyer and not to the supplier as it is the buyer who is
paying double tax so the rule is made to reduce the extra tax.
C-form is never used for that product whose tax rate is less than 2%.
3. Fulfillment team:
This team is made to look after the orders placed by the customers. It receives the goods from
supplier and goes for detail receiving. This team is responsible for the packaging of the goods in
proper way. Packaging team is part of this team basically.
4. PP team:
PP team handles the PP process. It receives order generates the PR sheet and all other post
procurement processes. It sends the runner to the supplier to collect the goods from there and
after factual receiving handover to the fulfillment team.
5. Logistics team:
It consists of the two teams. One is dispatch team and other is tracking team.
Dispatch team sends the product to the customer through the courier services. It also decides the
courier team to be used to send the good according to the performance of the team.
These above teams constitute our operation process. Each of these are very important as we can
only imagines the thing sitting in the office but they really face the reality of the day-to-day life.
Excel test:
I have learned some excel functions today in the excel test. I applied all these functions and
experience the practical and theoretical difference between them.
Procurement team:
This team receives the goods and makes a factual receiving of them. In this process it checks the
40% of goods and if its damaged it sends the damaged goods. Then it makes detailed receiving
of goods and checks the damaged good, returns it to supplier with the debit note. After this it
generates GRN.
Inventory team:
This team receives all the goods on SOR or outright and store it in inventory properly. To
manage the goods and make them easy to find anytime there are cells called Bins. Bins have a
unique Id or number. So the retrieval is very easy.
PP team:
This is responsible for all the products on PP. In the morning the orders raised for PP are
collected by the PP team and PR sheet is generated. Runner takes the PR sheet and gets the
goods to inventory. Receiving is done by PP and detailed receiving is done by the fulfillment
team. If not damaged the product is send to logistic after the packaging is done. Logistic dispatch
it to customer and fill the tracker of that product.
Fulfillment:
This team is responsible for all the detailed receiving of the products received in the inventory. I
have seen the fulfillment team packs the product to be sent to the customer. They use cartons to
pack them using thermocol or soft spongy thing to avoid damage. They also pack the damages to
be sent to the supplier.
Logistics team:
The packed goods ready to be delivered are send to the logistic team. It takes care of the courier
service to be used to deliver the goods to supplier. It dispatches the product and fills tracker for
it.
Today I have seen the different processes to be done from starting of the order placed to the
customer delivery.
I have seen the inventory where a lot of goods where managed by some persons. They work very
smartly to make the work easy to operate.