- the layout of the different sections of the book store
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CW Ahmedabad:
CW Ahmedabad houses two kinds of items: books and non-books, which include magazines, CD-ROMs, music, stationery and toys. It caters to the demands of customers with different tastes for books. The store is divided into sections like the children’s section, fiction and non fiction sections, philosophy etc. These sections are same in all the CW bookstores, although their sizes and the books they have in various sections might vary with different stores. size and amount of stock??
The organization structure: The CW Ahmedabad store is owned by Mr. Gaurav Shah. The total staff strength is 61 and the organizational structure is as follows:
- Accounts: 5 people. They manage the financial aspects of the store.
- Data entry: 6 people. They enter the stock information when it arrives from the suppliers. They tag the books with ISBN codes
- Data processing: 6 people. They generate reports everyday regarding the stock levels, demand patterns and sales.
- Cashiers: 6 people. They are responsible for the collection of cash and the issue of invoices. They also update the data on the sales made for a day.
- Helpers: 10 people. They help customers in locating a particular book.
- Other staff: 27 people
CW does not have a hierarchy as such, though there is an informal hierarchy based on seniority and performance. All the staff members report directly to the owner.
Procurement System:
CW procures books from publishers and wholesalers in Delhi and Ahmedabad. There are approximately 85 suppliers of books mostly in Delhi. The non book suppliers are local suppliers and there are approximately 85 of these. The orders are sent to the store using road transport. The local suppliers have a 30-day credit cycle and the outstation suppliers have a 90-day credit cycle. The suppliers are paid post-dated cheques and these are collected at the end of each month. The order takes 5 days to arrive if the supplier is based in Delhi and takes 2-3 days to arrive from a supplier based in Mumbai.
Supplier relationship: In a decade of operations, the store has maintained good relations with its suppliers and has not faced any major problems with the stock or payment. The principle concerns of the suppliers are - dead stocks i.e. unsold books, prompt payment of dues and steady trade relationship. In the book retail industry, there is standard practice of 10% dead stocks – the retail store is allowed to return 10% of the stock that it bought. By using effective inventory management practices, CW has managed to keep the problem of dead stocks to a very low scale. Moreover, by paying promptly, it has cultivated a trusting relationship with its suppliers. The store in return, expects the suppliers to send the orders on time and provide discounts on bulk orders.
Inventory management:
In order to minimize losses due to dead stock, the CW store operates on a philosophy of minimum inventory. There is no specific store room and all the stock of the book is displayed on the shelves. The movement of the stock and the information flow is depicted in Exhibit 1.
The movement of stocks is closely tracked and the inventory levels are continuously monitored by a proprietary software. Whenever the stock of any title drops below a stipulated reorder level, orders are placed for restocking. The order quantity and the reorder level depends on the demand pattern, the title etc. The data on this is provided by the sales record of the item and the decision about the quantity to be ordered is made by the sales staff.
Constant monitoring of every title assures that there is no need for rush orders. It also prevents the occurrence of dead stocks(books that failed to sell). There is a constant trade-off between ensuring that the books are available on the shelf and minimizing the dead stock losses. The problem is even more acute in the case of books for which demand builds up even before the stock arrives. For these books, there is considerable delay in obtaining the re-order stock, and hence, availability of these books in the initial days of peak demand is very crucial.
Trade promotions:
The CW retail chain has a stated policy of not promoting specific publishers. However, CW launches promotion drives for specific titles that are expected to perform well. The drive includes listing the book as a hot selling title on the website, recommending it on the website and placing the placard/book title on prominent positions within the store. The store displays the list of its top selling books and new arrivals in special sections in the store.
CW also organizes different festivals from time to time like the children’s book festival and Gujarati books festival. These festivals are meant to push sales of particular categories of books.
Some issues:
The entry of new players in the market is going to increase competition. With the entry of Pantaloon, one can expect margins to decrease. This would make better management of the store even more crucial. There are some steps that need to be explored to counter this threat:
- Estimation of demand for books would have to be more accurate to avoid short supply and dead stocks. One possible step that can be taken in this respect is to allow customers to book advance orders on the website. This will help in forecasting accurate demand figures. However, the membership information would have to be maintained to ensure false bookings do not happen.
- CW would need to build up on the customer’s shopping experience. This can be done by ensuring consistently high levels of service, highly trained staff and a good collection of books.
- Alternative distribution channels like email and phone for order booking exist but they need to be promoted more aggressively.
Exhibits:
Exhibit 1
Movement of stock and information flow
Reference:
Crossword Bookstores Limited,
Even without FDI, retail booms. The Financial Express. December 31, 2005. Retrieved January 30, 2006 from
Only otherwise mentioned, the various operations mentioned here pertain to the CW store at Raipur-Kankaria Road, Ahmedabad.
