Optimizing Inventory and Operations for Sustainable Growth
Jai Maa Jhandewali Store - BDM Capstone Project
Sumit Kumar | Roll No: 22f2000848
About Jai Maa Jhandewali Store
Store Overview:
- Type: Family-run B2C grocery store
- Location: VP Block, Pitampura, Delhi
- Owner: Mr. Satyam Prakash (Student)
- Established: ~2 years ago
- Products: Daily essentials, dairy, groceries, FMCG
- Operations: 9 AM - 9 PM, Family-run
Problem Statement & Background
Identified Objectives:
- Inventory Management Issues: Difficulty maintaining optimal stock, managing fluctuations for perishables/seasonal items, avoiding wastage/missed sales.
- Space Constraints: Limited physical space restricts efficient storage, product range expansion, and managing slow-moving products.
- Limited Business Growth: Reliance on family-run operations & manual systems hinders scalability and operational efficiency.
Problem Background:
The store handles diverse SKUs with varying shelf lives. The owner's academic commitments limit time for detailed inventory management, leading to overstocking or stockouts, especially for high-demand/seasonal items. Lack of automated systems worsens this.
Operating from a single room attached to home creates significant space limits. Excess inventory stored in the house is inefficient. This restricts product range expansion and complicates stock handling.
The family-run model faces scalability challenges due to potential inconsistencies and lack of professional systems (sales/inventory tracking). Competition from quick-commerce platforms necessitates exploring options like home delivery.
Data Overview & Collection
Analysis Methods Used
1. Descriptive Stats
Calculated stats (Mean, Median, StdDev) to understand SKU sales patterns.
2. Trend Analysis
Identified seasonal/weekly patterns using Box Plots & Line Charts.
3. ABC Segmentation
Classified products (A, B, C) by sales volume contribution.
4. Correlation Analysis
Used Pearson Correlation & Heatmap for category relationships.
5. Sales Prediction (ML)
Applied Linear Regression (Milk example) to show forecast feasibility.
Results & Findings
Average Monthly Sales Distribution
(Aggregated Daily Units - Placeholder Data)
- ▸ Peak Average Sales: Oct & Dec
- ▸ Summer Peak: May-July
- ▸ Lowest Average Sales: Jan & Feb
- (Note: Bar chart shows averages)
Monthly Sales Trend by Category
(Placeholder Data)
- ▸ FMCG leads sales volume.
- ▸ Dairy consistently second.
- ▸ Groceries lowest volume.
- ▸ Seasonal peak for FMCG in Summer (May-July).
ABC Analysis (% Volume Contribution)
(Placeholder Data)
- █ Category A (~76%): Prioritize (Milk, Bread, Chips...)
- █ Category B (~17%): Monitor (Pulse, Sugar, Butter...)
- █ Category C (~7%): Optimize (Rice, Spices, Salt...)
Key Category Sales Correlations
(Placeholder Data - Replaced Heatmap)
Key Correlations:
- FMCG & Groceries: ~0.65
- FMCG & Dairy: ~0.61
- Dairy & Groceries: ~0.43
Suggests bundling/placement opportunities.
Sales Prediction Example: Milk
(Linear Regression vs. Actual Monthly - Placeholder Data)
- ▸ Model captures general trend, useful for baseline planning.
- ▸ Misses volatility; advanced models (ARIMA) needed for accuracy.
- ▸ Validation (RMSE) required before use.
Recommendations
Optimizing Inventory:
| Recommendation | Rationale | Priority |
|---|---|---|
| JIT/Lean for Cat A perishables | High volume, wastage risk | High |
| Adjust stock via ABC Analysis | Align stock with sales | High |
| Use Sales Forecasts (start simple) | Reduce guesswork | Medium |
| Improve supplier communication | Ensure peak availability | Medium |
| Discount near-expiry items | Reduce spoilage loss | Medium |
Addressing Space & Layout:
| Recommendation | Rationale | Priority |
|---|---|---|
| Prioritize shelf space for Cat A & B | Maximize revenue/space | High |
| Optimize layout: Place correlated items nearby | Encourage cross-selling | Medium |
| Invest in vertical shelving | Maximize storage capacity | Medium |
| Reduce stock of Cat C items | Free up valuable space | Medium |
Enhancing Business Growth:
| Recommendation | Rationale | Priority |
|---|---|---|
| Automate Tracking (Excel -> POS) | Reduce manual effort, enable analysis | High |
| Hire Temporary Support (Peaks/Exams) | Manage bottlenecks, owner focus | High |
| Introduce Targeted Home Delivery | Compete, add convenience | Medium |
| Implement Seasonal/Bundled Promotions | Boost sales, use correlations | Medium |
| Establish Backup Operational Plan | Ensure business continuity | Medium |
Projected Benefits:
Financial
- ▸ Profit Margin Increase
- ▸ Reduced Wastage Costs
- ▸ Improved Cash Flow
- ▸ Revenue Growth Potential
Operational
- ▸ Fewer Stockouts
- ▸ Optimized Inventory/Space
- ▸ Streamlined Processes
- ▸ Better Demand Preparedness
Strategic
- ▸ Enhanced Customer Satisfaction
- ▸ Improved Competitiveness
- ▸ Sustainable Growth Path
- ▸ Reduced Owner Burden