IndiaRetailBiz

Reliance, which made heavy investments in 2003 in technology to tightly monitor and control the supply, delivery and dispensation of fuel products throgh its network of petrol pumps, is looking at extending the good experience to its retail venture. Reliance is considering an investment of at least Rs. 1,000 crore in technology, reports LiveMint. Apart from suitable hardware including networking and communication equioment, the company is likely to deploy SAP to run the business and Retalix to manage ‘point of sale’ terminals. Reliance, according to the report, has lined up a battery of consultants, technology providers and systems integrators like IBM, TCS, Satyam, Cap Gemini, Ernst and Young, Technopak.

Reliance expects to create competitive advantage for its retail business through this initiative. Apart from gatheing robust information on sales, by keeping a tight leash on movement and management of inventories, Reliance hopes to achieve economies of scale across hundreds of retail stores. As bulk of modern retailing revolves around high volumes with low margins, especially for fruits and vegetables which also happen to be highly perishable, tight control on inventories assumes critical importance in improving profits. In case of fuel pumps, apart from other obvious benefits relating to information and control, technology has helped Reiance to dynamically change prices of its products at all fuel pumps and even stop dispensation of fuel on suspicion of foul play such as adultration.

World over, technology has played huge role in the success of modern retailing which calls for cost effective and efficient management of supply chain and consumers. Retailers like Wal-Mart, Tesco, Carrefour are known to be spending big bucks on technolgy infrastructure and management. Their expenditure on technology could go up to 2% of investment. Tesco, in fact, has even set up a technology development center in India. Among Indian retailers, Kishore Biyani owned Future Group has spent around Rs. 100 crore on setting up technology infrastructure. It also spends Rs 8 to 10 crore every year on managing the same.

While SAP is the world’s highest selling Enterprise Resource Planning (ERP) software package originally developed in Germany, Retalix StorePoint is a point-of-sale (POS) and back-office software system for retail stores. Apart from managing supplies, forecasting and ordering of materials this Israeli system also helps in schedule of staff, a key requirement in labour-intensive retail outlets.