CORPORATE FINANCIAL REPORTING

PROJECT

SUBMITTED TO: MA’AM ANUM TARIQ

TOPIC: INTERVIEW A MANAGER RELATED TO INVENTORY

Mainly the business was started by Mr Iqbal Ali Sheikh in 1942 by the name of Al-Hamra
Super Store in Tolintel market, the Mall. In 1957 it shifted to Main Liberty Market from Mall
road. In 1984 his son established the Al-Fatah Super Store into Al-Fatah Departmental Store
in Liberty Market Gulberg on his own land.

They now have many stores in Lahore, Islamabad, Karachi and Faisalabad and a shopping
Mall in Gulberg 3 Lahore.

Interview:

We visited its head quarter in Gulberg 3 and asked some questions about their inventory
system from their procurement head Miss Saima.

Q1. Who is responsible for order taking and production?

Procurement department is responsible for order taking of all products and production of our
manufactured products, it’s their responsibility to make sure that whenever a certain product
is finished in stores, it is restocked as soon as possible. Procurement department takes
responsibility of everything from the preparation of product till the end receipt and approval
of payment.

Q2. How do you maintain stock level?

We maintain stock level through Minmax software which shows the list of products which
are about to end and those product which are in large range or quantity, through this software
we also come to know whether our sales are increasing or decreasing.
Q3. What method do you use for stocking?

We use pallet method of stocking in which every category of product is allocated at certain
column/rank or room like detergents are stored separately, electronics are stored in a separate
rank and perishable good are stored in a room at a certain temperature so that they remain
fresh.

Q4. What do you do with the products that get expired?

We return the goods to the company if they get expired. We actually don’t bare the loss
because we only have the agreement to further sell their goods and if any product gets
expired, it is their loss and they have to recover it. We make sure than we return all the
expired products back to the company and it is up to them how they deal with the loss.

Q5. If someone complains about a product how do you deal with it?

If someone gets an issue with any product then we call the floor manager and he looks up to
this issue. If they find a genuine issue then they provide a fresh product and change it or if the
customer wants to buy a different product then we let them buy a different product in the
same price of the product they have exchanged.

Q6. Where do you get your perishable goods from? And what is the duration of your
perishable goods?

We get our perishable goods from third parties on a daily basis. We also get fresh milk on
regular basis. The milk we get can stay in duration of maximum two days but whereas the
fruits and vegetables are concerned, they stay on the shelf for only a day because they would
otherwise get rotten and would remain fresh. We are very concerned about our daily products
because we want to give the best quality products to our customers.

Q7. Where do you store your perishable goods?

We do not find a need of storing our perishable goods because we stock them on daily basis.
What so ever the conditions maybe, we never lack in stocking our perishable goods on day to
day routine as they are not something that can be used for long and can get expired even
before time so we do not even take a risk of storing them.

Q8. What changes would you prefer in your inventory system?

I won’t really prefer any change in the inventory system of Alfatah as its very good keeping
in mind the proper chain of departments it follows for the delivery of its goods to the stores.
The chain of department starts from the Receiver to the Pallet (who’s a kind of supervisor),
then to the IT person who manages the online system of inventory, then to the Core
Management who dispatches the items according to the branch wise demand, then from store
to store where there is another receiver who receives the items in that particular store, to the
Floor Person and finally to the Shelf. This is how our inventory system works which i find
really professional and good for the proper handling of the inventory system.
Q9. How do you bear the prices of your imported goods that do not get sold?

We start promoting our imported goods three months before offering it. It creates demand
and need of the product in customers we post about the description and quality of our new
product before offering it but sometimes if our products do not get sold then we give our
customers discount offers in leftover products.

Q10. How would you conclude it?

As I’ve already mentioned that our inventory system is good overall so I would say that the
success of Alfatah lies behind mainly the inventory system because we leave no space for any
problem or hurdle to hinder our way to the supplement of goods. It’s very rare that Alfatah
store gets out of stock of any product and it’s because of the proper management and the
proper system.

Conclusion:
We observed that Al-Fatah’s inventory system is very effective because they maintain their
stock level through computer software Minimax. Their products went through from many
procedures and checking before placed on shelf in the store, due to this they are maintaining
the quality of the products they are selling. They allocate and store their products pallets wise
and they store every category of their product separately. To minimize the risk of loss they
return the expired products to the company and every perishable product is stocked on regular
basis so they can provide the fresh and quality product to their customers. They take
responsibility of every claim of their customers. Change and return counter are available in
their every store to facilitate them. The Al-Fatah’s stocking system is very strong that is the
reason they do not have the problem of shortage of stocks in their stores. They focus on
minimizing the loss and start promoting their imported expensive products three months
before its launch and give discounts too on their leftover products. Their procurement
department is responsible for availability of products and working very efficiently to make
the store more competitive among its competitors like Hyperstar and HKB.