Introduction

Used informally, supply chain strategy is often confused with supply chain management, where supply chain operations are controlled to reduce costs. Theres some truth to this definition, but supply chain strategy really is broader; it defines how the supply chain should operate in order to compete. Supply chain strategy is an iterative process that evaluates the cost benefit trade-offs of operational components.

Most companies have a business strategy, but are unlikely to have overtly designed a supply chain strategy. So, why is a supply chain strategy so important? Well, one good reason is to operationalize and support respective business strategies. At some point, a business strategy must be executed and typically this is done through the operational components of a company. Supply Chain strategy also focuses on driving down operational costs and maximizing efficiencies. For example, an organization may choose a strategy directed at supplier management as a way to remain competitive. By providing a clear purpose, the organization keeps sight of the strategy and is able to devise tactical steps to achieve these goals. Another reason for having a supply chain strategy is to establish how you work with your supply chain partners, including suppliers, distributors, customers, and even your customers customers. As the marketplace becomes more competitive, it is critical to reinforce existing relationships and work together. And for all these reasons, a well executed supply chain strategy results in value creation for the organization.

The various decision phases of a supply chain are supply chain strategy or design, supply chain planning, and supply chain operation. Strategy would include decisions about the structure of the supply chain and what processes each stage will perform. Strategic supply chain decisions include decisions regarding locations and capacities of facilities, products to be made or stored at various locations, modes of transportation, and information systems. Supply chain design must support strategic objectives. Supply chain design decisions are long-term and expensive to reverse must take into account market uncertainty.

The Underlying Drivers

As we know, the drivers of the supply chain are: Inventory Transportation Facilities Information

Objectives
What we would try to do over here is to have an overview of the role these drivers play in the supply chain in our case and have an insight about the intricacies involved in the store operations. We will also try and analyze to what extent there exists a fit (if any) in the supply chain strategies and store operations.

Scope
This particular study was conducted at Big Bazaar, Patia, Bhubaneswar. We had interactions with Mr. Ishta Ranjan, the Warehouse Manager, Mr. Abhishek Singh, the Assistant Store Manager as well as Mr. Biswasima Mohanty, the Department Manager and came across certain data, findings and observations pertinent to our topic of study.

Limitation
We could have a holistic approach and overview of the supply chain strategies because essentially it was beyond the company norms to disclose all its strategic decisions regarding the same.

 The Big Bazaar (Patia, Bhubaneswar) Chapter

Let us look into the observations and findings we had in the process of our study which are as follows

1. Product Categories:

1.1 According to the floor/tiers:

Floor 1 2 3 4 Food (Edible Oil, Fruits, Vegetables)

Category

Kids & Ladies (Accessories, Garments, etc.) Fashion for men (Footwear, Watches, Eye-accessories, etc.) Crockery, Plastic, Utensils, Furniture, Menswear, Luggage, Home-dcor, Electronics

1.2 According to Line of Business (L.O.B.): Food Kids, Ladies, Men Fashion(Footwear, Watches, Eyewear)

1.3 According to General Merchandise: Crockery Plastic Utensils

1.4 S.K.U.s: 9800 for apparels About 25,000 30,000 in all for all product categories; one of the largest in Bhubaneswar as claimed by Mr. Singh, the ASM.

2. Inventorying
Inventorying at Big Bazaar, Patia, Bhubaneswar is executed with the underlying factor of stock coverage. Another interesting finding was that the process of inventorying was automated with the help of the S.A.P. (Systematic Application Procedure) and A.R.S. (Automatic Replenishment System) softwares. This is also done keeping in view the levels of M.B.Q. (Minimum Balance Quantity).

The levels of inventory are determined on the basis of forecasted demand. In addition, the levels of inventory vary for different product categories. For example, in case of apparels, and T-shirts in particular, Big Bazaar, Patia maintains an inventory of around 500 units.

2.1 Reorder Points

The re-order points are determined by the A.R.S. software itself which places an order immediately when the stock falls below the M.B.Q... In the context of the apparels in question which the manager informed us about, when the stock falls below the M.B.Q. which is 200 units, the A.R.S. automatically places an online order for fresh and new sets of apparels which are also in tune with the seasonal demands if any.

2.2 Lead Time

The lead time between two orders again varies from one product category to another which has been reflected as follows:

Product Category Food/Staple/FMCG Fashion/Apparel/Accessories Consumer Durables

Lead Time 3 days 15 30 days Trimester-wise

3. Transportation
Big Bazaar, Patia, Bhubaneswar does not have any provision for any in-house transport system. The entire process is outsourced to third party transport agencies like DHL, Gati Logistics, Blue Dart etc. which are responsible for delivering certain products like delicate items, home products, consumer durables, assortments of fashion lines, etc. The rest of the items which comprise FMCG/staple are delivered by the DBSRs of the respective area.

4. Distribution
The distribution channel again varies from one product category to another. In case of FMCG products, it follows the regular distribution channel where the products are delivered from the C&F agent or distributor depending on the type of product (FMCG/CD, etc.).

5. Role of IT
As mentioned earlier, the retail outlet works with the help of ARS as SAP which has automated the system of flow of information throughout the supply chain.

 Observations

Lack of space management since it is a store of 25,000 sq. ft. and a floor area of the same size has been dedicated for storage of inventory.

No measures as such to optimize inventory levels in case there are seasonal fluctuations in demand leading to lots of unsold goods especially in the apparel section.

Space for storing inventory is not optimum because more than one product categories are stored in the same floor. For example, apparels, consumer durables, home products and accessories are stored in the same area, whereas storage requirement may be different for different products.

 Conclusion and recommendations

Looking into the supply chain strategies adopted by Big Bazaar, Patia, we can infer that certain decisions taken by the store are due to cost constraints and space constraints since the cost/rent per sq. ft. in that area is relatively on a higher end compared to other locations.

In this light, our recommendations would be: To incorporate more advanced software systems to predict demand more effectively so that an optimum level of inventory is maintained and stock turnover is ensured. Try and arrange for different storage provisions for different product categories in the inventory which would help in managing space efficiently.