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Supply Chain Management IN BIG BAZAAR

Introduction

A chain of hypermarket with 210 stores across 80 cities and towns in India Big bazaar is not just another hypermarket but it provides the best products at the best price Reflects the look and feel of Indian bazaars at their modern outlets All over India, Big Bazaar attracts thousands of customers on any regular day The large and growing young working population is a preferred customer segment Big Bazaar specifically targets working women and home makers who are the primary decision makers

What is Supply Chain Concept?


Is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customer"

Supplier Management

Material Flow Information Flow


Stock Deployment

Customer Management

Schedule / Resources

Conversion

Delivery

Supply Chain Concept : Evolution


Traditional SC view

An efficient supply chain ensures that the products are on the shelf, available for sale, when Shoppers come to buy them ... all the time!
Modern SC View An effective SC ensures high level of Customer Service at optimum level of working capital and cost! So simple yet extremly demamding......

SCM Of Retail Industry

Big Bazaar SCM


Modern Supply Chain Concept

Demand & Supply Planning

Data Integrity

Order & Query Mgmt

Stock Mgmt

POS & Display

Whousing & Delivery

Invoicing & Cash Collection

CUSTOMER FOCUSSED
Supply Chain is integration of our business processes and organisations around the entire demand and supply chain in servicing our customers and managing our inventories

Macro Processes in the SC of Big Bazaar


1. C.R.M. Customer Relationship Management Market Price Sell 2. I.S.C.M. Internal Supply Chain Management Strategic Planning Demand Planning Supply Planning Fulfillment Field Service 3.S.R.M.- Supplier Relationship Management Source Negotiate Buy Design Collaboration Supply Collaboration

Supply Chain Structure


SUPPLIER FACTORY DC RDC RETAILER CUSTOMER

Raw Materials

Finished Goods Information Flow

Supplier

Manufacturer

Distributor

Retailer

Customer

Upstream

Downstream

Big Bazaar SCM


Supply Chain Elements
Strategic
Supply Chain Design Resource Acquisition Long Term Planning (1 Year ++)

Tactical

Production/ Distribution Planning Resource Allocation Medium Term Planning (Quaterly/Monthly)

Operational

Shipment Scheduling Resource Scheduling Short Term Planning (Weekly/Daily)

Supply Chain

Logistics

Logistics is a part of supply chain management which deals with the inwarding and outwarding of goods and non saleable item as well RECEPTION OF GOODS FROM DC As soon as the goods are received they are checked by the seal condition and number as mentioned in the gate pass or delivery note Then the security in the logistics room will check for the no. of cartons Then the particular department is informed regarding the reception of goods

Logistics Cont..

The no of items are checked in front of the department member in stock transfer no wise With the help of the department member any discrepancy/shrinkage is found and informed to the supply site Then the in warding will be done in register also will be updated in the system Then the department manager moves the items to the floor.

Few cases in which out warding is done

Home Delivery
Store to Store transfer Damage or expiry stock sent to warehouse or vendor Return of non saleable items

Warehousing

In terms of internal communication, the warehouses of different Big Bazaars (different locations around India) are connected with each other Whereas the individual Big Bazaar outlets coordinate with their warehouses for daily stock requirements In situations where a Big Bazaar finds shortage in any of the stocks, it uses the internal IS connected through LAN to intimate its warehouse The warehouse supplies the required stock and keeps its own stock also in check. Warehouses utilize a REM (retail enterprise management) system to facilitate this process

Warehousing Cont..

The stocks are coded for simplicity and the garments are coded using a 14 digit number. while the stocks purchased from vendors use an alpha numeric system beginning with two alphabets (namely LP Local Purchase, OA for on approval and VC for vendor consignment) followed BY 10 digits. Each of the warehouses can order their stock in three ways . (i) Through the headquarters. (ii) Through another Big Bazaar warehouse (iii)Directly from their supplier. However, the delivery challans will be stacked and sent to the HQ every month thus keeping the purchases in check. The warehouses communicate to each other on a weekly basis to exchange their stock related information.

Functions of Warehousing- Stockpiling

Reverse Logistics

Big Bazaar has Central Return Center (CRC) which is a dedicated specialized building/area within Central warehouse Zonal Return Center (ZRC) which handles returns of each zone at these warehouses recycling, reconditioning, remanufacturing and refurbishing of products are done which areCustomer return items Defective items and Unsold goods/excess stocks

Reverse Logistics cont..


Warehouse returns defective items and unsold/excess stock to CRC/ZRC, accompanied by Goods return forms Customer Returns: reverse logistics warehouses receives the returned item with the Customer return note and decides whether these products to be sold as scrap locally at stores/ dispatched to vendor or dispatched to CRC(non apparel items)/ZRC(Apparel items) Defective items: after quality inspection, CRC/ZRC takes decision about disposition of these items by Scrap sale Auction sale Return to vendors Refurbish/ rework and sale in factory outlets Refurbish/rework and sale as fresh stock

Transportation At Big Bazaar

Transportation is movement of goods from one location to another. Transportation is the main artery of logistics and supply chain management Though transportation is at vendors expenses Big Bazaar has heavily invested into transportation for the effective flow of goods Transportation charges paid by the Big Bazaar to the transporter are 17500/month up to 1500 kilo meter. If the distance is more than this then 4.50Rs per kilo meter

SCM -Technology

IT helps to maintain manufacturing and distribution activities EIS and MIS reports generated for analysis and decision making Future Supply Chain Solutions (FSCS) is one of the seven verticals of Future Group which provides all the SCM related latest technology to the business FSCS has implemented a best-in-class WMS (Warehouse Management System), integrated with ARS (Automatic Replenishment System) FSCS has used advanced network planning and analysis tool to model optimised supply chain network for Big Bazaar retail operations The FSCS distribution centres are equipped with Imported Material Handling Equipments such as Reach Trucks, Stackers, Fork Lifts, Pallet Trucks, Roll Cages, RF Guns, Conveyors etc

SWOT Analysis : Big Bazaar SCM


Strengths
Variety of formats supporting each other - Better understanding of Indian suppliers

Weaknesses - SCM in real sense yet to evolve


- Push mechanism in ordering - Least focus on quality

Opportunities

Threats

- Organized retail growing at >20% CAGR


- Growing preference to organised shopping - Exponentially growing Indian middle class

- Competitors like Wal-Mart and Carrefore


- Government policies - Unorganized retail

Limitations

Significant losses/damages during shipping

Inadequate infrastructure
Warehouses located far from city

Conclusion : Big Bazaar Supply Chain


1. The Big Bazaar distribution centres act as warehouses alone, unlike Wal-Mart where these centres act as developers of suppliers. 2. There is no pull mechanism in order-generation and it depends largely on the decisions by individual category managers on weekly basis whereas in Wal-Mart, it is a daily pull mechanism based on store consumption.

Recommendations

Warehouse location

Improvement in packaging
Stock Control and minimization of excess stock Infrastructure Cross docking of finished goods should be done