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 Material Flow Customer

Management Management
Information Flow

Schedule / Stock
Conversion Delivery
Resources Deployment
 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 Order Whousing Invoicing

Data Stock POS &
& Supply & Query & & Cash
Integrity Mgmt Display
Planning Mgmt Delivery 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
• Supply Chain Design
Strategic • Resource Acquisition
• Long Term Planning (1 Year ++)

• Production/ Distribution Planning

Tactical • Resource Allocation
• Medium Term Planning (Quaterly/Monthly)

• Shipment Scheduling
Operational • 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
are-
 Customer 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 Weaknesses

Variety of formats supporting each other - SCM in real sense yet to evolve
- Better understanding of Indian suppliers - Push mechanism in ordering
- Least focus on quality

Opportunities Threats

- Organized retail growing at >20% CAGR - Competitors like Wal-Mart and Carrefore
- Growing preference to organised shopping - Government policies
- Exponentially growing Indian middle class - 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