SUPPLY CHAIN MANAGEMENT AT (BIG BAZAAR)

Submitted by
SIDDHARTH CHANDRA (1021132) BADRI ALAPATHY GAURAV KANSWAL AMIT PARASHAR (1021109) (1021113) (1021103)

BIG BAZAAR
Big Bazaar is a hypermarket consists of extremely large self-service retail outlet with a warehouse appearance, currently with 104 outlets in India. It is owned by the Pantaloon Retail India Ltd, Future Group. It works on the same economy model as Wal-Mart- based in United States and has considerable success in many Indian cities and small towns. The idea was pioneered by entrepreneur Kishore Biyani the CEO of Future Group. Currently Big Bazaar stores are located only in India. It is the biggest and the fastest growing chain of hypermarket stores and aims at being 350 stores by the end of year 2010. Tag line-

Is se sasta aur achha kahin nahi!

Different categories1. Apparel, fashion and accessories 2. Books and magazines 3. Bike and automotive 4. Camera and photo 5. Desk top, lap top and accessories 6. Furniture and decor 7. Gift and credit card vouchers 8. Health beauty and personal care 9. Jewellory and watches 10. Kitchen and home appliances 11. Mobile and service provider 12. Music and mp3 player 13. Software cds and vcds 14. Toys sports and video games 15. Other miscellaneous items

Big Bazaars Commitment Our commitment is to deliver sustained growth, through empowered people, acting with responsibility and building trust with customers. Heres I am explaining what this means:

Sustained Growth is fundamental to motivating and measuring our success. Big Bazaars quest for sustained growth stimulates innovation, places a value on results, and helps us understand whether todays actions will contribute to our future. It is about growth of people and company performance. It prioritizes making a difference and getting things done.

Empowered People means we have the freedom to act and think in ways that you feel will get the job done, while being consistent with the processes that ensure proper governance and being mindful of the rest of the companys needs. Responsibility and Trust form the foundation for healthy growth. Its about earning the confidence that other people place in us as individuals and as a company. Our responsibility means we take personal and corporate ownership for all we do, to be good stewards of the resources entrusted to us. We build trust between ourselves and customers by talking not by mouth but by our superior customer service and being committed to succeeding together.

Supply Chain Management Supply chain process

SUPPLIER
RETAILER CUSTOMER

MANUFACTURER
TRANSPORTER

As we know supply chain is the back bone of any industry. A supply chain consists of all parties involved directly or indirectly in fulfilling a customer request. The supply chain includes not only the manufacturer or supplier part but also transporter, ware house and customer part. In retail especially supply chain begins with the customer and his or her need for the product. In retail supply chain involved in receiving and filling a customer request. As we know customer is an integral part of the supply chain.In fact the primary part of any supply chain is to satisfy customer needs and in precess generate profit for itself. The term supply chain conjures u[ images of product or supply moving from to manufacturer to distributer to retailer to customer along a chain. This is certainly part of supply chain, but it is also important to visualize information, funds and products flows along both directions of this chain. In reality a manufacturer may receive material from several suppliers and then supply several distributers. A supply chain may include a variety of stages; 1. Customer 2. Retailer 3. Wholesaler/distributer 4. Manufacturer 5. Component/raw material supplier

Supply chain processSupplier

Procurement cycle

Manufacturer

Manufacturing cycle

Distributor

Replenishment cycle

Retailer

Customer order cycle

Customer

Supply Chain Management Supply Chain Management covers the planning and management of all activities involved in sourcing, procurement, conversion, logistics and Distribution. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers.

Objective of every supply chain should be to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customers request. Three macro processes in the supply chain of Big BazaarIn the Big Bazaar supply chain activities belong to one of three macro processes; 1. C.R.M.-All processes that focus on interface between the firm and its customers a. Market b. Price c. sell 2. I.S.C.M.-All processes those are internal to the firm. a. Strategic planning b. Demand planning c. Supply planning d. Fulfilment e. Field service 3. S.R.M.-All processes that focus on the interface between the firm and its suppliers. a. Source b. Negotiate c. Buy d. Design collaboration e. Supply collaboration

In the supply chain of any retailer the supplier does not play any role. Supply chain design, planning and operation decisions play a significant role in the success or failure of Big Bazaar. From its beginning, the Big Bazaar invested heavily in transportation and information infrastructure to facilitate the effective flow of goods and information. Big Bazaar designed its supply chain with clusters of stores around distribution centres to facilitate frequent replenishment at its retail stores in a cost effective manner. Frequent replenishment allows stores to match supply and demand more effectively than the competition.

Supply chain of Big Bazaar

Raising a purchase order to the vendor by the category (In head office and zonal office)

Delivery of the required (negotiated) stock to the store or ware house by the help of transporter (at company s expense)

Receiving of the material at the store with all the required documents

Receiving of the material at the central ware house (C.D.C.) Bangalore

Document check by the security at the gate and in ward register is maintained by following all the rules of S.O.P.

Weighing, counting of cartoons, generation of I.R. no. by putting information on SAP

Compare the material with the documents, stamp the documents, write information with signature of the security and then unload the truck

Stamp on P.O.D. copy and return to the transporter

Transfer of the material to the store ware house

Pre in- warding by scanning the material against the inbound no. by E.A.N. and article no.

Generation of the G.R.N. of the material after the scanning on S.A.P. as well as on REM against article no. or EAN

Post in warding by generating G.R.N. of the in warded stock.

Maintain in ward register by putting all the required information

Segregation of the material (M.C. wise and category wise)

Send the stock to the flour as per the requirement

Racking of the material by giving location to the rack as well as to the box (for the maintenance of the W.M.S. sheet)

Send all the documents to the commercial office for the preparation of MIRO sheet (send to head office for payment purpose) and for the records

Out warding of the material from central ware house to the store, after receiving S.T.O. from the store.

Posting of all the documents comes with the stock from vendor, as well as comes with S.T.N. to the commercial office for the payment purpose and record.

Receiving of the material at the store against S.T.N.

1) Raising a purchase order to vendorBig Bazaar category maintains the flow of material from vendor to store or from vendor to ware house to store. Category does not receive any demand order from store or ware house. Actually category keeps the record of movement of flow of material from ware house to store & also per day & per week sale on the flour. On the basis of this data & also from market research, category estimates the demand of customer & makes purchase order to the vendor. When we open a store we call different vendors then after negotiation with vendor on prices & other condition & schemes we provides them, vendor registration no. so purchase order is made against this vendor no.& then vendor give us information about no. of items presents in their manufacturing ware house for supply and we register those items by vender code. Mapping :The process of determining locations and adjacencies of departments and merchandise inside a store. 2. Delivery of the required (negotiated) stock to the store or ware house by the help of transporter (at Big Bazaar expense)After receiving purchase order from the category, vendor delivers the material to the given location (store or ware house) by the help of transporter hired by the vendor (transportation at vendors expense) with the invoice copy and purchase order copy. Document bring by the transporter with the stock are1. Consignee copy 2. P.O.D. copy 3. Purchase order 4. Invoice copy 5. A.S.N. copy 6. Quality check 7. Way bill (Out of state)

Conditions-

1.Material should be according to the quantity given in the purchase order. 2.Delivery should be at time. 3.Vehicle should be sealed pack at the time of delivery.

Packing guidelines1. Net weight of the packet should not be more than 25 kg. 2. BOPP tapes should be printed 3. Packaging with stretched wrapping 4. Packaging should be dry 5. Label pasted on the packages should be clearly visible

3. Receiving of the material at the Big Bazaar (Bangalore ,kormangla) store with all the required documentsCategory makes purchase order for the store directly in case of immediate requirement and local vendor. Especially in case of mobiles the material comes against invoice. Generally at store material is received against S.T.N. Material is received from vendor against invoice by following all the rules of S.O.P. Firstly gate keeper check all the documents necessary at the gate & compare the material with the invoice.

Paper check1. Receiving site 2. Supplying site 3. Invoice no. 4. H.U. no. 5. Material on paper 6. Gate pass 7. Cartoon counting

Gate keeper sign & stamp the document (invoice copy and purchase order copy) .After that transfer the material to store ware house where G.R.N. of the material is done after scanning by the ware house person. This G.R.N. no. is written on the invoice copy with date and quantity .According to S.O.P., date of receiving has been written on the cartoon received by the ware house person .Scanning of the material is done against each EAN no. and article no. in REM as well as in SAP. An inward register is maintained by the ware house people as well as by the security guard to keep the record of the inward material. Then after counting of material, it is send to the store to sell. For the security purpose security tags stitched on the material. Different types of tags with sensor are punched on the items. Tags are punched on items having cost more than Rs.99. 1. Hard tags-on cloths(Magnetic tags) 2. String tag-on cloths 3. Soft tags-especially on plastic, crockery, electronics etc. All the material is designed on the Racks and 1. Gandola 2. Gap table 3. D- unit 4. Four arms unit 5. Eight arms unit 6. Step table 7. Bins 8. Hyper bins 9. Wall hanging

4. Documents to commercialAfter the whole process in Big Bazaar (Bangalore) store ware house, the entire documents send to local commercial office for the payment purpose as well as for the record. Commercial people maintain a MIRO sheet and send this sheet to head office where category and commercial make cheque and send to local commercial and then commercial pay to the vendor only by cheque. Payment by the local commercial is done only in case of invoice.

5. Receiving of the material at the central ware house (C.D.C.) bangalore Material is delivered (out ward) by vendor to the CDC bangalore (central ware house) by the hired transporter with all the documentation. This time transporter is at the expense of vendor. Material is received by the central ware house C.D.C. by follow all the rules of S.O.P. After that they do in warding of the material followed by racking, segregation & out ward the material to nearest located store(Big Bazaar Bangalore in this case) against S.T.O. In case of Big Bazaar (Bangalore) the stock comes from central ware house C.D.C. Bangalore (Dewas Naka). Receiving of the material is done by the security in the ware house. First of all documents are matched with the material. L.R. no. on the consignee copy should match with L.R. no. on cartoons. Material is weighed by the security person at the receiving gate and actual weight is been written on the P.O.D. and consignee copy. This is for the reason that we pay to the vendor according to this actual weight. After that we fill all the information in SAP and generate inbound register no. and write this no. on inward register. Then security stamp on POD copy and return it to transporter. Then material is send inside for pre in warding, where scanning of the material is done. Post in warding is the next step in which we do the G.R.N. of the material and forward this material for the segregation .After segregation all the material is designed on the racks. 6. Out warding of the material from central ware house to the store, after receiving S.T.O. from the storeCentral ware house people outward the material after receiving S.T.O. from the Big Bazaar store. Ware house people generate the S.T.N. document and after packing of the material they stick new H.U. no. on the cartoons (on which information and description of the material is given) and load this material in the truck to deliver to the store. They send the copy of S.T.N. and gate pass with the material to the store. 7. Document sends to commercialAll the documents received by the central ware house people should send to local commercial for the payment purpose as well as for the record before outing of the material

In the supply chain of Big Bazaar mapping of the vendor is done by negotiating on the price, quantity and quality. Vendor is provided with a vendor registration no. Category receives the data of demand of material and makes purchase order to the vendor. Category purchases the material always in bulk to reduce the cost price of the material. With the help of the diagram above I want to explain the whole scenario and role of central ware house in the supply chain. For the storage of the material purchased by the category, they have two options. First they can make purchase order directly to the central ware houses from where they can deliver the material to the respective stores. Second they can store the material in the mother distribution centre or regional distribution centre (if the material is for a specific zone).And can deliver the material to the respective ware houses and from ware houses to the stores. If we take the example of C.D.C. Bangalore, supplying stock to Big Bazaar Bangalore, Suppose category has purchase 1000 pre pack of the formal shirts for the Big Bazaar Bangalore. Then in this case category will make purchase order directly for the central ware house Bangalore. Transportation of the material is done at the companys expense. Central ware house Bangalore will transfer the required stock of the shirts to store (especially 40% of the stock is transferred to the store; rest of the stock will be transfer at the next need). But the real supply chain come in to play when category purchase the stock in bulk. In the above diagram vendor is supplying shirts to all the eleven big bazaar stores.Acoording to the negotiating terms category have purchase eleven thousand pre pack of shirts for all these registered stores in winter season. Then category will generate purchase order to the vendor for the four central ware houses supplying the stock to these eleven stores. These four central ware houses control the flow chain of the material for these eleven stores. These central ware houses will receive the stock and will transfer the required quantity to the stores. Rest of the quantity will be stored in these ware houses for the future immediate requirement. Material at the time of need is transferred to the store against S.T.O. These central ware houses control nearest stores to minimize the expenditure of transportation. Concept of ware housing is to fulfil immediate requirement and storage of the material.

Transportation of material in Big bazaar-

S1 Ware house 1 S2 Vendor

S3 Ware house-2

S4

Transportation at Big Bazaar expense Transportation-

Transportation at big bazaar expense

1. Transportation is movement of goods from one location to another.

2. Transportation is the main artery of logistics and supply chain management.

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

Concept of ware housing in Big BazaarWare house is nothing but Companys inventory for meeting immediate customer demand. Ware houses have a very vital in role in supply chain of retail. High degree of cost efficient working is essential for retail-chain distribution. Old Concept of warehouse 1. To store products: finished products raw material.

2. To maintain original quality of store material

3.

A static Unit to hold products till sold (Cost Centre)

New concept of ware house invented by Big Bazaar1. Providing Logistic service in a cost effective manner 2. Making product available at right time, at right place, in right quantity and quality at right cost

Purpose of any supply chain management team is to reduce the supply chain or to reduce the distance of transportation because as the distance increases the cost per unit of the load moved also increases. In this whole process two types of costs are there. First is the fixed cost that is the cost which we have already paid to the vendor and second is the variable cost that may vary from different reasons. But in the above curve this variable cost varies due to increase in distance travelled by vehicle. Distribution of stores and ware houses is designed in such a way that transportation charges reduce to minimum.

Three type of distribution centre in Big Bazaar supply chain1. M.D.C. (mother distribution centre) e.g.Tarapure ware house 2. R.D.C. (regional distribution centre) e.g.Hassan garh ware house 3. C.D.C. (centre distribution centre) e.g. Central ware house (Bangalore)

Central ware house (C.D.C. Bangalore)There are ten to twenty central ware house of Big Bazaar in India. C.D.C Bangalore Dewas naka consists of 70000 square feet area on rent. This ware house start from July23 2007 .These central ware houses are made at the central location of some specific stores. And these are multipurpose ware houses. For example C.D.C. Bangalore receives the stock from the vendor as well as from the other ware houses (seasonal stock) and transfer this stock to the next places where it is required in the supply chain. We have three sites for storing the material. These sites are made to recognise the place of a particular item. Central ware house Bangalore pays 3.50 Rs./ square feet rent of the ware house to the 3-PL Indo arya. Site wise distribution of the material1. First site 8648 is consists of apparels(mens,womens and kids),general merchandising (home lenin,utensils,toys,stationary,autoacessories,luggage,plastic,footwear,depots) 2. Second site 8649 consists of winter wears apparels 3. Site 6648 consists of home solution retail India Ltd.

Site 8648This site in central ware house Bangalore consists of 300000 units, out of which 160000 units are of G.M. section and 140000 units are of apparels.

1. G.M. (160000 units)-

1. Plastic-60000 2. Auto accessories,depot,stationary-5000 3. Luggage-10000 4. Utensils-20000 5. Foot wear-20000 6. Home wear-25000 7. Sports 10000 8. Toys-10000 2. Apparels (140000 units)1. Kids-65000 2. Mens-45000

3. Ladies-30000

Site 8649This site consists of 550000 units in all out of which 50000 units are of rain wear and umbrella. 1. Kids-250000 2. Mens- 160000 3. Ladies-75000 4. Home wear-15000

PRIL 8649(winter wear season) 6648(ELECTRONICS) 31100 square feet 20900square feet

PRIL 8648(G.M.&Apparels)

HSRIL

18000 square feet

In central ware house C.D.C. Bangalore we receive the material in three conditions 1. Against S.T.O.- Transfer from other ware house 2. In voice-from vendor against purchase order 3. R.S.T.O.-seasonal return from all over India

Process in central ware house start with the receiving of the material. Firstly we receive all the documents from the transporter. Documents are different against all above three cases. In case of invoice we weigh the boxes and count them also. We match the L.R. no. on box with the consignee copy. Then after filling all the information in SAP we create an inbound register no. and PT no. We stamp on P.O.D. copy and write the I.R. no., actual wt., Date, no.

of boxes, signature of the security guards and return it to the transporter. In case if the boxes are open during receiving of the material then we write down the condition of box open on the transporter copy. We note down vehicle no. at the time of receiving also. Conversion-U.O.M.(unit of measurement)Pre pack-same colour, different article, different size Pre pack is the smallest unit, in this case we have a pre pack of Dj&C shirts have same colour, different size, different article. Combination-medium-1, large-2, XL-2, XXL-1 Bag-different colour, same articleBag is the mediocre unit between pre pack and cartoon. One bag may be of many pre packs. One bag has different colour but same article. CartoonBigger unit of packing. One cartoon has many bag, many pre pack with same article. W.M.S. (ware house management sheet)Ware house management sheet is formulated to keep the record of all the items present in the ware house and especially location of those items. When we receive a S.T.O. from a store then firstly we check the availability of the stock in store by the help of W.M.S. sheet. And then pickers pick the material from the location given by the W.M.S. sheet.W.M.S. Sheet is to make the work process easy. Out warding of the material- Out warding occur only against S.T.O. We receive S.T.O. from different stores and then create delivery of that S.T.O. and create a pick list (Its a document).Then we create H.U. no.(cartoon no.) and issue the material by goods issued and give its print in form of S.T.N. ScrapScrap is the audit part. This is the material which is of no use at present and was of

use earlier. We send this material to the registered vendor of scrap and vendor in return pay us by demand draft and we post this draft to head office.

Reverse logistics ware house-

The concept of reverse logistics ware house is implemented

for damage stock. Four reverse logistics ware house are there in India for four different zones. If damage is done at the store or in ware house then it is send to reverse logistics ware house of that zone. Cost monitoring or the expenditures of ware house1. Ware house rent 2. Contract labour cost 3. Future logistics manpower cost 4. Security cost 5. Utility cost 6. Ware house packaging cost

7. Others