Project

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT
STRATEGIES IN FLIPKART
TITLE OF SYNOPSIS
AN EVALUATION OF LOGISTIC AND SUPPLY
CHAIN MANAGEMENT STRATEGIES IN
FLIPKART.COM

INTRODUCTION
MEANING OF LOGISTICS
Logistics is concerned with getting the product and services where they are
needed and when they are desired. It is difficult to accomplish any marketing
or manufacturing without logistical support. It involves the integration of
information, transportation, inventory, warehousing, material handling, and
packaging.
The operating responsibility of logistics is the geographical repositioning of raw
materials, work in process and finished inventories where required at the
lowest cost possible support no activity can be performed to meet defined goal.
LOGISTICS MANAGEMENTS:
Logistics management is that part of the supply chain which plans, implements
and controls the efficient, effective, forward and backward (reverse) flow and
storage of goods, services and information between the point of origin and the
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point of consumption in order to meet customers requirements rather to the

customers delight. A professional working in field of logistics management is
called a logistician.
LOGISTICS MANAGEMENT AND SUPPLY CHAIN
SCM and logistics management, the definitions made by the Council of Supply
Chain Management Professionals, CSCMP. SCM is defined as supply chain
management encompasses the planning and management of all activates
involved
in
Management
sourcing
activities.
and
procurement,
Importantly,
it
conversion,
also
included
and
all
Logistics
coordination
and
collaboration with channel partners, which can be suppliers, intermediaries,

third-party
service
provider,
and
customer.
In
essence,
supply
chain
management integrates supply and demand management within and across

companies supply chain encompasses the companies and the business
activities needed to design RFDn, make, deliver, and use a product or service.
Business depends on their supply chains to provide them with what they need
to survive and thrive. Every business fits into one or more supply chains and
has a role to play in each of them. The pace of change and the uncertainty
about how markets will evolve has made it increasingly important for the
companies to be aware of the supply chains they participate in and to
understand the roles that they play. Those companies that learn how to build
3

and participate in strong supply chains will have substantial competitive

advantages in their markets. Supply chain management is the coordination of
production, inventory, location, and transportation among the participants in
supply chain to achieve the best mix of responsiveness and efficiency for the
market being served. There is a difference between the concept of supply chain
management and the traditional concept of logistics. Logistics typically refers to
activities that occur within the boundaries of single organization and supply
shins refer to networks of companies that work together and coordinate their
action to deliver a product to market. Supply chain management acknowledges
all of traditional logistics and also includes activates such as marketing, new
product development, finance, and customer service. In the wider view of
supply chain thinking, these additional activities are now seen as part of work
needed to fulfill customer requests. Effective supply chain management
requires simultaneous improvement in both customer service level and the
internal operating efficiencies of the companies in the supply chain. Customer
service at its most basic level means consistency high order fill rates, high ontime delivery rates, and a very low rate of product returned by customer for
whatever reason. Internal efficiency for organizations in a supply chain means
that these organizations get an attractive rate of returns on their investments
in inventory and other assets and those they find ways to lower their operating

and sales expenses.
OBJECTIVES OF THE STUDY

To understand the working of the various departments of flipkart.com.
To enable us to gain an insight into the ecommerce world.
To understand the various responsibilities and duties carried out by each
department of flipkart.com.
The study is aimed at understanding how an organization practically works
in the real situation.

To know the effectiveness of logistics management of flipkart.com and to

bench mark the organization with respect to the online retail industry.
To understand role of logistics system in functionality of flipkart.com.
To evaluate the image of flipkart.com in customers mind.
To find out the customer satisfaction with the existing services of
flipkart.com.
SCOPE OF THE STUDY

This report is based on the study conducted at flipkart.com, Delhi.
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It aims at understanding the company's establishment. Organization

structure,
departments,
techniques,
marketing
strategies
and
the
advantages it is having over the competitors.

An attempt is made to analyze the company's performance in comparison
to the theoretical aspects.
It aims to understand the skills of the company in the areas like
technological advancements, competition and in management.
Study of logistics and distribution of marketing
Knowing how logistics is done in flipkart.com.
LIMITATION OF THE STUDY

Time limit is a major constraint
As per the company rules many information was not disclosed
As the managers are busy in their daily schedules it is not possible for us to spend
more time in interaction and discussion with them.

RESEARCH METHODOLOGY
Every Research is based on a standard sequence that determines its
initialization, flow and completion. In my project I followed the following
sequence of steps.
OBJECTIVES DEFINITION
DEVELOP RESEARCH PLAN

COLLECTION OF DATA
ANALYSE THE INFORMATION INFORMATIO0N
PRESENT THE FINDINGS

A Research Methodology is the arrangement of condition of collection and
analysis of data in a manner that aims combine relevance to the research
purpose with economy in procedure.
RESEARCH PROCESS
RESEARCH OBJECTIVES
RESEARCH DESIGN
SOURCES OF DATA

DATA COLLECTION
DATA ANALYSE
Research Methodology is a way to systematically solve the research problem.
When we talk of research methodology we not only talk to research methods
but also consider the logic behind the methods we use in the contexts of our
research study and explain why we are using a particular method or technique
and why we are not using other so that results are capable of being evaluated
either by researcher himself or by others.
1. TO DECIDE THE OBJECT OF STUDY
2. TO DESIGN RESEARCH DESIGN
Generally there are three types of research design:
o Exploratory research
o Descriptive research
o Casual research
3. TO DETERMINE SOURCE OF DATA
Primary Data
Secondary Data

INDUSTRY PROFILE
E-Commerce Business in India
The internet retailing industry grew by 34% in 2011 to $ 10 billion with
investments of about $ 900 million over last year. It is expected to grow at a
compounded rate of 39% over the next 5 years. Online retail account for less
than 1% of the total retail market in India (compared to about 5% in the US),
and thus, presents a huge growth potential for international retailers. Internet
retailing in India mainly focuses on non-grocery products such as consumer
electronics, media products, sports equipment, consumer appliances and
books; products that do not require extensive touch and feel. Books and gifts,
however are the largest contributors. Several Internet retailing players are
providing much cheaper prices compared with store-based retailers, which is
attracting consumers in India. Retailing fashion apparel and accessories online
is also becoming a popular trend as e-commerce sites are now targeting women
to drive sales.
High discounts are primarily driving adoption while gaining the trust of
consumers through fraud proof options such as cash-on-delivery. Investments
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in logistics and infrastructure and support by third party companies have led
to ever expanding reach. It is evident that Internet prices are projected to be
more competitive than any other retailers in India.
Most Internet retailers offer services, such as flexible payment methods,
warranties for electronic goods and free home delivery. The prices from several
players are very competitive with all e-retailing players offering good deals on a
variety of products in order to attract customers. Players with a wide variety of
products have managed to gain the most value sales. Internet retailing in India
is segmented under different formats, including vertical shopping, whereby the
manufacturer is also the retailer, multi-product Internet retailers, such as
Future bazaar, Shoppers Stop and comparison shopping. International
companies were not allowed in India up to 2010 as the government put a ban
on FDI in multi-brand retailing. However, in 2011 the ban was liberalized and
in June 2013 one of the largest players in the world, Amazon entered the
Indian e-retailing environment and started offering a third party market space.
The industry, however, faces many challenges. The foremost being high
customer acquisition cost (approx. 1500) and small basket size. Repeat
purchases are essential to recover acquisition spending.
Companies tend to hold extensive inventory of up to 3 months in-order to get
discounts from their suppliers, this requires substantial investment. In-house
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logistics require further investment and third parties are operationally

expensive - delivery costs 5-10% of the product value. Internet retailers are
'burning cash to fuel growth', offering discounts deeper than their pockets and
spending heavily on advertising and marketing1.
Another major challenge is that some manufacturers are not on board with the
e-commerce sites selling their goods below the prescribed maximum retail
price. They feel this is the main reason for falling revenues of their brick and
mortar stores. Hence to discourage online purchases, some companies have set
terms and conditions so that products that are bought through online retail
sites would have lesser warranty periods and also different guarantee
specifications.
India has an internet user base of about 243.2 million as of January 2014,
20% of the population. Despite being third largest userbase in world,
the penetration of Internet is
low
compared
to
markets
like
the United
States, United Kingdom or France but is growing at a much faster rate, adding
around 6 million new entrants every month. The industry consensus is that
growth is at an inflection point.
1
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In India, cash on delivery is the most preferred payment method, accumulating

75% of the e-commercial activities. However, COD may harm e-commerce
business in India in the long run and there is a need to make a shift towards
online payment mechanisms. Similarly, direct imports constitute a large
component of online sales. Demand for international consumer products
(including long-tail items) is growing much faster than in-country supply from
authorised distributors and e-commerce offerings.
Market size and growth

India's e-commerce market was worth about $3.8 billion in 2009, it went up to
$12.6 billion in 2013. In 2013, the e-retail segment was worth US$2.3 billion.
About 70% of India's e-commerce market is travel related. According to Google
India, there were 35 million online shoppers in 2014 Q1 and is expected to
cross 100 million mark by end of 2016. CAGR vis--vis a global growth rate of
810%. Electronics and Apparel are the biggest categories in terms of sales.
Key drivers in Indian e-commerce are:
Increasing broadband Internet (growing at 20% MoM), 3G penetration,

and recent introduction of 4G in few cities.
Rising standards of living and a burgeoning, upwardly mobile middle

class with high disposable incomes
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Availability of much wider product range (including long tail and Direct
Imports) compared to what is available at brick and mortar retailers
Busy lifestyles, urban traffic congestion and lack of time for offline
shopping
Lower
prices
compared
to
brick
and
mortar
retail
driven
by disintermediation and reduced inventory and real estate costs
Increased usage of online classified sites, with more consumer buying

and selling second-hand goods
Evolution
of
the
online
marketplace
model
with
sites
like Jabong.com, Flipkart, Snapdeal and Infibeam.

India's retail market is estimated at $470 billion in 2011 and is expected to
grow to $675 Bn by 2016 and $850 Bn by 2020, estimated CAGR of
7%. According to Forrester, the e-commerce market in India is set to grow the
fastest within the Asia-Pacific Region at a CAGR of over 57% between 201216.
As per "India Goes Digital", a report by Avendus Capital, a leading Indian
Investment Bank specializing in digital media and technology sector, the Indian
e-commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year
2011. Online travel constitutes a sizable portion (87%) of this market today.
Online travel market in India is expected to grow at a rate of 22% over the next
4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-
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tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and

estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.
On 7 March 2014 e-tailer Flipkart claimed it has hit $1 billion in sales, a feat it
has managed to achieve before its own target (2015).
Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$24
billion) by the year 2015 with both online travel and e-tailing contributing
equally. Another big segment in e-commerce is mobile/DTH recharge with
nearly 1 million transactions daily by operator websites.
Closures
Though the sector has witnessed tremendous growth and is expected to grow, a
lot of e-commerce ventures have faced tremendous pressure to ensure cash
flows. But it has not worked out for all the e-commerce websites. Many of them
like Dhingana, Rock.in, Seventy MM amongst others had to close down
[15]
or
change their business models to survive.[16]

Infrastructure
There are many hosting companies working in India but most of them are not
suitable for eCommerce hosting purpose, because they are providing much less
secure and threat protected shared hosting. eCommerce demand highly secure,
stable and protected hosting. Cyber security issues of e-commerce business in
India would be required to be managed by Indian e-commerce stakeholders in
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the near future. In fact, Indian government is planning to introduce cyber

security
breach
disclosure
norms
in
India
very
soon. Recently
Target
corporation suffered a cyber attack that has put it under litigation threat in
multiple
jurisdictions. Trends
are
changing
with
some
of
eCommerce
companies starting to offer SaaS for hosting webstores with minimal one time
costs.
Regulatory violations and unfair practices
Legal issues of e-commerce in India are generally ignored by e-commerce
websites. This may change in the near future as foreign companies and ecommerce portals would be required to register in India and comply with
Indian
laws. E-Commerce
nutraceuticals, Bitcoin, Ayurvedic
websites
products, online
dealing
with
pharmacies, online
payment, online poker, etc. are violating laws of India.

Enforcement directorate (ED) of India has already initiated legal actions against
companies dealing with Bitcoins in India. Tax liability of foreign companies like
Google, Facebook, etc. is also under consideration in India.
Similarly, illegal online sales of prescribed drugs by illegal online pharmacies of
India are also under scrutiny of regulatory authorities of India.
Myntra, Flipkart and many more e-commerce websites are under regulatory
scanner of ED of India for violating Indian laws and policies. US-based
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transport application provider Uber Inc has also been questioned by the service
tax department of India. Recently Kerala Government slammed Flipkart,
Jabong and other two Ecommerce trade organizations for doing illegal business
in the state with a fine of INR 54 Cr. Flipkart (INR 47.15 Cr) will pay the
majority of fine followed by Jabong (INR 3.89 Cr), Myntra (INR 2.23 Cr) and
Zovi (INR 36 Lakh).
The Federation of Publishers and Booksellers Associations in India (FPBAI)
has also questioned the predatory pricing tactics adopted by various ecommerce websites in India. The Confederation of All India Traders (CAIT) has
also decided to approach the Competition Commission of India to oppose the
predatory pricing tactics of Indian e-commerce websites.
Demands for introducing suitable provisions to regulate taxation, anti
competitive practices and predatory pricing of Indian and foreign e-commerce
websites have also been raised.
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COMPANY PROFILE
Flipkart.com
Founded in 2007 by two IIT Delhi graduates, Flipkart.com.com is today Indias
largest online shopping website. The company was started with the prime
objective back of making books easily available to consumers who has access to
internet. Today, it is present across product categories including movies, music,
games, mobiles, cameras, computers, healthcare and personal products, home
appliances and electronics, stationery, perfumes, toys, apparels, shoes and a
lot more.
It has been cited as a success story in the domain of online retail a sphere
generally dubbed as impossible to succeed in India. Started with an investment
of Rs. 4 lakhs by the founders themselves, Flipkart.com has grown
exponentially in the last 5 years and touched revenues of 1180 cr in 20122013. Flipkart.coms success owes a lot to its original product portfolio that is
books. Margins in the books business are high (upto 40-50%) and Indian laws
allow books to be imported and cross state lines without taxes or octroi, and
they encourage customer trials as low-ticket items. They also came up with the
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unique proposition of giving customers an option paying Cash on Delivery

which helped them gain customers trust and made them a household name.
COMPANY STRUCTURE
The entire organizational structure of Flipkart.com is organized in three broad
teams as depicted below.
Product
technology
Website
and Business Development Operations
Management
ERP System
Vendor
Procurement
Management
Warehouse
Sales
Logistics
Management
Customer Support
Pricing
Strategies
Product and Technology Team

The product and technology team is the core strength of the company. The
team is responsible for the management of the website as well as the ERP
system. It has developed a state of art system in-house using open source
software. Website is a backbone of any online retail shop and Flipkart.coms
website is also managed by this team only. The team manage the entire process
right from listing of item to search engine optimization.
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Business Development Team

Business development team is responsible for all the activities related to sales
including vendor management to pricing and discount strategy.
Operations Team
Operations team deals with all the supply chain aspects of the company right
from procurement and warehouse management till customer support.The team
support the customers both online via telephone as well as offline via email.
Customer Support team
Flipkart.comhas a strong focus on customer service with customer delight as
the top most priority. And to fulfil it the company guarantees a 24/7 full
customer support and to cater this facility it has a dedicated customer support
team which offers both inbound and outbound support. There are two prime
responsibilities of support team:
o Website Guidance:The team basically provide guidance to new users of the
website on how to navigate through it. It also handles order processing
functions like order verification calls, payment related queries etc.
o Resolution of Issues: This includes intimation to customer about issues such
as any delay in delivery as well as resolution of complaints both pre-purchase
and post purchase.
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Logistics
Logistics is one of the most important facets of any successful ecommerce
venture. Flipkart.comships more than 30000 items a day which makes
management of the logistics a cumbersome task for the company. Furthermore,
the cost of the delivery is born by the company itself making logistics a
financially complex issue also. Hence in order to successfully manage logistics
Flipkart.com uses its in-house logistics (FKL) as well as third party logistics
(3PL) services. While more than 90% of the Cash on delivery (COD0 shipments
and about 60-70% of the overall shipments are delivered by the FKL the rest of
shipments are catered by 3PL service providers. Moreover, if there are more
than 100 deliveries for a particular destination the company uses FKL. In case
of FKL, the shipment is first transported to Mother hub and then to delivery
hub and subsequently from delivery hub the last mile delivery is done using
suitable mode of transport such as two-wheelers, bicycles, or on foot. The
company has tie-ups with more than 15 courier companies like Blue Dart, First
Flight etc. to deliver their products and Indian post for areas where courier do
not reach.And to manage the 3PL providers efficiently the company allocates
time slots to different logistics partners and they can pick up deliveries on
specified time slots only.
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For delivering the items the logistics service among the three is decided based
on the area where the item needs to be delivered as well as product type and
payment method. FKL is presently available in major tier 1 cities including
metros only. The company uses India Post only in case if the shipment location
is not serviced by any of the 3PL as well as FKL primarily because of the higher
delivery time. Moreover, India Post orders are of prepaid nature only. The
delivery time varies between 3 days to 3 weeks depending on the location and
availability of the product. For example imported products take about 3 weeks
time to get delivered to the customers whereas if product is available in local
warehouse it gets deliver within 3 days. The mode of transportation is also
dependent on the location. For example, the inter-city, trans-zone deliveries are
made using air cargo whereas satellite cities and others in close proximity;
products are transported overnight by train or truck.For the local parts of the
cities where the warehouses of the company exist products are delivered using
two-wheelers, bicycles, or on foot depending upon the proximity of the place.
Reverse logistics / returns processing
The returns for Flipkart.com are 2.6%. If follows a 30 day return policy. This
policy which is primarily aimed to build trust with the consumers, has led to
many customers duping Flipkart.com. For example there have been several
incidents when a
customer buys a book only to read it and then return it

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within 30 days. Similar incidents have been observed with mobile phones as
well. Flipkart.com, through its data management systems, has tried to identify
such frauds.
Return of a product to Flipkart.com can happen if the 3rd party cannot deliver
to the address or the customer does not accept the product. Some orders are
cancelled while the delivery is being processes by the courier company. Such
order is not recalled but delivered to the address and then cancelled.
Customers can call the customer support and courier back the product to
Flipkart.com. The delivery cost is borne by Flipkart.com.
When a customer requests return of a product, there are 3 paths this request
can take:
1. Replacement: Flipkart.com returns the product to the supplier and obtains a
replacement that is delivered to the customer.
2. Store credit: If the customer is not satisfied with the product, he or she is
given store credit of the same amount.
3. Actual cash-back: Given out as cash for cash-on-delivery payment or
refunded for online payment.
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Procurement
When Flipkart.com started its operations, they had employed the consignment
model of procurement. In this model, the retailer (in this case Flipkart.com)
holds the inventory owned by the supplier, and buys it from the supplier only
when it is sold to the end consumer. Since the channel was new and unproven,
this was the most risk-free way to operate. However, they have now
discontinued this now and inventory now is purchased.
Procurement of items could be for:
a Inventory: These items are pre-ordered based on previous sales data to
stock as inventory. This category includes items with relatively low
demand elasticity, fast selling items and items with relatively long shelf
life.
b Just in-time: Items procured just-in-time are used to serve immediate
outstanding orders. Items with low or unpredictable demand are typically
procured on an order-to-order basis. Just-in-time procurement is also
used for expensive items or products that have seen slow sales growth.
As of now, the number of orders served from the inventory is roughly 75%, with
25% orders being served by procuring just-in-time. Procuring just-in-time is
comparatively more expensive as the volumes for such orders are low, and the
supplier discount offered therefore is considerably lower. However when
24

ordering for inventory, bulk purchase is made and hence a much better price is
realized. Therefore the company would ideally like to move to a ratio of 9:1 ratio
of orders served through inventory to those procured just-in-time.
As a caveat however, there is an inherent trade-off between the companys long
term objective of reducing just-in-time procurement, and its motto of
Consumer Delight. This is because in order to maximize consumer delight,
the company would have to strive to serve all types of consumer orders and
provide them with the maximum possible variety of products, which would
require just-in-time procurement since many products have limited demand
and cannot be stored as inventory. However, operational efficiency demands
rationalisation of product line and choosing ones customers.
Sourcing at Flipkart.com is conducted at two levels:
a Regional: By Regional Procurement Teams
b Centre: By the Central Procurement Team
Each regional procurement team has a network of local suppliers for made-tostock as well as on on-demand (Just in-time) procurement. They also have
visibility of the stock for different SKUs with these suppliers, as last updated
on the procurement teams system by these suppliers. From Flipkart.coms
perspective:
Stock out: Defined as when the product is unavailable in the inventory (held in
warehouses) as well as Flipkart.coms suppliers (as last updated)
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The central procurement team has visibility of all the regional procurement
teams views, and therefore can monitor the stock levels for their suppliers all
over the country. The central teams focus is on bigger suppliers with a
country-wide reach.
Flipkart.coms Warehouse Management System
Flipkart.com has 7 major warehouses spread across the country in Mumbai,

Kolkata, Delhi, Noida, Pune, Chennai and Bangalore. They have smaller
regional distribution centres at over 500 locations spread across Tier I and high
volume Tier II cities.
In Flipkart.coms Warehouse Management System (WMS), there are three major
segments namely, Inward Processing, Storage Management and Outward
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Processing. Discussed below are the some of the details regarding each of the
sub-processes involved in the WMS.
Inward Processing
1 Physical inwarding: This is the area where physical delivery of goods from
suppliers to the warehouse is taken.
2 Quality Check + Scan: As soon as the goods are received, they go through
an initial quality check at this stage. After this, they are scanned to make
an electronic entry to record the input of goods into the warehouse on
the IT systems. This step of quality check is also undertaken at the
suppliers premises depending on the contract that Flipkart.com has
with them.
3 Pre-packing of products: At this stage, an initial packing of each of the
products is done. This pre-packing varies according to product. For
instance, a book-mark and think transparent film packing will be done
for a book. Similarly, if there is a freebie attached to a product, then the
two products will be packed together.
Storage Management
1 Put-list generation: When the input of all products is done on the IT
systems, a system generated list of shelves corresponding to the products
is generated to facilitate placement of products on shelves. This is called
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Put-list generation, which marks the place where the respective items
need to be put.
2 Order pending check: As soon as the system gets the input of the
incoming products, system checks if any of the orders for the incoming
products are pending or not. If orders are pending, the respective product
is sent directly to the Final Packaging Area for Outward Processing.
3 Physical placement on shelves: Based on the Put-list, the products are
placed on the respective shelves. If the marked shelves are not empty, the
product is put on an empty shelf, and the respective shelf number is
updated on the Put-list.
4 Closing Put-list: Once the product placement is done, Put-list is updated
with the actual placement information and the list is Closed.
Outward Processing
1 Pick-list generation: Based on the orders to be delivered for the day, a
Pick-list is generated by the IT system.
2 Pick-up from shelves: The respective products from the Pick-list are picked
up from the shelves as per the IT system entries and gathered together to
move towards Final Packaging Area.
3 Final packaging: The picked-up products are packed in Flipkart.combranded boxes. At this stage, packaging is done according to the
Category of the product, e.g., electronic items are packed differently from
stationery.
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4 Placement in respective delivery hubs bags: After the final packaging, a

product is placed in a specific bag which is dedicated for that destination
area delivery hub. These bags are dispatched to their respective delivery
hubs on a fixed timing during the day.
Some issues identified at the Warehouse Management level:
1 All the scans while conducting inward processing for each of the
products are done manually. There is some scope of automation at this
stage.
2 Due to packaging litter, there emerge chances of difficulty in mobility
within the warehouse. Disposal of packing material may be addressed for
better streamlining and ease of mobility.
3 Currently, there are separate sections for separate categories in the
storage area, e.g., in the Bangalore warehouse, a whole floor is dedicated
to books, while the other floor is dedicated to other categories. With the
increase in the number of SKUs that Flipkart.com is undertaking for
sale, the Warehouse management systems complexity will increase and
its scalability in the current form might come under question. Hence,
pre-emptive efforts may be made to make sure that the systems and
processes are scalable based on increasing variety and quantity of SKUs
handled.
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Order Processing
Flipkart.com uses its own ERP systems to process orders and track the details
of all the transactions that need to be carried out. A typical order at
Flipkart.com starts with the customer searching, selecting the required item
and placing the order. This on an overage takes around 8-10 clicks to get the
order placed. The email Id is considered to be the unique identification of a
customer and all the records are maintained with reference to this Id.
The payment can be made by using debit card, debit card, Netbanking or
COD(Cash on Delivery). The payment gateway used is powered by CC Avenue.
Flipkart.com is working to have its own payment gateway which has not been
possible so far because hosting a payment gateway requires fulfillment of
Payment Card Industry Data Security Standards (PCI DSS).
Order Fulfillment
Customer orders are fulfilled either via Inventory or JIT procurement depending
upon the availability of the products.
1. As soon as the order is placed and approved, there is an inventory check
done at the local warehouse. If the item is not found at the local
warehouse, then the order goes to the nearest and then other
warehouses. The product is then packaged and delivered to the
customer.
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2. If the item is not found in the inventory it is forwarded to the Regional

Procurement Team (RPT) for JIT procurement from local vendors. If yet
not possible, the order goes to the central procurement team (CPT)for the
last option of procurement. After procuring from the vendor, the product
is packaged and delivered to the customer via the most convenient
warehouse. They have an understanding with their vendors for order
tracking, reconciliation and MIS (Management Information Systems).
As and when the item is found, it is packaged then and there and shipped to
the customer via either courier, Indian post or its own internal logistics arm
depending upon the area where the item need to be delivered. The customer is
kept updated on the status of his shipment via message, email and/or through
website. An item is labeled out of stock only if it is not neither present in the
warehouses nor with the vendors.
Flipkart.com, with its focus on customer delight, ensuresan excellent aftersales service to its customers with regard to the delivery and/or addressing
grievances related to any faulty or unsatisfactory products. The return of such
items is done in an effective manner without any disputes. This is possible
given the understanding with the vendors. For example, in case of electronics,
warranty and after-sales service is largely manufacturers responsibility.
31

Whenever required, Flipkart.comfacilitates a smooth interaction between the

customer and manufacturer/service center.
Flipkart.com has fared very well in terms of the delivery time. It varies between
less than 24 hours and 3 weeks depending on the location and availability of
the product. On an average the delivery time is 3-4 days with a typical breakup
as follows:
1 day for order processing

2 days for delivery
1 day as buffer
32

Inventory Management
The inventory stocks are replenished whenever it goes below Reorder point. In
order to decide on reorder point and demand forecasting of each SKU, the
company employs Holts forecasting method. Holts method is useful in cases
where linear trends are present and requires separate smoothing constants for
slope and intercept. The forecasted demand used at Flipkart.com using Holts
method is based on historic trend and seasonality in not accounted.
The company employs FIFO(First In First Out) method for its inventory
management, under which for any shipment request to a particular warehouse
the oldest inventory items are shipped first. This makes a lot of sense especially
for the electronics items since the technology becomes obsolete very quickly.
With respect to determining what items to store in the warehouse and what
items to be procured from vendors, Flipkart.com uses Long Tail Concept, which
is nothing but selling a large number of unique items with relatively small
quantities. Flipkart.com orders such items on adhoc basis and usually dont
keep inventory of such items since the demand for such items is very less and
thereby minimizing overall distribution and inventory costs.
33

Supplier Management
Flipkart.com has always operated on the philosophy of starting out small and
then scaling up as demand grows. It has been the same with selection of
suppliers. For a new category, they generally start of by sourcing from local
suppliers and distributors. Once there is enough demand generated, they
approach the larger wholesalers or manufacturers directly. This serves two
main pruposes:
1. It helps them to get better deals from the bigger manufacturers if they
can order in larger quantities frequently enough.
2. It avoids the channel conflict dilemma that large suppliers face when
they agree to similar terms with a smaller volume online player like
Flipkart.com as compared to an established offline distributor.
An example of this strategy mentioned by Pawan Raghuveer, Mgr. Flipkart.com
Supply Chain Excellence Division, is that given that Flipkart.com is now Indias
largest online retailer of books and they are larger than many offline stores as
well most of Flipkart.coms books are sourced directly from publishers.
Across product categories, Flipkart.com works with over 500 suppliers
including several international suppliers as well. Flipkart.coms steady rate of
growth has allowed them to get the best credit lines from their suppliers. They
signed their first international supplier deal with Ingram Books in 2008 and
they prefer working with them due to high level of predictability.
34

In fact, considering that customer delight is Flipkart.coms primary motto, any

delay in supply can lead to late deliveries to the end-customer. So Flipkart.com
follows a grading system of its suppliers based on their fill-rate performance.
Suppliers are grouped into A, B and C grades based on their past performance.
There are several other secondary considerations while placing an order with a
supplier:
1. Price considerations As mentioned before credit lines and discount
terms play an important part in selecting suppliers.
2. Quality Check contract Depends on whether QC will be done at
suppliers place and then product will be shipped to Flipkart.coms
warehouses or if the QC has to be done at Flipkart.coms warehouses.
3. Percentages of Returns Accepted Higher the percentage of returns
accepted by a supplier, the better for Flipkart.com.
Customer Support
Customer Support function for an e-commerce website is one of the most
important touch-points for the business in terms of building trust, customer
acquisition and maintaining customer loyalty.
Flipkart.coms Customer Support team consists of call-centre agents who
handle in-bound and out-bound calls and also a team that handles e-mail
queries. The entire team is based out of Bangalore and forms a core part of
35

Flipkart.coms 6,000-strong employee base. Given that Flipkart.com tries to

differentiate itself on superior shopping experience and customer service is an
integral part of that Flipkart.com prefers to train its own support staff rather
than outsourcing the function to a BPO agency.
At present, a customer calls due to one of the below reasons:
1. Sales Assistance
2. General Enquiries
3. Product/Shipping related enquiry
One of the major reasons for these calls is Indian consumers poor familiarity
with online shopping protocols. It is important to note that Flipkart.com tries
to ensure that any order is placed within 6 clicks on the website.
There is also an outbound call-centre that performs the following tasks:
1. Pro-actively inform customers about any delay in deliveries.
2. Pro-actively check the status of refunds or returns.
3. Inform the user in case any delivery has not been successful due to the
customer not being present at his address.
Despite all the good intentions of Flipkart.com in providing high-quality
customer service, there are several internet blogs that suggest that their
service quality has dipped in the last year or so. A major reason for this could
be the growth in number of customer service executives not keeping pace with
the increase in business volume. There could also be a problem of increased
36

complexity in query handling due to increase in number of SKUs and product

categories that would demand more rigorous training for the support staff.
THEORATICAL BACKGROUND
AN
EVALUATION
OF
LOGISTIC
AND
SUPPLY
CHAIN
MANAGEMENT
FLIPKART.COM is a autonomous retail group so most of its logistics and

distribution is done by future logistics
LOGISTICS
INTRODUCTION TO LOGISTICS
One of the most important challenge in organized retail in India is faced by
poor supply chain and logistics management. The important can be understood
by the fact that the logistics management cost component in India is a high as
37

7% to 10% against the global average of 4% to 5% of the total retail price.

Therefore, the margins in the retail sector can be improved by 3% to 5% by just
improving the supply chain and logistics management.
Logistics and Supply Chain enables an organized retailer to move or store
products more effectively. Efficient logistics management not only prevents
needless movement of goods, vehicles transferring products back and forth; but
also frees up storage space for more productive use.
Logistics is the art and science of managing and controlling the flow of
goods, energy, information and other resources like products, services
and people from the source of production to the marketplace.
Its important to have professional logistical support logistical
The operating responsibility of logistics is the geographical repositioning
of raw materials, work in process and finished inventories where required
at the lowest cost possible
SCENARIO OF LOGISTICS IN INDIA
The logistics industry in India is evolving rapidly and it is the interplay of
infrastructure, technology and new types of service providers that will define
whether the industry is able to help its customers reduce their logistics costs
and provide effective services (which are also growing)
38

Changing government policies on taxation and regulation of service providers

are going to play an important role in this process. Coordination across various
government agencies requires approval from multiple ministries and is a road
block for multi modal transport in India. At the firm level, the logistics focus is
moving towards reducing cycle times in order to add value to their customers.
Consequently, better tools and strategies are being sought by firms in order to
enhance their decision-making. In this paper, we provide a perspective on these
issues, outline some of the key challenges with the help of secondary
information, and describe some interesting initiatives that some firms &
industries are taking to compete through excellence in managing their logistic.
Some Peculiarities of the Indian Supply Chains
The Indian logistics sector has typically been driven by the objective of reducing
transportation costs that were (and often continue to be) inordinately high due
to regional concentration of manufacturing and geographically diversified
distribution
activities
as
well
as
inefficiencies
in
infrastructure
and
accompanying technology. Freight movement has slowly been shifting from rail
to road with implications on quality of transfer, timeliness of delivery and
consequently
costs
except
for commodities,
39
which
over
long
distances,

predominantly move through the extensive rail network. More on the

manufacturer issues later.
The transportation industry is fragmented and largely unorganized a large
number of independent players with regional or national permits that carry
freight, often with small fleet size of one or two single-axle trucks. This segment
carries a large percent of the national load and almost all of the regional load.
This fragmented segment comprises owners and employees with inadequate
skills, perspectives or abilities to organize or manage their operations
effectively. Low cost has been traditionally achieved by employing low level of
technology, low wages (Due to lower education levels), poor maintenance
of equipment, overloading of the truck beyond capacity, and price competition
amongst a large number of service providers in the industry. Often, one finds
transportation cartels that regulate supply of trucks and transport costs.
However, the long run average cost of transport operations across the entire
supply chain may not turn out to be low
40

DISTRIBUTION
Distribution is one of the 4 aspects of marketing
Traditionally, distribution had been seen as dealing with how to get the
product or service to the customer.
Distribution is done by distributor who is the middleman between the
manufacturer and retailer
Supply chain is a coordinated system of organization, people, activates.
Information and resources involved in moving a product or services in
physical or virtual manner from supplier to the customer.
Supply chain activities transform raw materials and components into a
finished product that is delivered to the end customer
Warehouses
Warehouses of FLIPKART.COM are located at Patna. Suppliers of various
products
to
warehouses
from
warehouses
goods
supplied
warehouses.
In some cases as in food items vendors directly sell to retailers
INTEGRATED LOGISTICS
41
to
internal

Logistics
is viewed as the competency that links an enterprise with its
CUSTOMER
customers and suppliers. Information from and about customers flows
through the enterprise in the form of sales activity, forecasts and orders. As
products and materials are procured, a value added inventory flow is initiated
that ultimately results in ownership transfer of products to customers. Thus
the process is viewed in terms of two inter-related efforts, inventory flow and
information flow.
Inventory flow
MANUFACTURING
SUPPORT
INFORMATION FLOW
Inventory Flow
The management of logistics is concerned with the movement and storage of
materials and finished products. From the initial purchase of a material or
component, the logistical process adds value. By moving inventory when and
where needed. Thus the material gains value at each s t e p . For a large
manufacturer, logistical operations may consist of thousands of movements,
42

which ultimately culminate in the delivery of the product to an industrial user,

wholesaler, dealer or customer.
In order to understand logistics it is useful to divide it into three areas:
1. Physical distribution
2. Manufacturing support
3. Procurement
For FLIPKART.COM
FLIPKART.COM is completely product oriented therefore it have its own
material movement. That means it only involves physical distribution and
procurement. Procurement also includes the material needed for packaging
such as paper, molded trays and boxes, wooden crates, standard containers
wraps, plastic inlays etc. The materials or the goods collected from the
suppliers (goods like clothing, household good, chemicals, etc.) are weighed,
checked for condition, and depending upon its various characteristics it is
packed. The goods are then dispatched to their destinations.
INFORMATION FLOW
Information flows identifies specific location within a logistical system that have
requirements. Information also integrates the three operating areas. The
43

primary objective of developing and specifying requirements is to plan and

execute integrated logistical operations.
LOGISTICAL INFORMATION INVOLVES TWO MAJOR TYPES OF FLOWS :
1. Coordination flows
2. Operation flows
1. PLANNING AND COORDINATION FLOWS
Coordination is the backbone of the overall information system.
Strategic objectives:
Strategic objectives detail the nature and location of customers, which are
matched to the required products and services to be performed.
FOR FLIPKART.COM
It implies estimating the time required for collecting the goods from the
suppliers and then estimating the time for goods to reach the warehouse
FORECASTING
Forecasting utilizes historical data, current activity levels, and planning
assumptions to predict the future activity levels. Logistical forecasting is
generally concerned with relatively short-term predictions.
The overall purpose of information planning/coordination flow is to integrate
44

specific activities within a firm and to facilitate overall integrated performance.
FOR FLIPKART.COM
FLIPKART.COM whole business is dependent on products which are going to be
delivered from there suppliers. Based on the distance between the suppliers
location and warehouse location, the accessibility to the warehouse, etc.
FLIPKART.COM have fine tuned the process of delivery. They can accurately
gauge how much time it will take for goods to reach its end destination.
2. OPERATIONAL FLOWS
The second aspect of information requirements is concerned with directing
operation to receive, process, and ship inventory as required supporting
customer and purchasing orders. Operational requirements deal with
Order Management
Order Processing
Distribution operations
Inventory Management
Transportation and Shipping
Procurement
45

FOR FLIPKART.COM
FLIPKART.COM still doesnt have the tracking information for their goods,
which were delivered by their supplier for them. They have to relay on their
truck drivers only for exact position of there goods. This made them to fall
behind from there compotators.
INNOVATIVE SUPPLY CHAIN DEVELOPMENT

Supply chain management services are delivered across industry sectors and
provide expertise, knowledge and resources in terms of personnel and supply
chain tools. All services are targeted at optimizing logistical operation in both
process and strategy, and are aligned to the clients commercial expectations.
The services are as follows:
Strategic logistics consulting
Lead logistics provider
Consulting and providing transport optimization: Route-pro and TransPro
Consulting and providing supply chain design
Consulting and providing transportation
Engineering, optimization and re-engineering
Implementation and project management
46

Process management
Outsourcing
SUPPLY CHAIN RE-ENGINEERING

FLIPKART.COM works with suppliers to review supply chain efficiencies. One of
the main tasks is to evaluate cost efficiency, to ensure that costs are being
driven
down
throughout
the
contract
duration.
Data
analysis
allows
FLIPKART.COM to provide suppliers with what if modeling or the impact of

changing the business rule.
AFTER SALES OPTIMIZATION

Optimizing return logistics and spare parts logistics as well as maintenance
and repair services.
DISTRIBUTION TOWAREHOUSE MANANGEMENT
FLIPKART.COMs distributions to warehouse solution are focused on helping
retail outlets to create efficient and flexible supply chains to deliver products to
customers and with high level of service.
These solutions are built from several core services including reverse logistics:
Logistics network strategy
Warehouse design and simulation
47

Transport modeling.
TRANSPORTATION
Transportation is the most visible of all functions of logistics and high
contributor to logistics cost. We can see trucks, containers and wagonloads of
material being moved from place to place as an activity directly associated with
trade and business. We should also appreciate that this is an activity that adds
highest amount of cost to the activity of making inputs and outputs available to
consumers. Transportation function moves the product to meet customer
expectation at minimum cost. Transportation is one of the most visible
elements of logistics operation. Transportation provides 2 major functions:
product movement and product storage
PRODUCT MOVEMENT
Whether the product is in the form of materials, components, assemblies,
work-in process, or finished goods, transportation is necessary to move it to
neat stage of the manufacturing process or physically closer to the ultimate
consumer. A primary transportation function of product movement is moving
up and down the value chain. Since transportation utilizes temporal, financial,
and environmental resources, it important that items be moved only when it
truly enhances the product value. Transportation involves the use of temporal
resources because product is inaccessible during the transportation process.
48

Such product, commonly referred to as in-transit inventory, is becoming a

significant consideration as a variety of supply chain strategies such as just-intime and quick response practices reduce manufacturing and distribution
center inventories.
Transportation uses financial resources because internal expenditures are
necessary for private fleets or external expenditures are required for
commercial or public transportation.
The major objective is to move product from an origin location to a prescribed
destination while minimizing temporal, financial and environmental resource
costs. Loss and damage expenses must also be minimized. At the same time
the movement must take place in such a manner that meets customer
demands regarding delivery performance and shipment information availability.
PRODUCT STORAGE
Temporary storage in stationary vehicles or vehicles kept moving on a
circuitous route product storage is expensive in transport vehicle. But
sometimes keeping overall cost in mind this is adopted.
When unloading and loading is more expensive than storage
When storage space is limited. (situation when inventory levels are very
high)
49

PRINCIPLES
There are two fundamental principles guiding transportation management and
operation. They are economy of scale and economy of distance.
ECONOMY OF SCALE refers to the characteristic that transportation cost per
unit of weight decreases when the size of the shipment increases.E.g. a
truckload shipment coats less per kg then less than truckload shipment. It
also generally true those larger capacity transportation vehicles such as rail or
water are less expansive per unit of weight than smaller capacity vehicles like
motor or air. Transportation economics of scale exit because fixed expenses
associated with moving a load can be spread over the loads weight. The fixed
expenses include administrative costs of taking the order, time to position the
vehicle for loading or unloading, invoicing and equipment cost. These costs are
fixed because they do not vary with shipment volume.
e.g. suppose the cost to administer a shipment is Rs.100 then the 1-kg
shipment has a per unit of weight coat of Rs.100 while the 1000 kg shipment
has per unit of weight cost of Rs. 0.01. Thus, it can be said that economy of
scale exists for the 1000-kg shipment
ECONOMY OF DISTANCE refers to the characteristics that transportation cost

per unit of distance decreases as distance increases.
50

E.g. a shipment of 800 KM will cost less than two shipments (of the same
combined weight) of 400 KM. transportation economy of distance is also
referred to a se tapering principle since rates or charges taper with distance.
The rationale of distance economics is similar to that for economics of scale.
Longer distances allow the fixed expenses to be spread over more KM, resulting
in lower overall per KM charge. These principles are important consideration
when evaluating alternative transportation strategies or operating practices.
The objective is to maximize the size of load and the distance that is shipped
while still meeting customer service expectation.
TRANSPORTATION INFRASTRUCTURE
Transportation infrastructure consists of the rights-of-ways, vehicles, and
carrier organizations that offer transportation services on far-hire or internal
basis. The nature of infrastructure also determines a variety of legal and
economic characteristics for each mode or multimodal system. A lode identifies
the basic transportation method or form.
Rail Network
Since olden times, railroads have handled the largest number of ton-miles. As a
result of the early establishment of a comprehensive rail network connecting
almost all the cities and towns, railways dominated the intercity freight tonnage
51

till world war II and in some cases of Europe, Asia and Africa they even
connected the countries. This early superiority enables railways to transport
large shipments very economically.
MOTOR CARRIERS
Highway transportation has increased rapidly since the end of World War II.
This is because motor carrier industry results from door-to-door operating
flexibility and speed of intercity movement. They are even flexible because they
can operate on each and every kind of roadways. In comparison to railroads,
motor carriers have relatively small fixed investment in terminal facilities and
operate on publicly maintained highways. Although the cost of license fees,
user fees, and tolls are considerable, these expenses are directly related to the
number of over-the road units and KM operated. The variable cost per KM for
motor carriers is high because a separate per unit and driver are required for
each trailer or combination of tandem trailers. Labor requirements are also
high because of driver safety restrictions and the need for substantial dock
labor. Motor carriers are beat suited to handle small shipments moving short
distance.
Water Transportation
It is the oldest mode of transportation. First it was the sailing vessels, which
52

was replaced by steamboats in early1800s and by diesel power in the 1920s.

Domestic water transportation involves the great lakes, canals, and navigable
rivers. In every country, fewer system miles exist for inland water than any
other transportation mode.
The main advantage of water transportation is the capacity to move extremely
large shipments. Water transport employs 2 types of vessels. Deep-water
vessels, which are generally designed for ocean and great lakes use, and are
restricted to deep-water ports for access, in contrast, diesel-towed barges,
which generally operate on rivers and canals, have considerably more flexibility.
Water transport ranks between rail and motor carrier in the fixed cost aspect.
Although water carriers must develop and operate their own terminals, the
right-of-way is developed and maintained by the government and results in
moderate fixed costs as compared to railways and highways
The main disadvantage of water transport is the limited range of operation and
speed. Unless the origin and destination are adjacent, supplement haul by rail
or truck is required. The capability to carry very high cargo at an external low
variable cost places this mode of transit is secondary consideration.
AIR TRANSPORT
Air transport is the newest and the latest utilized mode of transport. Its major
advantage being its speed, which is accompanied by high costs. A coast-to
53

coast shipment via air requires only a few hours contrast to days taken by other
mean of transportation. The high cost of transport can be traded off for high
speed, which allows other elements of logistical design, such as warehousing,
inventory to be reduced or eliminated. But still air transport remains more of a
potential opportunity than a reality because it is very much underutilized.
The high cost of jet aircraft, coupled with erratic nature of freight demand, has
limited the assignment of dedicated planes to all-freight operations. However
premium service started off with documents and has moved onto large parcels,
which is an ideal service for firm with a large number of high-value products
and time-sensitive service requirements.
FOR FLIPKART.COM
FLIPKART.COM uses all the modes of transportation that is
Airways
Roadways
Waterways
Rail freight
FLIPKART.COM has its own transportation vehicles for transportation on road.
Once again the geographical location and how fast the goods have to be
54

delivered are the factors for the final selection of modes of transportation. The
concept of economies of scale and economics of distance are both take into
consideration in case of larger consignment where FLIPKART.COM provides an
appropriate logistical solution, which helps in reducing the overall cost for
them.
INVENTORY MANAGEMENT AND WAREHOUSING

Inventory is an unused asset, which lies in stock without participating in value
adding process. Unused equipment, raw material, WIP and finished goods,
consumables, spare parts, bought out parts, tools and tackles, gauge and
fixtures etc. In India 9 to 12 months of sales quantity lies in the form of
inventory [R/M, WIP, Bought out parts and finished goods] as against a few
days in japan and a month in the US and Europe. In our country inventory is
always viewed as asset [working capital], in fact, though it is called an asset, it
is big liability.
Warehousing was a customers function conventionally anywhere in the world.
Customer to protect himself from shortages at the time of inclement weather
always used to store provisions and other utilities in his house. Consumers
own stores provisions and other utilities in his house. Consumers own stores
were underground cellars, smoke house to store variety of items. Poor
55

communication infrastructure was mainly the cause for this storage by

customer.
Producers
and
tradesman
conveniently
shrugged
off
their
responsibility for storage and passed it on the customer who was left with no
option. Traditional concept of warehouse as store or godown has undergone
major change now. Warehouse is considered a value adding facility now, playing
a remarkable role as a function of logistical management.
Warehouse infrastructure network
Warehouse management solution
Inventory optimization
Special warehouse solution
Outsourcing projects
WAREHOUSE INFRASTRUCTURE NETWORKS

FLIPKART.COM warehouse service supports inbound logistics, distribution and
aftermarket services in a way that improves inventory management, reduces
total operating costs and improving cycle times.
FLIPKART.COMs warehouse is fully integrated into the wider supply chain and
meets the demand. This encompasses the design implementation and operation
for both dedicated and multi user sites.
56

BENEFITS INCLUDE IMPROVEMENTS IN

Customer satisfaction
Stock accuracy
Lead time
Redundant stock costs
Productivity responsiveness to a companys strategic needs
2. Warehouse management solutions
The warehouse management system (WMS) records all events and actions in
the receipt, handling and storage of products and orders in a warehouse
environment. The WMS also accurately records the location of inventory whilst
stored in the warehouse.
3.Inventory Optimization
Trough effective inventory management, inefficiencies can be driven out of the
supply chain, overall costs reduced and high service levels achieved. They
optimize inventory at a line-item level at every stage of the supply chain.
FLIPKART.COM focuses on driving results in
Suppliers management
Expediting
Order replenishment
Demand forecasting
57

Safety stock setting

Order pipeline monitoring
Excess stock management
Inventory optimization is supported by inventory management software that
calculates line item risk profiles that measures the variability of demand and
supply for each line item within a customers inventory.
CUSTOMER PERCEPTION MEASUREMENT

To succeed in any activites of business one has to always cater to and satisfy
the needs of the customer. To do so, it is essential for one to know how the
customer thinks in order to meet his needs in a more satisfying manner.
Therefore, an important component of leading edge logistical performance is
the regular measurement of customer perception. Such measures can be
obtained through surveys or by systematic order follow up. These surveys can
be company or industry sponsored. Such surveys ask questions regarding
the firms and the competitors performance in general or for a specific order in
particular. Most of the surveys incorporates measurement of customer
perceptions
regarding
availability
performance-cycle
time,
information
availability, problem resolution and product support. The survey may be

developed and administered by the firm itself or by consultants, delivery agents
58

or industry organizations.
ANALYSIS AND FINDINGS

Q1. How do you manage your supply chain?
Close Partnership With Suppliers
Close Partnership With Customers
JIT Supply
EDI
38
42
12
8
INTERPRETATION:
38% of the respondents are satisfied by the close partnership with suppliers
and 42% are satisfied with the close partnership with customers.
59

45
40
42
38
35
30
25
20
15
12
8
10
5
0
Close Partnership With Suppliers
JIT Supply
Q. 2. How successful do you think is your company in managing its supply

chain in general?
Not Successful at all

Not Successful
Somewhat successful
Successful
Very Successful
4
18
49
23
6
60

INTERPRETATION:
49% of the respondents belive that their company is somewhat successful and
23% do belive that their company is successful whereas 4% dont belive in the
success of company in managing its supply chain.
60
49
50
40
30
10
23
18
20
Q. 3. . Do you have effective supply chain management in your company?

Yes
No
78
22
INTERPRETATION:
78% of the respondents are satisfied with the supply chain management in the
company whereas 22% do think that their company is still uneffective in their
management.
61

90
80
78
70
60
50
40
30
22
20
10
0
Yes
No
Q. 4. Who according to you follow the best branding strategies?
Flipkart.com
snapdeal
Others
68
27
5
INTERPRETATION:
68% of the respondents follow the branding strategies of Flipkart.com and 27%
follow the snapdeal.
62

Q5. In a month how many times you visit Flipkart.com.com?

Once
Twice
Thrice
More than Thrice
As per requirement
7
23
8
25
37
INTERPRETATION:
Out of 100 respondent, 37% people visit the store when they have some
requirement and 25% are visited more than thrice, 23% visited two times in
63

month and 7% & 8% people visited one and three times in a month
respectively. Most of them regularly visit Flipkart.com.com.
40
35
30
25
20
15
10
5
0
37
25
23
Q6. Your shopping experience in Flipkart.com is always!

Outstanding
Excellent
Good
Average
Bad
1
21
43
32
3
INTERPRETATION:
64

Out of 100 respondent, 43% people has good shopping experience in

Flipkart.com.com, 32% has average and 21% people has excellent. But 1% has
outstanding shopping experience and 3% has bad shopping experience.
50
43
45
40
35
32
30
25
21
20
15
10
5
0
Outstanding Excellent
Good
Average
Bad
Q7. Brands and products availability in Flipkart.com is !

Outstanding
Excellent
Good
Average
3
28
44
22
65

Bad
INTERPRETATION:
Out of 100 respondents, Over all 31% customer are satisfied by the availability
of brand and products in Flipkart.com, 66% customer product availability is
average rest said it is bad. Some people think there is no good brands and
products availability in big snapdeal. Especially in apparels.
50
44
45
40
35
28
30
25
22
20
15
10
5
0
Good
Average
Bad
Q8. Discounts and offers served in Flipkart.com is !

Outstanding
Excellent
7
32
66

Good
Average
Bad
36
23
2
INTERPRETATION:
Out of 100 respondents, Discounts and offers served in Flipkart.com is good
said by 36% customers, 32% feel it is excellent and only 7% feel outstanding.
But 25% customers are not satisfied by Discounts and offers served in the
Flipkart.com.
40
36
35
32
30
23
25
20
15
10
0
Good
Average
Q9. Home delivery services of Flipkart.com is !
67
Bad

Outstanding
Excellent
Good
Average
Bad
7
32
36
23
2
INTERPRETATION:
Out of 100 respondents, Maximum number of respondent i.e. 64% is satisfied
by Home delivery services of Flipkart.com rest 36% is not satisfied. Some
customer never used this facility.
40
36
35
32
30
23
25
20
15
10
0
Good
Average
Q10. Location of Flipkart.com in your city is !

68
Bad

Outstanding
Excellent
Good
Average
Bad
7
32
36
23
2
INTERPRETATION:
Out of 100 respondents, 61% is highly satisfied with location of Flipkart.com in
city, 22% is satisfied and only 17% is not satisfied.
40
36
35
32
30
23
25
20
15
10
0
Good
Average
69
Bad

Q11. Product display and signage in the store is !

Outstanding
Excellent
Good
Average
Bad
8
36
40
14
2
INTERPRETATION:
Product display and signage in the store is highly satisfactory according to 44%
of the respondent, satisfactory according 40% of the respondent rest 16% are
not satisfied with it. Customers are satisfied with Product display and signage
in the store.
45
40
40
36
35
30
25
20
14
15
10
0
Good
Average
70
Bad

FINDINGS
Significant losses/damages during shipping
The next problem in setting up organized retail operations is that of supply
chain logistics. India lacks a strong supply chain when compared to Europe or
the USA. The existing supply chain has too many intermediaries: Typical
supply chain looks like:- Manufacturer - National distributor Regional
distributor - Local wholesaler - Retailer -Consumer. This implies that global
retail chains will have to build a supply chain network from scratch. This might
run foul with the existing supply chain operators. In addition to fragmented
supply chain, the trucking and transportation system is antiquated. The
concept of container trucks, automated warehousing is yet to take root in India.
Inadequate infrastructure
The lack of proper infrastructure and distribution channels in the country
results in inefficient processes. This is a major hindrance for retailers as a nonefficient distribution channel is very difficult to handle and can result in huge
losses. Infrastructure does not have a strong base in India. Urbanization and
globalization are compelling companies to develop infrastructure facilities.
71

The storage infrastructure, too, is severely restricted. In 2006, India had a total
warehousing capacity of 81 million tones. Like the rest of the infrastructure
sector, warehousing is highly fragmented and unorganized transportation,
including railway systems, has to be more efficient. Highways have to meet
global standards. Airport capacities and power supply have to be enhanced.
Warehouse facilities and timely distribution are other areas of challenge. To
fully utilize India's potential in retail sector, these major obstacles have to be
removed.
Almost 78% of total freight is transported by road.

Almost 78% of total freight is transported by road. But, according to the FICCIE&Y retail report, roads connect less than half of the half a million Indian
villages. The normal distance covered by trucks and trailers in India are 250300 km a day, whereas the international norm is 600- 800 km a day. Most
roads in India are designed to carry a maximum gross weight of 16.2 tones,
which allows for a maximum loading of about 9 tones. This severely restricts
the ability to transport goods on larger vehicles.
Warehouses located far from city
72

Some of the warehouse are located in villages and are far from the city so it
takes time for goods to reach mall.
SUGGESTION
Improvement in supply chains: Flipkart.com should use better techniques for improvising its supply chains.
The organizational structure and the business model of Wal-Mart are its
winning- formula for some markets. But this also dooms it to failure in others.
The heart of the matter is high-volume-low-cost strategy, which made it a
success in cost-conscious smaller, everybody-knows-everybody cities in the US.
But this very strategy doomed it to failure in larger (anonymity, high
consumerism) cities in the US. A very high real estate cost in big cities was also
detrimental to its strategy in such cities.
Warehouse location: -
73

Though it is a cost cutting formula of Flipkart.com, but now the Indian

scenario has changed. Though it has its own logistics called Future logistics, it
should try some other ways to improve its in housing of goods. Many a times it
happens that goods are not available to customers as the time taken between
ordering and processing is very long.
Improvement in packaging: Flipkart.com should ask suppliers to send goods with good packaging so that
losses due to breakage should be avoided. Moreover its own handling and
carrying should be improved.
Infrastructure
Internal warehouse of Flipkart.com has very low capacity. Its completely hochpoch. Due to insufficient space of storage losses are very frequent. Shop lifting
especially internal is very high. It should allow its suppliers to have a track of
their goods so that when stock finishes they will automatically supply.
74

CONCLUSION
A credible rival can do wonders to an enterprise and Flipkart is no different.
The entry of Amazon in India has enabled Flipkart develop a lot of in-house
75

innovation and organically developed best-practices - that have now become the
industry standard.
Flipkart began operations on the consignment model; goods were procured
from suppliers on demand, based on the orders received through the website.
Later, the books-to-electronics e-shop adopted the warehouse model. The
company had its own warehouses, and maintained its own inventory. However
in July 2013, Flipkart launched its model of marketplace just one month after
Amazon launched its marketplace in India.
It introduced payments brand PayZippy for online merchants and customers
seeking fast, hassle-free and safe payment options. Some 70 per cent of its
shipments are done by its own logistics company and about half of deliveries
are on a cash-on-delivery basis.
Flipkart has recently introduced the next day guarantee delivery service and
shopping from its own mobile application. Given the critical mass of
transactions Flipkart controls - about 100,000 a day - the company is betting
76

that it has the volumes to lay the foundation of what will be a profitable
business.
Last but not the least; Flipkart has very clearly prioritised customer delight as
its chief avenue for customer acquisition and retention. This causes them to
build a lot of slack into their existing systems causing higher costs at several
points in the supply chain. How they address this challenge is what will
determine their future success.
77

QUESTIONNAIRE
1. How your company needs to do in order to manage its supply chain better?
2. What types of systems are currently in use in your company to support
Supply Chain Management?
3. How much did you actually benefit from using these systems?
4. Do you have effective supply chain management in your company?
Yes [ ]
No [ ]
5. If yes, which process have you used?

6. If No, Do you have any improvement.
Yes [ ]
No [ ]
7. How do you manage your supply chain?

a. Close partnership with suppliers
b. Close partnership with customers
C. JIT supply
d. EDI
8. . How successful do you think is your company in managing its supply chain
in general?
a. Not successful at all
b. Not successful
c. Somewhat successful
d. Successful
e. Very successful
78

9. Brands and products availability in flipkart.com is !

a) Outstanding
c) Good
b) Excellent
d) Average
e) Bad
10. Discounts and offers served in flipkart.com is !

a) Outstanding
b) Excellent
c) Good
d) Average
e) Bad
REFERENCES
BOOK REFERRED:
1. Philip Kotler, Kevin Keller (2009), Marketing Management
(Thirteenth Edition)
2. Marketing Management, The McGraw.Hill Company Rajan
Saxena (Third Edition)
3. Berman, Berry and Joel r Evans (Oct- 1997) Retail Management:
A strategic approach 8th edition Englewood cliffs NJ printcehall
4. Research methodology (C.R. Kothari)
5. Retailing Management (Levy & weitz)
WEB SITES:
http://www.flipkart.com/
www.wikipedia.org
79

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AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

point of consumption in order to meet customers requirements rather to the

collaboration with channel partners, which can be suppliers, intermediaries,

management integrates supply and demand management within and across

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

and participate in strong supply chains will have substantial competitive

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

and sales expenses.

OBJECTIVES OF THE STUDY

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

To know the effectiveness of logistics management of flipkart.com and to

SCOPE OF THE STUDY

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

It aims at understanding the company's establishment. Organization

advantages it is having over the competitors.

LIMITATION OF THE STUDY

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

DEVELOP RESEARCH PLAN

PRESENT THE FINDINGS

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

logistics require further investment and third parties are operationally

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

In India, cash on delivery is the most preferred payment method, accumulating

Market size and growth

Increasing broadband Internet (growing at 20% MoM), 3G penetration,

Rising standards of living and a burgeoning, upwardly mobile middle

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

by disintermediation and reduced inventory and real estate costs

Increased usage of online classified sites, with more consumer buying

like Jabong.com, Flipkart, Snapdeal and Infibeam.

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and

change their business models to survive.[16]

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

the near future. In fact, Indian government is planning to introduce cyber

nutraceuticals, Bitcoin, Ayurvedic

payment, online poker, etc. are violating laws of India.

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

unique proposition of giving customers an option paying Cash on Delivery

and Business Development Operations

Product and Technology Team

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

Business Development Team

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

customer buys a book only to read it and then return it

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

AN EVALUATION OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

Flipkart.com has 7 major warehouses spread across the country in Mumbai,