Report On The Supply Chain & Operations of Flipkart: Sagyan Thapa (77224623)

Report on The Supply Chain & Operations of Flipkart
Sagyan Thapa (77224623)

i
TABLE OF CONTENTS:
ACKNOWLEDGEMENT................................................................................................................i
LIST OF FIGURES........................................................................................................................iii
EXECUTIVE SUMMARY............................................................................................................iv
1. INTRODUCTION TO THE COMPANY:...........................................................................1
1.1. Flipkart at the present:.......................................................................................................1
2. SUPPLY CHAIN & SUPPLY CHAIN MANAGEMENT (SCM):....................................2
2.1. Supply chain of Flipkart:...................................................................................................2
2.2. End to End Operations & Process Map of Flipkart:.........................................................3
2.3. Hurdles & Bottlenecks in the Process:..............................................................................6
3. LITERATURE REVIEW:.....................................................................................................8
3.1. Industrial Revolution, Industry 4.0 & Servitization:.........................................................8
3.2. Impact on Supply Chain:...................................................................................................9
3.3. Benefits, Drivers, Barriers & Relevancy in today’s context:..........................................10
4. INDUSTRY 4.0 & SERVITIZATION FOR FLIPKART................................................11
4.1. Scenario in India:............................................................................................................11
4.2. Context of Flipkart:.........................................................................................................12
4.3. Drivers for I4 & Servitization:........................................................................................12
4.4. Benefits from I4 & Servitization:....................................................................................15
4.5. Barriers for I4 & Servitization:.......................................................................................16
5. CONCLUSIONS & RECOMMENDATIONS..................................................................17
5.1. A Sustained Competitive Advantage for Flipkart:..........................................................17
5.2. Recommendations:..........................................................................................................17
6. REFERENCES:....................................................................................................................18

ii
LIST OF FIGURES
Figure 1-1:India's estimated E-commerce gross sales by 2023 (Source – Business Insider, 2019)
& Market Shares of Gross Merchandise Value (Source - Content.co, 2020)..................................1
Figure 2-1: Schematic Diagram of a Supply Chain (shaded) with the total Supply Chain Network
(Source - Vorst, 2004).....................................................................................................................2
Figure 2-2: Typical E-commerce Supply Chain & Logistics Model (Source - Hesol Consulting).3
Figure 2-3: Process Map of Order Fulfillment – Flipkart................................................................4
Figure 2-4: Process map for Inventory level maintained of High demand products by IMS -
Flipkart.............................................................................................................................................5
Figure 2-5: Process Map of Inventory Management system & Warehouse Management System -
Flipkart.............................................................................................................................................6
Figure 3-1: The fourth Industrial Revolution (Source - Kagermann et al., 2013)...........................8
Figure 3-2: Characteristics of industry 4.0 (Source - Tay et al.,2018)............................................9
Figure 3-3: Levels of Supply Chain (Source - Tjahjono et al., 2017).............................................9
Figure 4-1: Growth Potential of E-commerce in India by 2027 ( Source - IBEF, 2019)..............11
Figure 4-2:Indian E-commerce market FY2012- FY22E in billion USD (Source- PWC India,
2018)..............................................................................................................................................11
Figure 4-3: Newly deployed Automated Guided Vehicles (AGV) help Flipkart employees
process 4,500 packages per hour (Source - Flipkart Stories, 2019)..............................................12
Figure 4-4: Inauguration of State of the art 'Green Datacenter' at Hyderabad (Source - Flipkart
Stories, 2019).................................................................................................................................12
Figure 4-5: Retail E-commerce revenue forecast from 2017 to 2024 of India (Source - Statista,
2019)..............................................................................................................................................13
Figure 4-6: Population Pyramid & Disposable Income of India 2017-2022E (Source – PWC
India, 2018)....................................................................................................................................13
Figure 4-7:Number of Internet Users in India (Source - Statista, 2019).......................................14
Figure 4-8: Internet Penetration Rate of India (Source - Statista, 2020).......................................14
Figure 4-9:Sector Composition in E-commerce of India (Source - IBEF, 2019)..........................14

iii
EXECUTIVE SUMMARY
Flipkart is one of the top e-commerce company in India.

With a wide distribution network & supply chain, Flipkart
has secured a strong market presence in India, delivering
& managing shipments throughout the country. The
company has grown rapidly, developing capabilities to
rival domestic & subsidiaries of international companies
in the Indian E-commerce.This dominance over the e-commerce market is a result of its supply
chain, supply chain management and investments in artificial intelligence, data-driven
infrastructure & automation, a first for an Indian company. Flipkart has thus been able to signify
the importance of such technologies in the future of E-commerce in India.
This report illustrates& elaborates on the Supply chain &
End-to-End operations of Flipkart through process maps,
highlighting hurdles & bottlenecks in the process.
Further, reviewing literature on Industry 4.0
&Servitization, the report presents the drivers, benefits &
barriers for industries (including Flipkart) in adopting this
way of work while commenting on the relevancy of
existing practices. Finally, the report concludes on
sustaining a competitive advantage by recommending
ways Flipkart can further develop competency in such
technologies overcoming barriers for I4 &Servitization.
The Suppliers&Distribution network are fundamental for the success& popularity of an e-retailer
like Flipkart. It ensures availability & efficient delivery of products with minimum delays in
fulfilling orders & shipments. Further as an e-retailer, the End to End operations of Flipkart
consists of Procurement, Inventory & Warehouse Management, Order fulfillment, Logistics &
Reverse Logistics. However, with capabilities of 8 million shipments a month, the operations of
Flipkart still have limitations (bottlenecks).
Some of the hurdles & bottlenecks identified in the operations are:
 Customer data & data analysis.
 Transportation &Warehouse Storage limitations.
 Inwards processing, Scanning & Quality checking.
 Package Segregation.
 Logistics Failure & Reverse Logistics.

iv
Industry 4.0 fueled by Cyber-physical Systems & IoT in manufacturing withServitization,

shifting product-centric firms to service-centric model through Product-Service Systems (PSS)
challenge the relevancy of existing practices in value addition. They present significant impact
on the supply chain while transforming the way of doing business.
For Flipkart the drivers for such transformation in business can be:
 Popularity of digital services& digitization.
 Growing economy&Customer expectation.
 Increased smartphone/Internet users (digital users).
 Tough competition.
While the barriers can be:
 Lack of legislations, standards & policies.
 Lack of Infrastructure growth & Challenge of scope.
 Lack of Qualified workers.
 Lack of Integration.
 Lack of In-house competency.
However, by initiating AI & automation, Flipkart has gained significant benefits in operational
efficiency & customer satisfaction. It has enabled them to deliver an enhanced shopping
experience like no other in the Indian e-commerce.
With further investments, Flipkart must focus on developing competency, training qualified
workers, maximizing integration & minimizing disparity in their operations& operational
components. This can create a distinctive competence, eventually leading to a sustained
competitive advantage reinforced by the benefits & efficiency brough up by Industry 4.0
&Servitization.
Hence, Flipkart with such transformation in business & operations can secure the ‘First &
Fast mover’ advantage shaping the E-commerce future of India.

v
1. INTRODUCTION TO THE COMPANY:
Established by Sachin Bansal &Binny Bansal in 2007, Flipkartis one of the

fastest growing e-commerce company inIndia.With thevision of becoming
‘the Amazon of India’, Flipkart strives in providing its customers with a
hassle-free shopping experience combined with the best deals at competitive
prices. Core values of Customer obsession, Bias-for-action, Audacity&
Integrity drives Flipkart (Flipkart Stories, 2020).
Flipkart primarily competes against other domestic and International subsidiaries such as
Snapdeal & Amazon.in,focusing on Indian e-commerce.
1.1. Flipkart at the present:

Initially, an online bookseller popularizing online book sales in India, Flipkart has rapidly grown
its portfoliooffering80+product categories with over 80 million products ranging from books to
consumer electronics. The technological & operational capabilities of Flipkart enable 8 million
shipments/month,connecting 100,000 sellers with 100 million registered users through its online
platform (Flipkart, 2020). With daily page visits of 10 million users, maintaining efficiency in
Business operationsis a monumental task.
Since its acquisition by Walmart in 2018 (77% stakeholder) for $16 billion U.S.D., Flipkart is set
to lead the e-commerce marketplace with a projected online sale of $14.9 billion by 2023 over
Amazon’s $11.7 billion (Business Insider, 2019). The company valued at $29 billion in 2018 is
projected to be worth $65billion by 2023 (Business Insider, 2019). Currently, Flipkart holds 47%
share of gross merchandise value followed closely by Amazon at 33% (Content.co, 2020).
With recent investments in Artificial Intelligence &Automated systems, Flipkart is taking an
initiative towards the future of e-commerce in India(Flipkart Stories, 2019).
Figure 1- 1:India's estimated E-commerce gross sales by 2023 (Source – Business Insider, 2019) & Market Shares of Gross
Merchandise Value (Source - Content.co, 2020)

2. SUPPLY CHAIN & SUPPLY CHAIN MANAGEMENT (SCM):
“Supply chain is a sequence of (decision making & execution) processes & (material,
information & money) flows aimed to meet final customer requirements taking place within &
between different supply chain stages” (Vorst, 2004).
Figure 2-2: Schematic Diagram of a Supply Chain (shaded) with the total Supply Chain Network (Source - Vorst, 2004)
“SCM is the integrated planning, co-ordination & control of all business process & activities in
supply chain delivering superior customer value, lowering cost while satisfying interests of
stakeholders in supply chain” (Vorst, 2004).
‘Delivery of the right product, at the right place, at the right time with the right price.’
2.1. Supply chain of Flipkart:

Flipkart deals with buying & selling products through electronic systems where,SCM stretches to
all activities from demand to supply. Important components of Flipkart’s supply chain are:
i. Supplier Base & Product Base:The availability of assortment of products,enabledby a
well stablished network of sellers and suppliers,factorsin the popularity & success of an
online retailer.
With a strong network of 100,000 sellers, Flipkartensures availability &diversity of
products at competitive prices to its customers.
ii. Infrastructure & Distribution Networks:Reduced delays & Timely deliveriesare

equally importantwhere;an effective distribution network reduces both delivery time&
costin supply chain.
With 21 advancewarehouses, 100s of distribution hubs/stations spread acrossIndiawith
multiple 3rd party logistic partners (3PLs), Flipkart has a strong infrastructure & network
for effective operations.

Figure 2-3: Typical E-commerce Supply Chain & Logistics Model (Source - Hesol Consulting)
2.2. End to End Operations & Process Map of Flipkart:

TheOperations division is tasked with procurements, inventory&warehouse management,
logistics, reverse logistics& 24/7 customer support.Flipkart’s operationsconsist of:
Procurement:Initially, Flipkartheld inventory owned by the supplier & only bought items when
sold(Consignment model). But now Flipkart lets buyers directly deal with sellers, managing
delivery (Marketplace model).Inventory is managed based on sales data (Demand forecasting &
Supply planning) where,High demand items are stocked in warehouses while low demand items
are procured on an order to order basis (JIT procurement). Once items are procured & stocked in
Inventory, they are available forpurchase via the online platform. Inventory & orders are tracked
& maintained in real-time by the Inventory& Order management system (IMS& OMS), meaning
the product availability & delivery status can be checked by customers instantly.
Order Fulfillment:The Order Fulfillment processstarts when an order is placedby a customer &
ends when the item is delivered to the end consumer.It involves the following steps.
 Order is placed,Automatic order receipt is generatedby OMS.
 IMS checks for product at the nearest warehouse.
i. If the product is available,

 Picklist is generated & handled to an associate.

 Product is packaged &delivered.
ii. If the product is unavailable,
 Inventory is checked at other warehouses.
 If product is not in the inventory (including orders to marketplace sellers), itis
procured through Regional Procurement Team (RPT) or further through Central
Procurement Team (CPT) by Just-in-time (JIT) procurement from sellers & suppliers.
 Finally,the item is packaged & delivered.
Figure 2-4: Process Map of Order Fulfillment– Flipkart
Flipkart manages mainly two types of shipments:

i. Flipkart Advantage shipments (FA Shipments):Products ordered by customers which
are readily available at Flipkart’s warehouses.
ii. Non-Flipkart Advantage shipments (Non-FA Shipments):Products ordered by
customers which are available at marketplace sellers registered with Flipkart.

The FA shipments can be fulfilled within 2-5 days depending on the distance from the nearest
warehouse. However, Non-FA shipments can take 15 days depending on the availability at
selleror manufacturer.
Logistics & Reverse Logistics: This consists of all processes related to the transportation of
goods to and from the customer. Flipkart must handle the delivery of goods (Logistics) & return
of goods (Reverse Logistics) through in-house logistics E-kart or through third party logistic
partners (3PLs).
Inventory Management & Warehouse Management:
The inventory level (stocks) for high demand products are determined and maintained by the
Inventory Management System as illustrated below:

Figure 2-5: Process map for Inventory level maintained of High demand products by IMS - Flipkart

Figure 2- 6: Process Map of Inventory Management system& Warehouse Management System - Flipkart
2.3. Hurdles &Bottlenecks in the Process:

Flipkart ships 8 million shipments every month (Flipkart, 2020).However, as E-commerce gains
traction in India, unique challenges ariseassociated with the online model &business operations.
1. Customer Data&Database Analysis:User database &informationis pivotal fordemand
forecasting ultimately leading into demand-supply planning which ensures
optimumstocksforfulfillingmarket demands.
91% Flipkart users stay anonymous (Guesswork, 2017), creating unreliable user data
cascading problem in SCM such as:

2. Transportation& Storage: Though electronic systems enable fast communication of

information; transportation & storage still presentphysicalbottlenecks.
 Transportation capacity &infrastructure affects efficient delivery as Indian
companies largely rely on roadway. “30 Km Intra-city roads take upto 3 hours to
cover” – Sharma, VP of Ekart, Logistics arm of Flipkart (Yourstory, 2017)
 Warehouse Storage capacity& limited Rack spacesaffect efficiency.
3. Inwards Processing, Scanning& Quality checking:

 Manual nature of tasks in Inward processing, scanning & quality checking factors
in performance time.
4. Package Segregation:
 Careful handling & Sorting Packagesbased on delivery partner and destination
hub is time consuming.
5. Logistical Failures, Reverse Logistics& Troubleshooting:

 Order cancellation&Cart abandonment create issues in logistics.
 Product returns (reverse logistics) create bottlenecks in new order fulfillments&
shipments (Overburdens logistics function).
 Troubleshooting Order placements is time consuming.

3. LITERATURE REVIEW:
3.1. Industrial Revolution, Industry 4.0 & Servitization:

Signifying the beginning of a new industrial paradigm, the term‘Industrial Revolution’ defines
periods of technological changes with high impact on society(Klingenberg & Antunes, 2017).
Industry 4.0 represents one such emerging technological revolution.
Figure 3- 7: The fourth Industrial Revolution (Source - Kagermann et al., 2013)
First coined in 2011, the term ‘Industry 4.0’ marks the digital transformation of manufacturing
(Klingenberg & Antunes, 2017).By enabling Internet of Things (IoT) intothe
manufacturingenvironment (Tjahjono et. al., 2017), it interconnects equipment & facilities
throughout the supply chain (SICK, 2016). With technological foundations of Cyber-Physical
Systems (Srivastava, 2016),Industry 4.0 promotes the use of Big data, IoT & Artificial
Intelligence (Tjahjono et. al., 2017).
Industry 4.0 is a step beyond the digital era (SICK, 2016), an era of automation, digitalized
factory & digitalized products (Tay et al., 2018).
Industry 4.0 allows 3 levels of integration (Tay et al., 2018).
 Horizontal integration: Frames worldwide value chain network.
 Vertical integration:Hierarchical subsystems bringing flexibility in production.

 Engineering integration:End-to-End value chain for product customization.
Figure 3- 8: Characteristics of industry 4.0 (Source - Tay et al.,2018)
While Industry 4.0 adds value to manufacturing(Frank et al., 2019),another trendseeks adding
value to the customer.The process of creating value by adding services to product is termed
as‘Servitization’(Vandermerwe and Rada,1988). Globalization, uncertainty & tough
competition has led firms to pursue personalized solutions (Martin-Pena et al., 2019).Such shift
towards provision of integrated solutions helps achieve greater customer satisfaction (Storbacka,
2011).
3.2. Impact on Supply Chain:

The way of doing business will change through extensive application of Information Technology
(Porter &Heppelmann, 2014).Industry 4.0 will arise opportunities in supply chain levels
regarding warehouse management, order fulfillment, transport logistics & procurement functions
(Tjahjono et al., 2017; Pfohl et al., 2015).

Figure 3- 9: Levels of Supply Chain (Source - Tjahjono et al., 2017)
Supply chain empowered by Industry 4.0 will develop capabilities of Device level operational
status visibility, Interconnectivity & transparency throughout all levels, Efficient Autonomous
performance requiring minimal human intervention & Predictive analysis of data enabling
proactive decision making (SICK, 2016).
3.3. Benefits, Drivers, Barriers &Relevancy in today’s context:

Though emerging concepts, Servitization &Industry 4.0 can benefit firms through digital
transformation, enabling business model innovation (Frank et al., 2019).Additionally,
Digitalization facilitates emergence of digital business model (Martin-Pena et al., 2018)&
mediates between Servitization &enhanced firm performance (Martin-Pena et al., 2019).
Further, benefits such as increased flexibility, quality standards, efficiency & productivity
(Tjahjono et al., 2017), underpin the relevancy of such transformational trends.Apart from
providing array of viable solutions for growing needs in manufacturing (Dohale& Kumar, 2018),
this will enable mass customization, fulfillment of customer demands & value creation through
new products and services(Tjahjono et al., 2017).A whole new level of control, organization&
transformationcan be introduced to the entire value chain, resulting in higher productivity &
flexibility with horizontal, vertical & engineering integration(Tay et al., 2018).Such
technological advancements push towards Digital Supply Chain or‘Supply Chain 4.0’(Tjahjono
et al., 2017).
Digitalization acts as both an enabler & driver for Servitization (Martin-Pena et al., 2019). The
need for differentiation & demand for customized services drive Servitization as, intangible
dimensions are peeking customer interest (Confente et al., 2015). Information & Communication
Technologies also play a huge role for enabling such services (Kryvinska et al., 2014).
Further,installation & configuration of appropriate blend of intelligent sensor & AIDC solutions
are required for Industry 4.0 supply chain (SICK, 2016). Factors such as Data capture process,
Customers’ expectations & Service level compliance determine Industry 4.0 readiness (SICK,
2016) while,successful implementation relies on technical advancements, economic scenario &
demography, like previous revolutions (Klingenberg & Antunes, 2017). The acceleration of

Industry 4.0 into practice would benefit from further empirical & human machine interfacing
research (Dohale& Kumar, 2018).
However, Servitization can face challenges from Organizational Structure, Business model,
Development process, Customer & risk management (Zhang, 2017). Complexity, heightened risk
& lack of digital capabilities further restrict firms towards product-service systems as each
successive level of servitization requires greater levels of digitalization (Martin-Pena et al.,
2019).
In today’s turbulent times, current practices struggle sustaining a competitive advantage
for firms. ‘Technological revolutions’&‘Transformational trends’will continue shaping the
future for manufacturing where Industry 4.0 and Servitization will be the norm.
However, significant investments & developments are needed to attain such data-driven
future. Initiatives have been made but many challenges & barriers are yet to be conquered.
4. INDUSTRY 4.0 & SERVITIZATION FOR FLIPKART
4.1. Scenario in India:

AsIndiaeagerly embraces digital transformation, e-commerce secures significant growth
potential to $200 billion by 2027. Much of this growth is fueled by increased internet &
smartphone users while internet availability improves throughinvestments in IT infrastructure
throughout the country (IBEF, 2019). India as,
 Second Largest online market worldwide in 2019 (Statista, 2019)
 Expected to surpass the US e-commerce by 2034 (IBEF, 2019).
Figure 4- 10: Growth Potential of E-commerce in India by 2027 ( Source - IBEF, 2019)

Figure 4-11:Indian E-commerce market FY2012- FY22E in billion USD (Source- PWC India, 2018)
However, immense growth on the horizon can also invite challenges in fulfilling demands of
growing e-commerce customers. This is where I4 &Servitization plays a pivotal role.
4.2. Context of Flipkart:

Flipkart’sembracing groundbreaking technology overcomingbottlenecks in delivery time &
accuracywith AI-powered bots (AGVs) at its sortation center in Bengaluru (Flipkart Stories,
2019). Further, two AI-powered datacenters (one newly opened in Hyderabad)helpsimprove
services to sellers & customers (Flipkart Stories, 2019). Focused
onimprovement&expansionofE-commerce, Flipkart has already identified the importance of
I4&Servitization insustained data-driven transformation of India.
Figure 4-12: Newly deployed Automated Guided Vehicles (AGV) help Flipkart employees process 4,500 packages per
hour(Source - Flipkart Stories, 2019)

Figure 4- 13: Inauguration of State of the art 'Green Datacenter' at Hyderabad (Source - Flipkart Stories, 2019)
4.3. Drivers for I4&Servitization:

Some of the drivers for such transformational change in Indian business are:
i. Increasing Investments &Popularity ofDigital platforms & services:
With online sales expected to grow to $66.2 billion by 2024 (Statista, 2019)& over $4.32
billion in private equity & venture capital investments in 2019 (IBEF, 2019), e-
commerce& digital service companiesaregaining popularity in India. Governmental
initiatives such as ‘Digital India’, ‘Start Up India’ & ‘Digital Udaan’ will entice more
digitally driven companies, building competency in I4 technology and Servitization.
Figure 4-14: Retail E-commerce revenue forecast from 2017 to 2024 of India (Source - Statista, 2019)
ii. Rising Economic Conditions& Customer Expectations:

With 220 million online shoppers expected by 2025, a younger demographic profile with
relatively better economic performance (IBEF, 2019)expectsbetter products & services
presenting opportunities for I4 & servitization.

Figure 4- 15: Population Pyramid & Disposable Income of India 2017-2022E (Source – PWC India, 2018)
iii. Increase inSmartphone& Internet Users:

With 859 million smartphone users by 2022 & 8% annual smartphone shipments (IBEF,
2019),Internet users are expected to increase to 666.4 million by 2023with over
50%Internet penetration (Statista, 2020). With affordable mobile devices, wider Internet
availability& investments in IT systems & infrastructures, I4 &Servitization will find
wider appeal as entry cost are significantly lowered.
Figure 4-16:Number of Internet Users in India (Source - Statista, 2019)

Figure 4- 17: Internet Penetration Rate of India (Source - Statista, 2020)
Figure 4-18:Sector Composition in E-commerce of India (Source - IBEF, 2019)
iv. Strong Competition:

Strong competition drives technological advancementas more companies will seek the
integration of I4 technologies& servitization into their business for quality, continuous
improvements, value creation & new opportunities.
Hence, the drivers for I4 & Servitizaiton are the ever-rising customer expectation, growing
digital users, strong competition& increasing investments in the E-commerce Industry.
4.4. Benefits from I4&Servitization:

With AI-powered datacenter & automation, Flipkart aims to resolve bottlenecks unique to the e-
retail ecosystem by building upon service differentiation, better user experience & automated
back-end processes (Content.co, 2020).

i. Benefits from In-house Data Analysis,

Cloud computing & machine learning:
The data analytics infrastructure has enabled:
 Data security & Information transparency.
 Understanding customer buying behavior,
Effective marketing.
 Detect fraudulent buyers.
Partnering with Microsoft & utilizing Azure, cloud-computing has enabled:
 OptimizingMerchandising &Order placement for big events.
 Resolving last-mile delivery, Order management issues& Optimizing city delivery routes.
(Delivery time reduced by 3 hrs)
 Creating personalized search, recommendations, suggestions, product grouping &
discovery for users. (Increase click-through rate by 10%)
 AI-driven Chatbots & virtual shopping assistance. (Increase Cart addition by 12%)
 Identifying gaps in product quality &operations.
ii. Benefits from Automated systems, Robotics& IoT:

AGVs& IoT sensors have enabled automation of otherwise
manual tasks (Yourstory, 2019). This helps to:
 Sort 4500 shipments/hour at twice the speed with
99.9% accuracy.
 Reduce delay, order fulfillment time & increase
efficiency.
 Free up manpower for task of higher value addition.
 Attain space efficiency.
I4 technologies have enhanced & created a custom-tailored shopping experience for
Flipkart users by improving quality&reducing delays. Customization of products &
services, customer focus& service-oriented principles (Servitization) havelessened product
returns & Cart abandonment (Content.co, 2020).
4.5. Barriers for I4 &Servitization:

Though the concept of I4 and Servitization has been around for years, its applications are yet to
mature for industries. Some of the barriers for a technologically driven industry are:
i. Lack of standards, policies & legislations:
 Fewer policies, guidelines & standardslimit scope of practice & implementation
for Industries,as I4 &digital servicesare relatively new in India.
 Hurdle for companies seeking a foot in I4 technologies & digitization of services.

ii. Lack of qualified workforce:

 Requires skilled & trained workforce for effective operations & troubleshooting.
 Less than 5% formally trained workforce in India (Countryview, 2018) challenges
adopting advance technologies into business operations.
iii. Infrastructural growth&Challenge of Scope:

 Requiresfutureproof infrastructure to supportimplementation.
 Significant gap between urban & rural context of India limits &challengesscope
for I4 and digitization.
iv. Lack of Integration:

 Though I4 facilities in decentralization, Interoperability, Information transparency
& technical assistance, efficient function requires predictability& precision.
 Technological gap between small-large firms, suppliers & sellers challenge such
integration.
v. Lack of In-house Competency:

 Requires organizational competency for adopting such technology.
 Relative newness for Indian businessespresents challenges for younger teams &
firms in its effective use.
Flipkart has initiated implementation through AI and automation but still needs to cover a
lot of ground& overcome barriers for such revolutionary transformation in business
practices.
5. CONCLUSIONS & RECOMMENDATIONS
5.1. A Sustained Competitive Advantage for Flipkart:

A sustained competitive advantage requires avaluable resource that adds value to the customer
& enables firm to explore new opportunities. The rarity & Imitability of the resource further
adds to the proposition. Finally, Organizational readiness & management must nurture such
values into the culture & value chain (VRIO framework for Sustained Competitive Advantage).
In the case of Flipkart, the advancement of AI & Automation driven by big data & IoT in
operations is the first foran Indiae-commerce company.The technologically driven supply chain
of Flipkart ensure predictability, scalability & flexibility in business operations (Yourstory,
2019).The enhanced shopping experiencefollowed with streamlined operations& integrated

supply chain enables value addition for both the company & customers.With further investments
& organizational competency, Flipkart can create a value chain& customer experience which is
valuable, rare& hard for competitors to imitate.
Hence with I4 and Servitization, Flipkart can secure ‘First &Fast mover’ advantage in the
e-commerce future of India.
5.2. Recommendations:
Improvements for I4 &Servitization in Flipkart’s operations& Supply chain can be:
i. Further Investments for Advancement:
The AI-driven datacenter at Hyderabad & Automated sorting center at Bengaluru
(Flipkart Stories, 2019) can be the start towardsfuture investments in technologically
driven infrastructure of e-commerce. Flipkart should pursue expansion of such data-
driven infrastructurethroughout the nation ensuring consistency in user experience.
ii. Develop Organizational Competency:

Though Flipkart achieved monumental success in setting & adapting the automated
systems at the Bengaluru sorting center in 5 months (Flipkart stories, 2019), this
competency needs to grow throughoutthe organizational structure & culture.
iii. Train the future workforce:

Flipkart needs to train its workforce for the efficient operations of such transformational
technology. This need must be meet with urgency for rapid adoption & implementation
throughout the organization at all levels of operations & management.
iv. Maximize Integration, Minimize disparity:

Flipkart needs to ensure predictability and high level of precision throughoutits supply
chain. Minimizing operational & technological disparity between key partners and
systems ensures efficiency & consistency.
6. REFERENCES:
Journals:
CONFENTE, I., BURATTI, A. & RUSSO, I. (2015);The role of Servitization for Small firms:
Drivers Versus Barriers [Online]; International Journal of Entrepreneurship and Small Business;
Available at: https://www.researchgate.net/publication/280728014(Accessed: 10th May)
DOHALE, V. & KUMAR, S. (2018);A Review of Literature on Industry 4.0 [Online];
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Report on The Supply Chain & Operations of Flipkart

Sagyan Thapa (77224623)

Sagyan Thapa (77224623)

Sagyan Thapa (77224623)

Flipkart is one of the top e-commerce company in India.

Sagyan Thapa (77224623)

Industry 4.0 fueled by Cyber-physical Systems & IoT in manufacturing withServitization,

Sagyan Thapa (77224623)

1. INTRODUCTION TO THE COMPANY:

Established by Sachin Bansal &Binny Bansal in 2007, Flipkartis one of the

1.1. Flipkart at the present:

Sagyan Thapa (77224623)

2. SUPPLY CHAIN & SUPPLY CHAIN MANAGEMENT (SCM):

2.1. Supply chain of Flipkart:

ii. Infrastructure & Distribution Networks:Reduced delays & Timely deliveriesare

Sagyan Thapa (77224623)

2.2. End to End Operations & Process Map of Flipkart:

Sagyan Thapa (77224623)

 Picklist is generated & handled to an associate.

Figure 2-4: Process Map of Order Fulfillment– Flipkart

Flipkart manages mainly two types of shipments:

Sagyan Thapa (77224623)

Sagyan Thapa (77224623)

Sagyan Thapa (77224623)

2.3. Hurdles &Bottlenecks in the Process:

Sagyan Thapa (77224623)

2. Transportation& Storage: Though electronic systems enable fast communication of

3. Inwards Processing, Scanning& Quality checking:

5. Logistical Failures, Reverse Logistics& Troubleshooting:

Sagyan Thapa (77224623)

3.1. Industrial Revolution, Industry 4.0 & Servitization:

Figure 3- 7: The fourth Industrial Revolution (Source - Kagermann et al., 2013)

Sagyan Thapa (77224623)

 Engineering integration:End-to-End value chain for product customization.

Figure 3- 8: Characteristics of industry 4.0 (Source - Tay et al.,2018)

3.2. Impact on Supply Chain:

Sagyan Thapa (77224623)

Figure 3- 9: Levels of Supply Chain (Source - Tjahjono et al., 2017)

3.3. Benefits, Drivers, Barriers &Relevancy in today’s context:

Sagyan Thapa (77224623)

4. INDUSTRY 4.0 & SERVITIZATION FOR FLIPKART

4.1. Scenario in India:

Sagyan Thapa (77224623)

4.2. Context of Flipkart:

Sagyan Thapa (77224623)

4.3. Drivers for I4&Servitization:

ii. Rising Economic Conditions& Customer Expectations:

Sagyan Thapa (77224623)

iii. Increase inSmartphone& Internet Users:

Figure 4-16:Number of Internet Users in India (Source - Statista, 2019)

Sagyan Thapa (77224623)

Figure 4- 17: Internet Penetration Rate of India (Source - Statista, 2020)

Figure 4-18:Sector Composition in E-commerce of India (Source - IBEF, 2019)

iv. Strong Competition:

4.4. Benefits from I4&Servitization:

Sagyan Thapa (77224623)

i. Benefits from In-house Data Analysis,

ii. Benefits from Automated systems, Robotics& IoT:

4.5. Barriers for I4 &Servitization: