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Big Baazar

Supply chain Process at BIG BAZAAR


The supply chain Big Bazaar is managed by Future Supply chain, hich has
de!eloped e"pertise in supply chain management o# consumer product categories
such as #ashion #ood, home and General $erchandise% The company operates #rom
&' strategically located hubs, ser!icing more than (&'' retail outlets spread across
the length and breadth o# the country% Its netor) o# #acilities and specialised
e"pertise enable it to manage more than * million S+,s% This re-uires *' million
supply chains to be managed simultaneously, ith their on speci.c re-uirements
that need customized solutions%
Big Bazaar/s Supply 0hain/s transportation capability enables it to implement
Factory1Gatelogistics in!ol!ing pic)1up o# goods #rom !endors across the country,
national distribution o# goods, and city logistics that includes store deli!eries and
home deli!eries% Big Bazaar/s Supply 0hains is the .rst organized intra1city
transportation ser!ices company in India 1carrying out not only B(B deli!eries but
also B(0 deli!eries in the #orm o# thousands o# home deli!eries e!ery day across the
country, especially #or Furniture and 0onsumer 2urables%
Big Bazaar is also working on the vendor network as well as the logistics network. The company has
identified up to 40 anchor vendors, each with turnovers of US4! million, to achieve economies of scale.
The group is also keen to ensure that its smaller vendors are a"le to reach turnovers of around US#
million and a growth rate of 40$ annually, to "e a"le to pass on the "enefits of scales. The company is also
working towards "ringing its #,%00 vendors online, like &al'(art.
)n )ndia, Big Bazaar derives significant economies of scale in managing their supply chain. &ith more
than #*0000 products, the company maintains a strong supplier relationship in a partnership mode,
avoiding the e+ploitative supplier , "uyer transactional philosophy. The )T ena"led "ack'end operations
and supply chain management increases the relia"ility and efficiency of the "usiness.
-s part of the operation, Big Bazaar is also undertaking to reduce its warehousing costs through a
consolidation process. )n a country like )ndia, where most retail stores are located in the heart of the city
.where rents are high and storage space is scarce.supply chain management has even more serious
"usiness implications. /uture 0ogistics now handles two'and'a'half million S1Us 2or stock keeping units3
a day across the /uture 4roup5s various retail formats around the country. By %0#0, this num"er is
e+pected to increase to more than 60 million S1Us a day. 7ven with 89$ accuracy, some :00,000 pieces
will not "e delivered correctly, resulting in an estimated sales loss of more than ;s 4 crore a day.
Big Bazaar/s #our main consumer sectors 3 Fashion, Food, 4ome and General
$erchandise ha!e !aried product lines, each ith their on uni-ue needs that
re-uire *' distinct supply chain solutions%
Food supply chain of Big Bazaar can be divided into 3 categories:-
a. Farm Fresh-foods supply chain
0urrently, Food Bazaar stores across the country ha!e concessionaires handling the
Farm Fresh section o# their stores% The concessionaires ensure that the supply chain
comple"ities are reduced #or the store, because they/re in charge o# the goods that
they bring% o!er a period o# time Big Bazaar has de!eloped an e"pertise in
managing this #arm #resh #oods supply chain in the most e5cient manner% Big
Bazaar has remo!ed the traditional mandi route supply chain that traditionally
e"isted in the Indian mar)et, here #ruits and !egetables ould come a long and
tardy ay, right #rom the #armers to .nally reach the customers, as depicted belo%
Food Bazaar has lin)s ith #armers groing potatoes and #ruits% It has also sourced
produce #rom #armers groing e"otic !egetables li)e red pepper, mushroom, etc%
6arlier, agricultural and #arm products, ould .rst be collected by aggregators in
di7erent !illages, and then they ould sell the #ruits and !egetables at the
agricultural #arm yards, ho ould subse-uently sell it to a holesaler% 8o semi or
smaller holesalers ill buy these products #rom the larger holesalers and sell
them to di7erent smaller retailers, #rom here the customers .nally bought the
products
But Big Bazaar has shortened the supply chain path in such a ay that, the #arm
products can no directly reach the stores, or ta)e a slightly longer route o# .rst
getting collected at a collection centre, hich is then passed on to the processing
and distribution centre, #rom here they ould be deli!ered to the store #or sale to
customers%
These #eatures has enabled Big Bazaar to e5ciently car!e its supply chain, reducing
irrele!ant delays and #ruits and !egetables astage% Also #armers are at a bene.t
since, they are selling direct to the retailer, hence cutting out the commission o#
unnecessary aggregators, holesalers and #arm yards%
b. Cold-Chain
c. FMCG Supply Chain
The F$0G1non #ood category items #ollo usual general merchandise supply chain
netor)s, here products are .rst stored #rom the #actories to di7erent !endors or
distribution centres, #rom here Big Bazaar replenishes its stoc) based on demand
o# the items%
9hereas, health and personal care products may or may not be sub:ect to
re#rigerated distribution% They are more or less distributed as non1#ood F$0G goods
too%
Challenges it currently faces
The food supply chain is complex and difficult to manage due to its perishable nature and short shelf life
of the products as compared to other supply chains like electronics, home needs, consumer durables etc !t
also re"uires a robust infrastructure of #arehouses and transportation net#ork connecting suppliers,
manufacturers, distributors and retailers
The complexity of food supply chain increases further because of the belo# mentioned parameters
1. Food safety re"uirements
2. $egulatory re"uirements
3. %hort shelf life of products leading to expiry and #astage
4. &roduct recalls
5. &roduct traceability re"uirements
6. 'ffective handling of customer complaints
7. (igh order fre"uency and lo# volumes
The shelf life for the product is considerable )varying from 3-*+ months, Typically F-./0&rocessed
products, staples etc fall under this category 1lthough the shelf life of the product is 3-*+ months, the
products falling under this category re"uires strict monitoring of F!F2 at distributors end to ensure that
the products reaching the end consumer are left #ith enough shelf life
Model for solutions:-
1t our 3istribution .entres0 4arehouses catering to F-./ brands, #e have specifically designed
1 leading edge 4arehouse -anagement %ystem has been implemented #hich supports food
specific processes like cross dock, shelf life tracking)TraceTracker offers standardized and
customized soft#are solutions layered on top of the /T5et and T!6 that maximize shelf life
through supply chain collaboration The &roduct .hampion for example provides shelf life
management for perishable goods, and F'F2)first expired first out,
The &ut to 7ight %ortation %ystem, the first of its kind in !ndia, enables category specific and
delivery point specific segregation 5o further sortation is re"uired at the receiving end
1n auto !nbound and 2utbound 4eight .heck %ystem ensures *889 !nventory accuracy at the
time of receiving and dispatch
$oll cages are being used to reduce 3amages and %hortages to near zero level