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The supplychain practice in flipkart


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this gives an breif idea on e-com industry flipkart supply chain
and supplychain practices in flipkart

Published in: Leadership & Management
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The supplychain practice in flipkart

  1. 1. 1 Chapter-1 SUPLLY CHAIN A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. Supply chains underlie value-chains because, without them, no producer has the ability to give customers what they want, when and where they want, and z the price they want. Producers compete with each other only through their supply chains, and no degree of improvement at the producer's end can make up for the deficiencies in a supply chain which reduce the producer's ability to compete. STREAMS OF SUPPLY CHAIN Upstream Activity With the assembly plant as the focus of the supply chain, upstream activity includes suppliers of raw materials, which are materials not processed. For example, metals such as aluminum and copper are raw materials. Activities upstream could include a supplier mining these materials to fulfill orders. Suppose the materials are on order but not on hand. The focus of activity would likely be to mine the requested materials as quickly and efficiently as possible. Transporting or shipping to the plant is another example of upstream activity. Downstream Activity Downstream from the assembly plant are distributors, shipping partners, and point-of-sale stops along the way, such as wholesalers and retailers. One important downstream activity is inventory management. Distributors, wholesalers and retailers all strive to carry inventory in quantities needed to fulfill customer orders without overstocking. When operations are running smoothly, the distributors ship orders on time. When an order cannot be filled in a timely manner, this is called a "stock-out" and activity stagnates. A second example of downstream activity is customer service in the retail store, when the product finally reaches the consumer.
  2. 2. 2 FLOWS IN SUPPLY CHAIN There are 3 flows in a supply chain 1. Value flow 2. Information flow 3. Cash flow Value Flow This is the most obvious and visible part of a supply chain, moving largely from the vendor to the customer. Physically, the flow manifests itself as goods flows and service flow. Goods flow constitute raw materials (including material being stored or transported), work in process (including what is begin converted and what is in between operations), finished goods (includes material being stored or transported), spares, etc. Information Flow This is a significant part of the supply chain in that it is the enabler and driver of the concept of a supply chain. It consists of flows both from vendor to the customer and from the customer to the vendor. The major components of the backward flow (against the direction of the major value flow) are inputs for forecasts, marketing plans, dispatch plans, production plans and procurement quantities and timing, orders from customers and dealers, quality feedback, warranties that are invoked, etc. In the forward direction (in the direction of the major value) there are important components like capacity estimates for plans, stocks available, dispatch advices, stock transfer notes, quality assurance reports, warranties, etc. Cash Flow This is the commercially significant part of the chain, which is largely in a direction opposite that of the major value flow. The major part of this flow is the money paid for goods and services received. But there are other features to the cash flow, such as credit periods advances for payments from customers/dealers, and to vendors. Any credit/advance is with respect to the transfer of title and/or service delivery in the supply chain. The cash flow determines how a given value flow is financed by the various actors in the supply chain.
  3. 3. 3 SUPPLLY CHAIN MANAGEMENT Supply chain management (SCM) is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance.” Supply chain management means the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. The supply chain arrangement links a firm and its distributive and supplier network to end customers. OBJECTIVES OF SUPPLY CHAIN MANAGEMENT The objectives of supply chain management is 1. To integrate the people/institutions, divisions and activities along with supply chain 2. To supply superior quality goods faster with efficient processes 3. To be more responsive to the perceptions of the market place 4. To be able to change directions at will 5. To reduce inventory at all sites of supply chain 6. To reduce costs 7. To faster processing speeds 8. To reduce lead times 9. To reduce warehouse costs 10. To reduce obsolescence 11. To provide greater responsiveness to customer changes 12. To provide electronic links to suppliers and customers 13. To ensure continuous flow of products and information 14. To speed up the development cycle
  4. 4. 4 FUNCTIONS OF SUPPLY CHAIN MANAGEMENT Supply uncertainly can be addressed through a number of initiatives such as vendor development and certification, sharing of production. Minimizing Uncertainty: Supply uncertainty due to unreliability of vendors, process planning information and joint attention to transport arrangements. Process uncertainty is due to machine breakdowns, uncertain yields and absenteeism, which can be addressed through good maintenance practices, better technology etc. Demand uncertainty can be reduced to some extent by forecasting techniques and by better communication with customers. Reducing Lead Times: Lead times at the stages of procurement, conversion and distribution can be cut down by faster modes of transport, better planning practices and process technologies. Minimizing The Number Of Stages: In general, the number of stages that goods and services flow through adds to the complexity of SCM. Unification of tasks and reducing the number of stages make the coordination of decisions easier. This is the essence of another management concept namely Business Process Reengineering. Improving Flexibility: Reducing set-up or change overtimes in various processes and the use of flexible manufacturing and assembly techniques improves the flexibility of response. In transport, the use of smaller vehicles provides flexibility in making dispatches at short notice without being constrained by batching economies. As an extended principle wherever possible, batch processes should be made continuous processes. Improving Process Quality: A prerequisite to effective SCM in the light of reducing inventories and wastage is to do things right, the first time. This is deal for improving process quality. The techniques for this include statistical process control, root cause analysis of poor quality and improvement of process capability Minimizing Variety: Variety is one of the major causes for inventory in the downstream part of supply chain. One response appropriate promotion and branding. This will enable a better control of the supply chain right from demand generation. Delaying Differentiation: The value addition through product differentiation should be postponed as far as possible so that precise customer needs can be met without holding committed stocks in the entire chain there are numerous examples of how this can be done such as shipping of component level goods to major points and assembling according to customer needs, postponing, finishing operations like grinding and mixing of additives to cement till near the final point of consumption, etc. Kitting Of Supplies: A process in which individually separate but related items are grouped, packed and supplied together as one unit.
  5. 5. 5 Chapter-2 Company profile Flipkart is an Indian E-Commerce company established in 2007 by Sachin Bansal and Binny Bansal. The business was formally incorporated as a company in October 2008 as Flipkart Online Services Pvt. Ltd. During its initial years, Flipkart focused only on books, and soon as it expanded, it started offering other products like electronic goods, air conditioners, stationery supplies and life style products and e-books. The first product sold by them was the book Leaving Microsoft To Change The World, bought by VVK Chandra from Andhra Pradesh. Flipkart now employs more than 15000 people. It operates exclusively in India, with headquarters at Bangalore. Flipkart has launched its own product range under the name "DigiFlip" with products including tablets, USBs, and laptop bags. Flipkart has also launched its own range of personal healthcare and home appliances under the brand "Citron". Acquisitions  2010: We Read, a social book discovery tool.  2011: Mime360, a digital content platform company.  2011:, a Bollywood news site that offers updates, news, photos and videos.  2012:, an Indian e-retailer in electronics. Flipkart has bought the company for an estimated US$25 million.  2014: Acquired in an estimated INR 2,000 crore deal. Motorola Mobility, previously owned by Google but then sold to Lenovo, in an exclusive tie up with Flipkart launched its budget Smartphone Moto G in India on 5 February 2014. This triggered an overwhelming response from online shoppers and more than 20,000 units were sold within hours of launch on Flipkart. After the Moto G successful debut launch. The sale of high-end smartphone Xiaomi Mi3 produced by Xiaomi Tech was launched in India on an exclusive tie-up with Flipkart. 2014 Flipkart held a flash sale of the budget Android smartphone the Xiaomi Redmi 1S which was launched in India in July 2014. As per Alexatraffic rankings, Flipkart is among the top 20 Indian Web sites and has been credited with being India's largest online bookseller with over 11 million titles on offer. The store started with selling books and in 2010 branched out to selling CDs, DVDs, mobile phones and accessories, cameras, computers, computer accessories and peripherals, an din 2011, pens & stationery, other electronic items such as home applia nces, kitchen appliances, personal care gadgets, health care products etc. Further in 2012, Flipkart added A.C, air coolers, school supplies, office supplies, art supplies & life style products to its product portfolio. As of today, Flipkart employs more than 4500 people. Initially funded by the Bansals themselves with 400,000, Flipkart has raisedfunding from venture capital funds Accel India (US$1 million in 2009) and Tiger Global(US$10 million in 2010 and US$20 million in June 2011)., on August 24, 2012 announced the completion of its 4th round of $150 million funding from MIH (part of Naspers Group) and ICONIQ Capital.
  6. 6. 6 Chapter-3 THE SUPPLYCHAIN PRACTICE IN FLIPKART The flipkart obtains its products from different manufacturers’ and these are sent to warehouses or delivery centers of flipkart through the logistics of manufacturer of manufacturer’s distribution channel. The flipkart puts the order for the manufacturers for product to be delivered. The ware houses are located in the cites which are near to airport, Bangalore, Chennai, Delhi, Hyderabad, Mumbai, Noida, Pune and Kolkata. The customer processing cell of the flipkart receives the order from the customer via website and processes the order and sends the product to the delivery centers of the flipkart. From those delivery centers according to the geographical location the product can take two routes. In metropolitan city’s like Bangalore, Mumbai, Delhi, etc. The flipkart has its own delivery service. The delivery person of the flipkart goes to the customer to deliver the product through the flipkart logistics. In the other places the courier services like DTDC, BLUE DART and FIRST FLIGHT. These are the courier partners of the flipkart. The product from the delivery center of a city reaches to the courier service office of the same city. From there the product reaches the respective cities where to product must be delivered to the customer. Then the delivery person of the respective courier service delivers the product to the customer. Downward stream: The downward stream follows from manufacturers to warehouses and delivery centers of the flipkart , from there the product reaches to the delivery centers, to own transit services or courier services, to respective places of deliver, to the customer. In downward flow information and value flow happens. Upward stream: In the upward stream information flow and cash flow happens. The customer pays the amount for the product he purchases through debit card, credit card, net banking, flipkart wallet and COD (cash on delivery). Customer keeps the order via website. Internal stream: In the internal stream information flow and value flow takes place. Low stock ware houses contacts with the other warehouses for stocks and gets the delivery of the product within promised time.
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  8. 8. 8 The reverse supply chain of flipkart When a customer is not satisfied or receives other product or receives a damaged product the customer makes a complaint to the returns processing cell. The customer may ask for return of a new product or money according to the norms of the flipkart. Here the reverse supply chain of the flipkart starts. After making the complaint the customer packs the product and keeps ready. There are two ways here in the cities like Bangalore, Chennai, Delhi, Hyderabad, Mumbai, Noida, Pune and Kolkata with their own delivery centers the agent of the flipkart comes to the customer to take the product back in other places the customer has to courier the product through one of the courier services listed by flipkart. In both ways the next step in the supply chain is logistics either it may be agent or courier service. Through logistics the product reaches to the returns processing cell. After thourghly checking the product if the product is in a good condition or as stated condition by the customer the processing cell initiates the process to return the money to the customer. There are two ways in returning the money one is crediting money to the flipkart wallet which will be valid for 1 year to use for further shopping and the other is to directly deposit to the bank through which the customer has made the payment. But the courier charges incurred if any will be credited to flipkart wallet only.
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  10. 10. 10 Chapter-4 Findings  Flipkart is the first Indian firm to start E.COM business in India.  Though Flipkart has a largest network of supply all over the country. It could not reach the corners of the country.  Flipkart ensures that the reverse picking is completed within 72 hours.  Sometimes people receive defective products though they are replaced or refunded it takes some time.  Flipkart logistics is designed in such a way that other E.Com companies can also outsource delivery for flipkart. Suggestions  Flipkart still needs to work on its core competences that are books and stationary.  Flipkart needs to improve its services especially in the delivery period.  Some of the courier partners of flipkart are weak in some of the locations. Flipkart need to identify them and take steps accordingly.  Flipkart need to concentrate on its products as customers frequently complain about it. Conclusion  Overall flipkart is a successful E.Com firm running with profits and changing itself with the trends.  Flipkart is a cost effective firm which provides products to the customers with low prices.  Flipkart is outsourcing its delivery which may be a issue to the flipkart not now but in future.  If flipkart takes care of some of the issues in delivery and product miss match etc. it will be a leading online retailer in the near future and can earn a huge range of profits.