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When Harry Potter and the Cursed Child<\/span>\nwas launched globally, Snapdeal arranged deliveries of the book within\ntwo hours of the order being placed. It could do so thanks to its\npredictive demand management system fuelled by big data, and its 69\n‘fulfilment’ centres across the country.In the age of instant\ngratification, it’s getting harder and harder for companies —\nespecially e-commerce retailers — to meet customer expectations as\nshoppers want stuff here and now. Drones may help in the future. But\ntoday, as Samay Kohli, CEO and co-founder of Grey Orange, a logistics\nstart-up that builds robotic solutions, says, “The only way you can do\ntwo-hour deliveries is if you set up automated warehouses which are\ncloser to market.”
Snapdeal’s chief Customer Experience Officer\nJayant Sood says the company is focusing on leveraging cutting-edge\ntechnologies — from big data and predictive analytics to IoT\ntechnologies — to bring previously unexplored operational and business\nefficiencies at each leg of customer engagement.
He describes\nhow the e-commerce major is now operating closer to customer clusters,\nreducing last-mile delivery gaps, and has introduced six new one-touch\nfulfilment centres which combine warehousing, quality control and\ntransportation in one complex.
It has also piloted a\nplug-and-play model in Delhi-NCR, which, he says, “allows our partners\nto integrate with our supply chain management system on their own and\nwork towards better resource allocation.” This will be scaled up\nnationally soon.
Devangshu\nDutta, chief executive of retail consultancy Third Eyesight, says that\nacross India, you will still find old-style godowns “where workers\nclamber over sacks like monkeys” and where no digital inventory is\nmaintained. Yet, you are also seeing highly automated warehouses with\nintelligent tracking software that tells you exactly where a\nconsignment is, he says.<\/span>
He\nfeels e-commerce is leading the change. “E-commerce is mostly run on\ncash on delivery. The faster you can move products through by reducing\nshipping times and holding times, the quicker you can get your cash,”\nsays Dutta, pointing out that such considerations are driving companies\nto improve their supply chain.<\/span>
Another\nkey concern is to reduce fraud. Says Kohli of Grey Orange, “Our focus\nis to fight inefficiencies in the system, add scale and flexibility to\nsupply chain.”
Remember the time somebody ordered a laptop on\nFlipkart and got three stones instead? Or when somebody ordered a\nmobile phone on an e-commerce site and got a Vim bar?
Kohli\ndescribes how a lot of fraud happens within the supply chain. He cites,\nfor instance, a case where laptops were being shipped out of a\nwarehouse but were being billed as toys.
“Somebody was going\nonline and ordering toys and these laptops were being shipped out,”\nsays Kohli. The solution: sorters with X-ray machines which can catch\nthese pilferages.
Kohli also talks of how once a warehouse is\nautomated, it allows the e-commerce company to actually create demand\nand service it instantly. It can also be geared for unpredictability.\nFor instance, a tweet with a picture of red shoes got an apparel\ncompany a whopping 160 orders for the pair. In normal circumstances it\nwould not have been able to service the order quickly. But thanks to\nthe demand management software, very quickly the company caught on that\nsomething strange was happening.
“They spotted that order gap\ntime was reducing — earlier it was a week, now orders were coming in\nevery five minutes. By the time the fourth order came up, the message\nhad been communicated and, at the warehouse, robots moved the rack with\nred shoes right up front,” says Kohli.
“Through automation we can take care of all the spikes — both predictable and unpredictable,” says Kohli.
It’s\nnot just e-commerce companies. FMCG behemoth ITC, with brands such as\nSunfeast, Bingo and Yippee noodles, has also done formidable work on\nits distribution chain, putting in place an IT backbone to power it. In\nterms of scale, ITC has about 50 distributors, 2,800 stockists, and\n8,000-plus salesforce on ground and reaches out to two million\nretailers directly.
The IT backbone created by ITC’s Infotech division links the entire chain from head office down to every single outlet.
Advanced\nback-end individualised analytics capture outlet-level sales. Once the\nsales data is captured, and a pattern emerges, the company uses an\nalgorithm called the Schemulator to develop promotional schemes for\neach outlet.
If, say, a particular biscuit variety is doing well\nat a kirana storeoutlet, then very quickly the Schemulator formulates a\ndiscount incentive for that outlet — perhaps a pack of four biscuits\nfor the price of three, which is offered at the shop in next to no\ntime. Given that ITC owns the packaging business, it can very quickly\nchange packaging for individual outlets to match the scheme.
ITC\nis already moving towards a distributed manufacturing and an integrated\nwarehouse strategy. Once GST happens, a lot more companies will change\ntheir warehousing strategy. Currently, taxes determine where companies\nset up distribution centres. “But once GST kicks in, distribution centres will come up based on where your market is,” predicts Dutta .<\/span>
He,\nhowever, rues that despite being such an important cog in a company’s\noperational wheel, most companies still do not give supply chain\nmanagement the importance it deserves.<\/span>
“For\nmost companies it is not a board-level issue. You won’t find the supply\nchain head sitting in the board. You will have a marketing guy, a\nfinance guy on the board, but the GM Logistics will be reporting to the\nfinance guy,” he says.<\/span>
However, a recent high-profile\nannouncement from ITC headquarters is the appointment of its trade and\nmarketing distribution head B Sumant as the President of its FMCG\nbusiness. Shows which way the wind is blowing?<\/p>
(Published\nin The Hindu Businessline<\/a><\/a><\/span>)<\/i>\n<\/p>\n","protected":false},"excerpt":{"rendered":" Chitra Narayanan, The Hindu Businessline Bengaluru, 18 August 2016 When Harry Potter and the Cursed Child was launched globally, Snapdeal arranged deliveries of the book within two hours of the order being placed. It could do so thanks to its predictive demand management system fuelled by big data, and its 69 ‘fulfilment’ centres across the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2348","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\n