Description
the supply chain of reliance retail, general design criteria and principles
Reliance Retail Supply Chain Plan
Contents Introduction
Supply Chain Strategic Mission. Supply Chain design task Supply Chain Model. Flow paths. Network design. DC Design Cold Chain Transport . Systems and software
The Opportunities For Margins
• Global Sourcing
• Disintermediation
• Efficient movement • Safe storage –prevent damages and loss of shelf life • Use tax structure to advantage • Economies of scale
Our Guiding Philosophy
? ? ? Supply Chain Is Key To The Long-term Profitability In Retail
It Is Even More Critical For A Large-scale Endeavour Like Ours
Supply Chain Function Has The Potential To Create A Major Differentiator For Us As Well As Raise Entry Barrier For Others
RR Supply Chain- Strategic Mission
To Design A Retail Supply Chain Network Which – • • • • • • • • Delivers Best Service To The Customers Is Cost Efficient Realizes All The VALUE Possible In The Chain Sources Globally Is Spread Pan India Is World Class, State-of-the-art Technology Driven, Modular And Scalable Is Flexible To Encompass Ongoing Logistics Optimization
Supply Chain Design Task
• Network Design- Location and size of RDC, DC • DC Design • Transportation system • Cold Chain to increase shelf life and reduce Wastage • Cold Chain to make availability throughout year
Network Design
Number of tiers in the network Location of network entities Consolidation center, RDC, DC, Approximate size and nature of these entities (DC, Cross Dock, Flow through) Flow paths of all the major categories from source to stores Capacities of the entities
The Supply Chain Flow paths
Direct To Store
X-dock •Preallocated •Break Bulk
Supply to DCs , then to stores
Supply to RDCs , then to DC Choice Of Flow Types Depends On
• • • • Article Characteristics Sales Patterns (Customer Behavior) Supplier Characteristics Supplier Strategy
DC Design
The DC Design seeks answers to the following Should we store an item –if yes How much –Qty, space How –storage methods , Technology , temperature How we shall take it out (Picking ) How we shall place it in after receipt How many docks are required What activities will be carried out in DC Depending on above choice what equipment is required Total cost of investment and operation Evaluation of different options
Racking
Warehouse
Dock Leveller for loading/unloading
Handling equipment
Reach Truck
Narrow Aisle reach truck
Processing in DC
The Following Value Added Service For Agri. And Food Products Will Be Taken As Specific Need And Will Be Added Separately. • Grain Storage • Grading And Sorting Of Fruits And Vegetables • Meat Processing Etc. Following Food Processing Will Be Done In Dc Where Ever Required • Cleaning, Cutting And Packaging Of Ready To Cook Vegetables • Price Ticketing • Other Prep Tasks (Re-labeling, Re-boxing, Unit Labeling, Etc)
Cold Chain
The processing , movement and storage of products under controlled temperature and humidity conditions is called Cold Chain . Raw, Processed Foods ,Fruits /Vegetables meat , poultry, fish require to be stored and moved Under Controlled Conditions Requires Specialized Vehicles/Containers , storage rooms
Design of cold chain in warehousing and transport is in hand . Initial analysis of temp and compatibility shows that products can be grouped as given in next sheet
Cold Chain Groups
Type CC1 Specification Product categories
Cold Chain with -20 C Frozen vegetables , Frozen snacks, Veg /Non Veg Poultry and meat products , Processed Cold Chain with -20 C Raw Meat , Chicken ,Raw frozen veg Raw Frozen Cold Chain with 0-4 C Milk products , Cheese , Paneer,
CC2 CC3
CC4
CC5 CC6
Cold Chain with 0-4 C
Cold Chain with 0-4 C Cold Chain with 4-8 C
fruits like apricot, apple , Leafy veg , Exotic Veg
Raw chicken and chilled meat Papaya ,Pine apple ,
CC7
CC8
Cold Chain with 8-12C Mango , Watermelon, Lemon
Cold Chain at +16-20 Confectionery and Chocolates C
Transport
The links for which transport is to be organised are Primary movement Supplier to DC/RDC Imports and move to RDC/DC Secondary movement DC to stores –dry , Cold Home delivery Furniture and Consumer Durables Groceries
• Each Link Will Require Different Strategy Based On The Product Characteristics , Volumes To Be Moved ,And Distances And Suitable Solutions Will Be Developed. • Decisions involve Type of vehicle , organisation , ownership structure , operation philosophy and software for this part of Logistics
Transport options
• Market vehicles for Primary movement • Special vehicles for light cargo –CD and furniture • Multitemp vehicles • Palletised loading or roll cages • Dedicated vehicles with branding for Secondary • Small vehicles for home delivery • Multimodal movement for imports and heavy cargo
Tail Lift
Tail Lift and Roll Cages
Roll Cages
Software
• • • • Warehouse management systems Transport management systems Hand held terminals RFID at pallet level
Supply chain as Sales support
Supply Chain Needs To Play A Significant & Crucial Role In Total “Product Supply Management”
Satisfied Customers (Business Managers)
Quality
Meet All Aspects of Market Demand
Efficiency
Minimize costs Within ‘Q’
Flexibility
Maximize Flexibility Within ‘Q’ and ‘E’
Design Basis of RR Supply Chain Network
Assumptions
• •
Sr. No. 1 2 3 4 5 6
Total 784 towns of the initial project plan are considered. Population-wise break-up of the towns is as below -Town category No. of towns 6 29 14 66 274 395 784 Population (?000) 60021 47861 12053 30409 43247 27061 220652 Retail Interest (Rs. Cr.) 107847 67319 15810 35680 46589 27119 300364 RR Retail Interest (Rs. Cr.) 7623 13607 4568 10704 13977 8135 58614
Metros > 10 lacs 7.5 to 10 lacs 3 to 7.5 lacs 1 to 3 lacs 50k to 1 lac Total
(Ref: 20050621_company_RR_KT_BusinessModel-medium1)
General Design Criteria
Sourcing
• Supplier locations by product group • Ports of entry
Inventory
• Inventory levels by category • Re-order levels & order sizes • Additional inventory requirements for seasonal products
Distribution
• • • • Types of facilities DC location. size and capacity Inter-DC movements Secondary distribution planning - from DC to stores
Transportation
• Primary transportation • Secondary distribution • Tertiary distribution (Homedelivery or delivery to other retailers) • Inter-store distribution
General Design elements
Objective Demand Geography Service levels Fill rates Entities Suppliers/ Manufacturers Wholesalers/ Intermediaries Product mix Order fulfillment cycle times Ports / Airports Logistics Facilities Retail Stores
Transport Modes
Inbound
Meet & maintain service levels at minimum costs
Inter-facility
Reliable, Costeffective, Flexible, Scalable, Efficient
Quantities including seasonal patterns
Minimum Wastage
Store Delivery
GUIDING PHILOSOPHY— Plan for the future (1/2)
• • Keep the end state in mind and work backwards. Invest in Technology– Future is going to be for maximum exploitation of available & upcoming technological developments.
GUIDING PHILOSOPHY— Plan for the future(2/2)
• Keep it modular and flexible – In addition to the best efforts at the onset itself, continuous improvements will be the way life. The commodities, categories, consumption patterns, sourcing patterns, technology- all will change/ update/ upgrade longingly.
RR Design Basis – Key Assumptions(1/2)
• Multiple Regional Distribution Centers to be planned – No single central DC. • For items procured at national level : – Deliveries to be scheduled directly to the regional DC (where no processing is involved). – For products requiring processing, concerned RDC needs to have a processing centre also and will double up as a central DC for that product. • Schedule direct deliveries to stores from RDCs – Eliminate need for city level DCs. • For items procured locally, deliveries to be scheduled directly to the stores.
RR Design basis: Key Assumptions (2/2)
• Vendor managed inventory for high value items. • RDC location planning is based on the projected RR retail interest and will be kept on updating with it. • Considering the volumes, RDCs in metros will serve the area in a radius of 50 km only. (May vary as per business volumes). • For RDCs in all the other towns, the distance is kept at 180 km (6 – 8 hours travel at the max).
Sequential steps to arrive at the DC Done as of nowNo. and locations
1. DCs were identified in all the towns with population > 10 lacs. Redundancy or over-lapping were removed. 2. Areas still not covered from above were covered by selecting 4 towns from 7.5 to 10 lacs population category and 6 towns from 3 to 7.5 lacs population category. 3. This basis covers 628 towns with 87 % of our retail interest. 4. Mark on the map –
• • • Airports Seaports National highways
5. All major air and sea ports covered. 6. Cross check with list of warehouses of major FMCG companies.
(Ver 1 Output Marked on map enclosed)
RR retail interest covered in version - 1
(Figures in Rs. Cr.)
RR retail interest not covered in version - 1
(No. of towns)
• •
156 towns out of 784 planned are not covered in this version. This accounts for 11% of the population and 13 % of the RR retail interest.
Analysis of version – 1 of design basis • About 90 % of the towns not covered in this version
have population less than 3 lacs. Since the real-estate costs in these towns would be low, we can have integrated storage spaces within the retail stores located in these towns.
Sizing of the regional DCs
Having narrowed down to the no. of DCs & locations based on the aforesaid, the actual size of the RDC for specific location will be a function of ---a) Total volume of the retail interest serviced by the RDCs. b) If RDCs will act as central warehouses for certain categories of merchandises sourced from that region, volume & seasonality of such product. c) RDCs will act as ?HUB? for locations where crossdocking / temporary storage is required in the chain. d) Some DCs will have ?Warehouse Clubs?. e) Future expansion/ possibility of offering for other 3PL will be used to create buffer / scalability. f) Inbuilt processing facility in RDCs where-ever required.
doc_876773290.pptx
the supply chain of reliance retail, general design criteria and principles
Reliance Retail Supply Chain Plan
Contents Introduction
Supply Chain Strategic Mission. Supply Chain design task Supply Chain Model. Flow paths. Network design. DC Design Cold Chain Transport . Systems and software
The Opportunities For Margins
• Global Sourcing
• Disintermediation
• Efficient movement • Safe storage –prevent damages and loss of shelf life • Use tax structure to advantage • Economies of scale
Our Guiding Philosophy
? ? ? Supply Chain Is Key To The Long-term Profitability In Retail
It Is Even More Critical For A Large-scale Endeavour Like Ours
Supply Chain Function Has The Potential To Create A Major Differentiator For Us As Well As Raise Entry Barrier For Others
RR Supply Chain- Strategic Mission
To Design A Retail Supply Chain Network Which – • • • • • • • • Delivers Best Service To The Customers Is Cost Efficient Realizes All The VALUE Possible In The Chain Sources Globally Is Spread Pan India Is World Class, State-of-the-art Technology Driven, Modular And Scalable Is Flexible To Encompass Ongoing Logistics Optimization
Supply Chain Design Task
• Network Design- Location and size of RDC, DC • DC Design • Transportation system • Cold Chain to increase shelf life and reduce Wastage • Cold Chain to make availability throughout year
Network Design
Number of tiers in the network Location of network entities Consolidation center, RDC, DC, Approximate size and nature of these entities (DC, Cross Dock, Flow through) Flow paths of all the major categories from source to stores Capacities of the entities
The Supply Chain Flow paths
Direct To Store
X-dock •Preallocated •Break Bulk
Supply to DCs , then to stores
Supply to RDCs , then to DC Choice Of Flow Types Depends On
• • • • Article Characteristics Sales Patterns (Customer Behavior) Supplier Characteristics Supplier Strategy
DC Design
The DC Design seeks answers to the following Should we store an item –if yes How much –Qty, space How –storage methods , Technology , temperature How we shall take it out (Picking ) How we shall place it in after receipt How many docks are required What activities will be carried out in DC Depending on above choice what equipment is required Total cost of investment and operation Evaluation of different options
Racking
Warehouse
Dock Leveller for loading/unloading
Handling equipment
Reach Truck
Narrow Aisle reach truck
Processing in DC
The Following Value Added Service For Agri. And Food Products Will Be Taken As Specific Need And Will Be Added Separately. • Grain Storage • Grading And Sorting Of Fruits And Vegetables • Meat Processing Etc. Following Food Processing Will Be Done In Dc Where Ever Required • Cleaning, Cutting And Packaging Of Ready To Cook Vegetables • Price Ticketing • Other Prep Tasks (Re-labeling, Re-boxing, Unit Labeling, Etc)
Cold Chain
The processing , movement and storage of products under controlled temperature and humidity conditions is called Cold Chain . Raw, Processed Foods ,Fruits /Vegetables meat , poultry, fish require to be stored and moved Under Controlled Conditions Requires Specialized Vehicles/Containers , storage rooms
Design of cold chain in warehousing and transport is in hand . Initial analysis of temp and compatibility shows that products can be grouped as given in next sheet
Cold Chain Groups
Type CC1 Specification Product categories
Cold Chain with -20 C Frozen vegetables , Frozen snacks, Veg /Non Veg Poultry and meat products , Processed Cold Chain with -20 C Raw Meat , Chicken ,Raw frozen veg Raw Frozen Cold Chain with 0-4 C Milk products , Cheese , Paneer,
CC2 CC3
CC4
CC5 CC6
Cold Chain with 0-4 C
Cold Chain with 0-4 C Cold Chain with 4-8 C
fruits like apricot, apple , Leafy veg , Exotic Veg
Raw chicken and chilled meat Papaya ,Pine apple ,
CC7
CC8
Cold Chain with 8-12C Mango , Watermelon, Lemon
Cold Chain at +16-20 Confectionery and Chocolates C
Transport
The links for which transport is to be organised are Primary movement Supplier to DC/RDC Imports and move to RDC/DC Secondary movement DC to stores –dry , Cold Home delivery Furniture and Consumer Durables Groceries
• Each Link Will Require Different Strategy Based On The Product Characteristics , Volumes To Be Moved ,And Distances And Suitable Solutions Will Be Developed. • Decisions involve Type of vehicle , organisation , ownership structure , operation philosophy and software for this part of Logistics
Transport options
• Market vehicles for Primary movement • Special vehicles for light cargo –CD and furniture • Multitemp vehicles • Palletised loading or roll cages • Dedicated vehicles with branding for Secondary • Small vehicles for home delivery • Multimodal movement for imports and heavy cargo
Tail Lift
Tail Lift and Roll Cages
Roll Cages
Software
• • • • Warehouse management systems Transport management systems Hand held terminals RFID at pallet level
Supply chain as Sales support
Supply Chain Needs To Play A Significant & Crucial Role In Total “Product Supply Management”
Satisfied Customers (Business Managers)
Quality
Meet All Aspects of Market Demand
Efficiency
Minimize costs Within ‘Q’
Flexibility
Maximize Flexibility Within ‘Q’ and ‘E’
Design Basis of RR Supply Chain Network
Assumptions
• •
Sr. No. 1 2 3 4 5 6
Total 784 towns of the initial project plan are considered. Population-wise break-up of the towns is as below -Town category No. of towns 6 29 14 66 274 395 784 Population (?000) 60021 47861 12053 30409 43247 27061 220652 Retail Interest (Rs. Cr.) 107847 67319 15810 35680 46589 27119 300364 RR Retail Interest (Rs. Cr.) 7623 13607 4568 10704 13977 8135 58614
Metros > 10 lacs 7.5 to 10 lacs 3 to 7.5 lacs 1 to 3 lacs 50k to 1 lac Total
(Ref: 20050621_company_RR_KT_BusinessModel-medium1)
General Design Criteria
Sourcing
• Supplier locations by product group • Ports of entry
Inventory
• Inventory levels by category • Re-order levels & order sizes • Additional inventory requirements for seasonal products
Distribution
• • • • Types of facilities DC location. size and capacity Inter-DC movements Secondary distribution planning - from DC to stores
Transportation
• Primary transportation • Secondary distribution • Tertiary distribution (Homedelivery or delivery to other retailers) • Inter-store distribution
General Design elements
Objective Demand Geography Service levels Fill rates Entities Suppliers/ Manufacturers Wholesalers/ Intermediaries Product mix Order fulfillment cycle times Ports / Airports Logistics Facilities Retail Stores
Transport Modes
Inbound
Meet & maintain service levels at minimum costs
Inter-facility
Reliable, Costeffective, Flexible, Scalable, Efficient
Quantities including seasonal patterns
Minimum Wastage
Store Delivery
GUIDING PHILOSOPHY— Plan for the future (1/2)
• • Keep the end state in mind and work backwards. Invest in Technology– Future is going to be for maximum exploitation of available & upcoming technological developments.
GUIDING PHILOSOPHY— Plan for the future(2/2)
• Keep it modular and flexible – In addition to the best efforts at the onset itself, continuous improvements will be the way life. The commodities, categories, consumption patterns, sourcing patterns, technology- all will change/ update/ upgrade longingly.
RR Design Basis – Key Assumptions(1/2)
• Multiple Regional Distribution Centers to be planned – No single central DC. • For items procured at national level : – Deliveries to be scheduled directly to the regional DC (where no processing is involved). – For products requiring processing, concerned RDC needs to have a processing centre also and will double up as a central DC for that product. • Schedule direct deliveries to stores from RDCs – Eliminate need for city level DCs. • For items procured locally, deliveries to be scheduled directly to the stores.
RR Design basis: Key Assumptions (2/2)
• Vendor managed inventory for high value items. • RDC location planning is based on the projected RR retail interest and will be kept on updating with it. • Considering the volumes, RDCs in metros will serve the area in a radius of 50 km only. (May vary as per business volumes). • For RDCs in all the other towns, the distance is kept at 180 km (6 – 8 hours travel at the max).
Sequential steps to arrive at the DC Done as of nowNo. and locations
1. DCs were identified in all the towns with population > 10 lacs. Redundancy or over-lapping were removed. 2. Areas still not covered from above were covered by selecting 4 towns from 7.5 to 10 lacs population category and 6 towns from 3 to 7.5 lacs population category. 3. This basis covers 628 towns with 87 % of our retail interest. 4. Mark on the map –
• • • Airports Seaports National highways
5. All major air and sea ports covered. 6. Cross check with list of warehouses of major FMCG companies.
(Ver 1 Output Marked on map enclosed)
RR retail interest covered in version - 1
(Figures in Rs. Cr.)
RR retail interest not covered in version - 1
(No. of towns)
• •
156 towns out of 784 planned are not covered in this version. This accounts for 11% of the population and 13 % of the RR retail interest.
Analysis of version – 1 of design basis • About 90 % of the towns not covered in this version
have population less than 3 lacs. Since the real-estate costs in these towns would be low, we can have integrated storage spaces within the retail stores located in these towns.
Sizing of the regional DCs
Having narrowed down to the no. of DCs & locations based on the aforesaid, the actual size of the RDC for specific location will be a function of ---a) Total volume of the retail interest serviced by the RDCs. b) If RDCs will act as central warehouses for certain categories of merchandises sourced from that region, volume & seasonality of such product. c) RDCs will act as ?HUB? for locations where crossdocking / temporary storage is required in the chain. d) Some DCs will have ?Warehouse Clubs?. e) Future expansion/ possibility of offering for other 3PL will be used to create buffer / scalability. f) Inbuilt processing facility in RDCs where-ever required.
doc_876773290.pptx