PROJECT REPORT

Study of Supply Chain in E-Retailing for My Grahak

Submitted in partial fulfillment of PGDM program2013-15AMITY UNIVERSITY (CENTRE FOR DISTANCE LEARNING)JANAKPURIUnder the guidance of:

Submitted By:Mr. Ankur Iyer

Seema Handa

Enroll no- A19201131743CERTIFICATE I

This is to certify that the project entitled Study of Supply chain in E Retailing for My Grahak is a Bonafide work done by me, Seema Handa, under the guidance of Mr. Ankur Iyer in fulfilment of requirement of award of MBA by Amity University ASODL.

Place: Seema HandaDate: A19201131743Countersigned

Place: Ankur IyerDate: (Project Guide)

CERTIFICATE II

This is to certify that Seema Handa has planned and conducted the project entitled Study of Supply chain in E Retailing for My Grahak under my guidance and supervision and the report submitted therewith was the result of Bonafide work done by him..

Place: Ankur IyerDate: (Project Guide)

DECLARATIONI hereby declare that the project report titled Study of Supply Chain in E-Retailing for My Grahak is my own work and has been carried out under the guidance of Mr. Ankur Iyer, Store Manager (Operations), REI 6 Ten Retail Ltd. and Prof. Vineet Kakkar, Faculty, Amity University. All care has been taken to keep this report error free and I sincerely regret for any unintended discrepancies that might have crept into this report. I shall be highly obliged if errors (if any) be brought to my attention.I further declare that this Project Report does not form of any other project reports or dissertations on the basis of which a degree was awarded or conferred on an earlier occasion on me or any other candidate.

Thank You.

Place: Delhi

Seema HandaDate:

(A19201131743)ACKNOWLEDGEMENTThe satisfaction, which accompanies the successful completion of the project, is incomplete without the mention of a few names. I take this opportunity to acknowledge the efforts of the many individuals who helped me make this project possible. First and foremost, I would like to express my heartfelt appreciation and gratitude to my Industry Guide and Mentor, Mr. Ankur Iyer, Store Manager, REI 6 Ten Retail Ltd. His vision and execution aimed at creating a structure, definition, and realism around the project and fostered the ideal environment for me to learn and grow. This project is a result of his teaching, encouragement and inputs in the numerous meetings he had with me, despite his busy schedule. He has helped provide the scope and direct my studies in a manner to make them most beneficial to me and to the company.

I would like to express my sincere thanks to my Faculty for his guidance and support throughout my training. My learning has been immeasurable and working under him was a great experience.

I extend my sincere thanks to all for his splendid support and cooperation throughout the project.I am also thankful to my friends who with their valuable advice and support have contributed for the success of this study.

Seema HandaTABLE OF CONTENTS

Executive Summary

1) Introduction.2) Literature Review.3) Company Profile.4) Demand Forecast and Inventory Model.5) Economic Order Quantity.6) Supplier Selection and Distribution Mode.7) Research Methodology.8) Data Analysis.9) Recommendations.10) Bibliography.

EXECUTIVE SUMMARYThe project focuses on study of online retailing of grocery, homecare products and personal care products. REI 6 Ten Retail Ltd has recently launched e-retailing through their new website MyGrahak.com on test run basis in Delhi/NCR region and they wish to expand this business on PAN India basis. My objective was to make a sustainable business model and supply chain for this new and innovative venture. Since its a new venture, there was a need to forecast the demand, decide the inventory model and appropriately select the supply source. In my study I have also conducted a survey to know the customer buying behavior and accordingly modify the combo deals. Hence in a nutshell, the main objectives of conducting this study were:

To decide the inventory model and find out the EOQ and replenishment period for various SKUs. To select the supply source and distribution model To study the consumer buying behaviour and modify the combo deals To restructure the appearance of website for making it user friendly CHAPTER 1INTRODUCTION

INTRODUCTION TO RETAIL INDUSTRYIndia is fast becoming the retail destination of the world. According to the international management consultant AT Kearney, India has emerged as the leader in terms of retail opportunities. Total retail sales in India will grow from US$ 395.96 Billion in 2011 to US$ 785.12 Billion by 2015, according to the Business Monitor International (BMI) India Retail Report for the second-quarter of 2011. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organized retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities.

Mass grocery retail (MGR) sales in India are expected to undergo tremendous growth over the forecast period. BMI predicts that sales through MGR outlets will increase by 218% to reach US$ 27.67 Billion by 2015. Food and grocery are the two categories in the Indian retail sector which offer the most promising opportunities.

Organized retail in India is expected to increase from 5% of the total market in 2008 to 14-18 per cent and reach US$ 450 Billion by 2015, according to a McKinsey & Company report titled 'The Great Indian Bazaar: Organized Retail Comes of Age in India'

However, the face of the Indian retail industry is changing. India is passing through a retail boom today. A number of changes have taken place on the Indian retail front such as increasing availability of international brands, increasing number of malls and hypermarkets and easy availability of retail space. With the Indian government having opened up the doors for FDI, the entry of foreign retailers into the country has become easier. India has come a long way from the traditional Kirana stores and is on its way to becoming a mall country. The emphasis has shifted from reasonable pricing to convenience, efficiency and ambience.CHARACTERISTICS OF INDIAN ORGANISED RETAIL Infrastructure Woes:The Infrastructure in India is not as well developed as in other countries. Many parts of India still do not have roads and need to be delivered through bullock carts. Hence, any supply chain strategy for tier II and III retail would need to take all these indigenous factors into account.

Use of 3 PL: Gap between the expectations and the actual level of service provided, and prices charged by the 3PLs are the primary reasons why companies are not looking towards outsourcing their logistics to 3 PLs. Furthermore, the current service levels of the 3 PLs have a lot to be desired.

Impact of VAT: VAT system has been recently introduced and not yet implemented in its full impact. When fully implemented, it would have long lasting consequences on the way supply chain is being developed. The current form of VAT encourages retail trade within a single state, with significant implications on the location of warehouse and accordingly transportation costs.

Supply Base: Due to the fragmented nature of supply chain in India, the players have to deal with a wide number of other players. This results in lower margins per level for the same amount of goods being transacted. Furthermore, additional levels in supply chain also results in increased overall wastage for the chain as the number of points, at which wastage may take place, increases as well. MAJOR AREAS OF CONCERNWith the Indian Retail still in its developing stage, there are a lot of issues that need to be addressed.

Due to fragmented supply base and large number of intermediaries, the product costs get artificially jagged up, resulting in decreased margins at the retail point of sales

The decision to locate distribution centres is taken keeping the local tax laws under consideration. However, the operations inside these centres are not upon the standards leading to unnecessary expenses

Retail industry faces a big problem of forecasting and requirement of inventory because of lack of proper IT implementation, the historical data is not available at appropriate time. Even if data is available, there are not enough technical competencies to handle this data to derive meaningful insights. This results in increase in number of stock outs, increased mark downs, low inventory turns and high pilferage rate

With a fast-paced society and faster-paced technological changes, customers want new, different, and customized goods now, and they're not willing to wait

Pricing is very complex. It's no longer enough to be able to stamp a product's price and forget about it. Modern retailers are changing prices on goods daily. The benefit of flexible pricing is to be able to respond to changes in the market as they happen

The future is uncertain as the customer is fickle. Global market situations can also change the demand of products. And unexpected problems at warehouse or stores can also affect the supply.

CHAPTER 2LITERATURE REVIEW

OUTLOOK TOWARDS RETAIL SUPPLY CHAIN

With the growth in retail, not only front end but the entire network of activities leading to a culmination of a successful retail transaction has undergone a significant development. Supply chain is no different. After all, supply chain forms a major part of the sustenance of any retail venture. For the retail venture to flourish successfully, it should have an efficient and well established supply chain. In the modern format, when all other aspects of retail have been discarded as being a differentiating factor, the role of supply chain has become even more important. Importance of an efficient supply chain for a retail chain may be assessed from the gamut of areas in which it helps the chain such as sourcing of material for Private Label, supplying of SKUs to the distant tier II and III cities, more and more retailers entering into Food and Grocery segment resulting in need for transportation of perishable items requiring cold supply chain, etc. Hence it is deemed that from being just a part of the operations of a network, supply chain is soon going to become a source of competitive advantage for some firms.

If we look at the global scenario, we already have the example of retail mammoth, Wal-Mart. Wal-Mart is said to have the best supply chain which enables it to pursue the EDLP (Every Day Low Pricing) strategy. The Indian Retail is yet to reach that stage and it will be an amalgamation of huge investments, government policies, third party intermediation, and fast changing consumer preferences which will characterize this back end revolution.

The Indian retail has just started to develop. This is in contrast to the major international retailing countries where it has already reached the maturity stage. Due to this, there are still a lot many wrinkles which need to be smoothened out. The Indian retail is still not as effective as that in the global markets with the inventory turns being lower and stock outs being higher than global average.STATE OF ONLINE RETAILING IN INDIAThe phenomena that world is fast shrinking into a Global Village because of internet and other communication mediums is not completely reflective in the Indian context. While developed and fast developing countries have understood the power of internet, India still has a long way to catch up. The retail industry canvas has been repainted by internet and the rules of the game in retailing are fast changing.

Just a few years ago Indian retail was primarily unorganized but, the scene has been changing fast with emergence of big retail groups like Future Bazaar, 6 Ten, Shoppers Stop, Reliance Retail, Spencer etc.

INDIAN RETAIL IN NUMBERSA quick survey of average Indians who have access to internet showed that most of them hardly could recall 1-2 online retail portals and most of their responses were travel site. In comparison an average Indian settled in America could recollect more than 5 online portals. This clearly indicates the huge gap between the retail setup between India and other developed countries. Internet penetration rate of 7.1% in India is one of the highest in world and we have one of the highest numbers of internet users in absolute terms.

India is considered as one of the prominent IT hubs in the world but, all these have somehow not translated into positives in the retail space. Retail industry in India stands at $390 Billion and organized retail is fast catching up. Many of the big retailers have forayed into the online mode without much success.

Online retail forms a meager 0.47% of the total retail market. This shows the plethora of opportunity for online retailing in India. The Indian ecommerce market at INR 9200 Crores is heavily tilted towards travel sites. More than 75-80% of this market is constituted by travel portals like make my trip, yatra etc. About 12% of the rest is contributed by online classifieds like matrimonial and job portals. Our area of focus is the remaining INR 1100+ Crores market which is set to see tectonic growth given the right environment is built. This market is poised to grow at 30% per annum for next 5 years but, long term sustainability will depend on how the market fabric must change. Market players have to be more proactive and innovative in their approach and offering to make serious inroads.

ONLINE MARKET SETUPThe market setup in India is conducive for the online retail to proliferate. Internet accessing population in India is very high in absolute numbers (roughly more than 32 million) and its penetration rate across the country is also high. There are a handful of online portals in India which have been around for quite some time. Indians have started using online transactions for various purposes like paying bills, money transfers, ticket booking etc. Despite these conditions the online retailing has not picked up. Currently bulk of the online retailing is done in books, apparels and small electronic items. This is nowhere close to the online retailing services offered by Amazon or e-bay. The big question is why the Indian online retail is lagging behind. Many of the online retail portals are still trying to figure out the answer and probably they havent right answers.

6 Ten has attempted to come up with a solution by launching their My Grahak venture, an online grocery shopping portal with an aim to pick up online retailing in India.ISSUES PLAGUING THE GROWTH OF THIS MARKET Slow change in the buying behavior : Indians are still reluctant to buy online and prefer brick and mortar models. Indians still like to have a feel of product and spend time in buying.

Inability of online retail players to sway customers from offline mode to online retail channel: Lack of proper marketing and advertisement, inability to create a brand image, lack of proper usage of all possible online means like search engines, paid marketing, online ads, social networking, blogs etc to reach the customers. Inability of online retailers to drive the values a customer can derive by shopping on online channels.

Online portals are not up to the mark: There have been few lacunas in the exiting online websites like poor front ends, website search options are not good, lack of sufficient information about products and terms and conditions, slow websites etc.

Lack of seriousness: A lot of online portals have come up in India backed by major retail distributors but, for many it seems to have been just a onetime setup. Post this there hasnt been enough drive to propagate the brand and services of the portals among potential clients.

Issues concerning security and transaction frauds: In addition many of the web portals dont support all online modes of payments. There are high occurrence of failed payments and this if often a deterrent for clients to revisit the portal. As stated above, most of the key issues are already known by the market participants. Currently the inability of the retail portals to address these problems is hindering the unraveling of the true potential.

CHAPTER 3COMPANY PROFILE

COMPANY HISTORY AND PROFILE

REI Agro was established in the year 1994 with a vision to consolidate the fragmented basmati rice industry & today REI is India's Leading Food Major & is listed in Bombay Stock Exchange (BSE), National Stock Exchange (NSE), London Stock Exchange and Singapore Stock Exchange. REI Agro Ltd. contributes to 22% of country's basmati exports from India. It follows an integrated business model and is equipped with the latest technology available globally. The company operates state of the art rice processing units supplied by world leaders in food processing equipments.REI Agro launched its 6Ten chain of retail outlets in the last quarter of the fiscal of 2006-07. Through this venture, we endeavor to get closer to the customers to fulfill their needs. We are committed to provide excellent value for money maintaining an innovative and responsive operating structure that delivers quality products and services to customers.

Currently, 6Ten is operating 482 franchised stores in the NCR, Chandigarh, Mohali, Panchkula, Amritsar, Ludhiana, Jalandhar, Ambala and Nagpur. All the stores were started on COCO (Company Owned and Company Operated) basis but in 2010 company moved to FOFO (Franchisee Owned Franchisee Operated) model. Company is uniquely positioned because of its experience in the food industry as well as relationship in the supply network.

Presently, the private label products account a major part of sales at 6Ten. The products are packed in our Real Magic, Mr. Miller, and 6Ten brands. The companies have already started private labels for most of the products such as rice, pulses, wheat flour, tea spices, and other staples. FMCG products such as sauces, chocolates, juices, beverages, jams, biscuits, floor and toilet cleaners etc. are available under private labels. The private labels offer quality at prices lower than the national brandsCOMPANYS PRESENCE

MISSION

Only a small portion of the retailing market in India is organized. It is estimated that in the supply chain for fruits and vegetables in India a substantial part of the products ends up as wastage. 6Ten stores will strive to organize the retail market in India and to improve efficiencies in the supply chain in order to offer quality products at attractive prices. Companys mission is to be the trendsetter in the retail space in India with professional services making the lives of ordinary Indians easier and more convenient.

VISION

Through an efficient business model in the retailing sector, 6Ten will be a household name throughout the nation. By enhancing efficiency and reducing wastage it will ensure substantial savings in the food and vegetable retailing sector which will be passed on to the customers. The Company envisages an ideal retailing business model that can cater to the daily needs of the Indian consumers. MYGRAHAK OVERVIEWMy Grahak is the freshest venture that intends to delight all households of India with a promise of enviable online shopping. With a promise of trust and sincerity, company delivers every product consumers need to maintain consumers home, through extensive and wholesome online market. Customers can refill their monthly stores, through an easy onsite shopping or by placing a telephonic order, reducing their efforts and multiplying their choices. It can be anything from kitchen groceries to something for consumers pets, or toiletries like shampoos and deodorant.

Company believes in making life easier and My Grahak is the perfect place to redefine consumers lifestyle.

What makes customers fall back; with their shopping list is the potential to find all their required household products, at most reasonable rates, with complete shopping details, and a delivery right at their door step.

My Grahak is not only the initiator of an online grocery shopping; rather it is a brand name associated with trust and quality. Besides best value for consumers money, consumers get a complete leisure of home shopping, which saves consumers a meaningful time for family, from overbearing supermarket shopping.

MyGrahak.com has been developed to deliver grocery items to households across the nation including perishable and frozen goods. Their aim is to help consumers get the best possible price and products in consumers trolley while enjoying an easier and more consumer-friendly shopping experience. If consumers compare it with consumers nearby shop or a super market, companys only agenda is ensuring that the shoppers get the best value possible.

Our range of products touches every segment of consumers life, by including groceries, health & beauty supplies, gift items and several other food and non food products in our wholesome sale list. We also send care packages to the students and military personnel (APO and FPO addresses) and campers, cutting short any inconvenience on consumers part.

MYGRAHAKS WORKFLOW PROCESS

SWOT OF MYGRAHAK

STRENGTHS Already in retail business through its 6 Ten venture

Well established vendor relations

Private Label Sale own products (Hungry Hungama, Safachat, Real Magic, Mr. Miller, 6Ten brands)

Large product range

Shopping convenience

Dedicated CRM team

WEAKNESS Lacking IT infrastructure

Website is not user friendly

Poor inventory control

Fragmented approach to human resource

Staff Lack of knowledge about products

OPPORTUNITIES Expansion on PAN India basis

Can add more products to product category

No middleman, Vendors Customers

THREATS Low margins due to intense price competition

Convenience of home delivery to customers from nearby kirana stores

Other retail giants like Future Group is coming up with its online venture

High operating cost CHAPTER-4DEMAND FORECAST AND INVENTORY MODELOn reaching the conclusion that the company should keep some inventory, my next task was to decide the Inventory model. In present scenario, it is necessary to deal with an increasingly uncertain business environment due to the fast changing economic scenario. Decision-making becomes difficult in such uncertainty. Needless to mention that the uncertainty in business environment is due to the complex behavior of market related variables like demand, market share, peoples perception and factors affecting demand in the present day as a result of recent policy changes and market forces.

So before deciding an inventory model estimating demand is crucial.

The next challenge is inventory management because too much inventory means unnecessary cost and too little increases the risk of losing sales. Even with frequent deliveries, daily information updates may not be in time to optimize inventory management. Hence we need an inventory system which can withstand these challenges.

DEMAND ESTIMATEFor estimating the demand I have taken help from the companys marketing department. They are planning to target various offices for their monthly office and cafeteria supplies. The companys employees are also being targeted by offering promotional offers and discount coupons. They are already in conversation with many companies and few negotiations have already been done. So taking the past history in consideration and undergoing future negotiations I have estimated the demand as follows.

I took demand from employees of three companies and considered that 30% of them will prefer online grocery shopping and will spend Rs700/- to Rs1200/- per month on an average.

INVENTORY MODELE-Retail inventory management is probably one of the most complexes of all inventory management departments. You can control the inventory levels in your business to provide a suitable assortment and supply to meet market requirements while excessive capital is not tied up, excessive space is not required, and the investment does not force unnecessary borrowing and interest expense.

In e-retailing, there is a virtual store or online store where one can display a greater variety of products. Due to this wide variety of SKUs it becomes vital to adopt an inventory model using which we can optimize the inventory cost and reduce lost sales. In mygrahak.com the product range is as large as 3000 SKUs and the demand pattern for each SKU varies a lot. Some SKUs are demanded in high volumes, some in high frequencies and vice versa.

On the basis of sales history, I categorized goods as slow moving, fast moving, and very fast moving, and further categorizing them as vital, essential and necessity goods.

Slow Moving SKUs: These are the products which are demanded less frequently in low or high volume. Fast Moving SKUs: These are the products which are demanded more frequently in low or high volume. Very Fast Moving SKUs: These are the products which are demanded most frequently in low or high volume.

Further I categorized SKUs based on its utility:

Vital: These are the products for which customer does not compromise with any substitute available for it.

Essential: These are the products for which customer may or may not compromise any substitute available for it.

Necessity: These are the products for which customer is satisfied with the substitute, if the desired product is not available.

Hence out of 3000 SKUs in assortment plan, I selected 575 SKUs whose inventory should be maintained. These are the goods whose demand frequency is high but always demanded in low volume. These SKUs can be considered as Fast Moving and Very Fast Moving.

A Continuous (fixed order quantity) Inventory System should be followed to keep a continuous check on the inventory level. In a Continuous system, an order is placed for the same constant amount whenever the inventory on the hand decreases to a certain level. Whenever the inventory decreases to a predetermined level, referred to as the reorder point. A new order is placed to replenish the stock of inventory. The order that is placed for a fixed amount minimizes the total inventory costs. This amount is called Economic Order Quantity (EOQ).

CHAPTER-5

ECONOMIC ORDER QUANTITYEconomic order quantity (EOQ) is that size of the order which gives maximum economy in purchasing any material and ultimately contributes towards maintaining the materials at the optimum level and at the minimum cost.Formula for EOQ calculation:

SKU wise EOQ has been calculated on the basis of March 2012 sales data.

CHAPTER-6

SUPPLIER SELECTION & DISTRIBUTION MODE

IMPORTANCE OF SUPPLIER SELECTION

Vendor selection is one of the important decisions for retailers. There are many outside influences that affect profitability and a retailer's bottom line. Setting the right price is a crucial step toward achieving that profit. Retailers are in business to make a profit, but figuring out what and how to price products may not come easily. Before we can determine which retail pricing strategy to use in setting the right price, we must know the costs associated with the products. Two key elements in factoring product cost is the cost of goods and the amount of operating expense.

The cost of goods includes the amount paid for the product, plus any shipping or handling expenses. The cost of operating the business, or operating expense, includes overhead, payroll, marketing and office supplies. A retailer simply cannot succeed in business if they continue to sell their products below cost.

It is very crucial to select the right vendor to gain maximum margins. There are four different levels of vendors which offer different margins for the same product. Company can gain maximum margin by procuring from the manufacturer and least margin from cash and carry.

Margin levels will also vary depending on the distribution mode. Company can gain highest margin in DTH and varying margins in HUB packing or HUB Storage.

SUPPLIER SELECTION & DISTRIBUTION MODE

Supplier Selection depends on two factors:

i. Demand Situation: I have categorized demand into three types on the basis of frequency and number of units demanded.

a. High Units and High/Low Frequency

b. Low Volume and High Frequency

c. Low Volume and Low Frequency

ii. Distribution Mode: Depending on the demand situation there can be three different modes of distribution.

a. DTH: Direct to home from vendor is preferred when high units and high/low frequency is demanded

b. HUB Storage: Some SKUs will be stored at warehouse which has high demand frequency but units demanded at a time is low

c. HUB Packing: SKU's which has very low demand will be procured from vendor as and when it is demanded and then packed at HUB and delivered.

There are four levels of vendors from where we can procure the products. Among them first one being the Manufacturer (V1) who offers highest margin and then Master Franchisee (V2) after that Wholesaler (V3) and least margin is offered by Cash and Carry (V4).

Now depending on the demand situation distribution mode will be selected. And for each distribution mode there will be some adjustments in the margins offered by the vendors.

Case 1: High Units and High/Low Frequency In this case DTH is preferred mode of distribution.

We can see the different margins from each vendor, highest margin is offered by Manufacturer and then by Master franchisee. So they are the suitable vendors if units demanded are high.Case 2: Low Volume and High Frequency In this case HUB Storage is preferred mode of distribution.

We can see the different margins from each vendor, highest margin is offered by Manufacturer. So they are the suitable vendors if units demanded are low and frequency of demand is high.Case 3: Low Volume and Low Frequency In this case HUB Packing is preferred mode of distribution.

We can see the different margins from each vendor, as the volume demanded is low so the preferred vendor is Wholesaler and then Cash & Carry. So they are the suitable vendors if units demanded are low and frequency of demand is also low. Supplier Constraints:

REI 6 Ten Retail Ltd has 31 vendors. One or more brands are procured by 6 Ten from each vendor. Vendors have certain constraints:

Credit Period: Credit Period varies for brand to brand for various vendors.

Credit Limit: Credit Limit also varies for brand to brand for various vendors.

Truck Load: A vendor will supply goods only if there is a truck load.

So these constraints have to be kept in mind will making a purchase order.

COMBO DEALS

Combo Deals are a kind of discount offers, where a customer can select a bunch of products from a given list and can avail discount on it. Generally, in retail outlet customers do not have freedom to select products for discount on their own. But My Grahak (online retailing) can offer this freedom to customers. Customers can select products from a list.

For example, If My Grahak offers a combo deal for household needs then in the product list it can mention the category of products available in that deal and give the freedom of choosing brands and pack size to the customers accordingly. While preparing the product list, only the products having same margin levels should be included in the list. For a product category, My Grahak can offer all those brands and pack sizes which have same margin level.

For making a combo deal, I need to know customer buying behaviour. Hence, I conducted a survey in this regard. CHAPTER-7RESEARCH METHODOLOGYSTATEMENT OF PROBLEM- Company is facing problem with its cumbersome website of online Retailing. How to restructure it on the basis of customer preference? Company also needs to analyze the feasibility of its distribution channel and needs to design best inventory model in order to cut cost.

OBJECTIVE OF THE STUDY To suggest an inventory model To select supply source and distribution mode

To restructure the website and making it user friendly.

SCOPE OF THE STUDY The study aims to identify whether to run on zero inventory or not and recommend an inventory model accordingly.

The study also aims to select a vendor to maximize the companys margin and hence find out suitable mode of distribution.

The study identifies the preference of customers so that company can provide combo deals and make the website user friendly.

METHODOLOGYThe following procedure was followed for the research study:

i. Deciding upon the objective of the research study and its viability in current scenario

ii. Developing survey instruments

iii. Collecting responses by sending an online survey via LinkedIn messages and E-mail to people from various fields

iv. Analyzing the data

DEVELOPMENT OF THE INSTRUMENTSThe questionnaire which was to be filled by the people was developed in the following manner.

RESEARCH DESIGNA series of advanced decisions that when taken together, comprise a master plan or model for the conduct of investigations. A blueprint that is followed in completing the study:

Formulating objective of the study.

Designing the method of the data collection.

Selecting the sample size.

Collection of data.

Analysis of findings.

Conclusion and interpretations.

Suggestions and recommendations.

DATA COLLECTIONData collection was done through questionnaires only. The questionnaire covered the following:- i. Purchase Grocery, Home Care Products, Personal Care Products and Miscellaneous Products or not

ii. Products purchased together

iii. Buying Frequency

iv. Preference for Organic Food

v. Family Size

vi. Monthly Expenditure

vii. Location

viii. ProfessionQuestionnaire will be designed on Likert Scale.

COLLECTION OF PRIMARY DATAThe data collection was primarily done through online communication. It involves questioning respondents to secure the desired information, using a data collection instrument called questionnaire. The responses were collected in a Google spreadsheet.

I undertook the research activities in the following hierarchy

i. They determined the major requirement of the company and what information was needed by me to make the appropriate combos.

iii. A questionnaire was designed for people (perspective customers) that can be filled by them.

iv. Data was collected and put into the excel sheet so that it becomes easy to interpret.

v. After putting data into the excel sheets I analyzed the data.

vi. On the basis of data analysis I found the number of products purchased at a time and the combination of products people prefer to purchase together.

vii. Finally the suggestion and recommendations were given to the company.

Sample Design

Sampling is the process of selecting a sufficient number of elements from the population so that a study of the sample and the understanding of its properties or characteristics would make it possible for us to generalize such properties or characteristics to the population element. In a sample survey, only part of the total population is approached for data.

Sample sizeSamples were randomly selected and each of them responded. Sample consisted of employees who are presently working or house wife.Questionnaire Design

The questionnaire design was based upon mostly close ended questions and few open ended questions. The questionnaire had four or five sections, and depending on the answer of first question the respondent will get the next set of questions. The last section was compulsory for all the respondents to answer.

CHAPTER-8DATA ANALYSISQ1) Do you visit grocery or departmental store or supermarket for purchasing groceries?All the respondents who visit grocery and departmental store are taken for my study.

Q2) Which grocery items you purchase mostly? (Tick as many as)

When asked from the respondents that what item they go for purchasing in a grocery store then it was observed that sugar, salt and tea/coffee were frequently purchased by them.

Whereas products like dalia and dairy whitener and spices were less in demand by the sample respondents. Q3) How frequently do you purchase grocery?

Out of the sample respondents it was observed that nobody prefers purchasing of grocery on daily basis.

Whereas weekly and monthly purchase of grocery was major preferred from the sample respondents.

Q4) What proportion of your monthly expenditure contributes to grocery items?

Most of the respondents spend 10%-20% of their total monthly expenditure on grocery items.

And on the other hand below 10% is very less who spend their monthly expenditure on grocery items.Q5) I visit departmental or groceries store to buy_________ (Tick as many as)

Most of the respondents prefer to purchase household items when they visit a grocery or departmental store. Out of the total respondents after house hold items they prefer to purchase personal care products and organic food & vegetablesQ6) I choose a departmental store on following criteria (Rank these criteria)

(Rank 1 for most favourable and Rank 5 for least favourable criteria)

Most of the sample respondents prefer departmental store for their convenience and least price offered by them.

Also some of the respondents attracted by combo deals and offers provided by the stores.

Customers were least attracted by customer service given and fast transaction time provided to them.

Q7) I purchase groceries items for family of _______ person.

It was found that most of the respondents purchase grocery items for the family of 4 or more than 4. On the other hand no body purchase grocery items for single person.Q8) I usually prefer to purchase following household items from a departmental store. (Tick as many as)

Most of the respondents usually prefer to purchase Detergent powder from the departmental store. Aluminium Foil and utensil cleaner were their second demand after detergent powder.

Whereas toilet cleaner are not frequently purchased.

Q9) I usually prefer to purchase following personal care products from a departmental store. (Tick as many as)

Shampoo/conditioner were most demanded personal care products from departmental store.

Whereas other items like tooth paste, face wash, hair oil, Bath soap, body lotion and deodorant/perfume were in their in regular demand. It was founded that talcum powder was having lesser demand.

Q10) I usually prefer to purchase following products from a departmental store. (Tick as many as)

Biscuit & noodles/pasta were preferred by majority of respondents.

Whereas cornflakes & soft drinks were purchased on the regular basis.

It was interesting to found that milk and dry fruits were least preferred to purchase from departmental stores.

Q11) I usually prefer to purchase following organic foods from dept. store. (Tick as many as)

Pulses, rice & flour were most demanded organic foods to buy from departmental store. Whereas wheat & vegetables were less purchased as compare to the above mentioned organic foods.Q12) My monthly expenditure on groceries items increases when best prices are offered to me.

Most of the respondents agree that their monthly expenditure on the grocery items. Only 1 or 2 respondents disagreed that their monthly expenditure on grocery items increases.Q13) My monthly expenditures on groceries items increases in case of

It was surprised to see that every discount, buy one get one, combo deals and weekly or monthly offers attracts customer.Q14) I choose to visit a supermarket only if I need to purchase large amount of house hold items.

Most of the respondents agree that they purchase large amount of household items from supermarket. Q15 I choose a departmental store on the basis of its convenient location.

Most of the respondents take convenience as their top priority to purchase it from a departmental store.

Q16) Combo deals and offers influence my purchasing decision.

Most of the respondents agree that combo deals and offers influence their purchasing decision.

CHAPTER-9RECOMMENDATIONSRecommendations for inventory management

The Company should not run on zero inventory, it should keep some inventory

They should categorise their inventory according to the demand of SKUs and keep inventory for fast moving and very fast moving goods

They should follow Continuous Inventory Management System

Recommendations for supply source and distribution mode selection

For goods having very high demand volume, DTH distribution mode should be followed and manufacturer/master franchisee should be selected as the supply source

For goods having very low demand volume and high frequency, HUB Storage distribution mode should be followed and manufacturer should be selected as the supply source

For goods having very low demand volume and low frequency, HUB Packing distribution mode should be followed and wholesaler/cash and carry should be selected as the supply source

Recommendations for website and combo deals

In combo offers, only product category should be mentioned and customer should be given the freedom to choose brands and pack sizes

To make the website more user-friendly, there should be proper use of drop downs For same product, images of different pack sizes should not be displayed. Rather, after choosing the product its available pack size should appear for selection CHAPTER-10BIBLIOGRAPHY

James R. Ogden, Denise T. Ogden, Integrated Retail Management, Edition 2005, Biztantra

Russell & Taylor, Operations Management, Sixth Edition, Wiley India (P.) Ltd.

http://www.ideasmakemarket.com/2011/05/supply-chain-challenges-in-indian.html

http://www.mygrahak.com/

State of Online Retailing in India, report published by Channel Push Online Services Pvt. Ltd.

ANNEXTURE

Name:-

Age:-

Occupation:-

Contact no:-

Questionnaire

1Do you visit grocery or departmental store or supermarket for purchasing groceries?

Yes NO

2Which grocery items you purchase mostly? (Tick as many as)

a) Sugar

b) Salt

c) Edible Oil

d) Rice

e) Pulses

f) Wheat Flour (Atta)

g) Tea/Coffee

h) Dairy Whitener

i) Dalia

j) Spices

3How frequently do you purchase grocery?

a) Daily

b) Weekly

c) Twice a month

d) Monthly

4What proportion of your monthly expenditure contributes to grocery items?

a) Below 10%

b) 10%-20%

c) 20%-30%

d) Above 30%

5I visit departmental or groceries store to buy_________.(Tick as many as)

a) House hold items

b) Personal Care products

c) Homes Durables

d) Organic food & vegetables

e) Others

6I choose a departmental store on following criteria (Rank these criteria)

(Rank 1 for most favourable and Rank 5 for least favourable criteria)

a) Convenience

b) Least Price

c) Combo deals and offers

d) Customer Service

e) Transaction Time

7I purchase groceries items for family of _______ person.

a) 1

b) 2

c) 3

d) 4

e) More than 4

8I usually prefer to purchase following household items from a departmental store. (Tick as many as)

a) Detergent Powder

b) Kitchen/ Utensils Cleaner

c) Aluminium Foil

d) Sanitizer

e) Antiseptics

f) Toilet Cleaner

9I usually prefer to purchase following personal care products from a departmental store. (Tick as many as)

a) Shampoo/Conditioner

b) Toothpaste

c) Hair oil

d) Bath Soap

e) Deodorant/ Perfume

f) Face Wash

g) Fairness Cream

h) Body Lotion

i) Talcum Powder

10I usually prefer to purchase following products from a departmental store. (Tick as many as)

a) Biscuit

b) Noodles/Pasta

c) Tea/Coffee

d) Juices/Soft Drink

e) Cornflakes

f) Sugar

g) Dry fruits

h) Ready to eat foods

i) Milk

11I usually prefer to purchase following organic foods from dept. store. (Tick as many as)

a) Rice

b) Wheat

c) Flour

d) Pulses

e) Vegetables

12My monthly expenditure on groceries items increases when best prices are offered to me.

a) Strongly Agree

b) Agree

c) Neither Agree nor Disagree

d) Disagree

e) Strongly Disagree

13My monthly expenditures on groceries items increases in case of

a) Combo-deals

b) Buy one Get one

c) Heavy Discounts

d) Weekly or Monthly offers

14I choose to visit a supermarket only if I need to purchase large amount of house hold items.

a) Strongly Agree

b) Agree

c) Neither Agree nor Disagree

d) Disagree

e) Strongly Disagree

15I choose a departmental store on the basis of its convenient location.

a) Strongly Agree

b) Agree

c) Neither Agree nor Disagree

d) Disagree

e) Strongly Disagree

16Combo deals and offers influence my purchasing decision.

a) Strongly Agree

b) Agree

c) Neither Agree nor Disagree

d) Disagree

e) Strongly Disagree

Enrollment No:A19201131743

Name:SEEMA HANDA

Area of Specialization:Operations

Title of the Project: Study of Supply-Chain in e-Retailing for MYGRAHAK.COM

Statement of the problem: Company is facing problem with its cumbersome website of online Retailing. How to restructure it on the basis of customer preference?? Company also needs to analyze the feasibility of its distribution channel and needs to design best inventory model in order to cut cost.

Objectives of the study: To suggest an inventory model? To select supply source and distribution mode? To restructure the website and making it user friendly.

Methodology: Primary Data

Explanation of the Method:Explanation of the Project The project focuses on study of online retailing of grocery, homecare products and personal care products. REI 6 Ten Retail Ltd has recently launched e-retailing through their new website myGrahak.com on test run basis in Delhi/NCR region and they wish to expand this business on PAN India basis. My objective is to make a sustainable business model and supply chain for this new and innovative venture. Since its a new venture, there is a need to forecast the demand, decide the inventory model and appropriately select the supply source. In my study I need to conduct a survey to know the customer buying behavior and accordingly modify the offers according to their preferences.

Company Name:REI 6Ten Pvt Ltd

Company Profile:REI Agro was established in the year 1994 with a vision to consolidate the fragmented basmati rice industry & today REI is India's Leading Food Major & is listed in Bombay Stock Exchange (BSE), National Stock Exchange (NSE), London Stock Exchange and Singapore Stock Exchange. REI Agro Ltd. contributes to 22% of country's basmati exports from India. It follows an integrated business model and is equipped with the latest technology available globally. The company operates state of the art rice processing units supplied by world leaders in food processing equipments.

Questionnaire (10 to 15 questions)

1. Do you visit grocery or departmental store or supermarket for purchasing groceries? 2. Which grocery items you purchase mostly? (Tick as many as)3. How frequently do you purchase grocery?4. What proportion of your monthly expenditure contributes to grocery items?5. I visit departmental or groceries store to buy_________.(Tick as many as)6. I choose a departmental store on following criteria (Rank these criteria) (Rank 1 for most favourable and Rank 5 for least favourable criteria)7. I purchase groceries items for family of _______ person.8. I usually prefer to purchase following household items from a departmental store. (Tick as many as)9. I usually prefer to purchase following personal care products from a departmental store. (Tick as many as)10. I usually prefer to purchase following products from a departmental store. (Tick as many as)11. I usually prefer to purchase following organic foods from dept. store. (Tick as many as)12. My monthly expenditure on groceries items increases when best prices are offered to me.13. My monthly expenditures on groceries items increases in case of 14. I choose to visit a supermarket only if I need to purchase large amount of house hold items.15. I choose a departmental store on the basis of its convenient location.

Number of respondents:65

Area of study:New Delhi

Method you will use to classify data:

Method you will use to present data:Data is presented with the help of graphs, pie charts, bar diagram, line graph etc. so the complex data can be easily presented.

References:*Russell & Taylor, Operations Management, Sixth Edition, Wiley India (P.) Ltd. *http://www.mygrahak.com/

Profile of Project Guide

Name:Ankur IyerAge:30Educational Qualification:PGDMYears of Experience:6Current organisation:6Ten Pvt LtdCurrent designation:ManagerBrief profile:Address:House No:.B-114, Sector-1Street:RohiniCity:DelhiState:DelhiPhone Number (Residence):Phone Number (Office):Mobile:9953789095Email:Ankuriyer321@gmail.com

ANKUR IYERB-114, Sector-1 Mobile No: 9953789095

Rohini Email: ankuriyer321@gmail.comNew Delhi-110085PROFILE SNAPSHOT

Results driven professional over 10 years of experience in the area of operations.

Proactive and smart planner with expertise in strategic planning, data analytical, product management.

Hands-on executive, passionate about utilizing technology to improve business results.

Skilled communicator and quick learner with analytical bent of mind coupled with zeal to utilize and enhance ideas, knowledge and skills.

Exceptionally well organized with track record that demonstrates self motivation, creativity and initiative to achieve both personal and corporate goals.CORE COMPETANCIES Leadership

Client Relationship

Project management Skills.

Service management Expertise in the domain of Windows/AD

CAREER SKETCHREI 6 Ten Pvt LtdWorking on day to day on Operational Issues.

PROFESSIONAL QUALIFICATIONS Masters in Business administration in operations from IMT.

Bachelor in Commerce from Bhagat Singh College (Delhi University).

Done Schooling from Mount Abu Public School.

PERSONAL INFORMATIONDate of Birth: June 30, 1984Nationality: Indian

Marital Status: Unmarried