TEAM

STEPPERS
Ankit Anand Ranjan Richa Malhotra Rishab Arya
VGSoM, IIT KGP VGSoM 2021-23 VGSoM 2021-23 VGSoM 2021-23
 Case Overview Ideas Maximized NewIdeasMaximised
Supply Chain
Objective Key Statistics - Quantitative
Design a low cost supply chain for low 1 Flexi Delivery
ASP products in Tier 2+ geographies
considering the low demand density 20% 30% 70% 54% 40%
Enables customer to choose the desired delivery date from
Key Factors the list of available dates. Analytical capabilities are used to
v Internet Penetration Return Warehouse Direct Consumers Shipments display variable delivery charges on respective dates
v E-Commerce Demand Order Shipments Shipments Prefer LP to T2+ geo.
(Tier 2+ geographies) Key Statistics - Qualitative Dates & Cost Selected Order Placed

v Unit ASP v Consumers in T2+ geographies prefer value over speed of delivery
v Fashion is the biggest category in terms of sales in T2+ geographies
v Cost of Supply Chain v BOPicK model is a proven win-win situation for shoppers & platforms
Factors influencing Delivery Date
First Mile Line Haul Cost Breakup Product Categorization
Delivery

Order Quantity Truck Load Demand Cost Involved Manpower

Seller 1 15-20%
Pickup First Mile Delivery
Existing Supply Chain

Hub 1
Fashion Personal Care
Mother
Hub
Seller 2
20-25%
Pickup
Hub 2 23
Line Haul(SV)
Increased Customer Satisfaction

Benefits
Seller 3 with Flipkart incentives

%
FMCG/CD Accessories
40-45% Load optimization by ensuring 2% 156 L
Customer 1 Dist.
Centre
43
Last Mile Delivery
Full-Truck Load Supply Chain Saving per
Cost Reduction month

%
Infrastructure and Capabilities Required
Decor Electronics q Analytical capabilities for regulation of delivery cost by
Customer 2 10-15%
prediction of demand aggregation
Mother Hub Low Medium High
Last Mile Delivery 12% q User Interface to be modified to enable the flexi date feature
Standardization Scale

TEAM STEPPERS
 Case Overview Ideas Maximized NewIdeasMaximised
Supply Chain

2 Leveraging Technology for End Mile 3 F-Local: Local Fulfilment & Localized Delivery 4 Leverage Asset Marketplace

Usage of Analytical capabilities and learning algorithms Strategic partnership with Electric Mobility
Using analytical capabilities to identify potential locations
to create structured optimized routes for the delivery companies & Asset based platforms to reduce
for local partnership to aid in demand aggregation
person. Taking availability confirmation through push-up First Mile & Last Mile cost
notification and redirecting the route accordingly Reduce product travel distance Local retailers as Drop-Off Points
Go Green with eV Partner with Existing Players
Push-up .
Onboarding local retailers for Aggregating the volume of orders
Notification Availability .
Strategic partnership with Contractual Partnership
Check shorter supply chain cycles, thus to one specific location, thereby
Yes with existing asset
reducing cost and delivery time. reducing last mile delivery eV based aggregators to
aid in delivery during the marketplace during the
No First Mile & Last Mile. OFF hrs in the First Mile.
Reduction in Last Mile Delivery &

Benefits
Route Restructuring
First Mile Delivery
Better business for Kirana Store 130 L
2%
Increased fuel economy and as customer opted for self pickup Saving per Supply Chain
Benefits

lower delivery time can be a potential customer month Cost Reduction

Reduction in order delivery 539 L 8%
Saving per Supply Chain Infrastructure and Capabilities Required
failure rate
month Cost Reduction q Analytical tool for identifying potential locations Reduction in Last Mile
q Dashboard creation for local suppliers Delivery & First Mile
Infrastructure and Capabilities Required

Benefits
q Linking up with Kirana Stores of the Identified areas. Delivery cost
q Analytical tool to form the optimized route
q Legal check of Identified Stores 539 L 8%
q In-App availability confirmation by customer
q Marketing and Awareness of the model Integration of Saving per Supply Chain
q Driver friendly mobile application for re-routing
Sustainability in the month Cost Reduction

5 Smart Secured Lockers Supply chain

3 Step Process Benefits

Provision of Smart & Secured Infrastructure and Capabilities Required
Pain Point: Local retailers,
Lockers at retail stores or No constant q Legal Compliance check of Identified Partners
during peak time, may not
Kirana stores. manpower q Charging Infrastructure support at local
attend the Flipkart customer on
Customers can pick their orders retailer/hubs
top priority. This may lead to
at their convenient timings. This Step 1 Step 2 Step 3 q Application interfacing between partner
customer dissatisfaction. Higher customer
can be clubbed with F-Local Collect application and Flipkart
Scan QR Unlock satisfaction
Package

TEAM STEPPERS
 Case Overview Ideas Maximized NewIdeasMaximised
Supply Chain
IdeasMaximised
6 Reverse Logistics: Go-Local New Supply Chain Design & Idea Implementation Areas
Enabling customers to access GoLocal feature linked Potential Cost
with Flipkart product page wherein failed delivery items Saving
Customer 1 Existing Supply Chain
will be made available to people of that respective location
at a lower cost
1
Item listed on GoLocal
3
Rs. 40
Seller 1 Pickup Cost per Order
Hub 1 Customer 2

Mother Dist. 2
Order Placed Faster Delivery Delivery
Delivery Denied/
Success Hub Centre
Return Customer searching for
products Seller 1 3 -18%
4 Customer 3
Reduction in overall Reverse logistics cost Pickup 4
Benefits

Hub 1
Value addition for customers as they can avail products 3
at deal price with faster delivery
Seller 1
Customer 4
Rs. 33
Infrastructure and Capabilities Required Cost per Order
q Local Storage facility for last mile return orders. Dark stores
can be setup for storage Customer 5 New Supply Chain

Customer
Idea No. Idea Description Feasibility Cost Impact Scalability First Mile Line Haul Last Mile
Experience

Demand aggregation and load optimization

1 Flexi-Delivery Cost saving partly passed to customer
reduces cost
Scalable, No major setup required Applicable Applicable Applicable

Cost reduction due to efficient & optimized

2 Leverage Technology in End-Mile Feasible, with usage of Machine Learning
route
Replication possible across all locations Applicable Not Appl. Applicable

Local retailers tie-ups can ↑ with

3 F-Local Ample Space Availability in Tier 2+ Last mile distance reduced, saving fuel cost
demand ↑
Applicable Applicable Not Appl.

4 Leverage Asset Marketplace Feasible, As EV penetration in Tier-2 is ↑ Fuel Cost reduction with usage of EV’s Scalability difficult in Tier 3 Cities Applicable Not Appl. Applicable
Modular design enables cost optimization Requires Capex, but can be clubbed with Modular design allows scaling up and down
5 Smart Delivery Lockers
based on order density Kirana delivery the lockers
Not Appl. Not Appl. Applicable

6 Reverse Logistics - GoLocal Feature required on Flipkart App Cost reduction in Return cost Can be scaled basis the product availability Not Appl. Not Appl. Not Appl.

TEAM STEPPERS
Thank You
 Annexure 1

F-Local: Partnership with Local retailers Flexi-Delivery System: Patience is Rewarded

Average Monthly Orders 60000000 Average Monthly Orders 60000000
Monthly Orders - Tier 1 18000000 Percentage of Total Orders 30% Monthly Orders - Tier 1 18000000 Percentage of Total Orders 30%
Monthly Orders - Tier 2 42000000 Percentage of Total Orders 70% Monthly Orders - Tier 2 42000000 Percentage of Total Orders 70%

Considering Tier-2 as price sensitive and 500 as average cost per Considering Tier-2 as price sensitive and 500 as average cost per
order, we assume 40% as Low ASP order order, we assume 40% as Low ASP order
# of Low ASP Orders 16800000 Low ASP orders % in Tier 2 40% # of Low ASP Orders 16800000 Low ASP orders % in Tier 2 40%
Average Order Price (Low ASP) 33,600 INR L Average order price (Low ASP) 20000% Average Order Price (Low ASP) 33,600 INR L Average order price (Low ASP) 20000%
Existing Supply Chain Cost 40 INR per Order Existing Supply Chain Cost 40 INR per Order
Total Supply Chain Cost (Low ASP Orders - Tier2) 6,720 INR L Total Supply Chain Cost (Low ASP Orders - Tier2) 6,720 INR L

Standard Category Items out of Total Low ASP Orders 6720000 % of Total Low ASP Orders 40% Considering the cost-sensitive population in Tier-2+ locations, we can assume that 30% of customers ordering Low ASP orders opt
Non-Standard Category Items out of Total low ASP orders 10080000 % of Total Low ASP Orders 60% for Flexi-Delivery. The calculations are given below:
Out of Standard Category items, no. of items catered by local Total Orders with Flexi Delivery 5040000 % of Total Orders 30%
1680000 25%
partnership % of Standard category items Remaining Orders 11760000
Existing Supply Chain Cost (Assuming total cost of Rs 40 per order)
First Mile Cost 6 Contribution % of total cost 15% First Mile Cost 6 Contribution % of total cost 15%
Line Hauling 8 Contribution % of total cost 20% Line Hauling 8 Contribution % of total cost 20%
Last Mile Delivery 20 Contribution % of total cost 50% Last Mile Delivery 20 Contribution % of total cost 50%
Others 6 Contribution % of total cost 15% Others 6 Contribution % of total cost 15%
Total Cost 40 Total Cost 40
Total Supply Chain Cost per month (Considering Low ASP Orders) 6,720 INR L Total Supply Chain Cost per month (Considering Low ASP Orders) 6,720 INR L

With local Partnerships Reduction With Flexi-Delivery - Load Optimization Reduction

First Mile Cost 6 % reduction from existing 0% First Mile Cost 5.7 % reduction from existing 5%
Line Hauling 3.2 % reduction from existing 60% Line Hauling 7.2 % reduction from existing 10%
Last Mile Delivery 18 % reduction from existing 10% Last Mile Delivery 18 % reduction from existing 10%
Other Cost (Remains Constant) 6 Other Cost (Remains Constant) 6
Total Cost 33.2 Total Cost 36.9
Total Supply Chain Cost per month (Considering Low ASP Orders) 6,606 INR L Total Supply Chain Cost per month (Considering Low ASP Orders) 6,564 INR L
Cost Saving (Per Month) 114 INR L Cost Saving (Per Month) 156 INR L
%Saving of Cost 2% %Saving of Cost 2%

TEAM STEPPERS