Reliance Fresh Supply Chain Management

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Introduction

Inter-connected Business According to the Council of Supply Chain Management Professionals (CSCMP), supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management Includes storage of raw material, Work in process inventory and finished goods

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Supply Chain Management

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Reliance Fresh
Reliance fresh retail chain division of Reliance Industry Present in every metropolitan and regional area of India Plans to expand its retail presence to 784 cities

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Strategy adapted by Reliance fresh

Buying directly from Farmers Price reduction from 15% to 20% Delivering value to the customers Assisting farmers with high quality inputs which disinter mediates supply chain and eliminates the waste

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Procurement process
Goods procured locally and Nationally Fruits, grains and other Agri products procured from Local farmers FMCG from Kerala 2 Warehouses Calicut and Kozhinjampara

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Supply chain for fruits and vegetables

The produce from farmers is collected at the Collection Centers (CC) and Quality check is done. Goods are sent to Distribution centers (DC)- Sorted and graded data entered into the SAP system for easy tracking Estimate the demand and raise the order for next day requirement Based on the availability of goods delivered to the store

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Supply chain for Non fruits and vegetables

Goods directly collected from Manufacturer delivered to the local DC Availability of Minimum Base Quantity (MBQ) for all items SAP automatically reorders if MBQ is low

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Contract Model
Pre-agreed price, quantity, measure of quality between the company and the farmer Procures different kinds of vegetables like carrots, onions, cabbage, cauliflower etc.. Pros Reduce load on central and state level procurement Access to reliable markets Cons Rejection rate of agricultural produce by retail is high Unsuitable technology and crop incompatibility

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Farm to Fork Model

Pros
Leads to removal of non-value adding intermediaries from supply chain Cost reduction Reduction in lead time Reduction in intermediaries leads to lesser wastage

Cons
Loss of employment Need for large investements

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Supply relations
Perishable Items: Fruits & VegetablesContract Farming Dairy-Partner supplier relationship, Milk is directly from MILMA, dairy products from Amul and MILMA Bakery items Multiple supplier FMCG P&G, HUL and Durable arm lengths

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Inventory Management
Storage area is available to each store  Large inventory can add to the storage cost  too much of inventory can also add to wastage if perishable items in quantity  Less inventory may add to disadvantage as sales figures would go down Time lag between demand and supply of goods = 2 days

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Cycle of replenishment

Cycle of replenishment happen on daily basis FRESH MODEL Maintain inventory requirement of One day Small storage area replenished in Morning Perishable are stocked fresh daily into the shelves. Other FMCG goods with longer shelf life are replenished as and when required. The rate of replenishment varies for each product

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Customers Classification

Time of arrival 5 to 7:30 P.M To tap more loyal customers offered loyal cards Wide market customers - depend on the store or all purchases Narrow market customers - they purchase only a few items from the shop Age group segment Old age group comfortable with their brands New age group - comfortable in testing new products

References
http://www.ril.com/html/business/business _retail.html http://www.london.edu/assets/documents/f acultyandresearch/Reliance_Fresh.pdf

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