STUDY OF OPERATIONS At BIG BAZAAR

Submitted To:

Prof. Alok Kumar Singh

Submitted By:
Keerthana Latha– 19PGDM159
Krati Gugnani – 19PGDM160
Mahek Jindal– 19PGDM162
Mansi Garg- 19PGDM163
Triyaksh Batra – 19PGDM205
Vignesh VS – 19PGDM206
Vishant Chopra – 19PGDM207

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Learnings:
Aggregate Production Planning
Aggregate production planning is concerned with the determination of production, inventory,
and work force levels to meet fluctuating demand requirements over a planning horizon that
ranges from six months to one year. Typically, the planning horizon incorporate the next
seasonal peak in demand.
In simple terms, aggregate planning is an attempt to balance capacity and demand in such a
way that costs are minimized.
For example, with automobile manufacturing, aggregate planning would consider the total
number of cars planned for not the individual models, colours, or options.

Materials requirement Planning:

Material requirements planning (MRP) is an inventory management system designed in order
to help production managers in scheduling and placing orders for items of dependent demand.

Dependent demand items are components of finished goods—such as raw materials,

component parts, and sub-assemblies—for which the amount of inventory needed depends on
the level of production of the final product. For example, in a plant that manufactured bicycles,
dependent demand inventory items might include aluminium, tires, seats, and bike chains.
MRP systems offer both advantages and disadvantages:

Key benefits include-

 Minimizing inventory levels and the associated carrying costs
 Track material requirements
 Determining the most economical lot sizes for orders
 compute quantities needed as safety stock
Drawback of MRP: -

MRP relies upon accurate input information. If a business has not maintained good inventory
records or has not updated its bills of materials, it may encounter problems with the outputs of
the MRP system. The problems could range from missing parts and excessive order quantities
to schedule delays and missed delivery dates.

Inventory management
Inventory management refers to the process of ordering, storing, and using a company's
inventory. These include the management of raw materials, components, and finished products
as well as warehousing and processing such items.
For companies with complex supply chains and manufacturing processes, balancing the risks
of inventory gluts and shortages is especially difficult.

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To achieve these balances, firms have developed two major methods for inventory
management: just-in-time and materials requirement planning: just-in-time (JIT) and materials
requirement planning (MRP).
Short term scheduling
Normally scheduling is associated with material / inventory level maintenance like determining
EOQ, sales requirements scheduling what process to be done at what time while short time
scheduling is associated with particular job or for a small period of time like in case of special
order we use methods like Hungarian to objectify the least cost method to be chosen for
particular job and cyclic scheduling for fulfilling staff/employee requirement at least cost
Likewise, we have seen in the case of Big bazaar where they used short term scheduling for
staffing and logistics during their annual busy days like “sabse saaste din” and other annual
events sales like republic days sales, Diwali sales etc. to meet the excess demand over that
period of time

Quality Control:
Quality control helps in ensuring that product quality is maintained with zero errors or defects.
In general, there are seven tools Quality management namely, Stratification, Histogram. Check
Sheet, Cause-and-effect diagram, Pareto chart Scatter diagram and Control chart

Service Process Management and Queuing Theory

In services, process management and queuing, waiting lines play a key role in customer
satisfaction, retention and reducing cost. Service blueprint helps in setting standard operating
procedures, improving communication and enhance the speed of service delivery.

Understanding average server utilization and waiting time in the system will help in reducing
the cost of both, the cost of providing service and the cost of the waiting line. For Example, in
restaurants high waiting line can frustrate the customer and will lead them to leave. To improve
customer service, restaurants can increase offer early bird dinners, increase the number of
serves(tables), increase activity like giving menus before seating, proper seating area with TV,
prior bookings availability. Differentiated pricing with timings can increase the server’s
utilization and decrease waiting time during peak durations.

Supply Chain Management

supply chain management is sum of all the activities that a firm do , from purchase of raw
material, to logistics and all the activities done in manufacturing and there after supply of
good/services. Implementing an efficient Supply can have a positive effect on the overall
profitability of the organization.

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 Supply Chain Management at Big Bazaar
Inventory and Employees benefit expenses are the major expenses (refer Fig. 1) born by big
bazaar and a small change in these expenses may affect the overall profitably of big bazaar as
around 75% of its total expenses are stock in trade related and over 5% is related to employee
expenses

Fig. 1

Retail Strategy at big bazaar/Policy Adopted by big bazaar to minimize inventory cost with
limiting the stock out stock out situation.

Just In Time:
JIT is fabricating logic including an integrated set of procedures/activities planned to achieve
a volume of generation utilizing minimal inventories Works best where there is a close
relationship between manufacturer & suppliers to get high level of output at the lower unit cost
based upon anticipated consumer demand and materials are to be purchased to manufacture
components just in time which basically result in low storage cost, Less vulnerability to fashion
and technology changes and increased cash flow

Inventory Management at Big Bazaar based on daily requirements and special events like
“Sabse Saste Din”, “Wednesday Bazaar” and other important events
For day to day requirements like

 Food items/grocery
 Apparel
 Electronic
 Toys
Staff Scheduling should be done with taking these factors in consideration also, re-order level
should be set as per previous months performance

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 Fig. 2
Supply Chain Management
Cycle
Procurement in Big bazaar happens from-
i. Central distribution center.
ii. Neighborhood sellers.

1. They keep a minimum stock of 9 days so that there is no shortage of stock and in the
mean time the local suppliers recharge their stock after accepting purchase order.

2. Big Bazaar use automated replenishment system for Inventory Management to get its
orders fulfilled from 15-20 neighborhood merchants which cater particularly to the
present-day trade channel members, offering them deep discounts which defines the
need of different inventory level management system for food, fashion and electronics.

Fig. 3 Sales Chart at Big Bazar

For perishable good they used local vendor and to settle the unexpected demands they used to
contact nearby big bazaar which minimized the chance of losing a customer.

While fashion big bazaar which mainly focuses on the new stylish and fashionable clothes for
all age group hence maintain optimum level of stock is quite difficult to determine so they keep
organizing the sales, bundling and shifting the unsold supply from tier 1 to tier 2-3 cities
Scheduling:

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More staff is needed when there is huge discount period like

 Wednesday Bazaar
 Sabse Saste Din
 Great Exchange Offer
 Maha Bachat
 Month’s first Weekend
which helps in avoiding Poor Crowd Management and long queues at billing counter during
high discounts period.

Quality Control at Big Bazaar:

To find out if an item is either good or defective, they use quality control techniques. Their
main goal is to find the percentage of defects occurring in a sample as the attribute measure.
The parameter they focus on most is, the percentage of items that are defective from their
supplier. In general, it is important to have a high-quality control agreement with suppliers.
They have set critical control points for their suppliers It is important that the suppliers agree
to have a self-assessment audit and undergo a validation by the company. In general, big
hypermarkets such as these have certain factory security standards for their suppliers.
Continuous Improvement:

Continuous improvement is essential as it is important to find and eliminate the problems.

There can be several different problems that have nothing in common, for instance, it can be
the supplier's inexperience workers, materials, inspectional skills, or technology. The problems
are separated by major causes and then are broken down using the ishikawa diagram.
Six Sigma:
Six Sigma is a statistical based data driven approach that aims at identifying and preventing of
defects to achieve or exceed total customer satisfaction. Stores are using procedure like six
sigma in every aspect. The supervisors are trained as of what to look for and what they need to
analyse and to show them what to do to improve and keep improving.

Supply Chain Management

Here we can see that Big Bazaar use centralized storage house and scheduled staff and
inventory management system to save some cost on that fold.