The role of logistics in the successful functioning of an e-commerce venture is indispensable.

All these innovative services will be ineffective if the products do not reach the customers on time. Here are some Best Practices of the Supply Chain of Flipkart: Building the Suppliers base- The Company has established a network of more than 500 distributors and only stocks frequently ordered items. Items like the 'Long tail' are almost always sourced from suppliers in real time and as and when the customer places an order. Building Infrastructure for Operations- The Company has 4 offices in 4 metros cities with more than 500 employees. Warehouses of the company are located in 7 cities including the metros. Company has tie-ups with more than 15 courier companies like Blue Dart, First Flight etc. to deliver their products and Indian post for areas where courier do not reach. The Process of Supply Chain- The first step in buying the products like books online from the Filpkart.com site by making payments using payments options like credit/debit card, cash-on-delivery, net banking, cheque/DD and money order and enter the phone number and address where the items need to be delivered. Depending on items purchased they are packed and shipped accordingly for example mobile phones and books are packed differently as per requirement and also all items have transit insurance against theft and damages that may be caused while they are in transit. Flipkart bears the cost of delivery and this make them give a reason/motivator for improving efficiency at every point of supply chain. This also makes them differentiate from their competitors. Now for delivering the items depending upon the area where the item need to be delivered either courier, Indian post or own internal logistics arm is used. The delivery time varies between less than 24 hours and 3 weeks depending on the location and availability of the product like the products which are imported take 3 weeks time to get delivered to the customers. The inter-city, trans-zone deliveries are made using air cargo. For satellite cities and others in close proximity, products are transported overnight by train or truck. For the local parts of the cities where the warehouses of the company exist products are delivered using two-wheelers, bicycles, or on foot depending upon the proximity of the place and because of this many of the deliveries are made within a day of the order being made. All the Team Members have been trained to work efficiently to meet customer expectations. Use of Information system: The Company use sales to predict the inventory levels. The warehouses are split into multiple areas inventory, packing, shipping and so on. The stocks are replenished every 24-48 hours. In the Back End, Flipkart stores details of all the transactions that need to be carried out. They have an understanding with their associates for order tracking, reconciliation and MIS (Management Information Systems) reports. The private courier companies in turn have their own ways of tracking every package. The customer is also updated about the status of his shipment via message, email or through the website. When the product needs to be returned then due to the companies understanding with the courier companies it happens without any disputes o r problems efficiently. Flipkart

takes care of the after-sales needs of its customers with regard to delivery of an item or addressing grievances including delayed delivery by the logistics partner, or addressing issues when an incorrect product is delivered. In the case of electronics, warranty and after-sales service is largely the responsibility of the manufacturer. Flipkart does however facilitate interaction between the customer and manufacturer/service center as and when the need arises.[1] Future for E-Commerce: India has 11 million online customers now which will increase to 30 million by 2015 which shows that the e-commerce industry with the increased internet penetration will be the service sector's growth engine in India. The industry's size is expected to increase to $11.8 b. Among the challenges faced by the industry is its dependency on the service providers like suppliers, logistics service providers, etc. whose service in not up to the expectation and are affecting the service of the online companies. To solve this issue efforts are to be made to educate these service providers the importance of using technology and provide them incentives to use these technology and shift their focus on to the customers. Seeing the prospects of growth a lot of new online retailers have come up and there is a price war going on to attract more and more customers which is putting pressure on the profitability of the companies so it has become extremely important to manage cost to increase profits which is only possible by building an efficient backend- a nationwide delivery network, warehouses , inventory management , logistics, efficient teams to manage all this therefore supply chain management becomes an important factor on which companies depend to sustain in this industry. Flipkart obtained funding from Tiger global management in 2010 which is being utilized by the company for strengthening supply chain capacity and upgrading technology platforms, including automation at warehouses.

Flipkart must be doing things right considering it is the largest online book store in India today. Remya Philip finds out the workings of Flipkarts supply-chain. The role of logistics in the successful functioning of an e-commerce venture is indispensable. You could get everything right but if you dont have the logistics in place it could prove fatal. The manner in which logistics is handled differentiates one online retailer from another, and this could be, as weve learnt from Flipkart, an edge over competitors. According to media reports, in 2010, the size of the e-commerce market in India was around `9,500 crore, of which the pure play online shopping market was worth `1,300 crore. While online shopping globally is growing at around 8-10 percent, in India the growth rate is upwards of 30 percent. However, while Indias presence in the e commerce industry is positively on the rise, online shops like Flipkart are way ahead of their time. The Tale Of The Cart Flipkart was founded in 2007 by Sachin Bansal and Binny Bansal, friends and classmates at IIT (Delhi) and Computer Science graduates. They had planned to start a

shopping comparison engine but research gave them an insight into the inability of the Indian e-commerce companies to provide prompt customer service. Their research led them to the discovery that e-commerce was plagued with problems like wrong product deliveries, delays, poor customer support, among other things. So they moved to starting an online store. As the website would initially sell only books (more categories were added much later), Flipkart seemed an apt name as cart is a familiar shopping term and flip refers to flipping of the pages of a book. When starting out, the young Bansals had a vision: To be one of the largest multicategory e-commerce destinations in India, with a strong focus on customer service. This cannot be achieved with selling only books. But they were sure of requiring a sound strategy behind every category they would venture into. So they set about building a bandwidth in terms of people and technology, and new product categories. Says Sachin proudly, Today we are the only online store with a 24*7 customer support team. We started with books and have now moved into various other categories in a span of just three years. We are on track to achieve our goals and will keep adding more categories. Their user base consists largely of people belonging to the 25-35 age group, Englishspeaking, urban and semi-urban internet users. With the introduction of cash-ondelivery, more students without access to cards have started using Flipkart. Sachin said, We started with books because they are a comparatively easy category of products to sell online. They do not require huge inventory maintenance, are easier to negotiate supplier terms and profit margins are high. Also since books are low value items, inducing customer trial was easy. It was a safe option to start off with books, given their appreciation in e-commerce the world over. The database of products has been created through tie-ups with various distributors of products. The company has established a network of 500 distributors and only stock frequently ordered items. The long tail items are almost always sourced from suppliers in real time and as and when the customer places an order. The success of the venture can be gauged from its revenue in fiscal year 2009-10. The company posted revenue of `25 crore and is expecting to hit `100 crore this year. We are the largest online book store in India in terms of revenues and number of books sold, says Sachin. Today, Flipkart sells CDs, VCDs, DVDs, games, software and electronic gadgets like computers, laptops, gaming consoles, cameras and mobile phones. Infrastructure Build The Bansals manage their daily operations through four offices located in the four metros, and a team consisting of more than 500 employees. The warehouses are also located in the same cities as the offices. For areas in which warehouses are not present, items are shipped from the warehouse situated closest to that particular city or

town, with all the other processes remaining similar to those in cites that house their warehouses. Having a wide reach, Flipkart ships products to all parts of the country. Sachin says, We have tie-ups with more than 15 courier companies who deliver our products. To places where couriers do not go, we use the Indian Post. Blue Dart, First Flight, Fedex, Aramex and Professional Couriers are some of the courier services used. The Supply-Chain Story Buying a book online is easy. You visit the website and select the product(s) from various categories and options. Once the item is chosen, you enter the phone number and the address where youd like the delivery to be made. There are various payment options to choose from credit/debit card, net banking, cash-on-delivery, cheque/DD and money order. The supply chain of all the products is more or less the same. Any difference involved would be at the packing and shipping stage. For example, mobile phones make use of bubble wraps and other buffers for safety during transit so that they reach the customers safely and in good condition. All items, especially the electronic products have transit insurance against theft and damages caused while in transport. As for the cost, the customer pays only for the product. Flipkart bears the cost of delivery and this works as an incentive for them to improve efficiency at every point in the supply chain. The expected time of delivery is mentioned against each item on the website. Using services of courier companies, the Indian Post and in some cases, their own internal logistics arm, the product is delivered to the customer. The delivery time varies between less than 24 hours and 3 weeks depending on the location and availability of the product. If the product has to be imported into the country, it would take between two and three weeks, given that they arrive from the US or UK, and are then shipped across to the customer. The inter-city, trans-zone deliveries are made using air cargo. For satellite cities and others in close proximity, products are transported overnight by train or truck. The Government postal system manages deliveries through their respective channels and transport system. In cities where Flipkart has its warehouses, delivery is on a two-wheeler or bicycle or foot for the shorter distances; many of the local deliveries are made on the same day as on which the order is placed. The company has trained all its team members to be efficient, organized and quick, in order to meet customer expectations. Systems In Place

Commenting on inventory, Sachin says, People who visit our warehouses compare it to a very large library. Our sales predict our inventory, and our inventory fulfills the bulk of all sales. The warehouses are split into multiple areas inventory, packing, shipping and so on. The stocks are replenished every 24-48 hours. Internally, Flipkart has details of all orders and shipments that need to be carried out. They have an understanding with their associates for tracking systems, reconciliation and MIS (Management Information Systems) reports. The private courier companies in turn have a shipment tracking ID or an airway bill number linked to every package. The customer is also updated about the status of his shipment via email or on the website. The long-term relationships with the shipment companies also help them manage reverse logistics effectively. In an event a product needs to be returned, their understanding with courier partners ensures it happens successfully. Gi ven that such cases are few and far between, it plays a very small role in our day-to-day operations, adds Sachin. Flipkart takes care of the after-sales needs of its customers with regard to delivery of an item or addressing grievances. This could pertain to a delayed delivery by the logistics partner, or addressing issues when an incorrect product is delivered. In the case of electronics, warranty and after-sales service is largely the responsibility of the manufacturer. Flipkart does however facilitate interaction between the customer and manufacturer/service center as and when the need arises. Whats In Store Sustaining an online shopping venture is no easy task, more so in a country where ecommerce is nascent. According to Sachin, there are a few structural issues that need to be resolved for e-commerce to take off. Increasing internet penetration would make online retailers accessible to a large number of potential buyers. Although things are looking better with increasing broadband connectivity and lower costs for accessing the internet, the pace needs to improve. A major challenge is that online retailers depend on a network of offline service providers (suppliers, logistics service providers, etc.) whose service delivery is not amongst the best, thereby affecting the service of Flipkart and other such online stores. The solution would be to educate offline partners, suppliers and vendors about the benefits of using technology and to provide them with incentives to adopt technology and improve customer focus. Flipkarts competitors are other e-commerce stores like infibeam, rediff, indiatimes, indiaplaza, etc. We have always differentiated ourselves on the basis of superior customer service. It is what we focus our efforts on and this is ingraine d in us, asserts Sachin. So as the cart gets bigger and better, more Indian shoppers are likely to get wooed into becoming flipkarters, a term that might soon become the in-thing.

--