SOLVING UNCERTAINITIES IN LAUNDRY SERVICE

Sipping into his Hot Coffee on a Thursday evening, Mr. Parag had a lot of calculations going
through his head regards to his start-up that he has run for the past 3 years.
“How much more will I lose before I start gaining?” were the words Mr. Parag used when
asked about what was bothering him.
Mr. Parag further elaborates that his start-up which was primarily a Business to Business (B2B)
model, in search of expanding its wings has ventured into Business to Customer (B2C) model
and this move has resulted in him losing money. The losses became a habit and it started eating
into the profit that the firm was making in the B2B model.
Mr. Parag and his “PickMyCart” are a Goa based Express Laundry Service providers who are
tied up with almost 30% of the Hotels across a Holiday destination like Goa. After serving in
the B2B industry for almost 4 years Mr. Parag and his firm shifted their focus to B2C with
Panaji (Capital City of Goa) being their prime target, the locations where he serves are as
follows: Taleigao, Caranzalem, Dona Paula, St. Inez, Tonca, Miramar, Panaji Market. Mr.
Parag wants to set the ball rolling in the B2C industry with his cutting-edge technology and
excellent quality of services that he provides. The process flow that PickMyCart follows is
mentioned in Exhibit 1.

The Indian dry-cleaning and laundry services valued at $30 billion in market size in 2017 and
growing at a compound annual growth rate (CAGR) of 8.7% since 2014, and is expected to
grow to $76 billion by 2020. It is estimated that by 2020 almost 3 million Households will be
in need of weekly Laundry service. (Forbes, n.d.) The figures look quite promising but gaining
market share is a tough nut to crack looking at how unorganized the sector is.

Mr. Parag also echoed the same voice when he says: “There have been a lot of start-ups who
have invested in the express laundry services in India and have shut shop as well owing to the
nature of the competition that our industry faces.”

But Mr. Parag doesn’t want to follow the suit of his predecessors, he wants to expand and grow
his Business both horizontally and vertically, not just in Goa, but even in the neighbouring
states of Karnataka & Maharashtra.

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Business to Business (B2B):
The Business to Business (B2B) market of PickMyCart is where the profitability of the
company lies and the majority of customers are hotels in North Goa. The various locations
from where the Hotels are catered are mentioned in Exhibit 2. PickMyCart executives use two
different routes – 1st Route is used by them for their everyday operations and the other is used
on alternate days only (Exhibit 3). The distance of the Individual locations to the Operations
centre is explained in Exhibit 4.
Currently Pick my Cart has an outsourced washing and related activities to an external vendor
in Vasco, in which all the machines are proprietary to Mr. Parag. The data pertaining to the
expenses that he incurs in the current model is mentioned in Exhibit 5.
Mr. Parag wants to come out of the outsourced place in Vasco and is on the lookout for a place
to consolidate both the set of customers i.e., B2B & B2C to a large extent.

Business to Customer (B2C):

PickMyCart has ventured into the B2C front only very recently which is clearly pointed out by
Mr. Parag and he looks to set the ball rolling in an industry where start-ups like him have failed
to establish themselves earlier.
But the challenges that Mr. Parag and Pick my cart face here are so unpredictable that his
expansion plans within his city of operations itself seem a distant reality let alone expanding to
neighbouring metros.
This led to him to contemplate the Franchisee model not just for his expansion plans, but also
for his existing B2C model.
Mr. Parag though remaining the Optimist that he is presenting a different viewpoint to the
whole problem,” If start-ups before me have failed I don’t take that as a challenge rather a
blessing in disguise because I view this as a lack of competition to my firm”. The process steps
in B2C are similar to that of B2B business and distance of the different customer locations is
given in Exhibit 6.
PickMyCart offers three different services in B2C business – washing, ironing and dry cleaning
(Exhibit 7).
He also collated some data from the limited operations that he has overseen in the past few
months. (Exhibit 8 & 9).

Note: - The Capital city of Goa is the costliest in terms of real-estate in the state.

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Business Concern:
Mr. Parag and his PickMyCart want to thrive in this industry and is willing to put in that extra
yard. All he needs is that a proper jump start to his expansion plans and the right direction to
prosper.
Easier said than done, the problems that the industry as a whole face is very evident from the
fact that start-ups of this capacity in this industry have barely managed to survive let alone
thrive. This coupled with already growing outflow of cash that Pick my cart is incurring in their
B2C venture, the challenges are aplenty.

Way forward?

1. Design a complete transportation model to optimize the B2C model and enhance the
existing B2B model. Support your model with Suitable calculations and mention any
considered assumptions. (Translate distances to costs wherever needed)
2. Suggest ways to maintain the growth rate in the B2B segment and ideas to expand the
B2C business with Minimum investment ( Initial Investment & Working capital
requirements for the business to be assumed with proper references for cost benefit
analysis matrix).

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Exhibit: 1 – Process flow followed by PickMyCart

Press man accept

Counting Tagging Sorting as per one load/order/bag
Location at a time on his
table

Sorting as per Packing in Box

Location & Packing bags to Cross checking Processing
delivery timing avoid wrinkles Counts

Billing Out for delivery

Exhibit: 2 – Customer locations for B2B Business

B2B-North Goa NOS
Panaji 7
Porvorim 3
Calangute 1
Baga 5
Mandram 2
Ashvem 1
Arambole 1
Total 20

Exhibit: 3 – Routes used for B2B operations

B2B route 1 – Every day

Panjim Porvorim Calangute Baga Panjim Vasco Panjim

B2B route 2 – Alternate days

Panjim Mandrem Ashvem Arambole Panjim Vasco Panjim

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Exhibit: 4 – Distance of different customer locations (B2B business)
Vasco Panjim Porvorim Calangute Baga Mandrem Ashvem Arambole Mapusa
Vasco - 27 30.4 38 40.5 54 55.3 60.4 37
Panjim 27 - 8.2 14.3 16.8 28.9 30.3 35.5 14.5
Porvorim 30.4 8.2 - 6.7 9 22.4 22 29 7.3
Calangute 38 14.3 6.7 - 2.5 17.9 19.2 24.5 8.7
Baga 40.5 16.8 9 2.5 - 16.5 17.8 23.1 9
Mandrem 54 28.9 22.4 17.9 16.5 - 5.6 7.8 14.5
Ashvem 55.3 30.3 22 19.2 17.8 5.6 - 6.9 15.8
Arambole 60.4 35.5 29 24.5 23.1 7.8 6.9 - 21.1
Mapusa 37 14.5 7.3 8.7 9 14.5 15.8 21.1 -

Exhibit: 5 – Cost allocation for various Expenses

Heads Cost
Rent Rs 65000
Water + Electricity + Chemical cost Rs 4.3 / Kg
Current Monthly demand 30,000 Kg
Transportation cost – Rent of
Vehicle Rs 14000
Transportation cost – Fuel cost Rs 30000
Washing time/ Batch 1 Hour
Quantity/ Batch (maximum capacity) 90 Kg

Exhibit: 6 – Distance of different customer locations (B2C business)

Taleigao Caranzalem Dona Paula St.Inez Tonca Miramar Panjim Market
Taleigao - 2.5 3.5 1.1 3.3 2.7 2.8
Caranzalem 2.5 - 2.3 2.7 1.3 1.2 4.7
Dona Paula 3.5 2.3 - 4.3 2.8 2.3 6
St.Inez 1.1 2.7 4.3 - 2.1 1.5 2
Tonca 3.3 1.3 2.8 2.1 - 0.65 3.8
Miramar 2.7 1.2 2.3 1.5 0.65 - 3.4
Panjim
Market 2.8 4.7 6 2 3.8 3.4 -

Exhibit: 7 – Cost of different services in B2C

Services Cost in INR
Washing/kg 14.62
Ironing/piece 5.92
Dry cleaning/piece 20

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Exhibit: 8 – Customer locations for B2C Business
B2C/Month
B2C-Panjim Nos
Taleigao 70
Caranzalem 25
Dona Paula 10
St.Inez 10
Tonca 10
Miramar 5
Panjim Market 5
Total 135

Exhibit: 9 –Sales data for B2C Business

No.of Orders Revenue Generated
Wash & Dry Wash Dry
S.No Year Month Iron Iron Clean Total Iron & Iron Clean Total
1 2018 April 200 10 20 230 33400 2750 7000 43150
2 2018 May 210 11 21 242 35070 2888 7350 45308
3 2018 June 215 11 22 247 35905 2956 7525 46386
4 2018 July 209 10 21 240 34903 2874 7315 45092
5 2018 August 220 11 22 253 36740 3025 7700 47465
6 2018 September 218 11 22 251 36406 2998 7630 47034
7 2018 October 225 11 23 259 37575 3094 7875 48544
8 2018 November 252 13 25 290 42084 3465 8820 54369
9 2018 December 248 12 25 285 41416 3410 8680 53506
10 2019 January 260 13 26 299 43420 3575 9100 56095
11 2019 February 255 13 26 293 42585 3506 8925 55016
12 2019 March 275 14 28 316 45925 3781 9625 59331
13 2019 April 260 13 26 299 43420 3575 9100 56095
14 2019 May 265 13 27 305 44255 3644 9275 57174
15 2019 June 270 14 27 311 45090 3713 9450 58253
16 2019 July 280 14 28 322 46760 3850 9800 60410
17 2019 August 300 15 30 345 50100 4125 10500 64725
18 2019 September 320 16 32 368 53440 4400 11200 69040
19 2019 October 335 17 34 385 55945 4606 11725 72276
20 2019 November 340 18 35 393 56780 4813 12250 73843

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Exhibit: 10 –Sales data for B2B Business
S.No Year Month Revenue
1 2018 April 150000
2 2018 May 150000
3 2018 June 190000
4 2018 July 210000
5 2018 August 220000
6 2018 September 240000
7 2018 October 250000
8 2018 November 250000
9 2018 December 265000
Total 1925000
10 2019 January 287000
11 2019 February 350000
12 2019 March 375000
13 2019 April 400000
14 2019 May 450000
15 2019 June 500000
16 2019 July 500000
17 2019 August 500000
18 2019 September 500000
19 2019 October 500000
20 2019 November 500000
Total 4862000

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