OPERATIONS OF BIG BAZAAR

A PROJECT REPORT

Submitted by

VANSIKAJALAN
VARUN KAYAL
VISHAKHA GUPTA
VISHAL AGARWAL

in partialfulfillment for the award of the Diploma

of

POST GRADUATE DIPLOMA IN MANAGEMENT

In
OPERATIONS MANAGEMENT

AT

INTERNATIONAL MANAGEMENT INSTITUTE (IMI) – KOLKATA

AUGUST, 2021

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 INTERNATIONAL MANAGEMENT INSTITUTE

BONAFIDE CERTIFICATE

Certified that this project report “OPERATIONS OF RETAIL SECTOR” is the bonafide

work of “VANSIKA JALAN, VARUN KAYAL, VISHAKHA GUPTA, VISHAL

AGARWAL” who carried out the project work under my supervision.

Operations Management

DEPARTMENT SUPERVISOR

Dr. Sachin Modgil

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 ABSTRACT

he Indian media and entertainment industry is projectedto grow at a compounded

annual growth rate
(CAGR) of 13.7% over 2015 and reach US$20.5 billion and it is expected to grow at a rate
of 14.3% to Rs.
22.60 billion by 2020. Television is expected to grow at a CAGR of 15.1 %. The
highest growth rate at
CAGR of 33.5% is expected to be in Digital Advertising. Traditional media such as Radio is
also expected
to grow at CAGR of 16.9% due to up gradation and change in technology. Films is also
expected to grow
at CAGR of 10.5% with acceptance of Regional and Hollywood content. Animation
and Visual Effects
industry in India is projected to grow at rate of 16.7% during 2016-20. The Indian
Animation and Visual
Effectsindustry is expected to grow fromUS$797 million in 2015 to US$909 million
in 2016 and it will
reach to US$1.68 billion by the end of 2020.The growth in the Indian TV industry has been
the result of the
thriving number of Television channels, FM radio channels. The purpose of this
study is to find the
opportunities and threats of Animation and Visual Effects in Indian media and entertainment
Industry
he Indian media and entertainment industry is projectedto grow at a compounded
annual growth rate
(CAGR) of 13.7% over 2015 and reach US$20.5 billion and it is expected to grow at a rate
of 14.3% to Rs.
22.60 billion by 2020. Television is expected to grow at a CAGR of 15.1 %. The
highest growth rate at
CAGR of 33.5% is expected to be in Digital Advertising. Traditional media such as Radio is
also expected
to grow at CAGR of 16.9% due to up gradation and change in technology. Films is also
expected to grow
at CAGR of 10.5% with acceptance of Regional and Hollywood content. Animation
and Visual Effects
industry in India is projected to grow at rate of 16.7% during 2016-20. The Indian
Animation and Visual
Effectsindustry is expected to grow fromUS$797 million in 2015 to US$909 million
in 2016 and it will
reach to US$1.68 billion by the end of 2020.The growth in the Indian TV industry has been
the result of the
thriving number of Television channels, FM radio channels. The purpose of this
study is to find the
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opportunities and threats of Animation and Visual Effects in Indian media and entertainment
Industry
Big Bazaar is an Indian hyper market chain with stores at more than 100 locations. It is a

subsidiary of Future Group Venture Ltd and operates on the same business strategy as

Walmart follows in United States. It has become as one of the leading retail chain stores in

India for products that consumers use in day to day lives. For example, food, general and

home products. These products are cater to customer requirements.

Big Bazaar provides to its customers a great shopping experience as one can find everything

under one roof. The look, feel and atmosphere of Indian Bazaar gets combined with variety

and convenience of modern retail at Big Bazaar. Big Bazaar opened its 100th store in 2008,

marking the fastest organic hypermarket expansion ever. Big Bazaar outlets first established

in Kolkata, Hyderabad, and Bangalore in 2001.Despite the fact that Big Bazaar deals with

four different supply chain i.e. Food, fashion, general merchandise and home, the most

critical part is the food supply chain. By directly acquiring farm-fresh products from farmers

and distributing them straight to retail stores, Big Bazaar revolutionised the food supply

chain's procurement and distribution processes.

This report focuses on the in-depth analysis of food supply chain of Big Bazaar. The analysis

further helped to see some of the challenges that company might face in the near future

based on research of secondary data. Some suggestions have been given according to the

research and development of industry.

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 Table of Contents

Sl. No. Contents Page No.

1. Abstract 3
2. Introduction 5-6
3. Operations and Supply Chain Practices at Big 7-9
Bazaar
4. Current Perspective of Operations 10
5. Challenges Faced by Big Bazaar 11
6. Operating Framework 12
7. Recommendations and Suggestions 13

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 CHAPTER 1: INTRODUCTION ABOUT THE INDUSTRY

From department stores to coffee machines, from the town square to the digital storefront, from the most
hopeful transformations to the apocalypse, retail is a big industry.

Productivity is high in a robust economy, and wealth is reflected in consumption, which is mostly centred in
retail. As a result, one of the first sectors to decline in times of crisis is retail, which suffers immediately:
consumption falls, and as a result, operators whose companies are based on the sale of food or consumer
goods see their revenues plummet, resulting in job losses.

DEFINITION OF RETAIL

We define "retail" as a market that includes all operations, such as a company's direct sale of goods or
services to consumers for personal or family use.

There are both retail and institutional retailers. Both are made up of a vast number of small
transactions. The wholesale market, on the other hand, is a marketplace for businesses (rather than
individual consumers), and some businesses serve both purposes simultaneously.

ONE SECTOR, THREE SEGMENTS, 5 TYPES OF ACTIVITIES

The activities that make up the retail market are typically divided into three macro-areas:

The retail market's activities are often classified into three macro-areas:

1. Food products, which include all activities related to the delivery of food and related goods to
consumers.

2. Consumer products, which includes all activities involving the sale of goods, many of which can be
reused.

3. Long-lasting consumer goods, which include actions that provide consumers with long-lasting
goods such as household appliances, furniture, and kitchenware.

While retail is a B2C industry, there are a variety of approaches to do this. In light of this, a further
differentiation within the retail sector is possible. When we consider the various types of stores, we
can come up with at least five different categories of activities.

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 1. The first is "fixed location" retailing. This is an old-fashioned store where you can buy stuff.
This type of retail is commonly seen in shopping malls or along street streets.
2. Supermarkets make up the second type of retail. The range of products offered in this setting is
substantially wider, encompassing everything from household items to technology and food.
3. The third segment includes discount stores. While discount stores are similar to supermarkets,
this category focuses on food and frequently sells "off-brand" goods that are sold at retail and
at lower prices than those found in supermarkets.4. Temporary stores are the fourth kind.
4. The fourth category is vending machines. In this circumstance, the store is practically non-
existent, and the service is completely automated. The interesting thing is that, in comparison
to previous generations, the variety of items available from corner shops has increased; they
now comprise anything from food to pharmaceuticals to little toys.

MARKET SIZE
According to Forrester Research, India's retail sector would be worth $883 billion in 2020, with $608 billion
in food retail.

India's direct selling industry would be worth $2.14 billion by the end of 2021.

According to the Retailers Association of India (RAI), the retail industry reached 93 percent of pre-COVID
sales in February 2021; consumer durables and quick service restaurants (QSR) rose by 15 percent and 18
percent, respectively.

After a 19 percent drop in the January-March 2020 quarter, the FMCG industry showed indications of
recovery in the July-September 2020 quarter, with a 1.6 percent y-o-y increase. The growth in the fast-
moving consumer goods (FMCG) industry was also a reflection of the wider macroeconomic situation,
which has improved with the liberalisation of the economy and the lifting of tight restrictions.

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 CHAPTER 2: OPERATIONS AND SUPPLY CHAIN PRACTICES AT
BIG BAZAAR
Big Bazaar's supply chain is handled by Future Supply Chains, a company that specialises in supply chain
management for consumer goods categories such as fashion, food, home, and general merchandise.
The organisation services more than 2600 retail stores around the country from 60 strategically situated
hubs. It can manage over 3 million SKUs because to its extensive network of facilities and specialised
knowledge. This necessitates the management of 30 different supply chains at the same time, each with its
own unique requirements that necessitate bespoke solutions. Big Bazaar's Supply Chain can integrate
Factory-Gate logistics because of its transportation capabilities. Picking up goods from vendors across the
country, national commodity distribution, and city logistics, including store and home deliveries. Big Bazaar
Supply Chains is India's first organised intra-city transportation services provider, offering not just B2B but
also B2C in the form of thousands of daily home deliveries across the country, specialising in Furniture and
Consumer Durables. Big Bazaar is also focusing on growing its vendor and distribution networks. To
achieve economies of scale, the company has chosen up to 40 anchor providers, each with a turnover of $1
million or more.
When it comes to managing their supply chain in India, Big Bazaar benefits from enormous economies of
scale. The organisation maintains a solid supplier relationship in partnership mode with over 170000
products, avoiding the exploitative supplier-buyer transactional attitude. The business's reliability and
efficiency are increased via IT-enabled back-end operations and supply chain management. Big Bazaar is
consolidating its warehouses as part of the transaction. In a country like India, where most retail
establishments are in the city centre—where rents are high and storage space is scarce—supply chain
management is even more important.
Fashion, Food, Home, and General Merchandise, Big Bazaar's four core consumer sectors, each with its own
set of requirements, have a diverse product portfolio. Our research has focused on Big Bazaar's food supply
chain management.

FOOD SUPPLY CHAIN AT BIG BAZAAR

Supply Chain in the Food Industry Customers have become more demanding in today's competitive market,
seeking high-quality food that is safe. To cut inventory holding expenses, on-time delivery is becoming the
standard. Due to rising operational complexity, rapidly changing consumer expectations, government
regulations, and short product life cycles, the food business is facing issues. To manage the end customer's
constantly changing needs, a smart, efficient, and agile supply chain is required. Now as a result of its
partnership with Food Bazaar, Big Bazaar has gained and mastered the art of controlling the food supply
chain. They also possess good management skills which is required in order to operate effectively. They
even have state-of-the-art warehouses across the country that can accommodate special requests.
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Big Bazaar has well-equipped in-house transportation department with a diverse fleet of cars to meet any
need. Having an access to the most advanced warehouse management system, ensuring all areas such as
FIFO, Lot management, product traceability, and product recalls definitely makes their supply chain a robust
one.

CATEGORISATION OF FOOD SUPPLY CHAIN AT BIG BAZAAR

Big Bazaar's food supply chain may be classified into three categories.

a. Farm fresh food supply chain

Concessionaires are currently in charge of the Farm Fresh area of Food Bazaar outlets across the
country. Because they are in charge of the goods they bring, the concessionaires ensure that the
store's supply chain is simplified. Big Bazaar has established expertise in the most efficient
management of this farm fresh foods supply chain over time. Big Bazaar has eliminated the
traditional mandi route supply chain that existed in the Indian market, where fruits and vegetables
would travel a long and inefficient journey from the farmers to the clients.
Farmers raise potatoes and fruits, and Food Bazaar has ties to them. It has also obtained products
from farmers who grow unusual veggies such as red pepper and mushrooms. Agricultural and farm
products were once collected by aggregators in various villages, and then sold to agricultural farm
yards, who then sold to a wholesaler. These items will now be purchased by semi- or smaller
wholesaler’s larger wholesalers and resell them to a variety of smaller merchants, from whom
customers eventually purchased the items. Big Bazaar, on the other hand, has reduced the length of
the supply chain to the point that agricultural items may now be delivered straight to retailers., rather
than taking a slightly longer route of first being collected at a collection centre, then being passed on
to a processing and distribution centre, from which they are delivered to the store for sale to
customers. Big Bazaar has been able to carve out a more efficient supply chain as a result of these
characteristics, avoiding unnecessary delays and food waste. Farmers also benefit since they sell
directly to the merchant, eliminating needless commissions from aggregators, wholesalers, and farm
yards.

b. Cold Chain
A temperature-controlled supply chain is referred to as the cold chain. An unbroken cold chain refers
to a continuous succession of storage and distribution actions that keep a specific temperature range
constant. It helps to extend and ensure the shelf life of things like fresh agricultural produce, frozen
food, photographic film, chemicals, and pharmaceutical pharmaceuticals. Packaged food and dairy
items are delivered via Big Bazaar's cold chain.

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 Despite the fact that dairy products have a long shelf life, packaged foods have a longer shelf life.
Dairy products, as a result, receive extra attention. Big Bazaar buys its dairy goods directly from
dairy farms rather than through middlemen, which saves money. Packaged foods are gathered from
cold-storage warehouses or pre-cooling distribution hubs, and then transported via refrigerated trucks
or containers to the numerous Big Bazaar retail stores.

c. FMCG Supply Chain

Big Bazaar manages the supply chain for three types of FMCG products: food, non-food, and health
and personal care, with the latter being the most recent addition to its portfolio. Non-food, health and
personal care, and FMCG-food are all distributed through cold-chain networks. The items in the
FMCG-non-food category follow standard general merchandise supply chain networks, in which
products are first stored at manufacturers before being sent to various vendors or distribution centres,
from which Big Bazaar replaces its stock based on demand. Health and personal care items, on the
other hand, may or may not be distributed chilled. They're also sold as non-food fast-moving
consumer products in some cases.

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 CHAPTER 3: CURRENT PERSPECTIVE OF OPERATIONS

Big Bazaar plans to open 300 hypermarket outlets in the upcoming months with an emphasis on tier-2 cities-
In a recent news it was reported that Big Bazaar, the country's largest hypermarket chain with locations in
over 100 cities, plans to build 16 more stores bringing the total number of stores to 300. The Future Group is
growing into smaller tier-II cities in India, which are less affected by the pandemic and have aspirations and
an emerging consuming class, as part of its expansion strategy.
Big Bazaar is on the track of accomplishing its goal of 300 supermarkets outlets in next three quarter.
Big Bazaar now offers two-hour delivery on all products-Future Group has launched an initiative to deliver
all of its consumer goods, clothes, and general merchandise within two hours, the fastest of any brick and
mortar retailer in India. The project will be launched in three cities: Mumbai, Bangalore, and the National
Capital Region (NCR), and will include both online and in-store purchases.
With the support of an instant home delivery service, Big Bazaar hopes to double its online sales
contribution- Big Bazaar, a retail chain owned by Future Group that competes with prominent e-retailers in
the 'two-hour rapid home delivery service' market, is aiming to double its online sales contribution in a
month. The company has announced the "Home Delivery Sale," a "click-to-home" online shopping festival,
and is expanding the two-hour home delivery service, which began in March.
Big Bazaar is already getting approximately 40% of its sales orders online in some areas.
Customers have responded positively to the two-hour home delivery service, despite the significant increase
in pandemic cases and travel restrictions imposed by several state governments to break the COVID-19
transmission chain.

PANDEMIC TURNED INTO OPPORTUNITY FOR BIG BAZAAR

The largest issue for businesses during the pandemic was providing essentials to consumers at their houses,
as they were locked within the confines of their homes and were hesitant to leave owing to the dread of
COVID-19.
Big Bazaar is known for offering necessary commodities to its consumers. As a result, it was left with little
choice but to transition to digital platforms, just like other firms. Despite the fact that Big Bazaar have
always been a physical merchant, they swiftly adapted to digital retail. Their online platform was launched
in June 2020 to ensure that customers could get whatever they wanted from Big Bazaar. Products were just a
click away. WhatsApp shopping was also launched which received a tremendous amount of positive
feedback.

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 CHAPTER 4: CHALLENGES FACED BY BIG BAZAAR

Some of the challenges faced by Big Bazaar are listed below:

a. Incorrect Merchandise Mix: Both maintaining things that customers don't want and not keeping items
that customers want might be detrimental to a hypermarket's success. While it is impossible to have every
item in the store, if customers can't locate half of what they want, they will not return. It has been found that
if a customer cannot find 5% of the things in a store, the store loses 20% of its sales.
b. Lack of Depth in Local Selection: Kirana stores outperform other retail operators in terms of local
assortment or goods mix. On the other hand, client loyalty has been observed to be highest in local items.
Because there are no significant manufacturers for these local things, it is difficult for bigger retailers to list
them in their stores.
c. Misalignment of Price Points: Some cities will be more prosperous than others. Some buyers will be
more price conscious than others. As a result, the merchandising mix must be carefully designed, with
assortment across price points determined at the shop level. Otherwise, footfalls will be a constant
annoyance.

d. Competition with Kirana Stores: On the credit front, Kirana Stores also triumph over the organised
players. Unlike kirana establishments, organised players do not use a credit system. In large hypermarket
outlets, one-on-one relationships are also lacking. People sometimes prefer to buy from someone they know
and trust.
e. Diverse Tastes and Preferences: India has a diverse population of people who follow various religions
and speak a variety of languages, which varies every 20 kilometres. Because different cultures have different
likes, preferences, and habits, the reasons for hypermarket success in India may differ from those in other
countries.
f. Purchasing Habits: The Indian customer, who has been exposed to modern organised retail for some
time, has warmed up to the concept. Indians' purchasing patterns have not changed, and they still like to buy
food, fruits, and vegetables on a daily basis. Due to dietary patterns, low penetration of refrigerators, poor
electricity supply, family structure, and lack of transportation facilities, Indian consumers prefer freshly
cooked food over packaged food. As a result, consumers choose to buy from stores located near their homes
in smaller quantities, mostly on a daily basis, and kirana shops have a padlock on these frequent purchases.

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CHAPTER 5: OPERATING FRAMEWORK

Identify products and service requirements

Supplier selection for sourcing best valueproduct

Purchase order issued

Supplier ships and product received

Stored in warehouses

Distributed to stores

Customers

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 CHAPTER 6: RECOMMENDATIONS AND SUGGESTIONS

 Logistics Management
Big Bazaar has its own logistics, named Future Logistics, but it will have to do a lot in the near
future to keep up with the developments. The logistics companies at the present provide services
from transportation to warehousing and inventory management. But, within the near future, they're
going to need to expand their products baskets to incorporate new value-added services, like
packaging, labelling, and reverse logistics.

 Warehousing location
The Big Bazaar distribution centre acts as a warehouse alone. The warehouse is located far from
cities which makes time lag in the supply of goods to the customers. If the warehouse is located in
the city then, it would be more convenient and reduce the lag period in the supply of goods.

 Inventory Control
Big Bazaar deals in a large variety of products so it maintains a huge stock which should be
controlled as the major part of the stocks have expiry dates due to which makes it risky for the
company and suffers a huge loss. To reduce such conditions, it should develop a supply chain in
which is fast and reduces the risk of overstocking.

 Improvement in packaging
The main concern for Big Bazaar is that, a large number of products are damaged in the
transportation of goods. It needs to ask its suppliers to deliver the goods in a good packaging so that
the loss due to breakage can avoided. Moreover, its own handling and carrying should improve.

 Cross-docking of goods
Big Bazaar should opt for cross-docking of goods as it would increase productivity, cost, and
customer satisfaction. It can advance the supply chain. The transportation of goods to the customer
can become a faster and more efficient process through cross-docking.

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 REFERENCES

https://www.slideshare.net/roopammapoor/scm-big-bazaar

https://pdfslide.net/documents/food-supply-chain-of-big-bazaar.html

https://www.slideshare.net/roopammapoor/scm-big-bazaar

https://pdfslide.net/documents/food-supply-chain-of-big-bazaar.html

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