UNIVERSITY OF CENTRAL PUNJAB

Fundamentals of Supply Chain Management

Assignment

Submitted to: Sir Mubashar Ali Butt

Submitted by:

Muhammad Waqas Ali L1S21BBAM0003

Haider Sultan L1S21BBAM0190
Daniyal Khalid L1S21BBAM0186
Ahmer Subhani L1S21BBAM0164

Date: 29-05-2024

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Table of Contents
Introduction................................................................................................................................................2
Procurement:..............................................................................................................................................3
Product Sourcing.........................................................................................................................................3
Supplier Selection and Management:........................................................................................................4
Supply Chain Operations:...........................................................................................................................5
Inventory Management..............................................................................................................................5
Warehouse and Fulfillment Centers...........................................................................................................5
Last-Mile Delivery....................................................................................................................................6
Diagrams and Visual Aids...........................................................................................................................6
Business, Organizational & Supply Chain Strategy for Pandamart............................................................7
Forecasting and Supplier Planning.............................................................................................................8
Store Transfer Planning System..................................................................................................................9
Dark Store Management............................................................................................................................9
Software's that Food Panda Uses...............................................................................................................9
Conclusion.................................................................................................................................................10
References.............................................................................................................................................11

Question: Analyze and explain the supply chain operations of Pandamart,

foodpanda’s quick commerce business.

Supply Chain Components:

Procurement:

How does Pandamart source its products?

What strategies are used for supplier selection and management?

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Introduction

Pandamart, part of foodpanda, is an innovative player in quick commerce

(Q-commerce), which focuses on delivering groceries and other essentials within
minutes. To understand how Q-commerce achieves such rapid delivery times, it's
important to look at Pandamart's supply chain operations. Our analysis will explore
the components of Pandamart's supply chain, especially procurement and supplier
management.

Pandamart is the quick commerce branch of foodpanda, dedicated to delivering

groceries and daily essentials quickly. The efficiency and effectiveness of its
supply chain are crucial for maintaining high service levels and customer
satisfaction. This document examines the procurement strategies and supplier
management techniques used by Pandamart. It will reveal the inner workings of
Pandamart's supply chain, which is the foundation of foodpanda's Q-commerce
business. We'll look into how Pandamart selects and manages its suppliers.

Supply Chain Components:

Procurement:
Product Sourcing
Pandamart sources its products from a mix of local suppliers and large distributors
to ensure a wide variety of products, freshness, and availability. Here’s how they
do it:

1. Local Suppliers: Pandamart partners with local farms and food producers to
provide fresh produce and perishable items. This reduces lead times and
supports local economies.

2. National Distributors: For non-perishable goods and branded products,

Pandamart works with national distributors who can supply popular items
consistently.

3. Direct from Manufacturers: In some cases, Pandamart gets items directly

from manufacturers, especially for private label goods, which helps them
control quality and costs better.

Pandamart balances its product sourcing between two main sources:

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 1. National and International Brands: They directly source well-known
brands like P&G and Unilever to ensure consistent quality and brand
recognition for customers.

2. Local Grocers and Producers: Pandamart supports local businesses by

sourcing from local grocers and producers. This strengthens the local
economy, offers fresh produce, and caters to regional preferences. In regions
like Malaysia, over 60% of products are locally sourced.

Supplier Selection and Management:

Pandamart employs a comprehensive approach to evaluate and manage its
suppliers to ensure quality, reliability, and efficiency. Here’s a detailed look at
their strategies:

1. Vendor Evaluation: Potential suppliers are assessed on their ability to meet

quality standards, reliability, cost-effectiveness, and quick delivery capacity.
Key criteria include production capacity, financial stability, and past
performance.

2. Contracts and Agreements: Long-term contracts with key suppliers ensure

stability and consistent supply. These agreements often cover delivery times,
quality standards, and pricing structures.

3. Technology Integration: Suppliers are integrated into Pandamart's digital

system, enabling real-time inventory management and demand forecasting.
This integration helps reduce stockouts and overstock situations.

4. Regular Audits and Reviews: Periodic audits and performance reviews

ensure suppliers meet standards and help identify areas for improvement.

5. Sustainability and Ethical Sourcing: Pandamart emphasizes sustainable

and ethical sourcing, preferring suppliers who follow environmentally
friendly practices and fair labor conditions.

6. Quality and Hygiene: Pandamart prioritizes freshness, authenticity, and

hygiene. They maintain stringent quality control measures and conduct
regular checks on suppliers.

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 7. Data-Driven Selection: Data analytics are used to understand customer
preferences and buying habits. This data influences supplier selection to
ensure popular and fast-moving items are available at each location.

8. Partnership Approach: Building strong partnerships with suppliers is

crucial for the fast-paced Q-commerce environment. Streamlined
communication and efficient order fulfillment are achieved through
collaborative efforts.

9. Supporting Local Businesses: Supporting local producers strengthens the

supply chain and offers unique products to customers. Pandamart may have
dedicated programs or selection criteria focusing on local partnerships.

Supply Chain Operations:

Inventory Management
Pandamart uses advanced inventory management systems powered by data
analytics to predict demand patterns. This system helps maintain optimal stock
levels, reduce waste, and ensure product availability.

Warehouse and Fulfillment Centers

Pandamart operates a network of strategically located micro-fulfillment centers
(MFCs). These centers are smaller than traditional warehouses and are closer to
urban areas, enabling faster delivery times. Operations within these centers
include:

1. Automated Systems: Robotics and automated systems are used for sorting
and packing to enhance efficiency.

2. Efficient Layouts: MFCs are designed to minimize picking times, with

frequently ordered items placed in easily accessible locations.

3. Cold Storage: Dedicated sections for cold storage ensure that perishable
items remain fresh.

Last-Mile Delivery

Last-mile delivery is a critical component of Pandamart's supply chain. It includes:

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 1. Delivery Fleet: A fleet of delivery riders and drivers equipped with GPS and
route optimization software to ensure swift delivery.

2. Hyperlocal Delivery Model: Focus on delivering within a small geographic

area to minimize delivery times.

3. Partnerships: Collaborations with third-party logistics providers for areas

where in-house delivery is not feasible.

Diagrams and Visual Aids

Below are some diagrams to enhance understanding:

1. Supply Chain Flowchart:

=Suppliers → MFCs → Delivery Fleet → Customers

2. Warehouse Layout:

=Diagram showing the layout of a micro-fulfillment center, indicating areas for

receiving, storage, picking, packing, and dispatching.

3. Last-Mile Delivery Process:

=Flowchart illustrating steps from order placement to delivery.

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Business, Organizational & Supply Chain Strategy for Pandamart

• They have Distributions Centers (DC) & Dark Stores

• High Demand SKUs are delivered to DC whereas low demand items are directly
delivered to Stores

• 70% sales drive through High Demand Items

• Supplier Deliver the stocks to DC from where replenishment done to different

stores across the cities

• Replishment done on daily basis in High Demand stores which are in Johar,
Buhadarabad, Nazimabad whereas Replishment done in every 2-3 days for low
demand items

• Karachi is the top contributor of sales. Daily of 150,000 units of SKUs are
replenishing whereas on the time of sale it can rise up to 200,000 units

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Forecasting and Supplier Planning

• Lays receive a forecast on April 20th for the amount of stock required for May.

• The warehouse has a capacity limit and can't handle the entire month's stock at
once.

• Multiple category suppliers need to be managed simultaneously, which is the

supplier planning concept.

• Weekly splits are provided, like 250 units for the first week and 200 units for the
second week.

• Delivery alignment starts on the DCs from the 26th of the month.

• A PO is sent on the 24th-25th, and the stock arrives by the 30th.

• The delivery truck dispatches to different stores on the same day it arrives.

• If there is enough space, the entire stock is delivered at once. Otherwise, it's
delivered in batches.

Store Transfer Planning System

• When DCs send stock to the Dark Store, it's known as ST Planning.

• The company has a complete system for this.

• The warehouse team creates a plan at 6 PM, including which SKUs to send, the
transfer, and the quantity to be sent.

• Dispatches are made to the stores based on demand and availability.

• The plan is uploaded with all quantity, stores, and SKUs.

• Each store gets a separate ST.

• Live data is shared when the truck starts loading, such as the ST number,
inbound, and outbound status.

• If the ST is created at 6 PM, it will be completed before 9 AM the next day.

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Dark Store Management

• When a customer places an order, the Dark Store manager receives it through the
system.

• They have handheld devices that assign orders to the nearest picker
automatically.

• The picker collects the order and hands it over to the packer.

• The packer packs the order and sends it to the cashier.

• The cashier dispatches the order and assigns a rider to deliver it.

• The rider takes 5-7 minutes to find the location after receiving the order.

Software's that Food Panda Uses

• The company does not use SAP or any other software. Instead, they have their
own built-in software.

• The software includes an Inventory Management System and a tool for purchase
orders.

• The Inventory Tool provides real-time data on inventory levels, which is 100%
accurate.

• The store transfer tool is used to transfer stock between stores.

• There is also a supplier portal where all the vendors' data is available, including
their IDs, the store they have supplied to, the amount, price, and GST of the goods
supplied, and other information.

• All stock leaving the warehouse is barcode scanned, so stores can immediately
know how much stock is coming their way and can prepare the necessary space
and labor.

• If there is a discrepancy in the inbound stock count, the team will run a cycle
count and outbound count before running another inbound count. If the error
persists, they will call the destination store and ask them to check the SKU count.
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Conclusion
Pandamart's success in the quick commerce sector is underpinned by its efficient
and innovative supply chain operations. By leveraging advanced inventory
management systems and strategically located micro-fulfillment centers,
Pandamart ensures optimal stock levels, reduced waste, and quick product
availability. The use of automated systems, efficient warehouse layouts, and
dedicated cold storage sections further enhances operational efficiency.

In addition, Pandamart's robust last-mile delivery network, which includes a well-

equipped delivery fleet and partnerships with third-party logistics providers,
ensures swift and reliable delivery to customers. By supporting local suppliers and
integrating sustainable sourcing practices, Pandamart not only boosts local
economies but also meets the growing demand for fresh, high-quality products.
Through these comprehensive strategies, Pandamart consistently delivers on its
promise of fast, reliable service, setting a high standard in the quick commerce
industry.

References

To enhance your document, consider referencing scholarly articles on Q-

commerce, supply chain management textbooks, and reports from industry analysts
on the latest trends in e-commerce logistics.

https://youtu.be/t6lZ4c0fFfg?si=0gSdGs9EUnzYNoZe

https://youtu.be/VFqd9ToapW0?si=2WEYkkoFLXq-RUOt

https://youtu.be/cnvDOJJN53U?si=oS7nF5QDxi0XRD9B

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