Supply Chain Effeciencies

I read this great article the other day which was written by Mr.Raj Jain who is the President,Wal-mart India and MD and CEO Bharti Wal-Mart Pvt ltd. The article throws light on how Bharti Wal-mart is testing the Indian Retail scene and taking calculated and well structured steps to get the Indian retail story buzzing. Droughts, infrastructure issues, wastages etc are the problems that India has been facing. The challenge is to how to be well equipped when times are trying and get the best out of a situation.

It is interesting to note that even this promising joint venture was struck by industry behemoths, they have taken their time and effort to study the Indian market, developed well thought of business practices, are building mini- business models and learning the tricks of the trade through the learning curve.
Mr.Jain is of the opinion that the supply chain issues of India are because if wastages, and inefficiencies and the 3 things to get things back on track are as follows:

1.)Creating Regional Supply Chain to reduce food miles-

It is true that in India, food taste and food habits change every 200 kms. Food miles mean how much distance does food have to travel before making it to consumer’s plates. Hence it is imperative to create regional/local supply chains instead of national supply chains. Bharti Wal-mart has adopted this approach and sources all of its requirements within 150 kms of the store.

Following are the advantages of this approach:
A.Reduces cost
B.Greater predictability
C.Qualiy &
D.Focus

2.)Develop a world class Supplier Base-
Walmart is known for procuring their goods at lower prices. People have an incorrect assumption that because of Walmart’s scale and negotiation power are instrumental fow them getting lower prices. However that’s just not the case. Walmart works with the suppliers to “save their money” by reducing excess cost and wastages out of their system, and inturn, suppliers given them a better prices. Not only this, Walmart also improves their technology, market access and product quality.

3.)Fix the Infrastructure-

Infrastructure development is key for growth. India’s infrastructure plans have to stick to the schedule and if possible get done faster. Bharti Wal-mart has made sure that the stick to shorter transportation routes so that infrastructural inefficiencies do not cause hindrances.

Drought is no doubt a problem, however wastages compound the problem. It’s upon us what we segregate as a controllable issue and an uncontrollable one.
It is interesting to follow this great retail revolution in India which will be a great example of glocalisation and how a sustainable business model is built to suit this great, diverse country.