A Study on Inbound logistic Strategy of Reliance Fresh.



1.1 Overview of Reliance: The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 30 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail and special economic zones. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. Major Group Companies are Reliance Industries Limited (including main subsidiary Reliance Retail Limited) and Reliance Industrial Infrastructure Limited. 1.2 Reliance Retail Group: RRL launched its first store in November 2006 through its convenience store format ‘Reliance Fresh’. Since then RRL has rapidly grown to operate 590 stores across 13 states at the end of FY 2007-08. RRL launched its first ‘Reliance Digital’ store in April 2007 and its first and India’s largest hypermarket ‘Reliance Mart’ in Ahmedabad in August 2007. This year, RRL has also launched its first few specialty stores for apparel (Reliance Trends), footwear (Reliance Footprints), jewellery (Reliance Jewels), books, music and other lifestyle products (Reliance Timeout), auto accessories and service format (Reliance Autozone) and also an initiative in the health and wellness business through ‘Reliance Wellness’. In each of these store formats, RRL is offering a unique set of products and services at a value price point that has not been available so far to the Indian consumer. Overall, RRL is well positioned to rapidly expand its existing network of 590 stores which operate in 57 cities.


During the year, RRL also focused on building strong relationships in the agribusiness value chain and has commenced marketing fruits, vegetables and staples that the company sources directly to wholesalers and institutional customers. RRL provides its customers with high quality produce that has better shelf life and more consistent quality than was available earlier. RRL has made significant progress in establishing state-of-the-art staples processing centres and expects to make them operational by May 2008. Through the year, RRL also expanded its supply chain infrastructure. The Company is fully geared to meet the requirements of its rapidly growing store network in an efficient manner. 1.3 Reliance Fresh Reliance Retail has a target to open one store for every 3,000 families within a radius of 2 km across all locations by 2011. The company is competing directly with the large number of traditional local provision stores. Reliance Retail is either going to set up new stores in the identified areas or take over existing stores. The company has already done that in Mumbai and other cities. Of the four million sq ft of retail space to be created under the "Reliance Fresh" brand (for groceries), one million will be through acquisitions. The retailer is also moving into laundry, personal care and apparel product lines, in which it plans to launch private labels. Reliance is planning to roll out its specialty format stores this year, beginning with consumer durables, for which it has struck sourcing deals with companies in Hong Kong, the Chinese mainland and with Videocon in India. To strengthen its links with farmers, the company is setting up integrated agri-retail business centres, which include three processing and distribution centres, 51 retail outlets for farmers and 75 rural business hubs, all with an investment of US$445 million. Many companies, looking at the retail boom in food and grocery, are setting up ventures to help retailers source these goods. 2.1 Reliance fresh in Bhubaneswar: Bhubaneswar, the capital of Orissa has a population of 10,00,000 as per the 2008 census with a fair average income. Therefore undoubtedly Bhubaneswar is the target of many retail chains and Reliance is not a exceptional to it. The population and purchasing habit of Bhubaneswar has resulted in 7 reliance stores in Bhubaneswar. For the convenience of the project the store situated near Ravi talkies’s square has been selected.



2.2 Product availability: Although Reliance fresh is mainly concerned about stocking fresh vegetables and fruits but due to some political controversy they mainly focus on the household products and FMCG products. The product details are listed bellow. 1. Fresh fruits. 2. Vegetables 3. Chocolates 4. Confectionaries. 5. Cold drinks. 6. Freeze items like butter, icecream etc. 7. House hold products. 8. Toilet items 9. Spices and dry food 10. Office stationeries.

The product are displayed in selves in such a height so that they can be easily availed by the customers and customers can compare the product specifications and price.


2.3 Store Design: The store is designed and maintained in a very systematic manner. Like as the chocolates and office stationeries are kept just in front of the cash collector desk so that customer are lured to have some at the last moment of their shopping. The detailed design of the store is presented bellow.



2.4 Inventory management and Logistics : The selves are refilled during the mid day (generally around 2:00 to 3:00pm) when the customer pressure is very less. As per the store manager they generally refilled the stores twice or thrice in a week depending upon the sales of the products. Like as the fruits and vegetables are highly perishable items so the stock is relatively less and are refilled more often than others. The vegetables are kept in a low volume as they stay only for a day, whereas the fruits are kept in specially designed selves where the fruits stay fresh for a longer time. The cycle of inventory management is described in the flow chart bellow.
Order processing Order transmissio n Customer order

Order selection

Order transportati on

Customer delivery


The main four sources of processes are (1)Sourcing (2)order placements and expediting (3) transportation (4)receiving. As per the store manager they have a particular source for all the reliance stores in Bhubaneswar from that the products are distributed in each of the reliance fresh store according to the need and requirements. Though he has not disclosed the overall inbound logistics strategy in his store, he told reliance fresh’s inbound logistics strategy all over the India. They have their own Reliance Logistics Ltd part of Reliance Industries Ltd, currently handles Reliance Retail's logistics services.

2.5 Implementation of IT system by the organization. Retalix StoreLine is an open standards, fully integrated and cross functional Point of Sale (PoS) and store management software system. Its uniqueness is in the functionality, world wide install base, and hardware independence. Multi-concept functionality that delivers a fully integred POS solution to meet all your business needs. Opened by design support industry standard and is hardware independent and implication with other third party retail applications is straight forward, affordable and low risk. The software not only track the available inventory in the store but also maintain daily day outgoing of products from each category.


Secondly, the cash dispatching system is pretty fast as the trained staff handled the customer very efficiently and effectively. Customer retaining: Reliance has an unique strategy to retain its customer which differs form other retailers. It provides a card to each customer after they registered themselves. For each Rs.100.00 purchase a point is given to that customer against his card and he get some special discount for producing the card. After reaching 25 points the customer can avail some special discount/prize by any Reliance store. Conclusion: With the growing retail concept Reliance Fresh is really a fresh air in the arena of vegetable and fruit market. But due to some political and local problems all Reliance stores are not allowed to keep vegetables and fruits according to their goal.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.