Ninjacart: Eliminating the middlemen in B2B Fresh Produce Supply Chain

Ninjacart helps farmers sell vegetables and fruits to retailers and restaurants in Bangalore. The startup
picks up the produce from the farmers’ fields and delivers it to the doorstep of businesses. It started
in 2015 as an on-demand grocery delivery company but pivoted to the current business-to-business
model. It was started by Thiru and Vasu along with four other co-founders.

The objective was to eliminate loss of food due to information barriers, inadequate infrastructure and
responsive distribution mechanism. They attempted to build a robust supply chain mechanism to
transfer the SKUs from the village-level Collection centers to the city-level Distribution centers
achieving a high service level and speed while also optimizing logistics cost. Ninjacart is constantly
trying to improvise its current model to bring down logistics costs further to pass the benefit to
farmers and customers

The Ninjacart Supply chain

The Ninjacart supply chain consists of 13 collection centers (CC) in the farming clusters across
Karnataka, 1 Fulfillment center (FC), which acts as one big consolidation and deconsolidation point at
the outskirts of the city and 13 Distribution centers (DC) inside the city closer to customers for faster
delivery [Exhibit 1]. It deals with 15 SKUs of Vegetables and fruits that they procure directly from the
farmers through the collection centers and supply to their customers through the distribution centers
(for perishable items) and fulfillment center (for semi-perishable items)

An SKU can be made available at the distribution center through three routes. The model must be able
to predict which SKU has to go through which route. The three routes are:

 CC to DC (No aggregation of demand at the FC) [Channel 1]

 FC to DC (Only for semi-perishable goods) [Channel 2]
 CC to FC to DC (conventional way) [Channel 3]

The working model should optimize the cost and run-time of transportation by predicting which SKU
has to go through which route. The routing decision has to be taken as a part of the procurement plan
for Ninjacart that is based on the estimated demand for next day.

Formulation of the logistics plan

The logistics plan (this includes vehicle selection & route plan) is at the heart of Ninjacart’s operations.
There are two kinds of trucks, with varying capacities and tariffs [mentioned in Exhibit 2], that can be
used for transporting the produce. Vehicle capacity is measured in terms of slots it can accommodate.
14 big crates or 44 small crates or a combination of big and small in the ratio of 1 big crate equaling
3 small crates makes up a slot.

To move the items from CCs, vehicles have to be sent from FC to CCs the previous day based on farmer
procurement plan for each CC. The time of dispatch should consider the following factors

 Transport time with empty crates from FC to the CC can be taken basis the distance and an
average truck speed of 50kmph
  The batching [process of consolidating multiple SKUs as per FC or specific DC demand] and
loading process at the CC (It takes 2 hours for this process, however crowded the arrivals of
SKUs maybe)
 Travel time with the produce from CCs to multiple DCs and also for FCs (Semi-perishable
goods) can be taken basis the distance and an average truck speed of 40 kmph
 Transportation time required to travel between each DCs to deliver the orders is 30 mins
 It takes 15 mins to unload the crates at each FC and maximum of 2 trucks can be unloaded at
a time in a DC
 The leftover inventory (In case of CC-DC Channel) needs to be delivered to the FC for salvaging
through recovery channels

The orders for the next day morning delivery starts flying in from 12 noon and continues until 8 PM in
the evening after which the ordering process is halted. It is seen from previous data that around 75%
of the demand is received by 5 PM, 85% of the orders are received by 6 PM and around 90% of the
orders are received by 7 PM. You can assume any suitable distribution pattern to model the given
scenario. The vehicle dispatch decision can be taken at any point between 12-8 PM but it has to be a
single period order.

Order Fulfillment at Ninjacart

Exhibit 3(a) & 3(b) shows the average demand data for each SKU (in terms of no. of crates
procured/needed to fulfill the demand) at each CC/ DC. The demand patterns can be assumed a
Normal distribution with variance of 15% from the mean demand.

Out of the 15 SKUs, 11 of the perishable items are mostly delivered via Channel 1, the remaining 4
SKU orders has to be fulfilled from the FC which can be done via either channel 2 or channel 3. The
only objective in this case is to maximize fulfillment ratio at minimum logistics cost.

The last set of constraints for Thiru and team is that the last vehicle should hit the DC by 1 AM, after
which no goods received would be processed and the item has to be returned to the FC. The DC is
operational from 9 PM until 4 PM the next day. The FC is operational from 2 PM until 7 AM the next
day. Any truck hitting the DC or FC before their corresponding windows has to wait at that particular
station until it opens.

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CASE OBJECTIVE

 Design a robust working model for generating the run-time logistics (vehicle & route) plan on
daily basis for Ninjacart based on the actual procurement at CCs and customer demand
 You have to minimize the logistics cost in the whole model. Logistics cost should be calculated
and presented on a per kg basis
 Brownie points will be given if you are able to move the items sooner to DCs
 A substantial part of the evaluation will depend on the logic and concepts used for arriving at
the model
 You are free to make suitable assumptions but state your assumptions clearly
Here, The SKUs A1-A11 are Perishable and are procured directly from the CCs; B1-B4 are semi-
perishables and are procured via the Fulfillment Centers where these items can be stocked for 2-3 days,
thus you can assume sufficient stock of these SKUs at FC while preparing the model

Requirements for One-Pager

 Format:
 Assumptions
 Levers influencing cost
 Levers influencing speed
 Approach
 State your assumptions clearly
 List out the levers (factors that influence cost and speed) to be considered while calculating cost
 State your approach for building the model.
 You have the option to explore one model (which one), or multiple models in the next round.
Give reasons for choosing either.
 You may add a small diagram as an annexure, in addition to the One-Pager.

Guidelines
 Deadline to submit your One-Pager is 21st August, 2019
 Send your One-Pager in a PDF file under 200 KB in size
 Name your PDF in the following format – Team Name | The Unveiling
 Mail your PDF to hustle@ninjacart.com with the subject line in the following format –
Team Name | The Unveiling
 Start your document in the following format:

Team Name
College Name
Name 1 Name 2 Name 3

Failure to follow these guidelines might result in disqualification.