Supply Chain Management

Individual Assignment
On
“Comparative Analysis in reference to Supply Chain Strategies
between BigBasket and Grofers ”

(TERM-IV; Batch 2019-21)

Under the Supervision of

Dr. Keshav Sharma

COMPARITIVE ANALYSIS OF SUPPLY CHAIN STRATEGIES: BIG BASKET & GROFERS

SUPPLY CHAIN DESIGNS

1. BIG BASKET

Order

MAIN DISTRIBUTION
CENTER

PRODUCTS
Or
de
r

HUB 1
PRO
DU
CTS
PRODUCTS

HUB 2
PRODUCTS
CUSTOMER

TS
UC
HUB 3 OD
PR

BRAND/DISTRIBUTER
SEGREGATION HUB

PURCHASE ORDERS
SUPPLY DEMAND
DEMAND FORECASTING
PLANNING PLANNING

SUPPLY CHAIN DESIGN : BIG BASKET

INTRODUCTION
Big Basket is an Indian grocery store delivering to the customers house, which was founded
in dec 2011, and headquartered in Bangalore, India. The company’s primary focus was to
deliver all the goods normally found in convenience store, food supplies and all the essential
commodities to the customers.

Customers order groceries online through bigbasket mobile application, after that the
BigBasket collect the item securely from their warehouses and deliver the items to the
customers on time. For the harvest crops, bigbasket has partnership with Bayer Crop
Science project under which more than 8000 local farmers are helped to harvest the crops
and process the same to the big basket collection centers. For the daily milk delivery , they
launched BBdaily in dec 2018. The three segment BB has expanded now:

BigBasket

BBdaily BBinstant BBbeauty

MAJOR ISSUES FACED BY BIGBASKET

 City -wise specific model.

 They were dealing in perishable item, which requires same day or next day delivery.
 Capital intensive model
 Major investments were required for warehouse & distribution centres, Logistics,
and IOT.

COMPETITIVE STRATEGY

 BB has been steadfast in introducing new categories and services to capture the
market. It is not only in Essential items and vegetables, but dabbles in everything,
right from staples, fish, meats and kitchen items and beauty item too
 It got mix of its own in-house brands and third-party brands.
 They get 36% of its revenue from the inhouse brands.
  Big basket not only deals with B2C but it also runs B2b business in which it sells its
private brands to commercial establishment and also distributes to approx. 5000
brick- and- mortar grocery stores across the country.
 Fresh produce is the category which they excel as it is 1/5th of its revenue.
 Bigsket has their ERP installed. It is called BB utilities wherein all the data can be
accessed.

SUPPLY CHAIN DRIVERS:

SUPPLY CHAIN DRIVER BIG BASKET
FACILITY Facilities are basically the place or the
physical location, where all the goods which
are to be delivered are stored or get
transferred. BB facility are usually its own
distribution centre and the various active
hubs which act as an intermediary between
the customers and BB.
They also deliver directly through their own
distribution centres, so as to avoid delay in
fresh and perishable items.
 Facilities located in centre so as to
deliver the perishable goods in 60
min, or next day.
 Their Mobile application makes it
easy and relax way to shop.
 On- time delivery and well
navigation system through sites.
INFORMATION 1. Information here refers to the
synchronized communication
between the BB and its suppliers
which are Farmers, and big Brands
such as HUL, p&G, Marico.
2. Synchronized communication
between data entry operators and
regional business head & all other
delivery boys, segregators, logistics.
3. A proper inbuilt communication
application which runs for smooth
communication.
PRICING BB is into competitive pricing, as a lot of
 inventory needs to be stored at the
warehouse and the hubs, therefore the
cost of handling inventory gets distributed
The procurement price is fixed as they uses
farm to home model.
For increasing the sales they offer coupons,
discounts to get more traffic on their
website.
Transportation Since BB is dealing in the perishable items,
therefore they use cold storage trucks to
import goods from farms to the warehouse.
They also use these cold storage to import
perishable goods from outside the country,
which involves huge cost , therefore they
use seaways.
Both the third party logistics and inhouse
logistics are used, since they need to cater
thousands of customers on daily basis.
They use mini trucks to deliver goods to the
customers, which involve 5 kind of delivery
system they deal in:
 Express delivery
 Full-service delivery
 Kirana model
 Speciality delivery
One of the most crucial software that they
operate is called Locus. This software does
the work of allocating the delivery vans to a
particular route (to achieve efficiency).
With the help of its sophisticated algorithm
the locus software is capable of providing
an optimized route for every delivery van.

SOURCING & INVENTORY They are involved in bulk buying from the
mandis and various distributers so as to
achieve economies of scale.
To handle the stock out situation they
always have 7 days of safety stock
They use mix of Inventory and hyperlocal
based model.
GROFERS

SUPPLY CHAIN DESIGN

HUB 1

SUPPLIER WAREHOUSE HUB 2 CUSTOMERS

HUB 3

SUPPLY CHAIN MODEL: GROFERS

INTRODUCTION

It is also India leading online grocery delivery app, which was founded in Dec 2013, Head
quartered in Gurugram. The company is backed by strong funding from big investors like
SoftBank, Tiger Global, and Sequia capital. The delivery system for the grofers usually runs
on the time span two hours, i.e. in those two hours it can be delivered anytime. Currently its
been operating in the 29 cities.

The company got its eight inhouse brands:

G. happy days

G. happy home

G. Mothers Choice

G. happy baby

G.Fresh

O'range

Savemore

Havemore

COMPETITIVE STRATEGY:

 Fresh produce is the category which was earlier in Grofers but now they have stop
dealing in fresh produce at it involved huge inventory handling cost.
 Grofers work upon the commission based models with the different merchants as
they are getting more business to the merchants and therefore, they pay grofers a
commission of 8% over the goods ordered below 500-700rs, and above it they
charge 12% and 15% on the orders ranging between 700-1000.
 Grofers not only deals in the essential goods,in the FMCG industry, but also deals in
the home furniture, Hope appliances, Clothing and accessories category too.

SUPPLY CHAIN DRIVERS FOR GROFERS

SUPPLY CHAIN DRIVER GROFERS
INVENTORY & FACILITY Grofers deal in the hyperlocal model, i.e. they don’t
store huge inventory levels which may involve high
cost as the products may get expired too, therefore
they don’t deal in stocking up the products.
Whenever the order is placed the product is
purchased from the local kiranwala and then
delivered to the final customers.

They don’t have multiple warehouse, they got pone

warehouse in a city from where they get the goods
deliver to the ultimate customers.
TRANSPORATATION Grofers promise to deliver in 90 mins, for which they
have designed the order chain management, as they
are hyperlocal service providers.
When the customer places an order, due location
wise, it went to the sub-station in that area, where
the on duty field officers receives orders, and
procures the good from the grocery stores and get
that delivered with the especially designed GPS
system of their own.
INFORMATION As, Grofer is into hyper local model therefore it is
very important to have proper communication
between the merchants, and the on field officer, who
should also have strong communication through the
apps so as to know the orders approaching in his
area. Therefore they have to responsive and efficient
both.
PRICING Grofers prices are lower than bigbasket because they
don’t have huge inventory handling cost as they deal
on the hyper local model basis , therefore the prices
they charge from the customers are on high
discounts, as they fetch it from the local kiranas on
the commission basis, with giving them more volume
in their sales, rather than value.
SOURCING They source from the local kiranas , so as to reduce
the cost of inventory handling.
More tie up in different area with the merchants on
commission basis.
They don’t have proper system for handling stock out
situation as the local kirana wala don’t’ have large
inventory stocked up with him.
CONCLUSION:
After analysing the supply chain models for the Bigbasket and Grofers, it can be easily
identified, that grofers offer much cheaper goods to the customer as they don’t have huge
inventory handling cost. Bigbasket runs on the hybrid model of inventory and hyper local,
which means low inventory management cost as the size of the inventory is usually small.
Whereas Grofers, have hyper local model, which reduce the cost of unsold inventory as the
purchase of product is purely demand driven, but grofers can’t handle big orders whereas
the bigbasket can handle monthly and big orders.
Therefore BigBasket Supply chain in more responsive and efficient.