GRADUATION VOONIK.

COM
PROJECT
PROJECT OBJECTIVE
“To reduce the returns occurring due to quality issue”

Quality Fit and size intentional

44
41

13

Returns Source: Shopify.Inc

SUB OBJECTIVES
 Standardized operating procedure for audit
 Vendor performance rating by the quality of service
OBJECTIVE FORMULATION
 Analysts estimated nearly one third of all online purchases are returned.
 According to Shopify Inc. 44% of Apparels are returned due to Poor Quality of
product or service provided by the vendor/ marketplace/ manufacturer. 41% of
returns are due to the fitting problem, and 13% are returns due to the customer
who orders the product without purchase intention.
 Most of the sellers (vendors who selling highest units of products on Voonik
market place) had return percentage ranging from 12% to 25%, in certain some
rare circumstances returns percentage go more than 30% which is quite high.
With total return percentage amounting to 13%.
 The return acted as a yield killer for the profits of the company and thereby
causing a loss in customer’s trust.
So the project aimed to reduce the number for women’s wear section by
introduction of quality audit team and SOP
ABOUT THE COMPANY
 The Bangalore-based company was founded in 2013 by Sujayath Ali and
Navaneetha Krishnan.
 Desktop and app based
 $5 million dollar serie A funding
 The app recommends the most suitable clothes and accessories to the user
based on criteria such as skin tone, height, body shape and the styles they
prefer which can be traditional, modern and trendy.
 The users have to go through a one-minute visual quiz and complete this
procedure.
 More than 5 million times downloaded.
 witnesses about 2,500 purchases daily from about 1,500 unique customers.
Every Woman’s Personal Stylist
 Voonik is a
Personalised
Fashion
Marketplace
for women
 Personalised
Personality The Voonik app helps users
discover insanely relevant
Body Type fashion that suits their body,
lifestyle, personality, and
In Trend budget

Budget Personalisation through

Behavioral Mapping, Style
Lifestyle Quizzes, Image reading, and
auto-tagging.
 Fashion Marketplace
1.2 MM SKUs Voonik is building a
(10X growth from Feb)
“one-stop-shop” with the
largest collection of
Larger apparel and accessories
5X than immediate
competition
from anywhere on the
world, ranging from leading
online retailers, individual
sellers, boutiques, brands,
6000 Merchants and manufacturers
 1
The Product
 2
Our Customers
Love Us
#1 Most Downloaded Women
Fashion App

5.3 Million Installs

 Highest Rated
4.2 Fashion App
METHODOLOGY

Analysis of sales and return data

Identification of weak areas
Planning the system
Implementation and Analyzing the Result
UTILITY IN TERMS OF
COMMERCIAL/ PRACTICAL/
INNOVATION
 GROWTH OF ECOMMERCE: 6 million new entrants every month.
 QUALITY CONTROL & ECOMMERCE:
1) Shipping Cost
2) Customer Loyalty
3) Protects the Brand Name
4) Saves Money
QUALITY & PROFITABILITY
IMPROVED
CONFORMANCE

BETTER OUTGOING
QUALITY INCREASED SALES
LOWER REWORK AND
SECONDS COSTS

LOWER COSTS OF LOWER OPERATION

RETURNS COSTS

INCREASED PROFITS
LITERATURE REVIEW
 Ecommerce: Models , Working, Growth
 Quality Control & Ecommerce: Shipping, Customer , Money
 Cost due to Poor Quality
 Need of Improving the Quality
 Standard Operating Procedure
 Inspection List
ECOMMERCE
 Models : Business, Consumer & Government
 Working : Inventory, Marketplace & Mixed
 Advantages & Disadvantages
 Growth : 6 millions new entrants every month ,
75% COD
Annual Growth Rate: 8-10%
 year 2020: 100 billion Dollar online retail
 35 billion dollar through fashion E commerce
Source: Avendus
Capital
QUALITY CONTROL &
ECOMMERCE
 Around 44% of returns
 Loss of cost in shipping, packaging, operations , support, and
revenue
 Customer Churn : Loss of Customers
 Loss of Brand Name
 Without the cost of returns, the retailer’s profits would be almost
50% higher, the study found. (Economist, 2013)
COST DUE TO POOR
QUALITY
 External failure cost
Complaints
Repairing goods and redoing services
Warranties
Customers’ bad will
Losses due to sales reductions
Environmental costs
SECONDARY DATA
 All secondary data are gather through internet and online portals.
 Secondary data consist of Quality manual and inspection sheet of
various companies
 Quality Assurance & Audit programme : AlanWire, Bon Ton, Fabric
Manufacturer Procedure Manual
 E-Marketplaces: Structures, Mechanisms, Economics, and
Impacts : 2008 Pearson Prentice Hall, Electronic Commerce 2008,
Efraim Turban, et al.
 Case Study on reducing Returns in online market place: Katrik
Singh (Flipkart)
 Total Quality Management : Fibre2 fashion, Textile Learner
PRIMARY DATA
1) Sales and Return Record of 2036 Vendor
2) Seller Survey
SALES AND RETURNS DATA
 Data of 2036 Active Seller (Women’s wear) were provided

Reasons for Returns

Missing Item Mis-Shipment
2% 1%

Color/Size
13%

Damaged Product
26%

Quality Issues
57%
REASONS FOR RETURN

Damaged
Quality Issue Color/ size issue Missing Item Mis-shipment
product

• Fabric • Damaged Outer • Size not as • Missing Product • Didnt recieved

• Stitch package Expected • Missing the exact
• Finishing Received • Color Not as Accessories product
• Packed • Damaged Expected • Missing Freebie • Specification
• Information Product • Fit Not as Error
received Expected • Delay in the
• Tampered Seal shipment
DATA ANALYSIS

Total number of returns 1,18,634

Average returns per Seller 58

Average percentage of returns per Seller 12%

Average sales by each Seller per day 8

Average return by each Seller per day 1

Seller with no returns 63

Seller with returns more than 50 419

Total number of returns of 419 Seller 97,915

FINDING
20.57% of Sellers (419) are responsible for 82.53% of returns
(97915)
Data time frame: February 2016 and March 2016
Women apparel category (ethnic+ western wear) holds 85% of
total product share
Active customers: 5700- 7000
Sales per day: 3500-4000
Total Number of products: around 4 lakhs
Number of active sellers in Delhi/Ncr: 1000-1200
Fabric Quality 44665

Stitch Quality 4551

Information Variation 18508

Damaged Product 31210

Color/Size 15720

Missing Item 2430

Mis-shipment 1550
 Top Returned Verticals
Kurta/ Kurtis Sarees/ Blouse Dresses Tops/ Tunics
Ethnic Bottoms Western wear Bottom Others

29

17

13
10
8
6
5
 INFORMATION FLOW CHART
Product Complaint
CUSTOMER SUPPORT
Feedback

Pick up the Customer & product

product details
ACCOUNT
MANAGEMENT

Seller &
customer
Product Feedback
Details

LOGISTIC Deliver the product

S VENDOR
COST DUE TO RETURNS

 On an average, the cost of product varies from Rs 400 to Rs 800

 The average Product Cost: Rs 500
 Commission rate: 20% of selling price
 Fixed Shipment charges to the vendor: Rs 70 (pay to marketplace)
 Shipment charges for marketplace depends on the volume and
distance: Rs 50- Rs 200
 Average Shipment charges for marketplace: Rs 90
 Cost of packaging material: Rs 3
SALES
Seller ID 132467

Total sales per two months 27266 products

Total GMV 500* 27266 = Rs 1,36,33,000 (where 500 is the average price of the
product)
Commission Charges 1,36,33,000 * .20 = Rs 27,26,600

Shipping charges 20* 27266 = 5,45,320 (where 20 is the average cost of shipping for
marketplace, 90-70)
Packaging material cost 3* 27266 = 81798

Total grossing to marketplace 20,99,482

RETURNS
Total returns
Commission charges
Shipping Charges (Return)
Packaging material cost
Damaged product/ wrong shipment
Cost of return
Total grossing after return
2402
500* 2402* .20 = Rs 2,40,200 (to be returned to the vendor)
20*2402= Rs 48,040
3* 2402= Rs 7206
According to the operations head, on an average 1 out of 1000
products is misplaced, damaged during the shipment.
Marketplace is responsible for the damaged and misplaced product.
27266*0.0001= 27
Cost of 27 products = 13500
Shipping charges( return) + Damaged product cost – commission of
damaged product
= (48040 + 13500 - 2700)
Grossing without return – Commission of returns – cost of
returns
20,99,482 – 2,40,200 – 58,840 = 18,00,442
FINDINGS
 Total grossing to the marketplace without any returns = Rs 20,99,482
 Total grossing to the marketplace after returns= Rs 18,00,442
 Percentage of returns for seller132467 = 2402/27266*100 = 8.8 %
 Due to 8.8 % of return, total grossing for the marketplace from the seller (Seller
ID 132467) goes down to 14.2 %
 Note: Indirect costs (Operating/ overheads/ seller and customer support/
Marketing and promotions etc. are not included)
 Average and minimum costs are taken to have simplified calculations.
 Total numbers of returns for 2036 seller are 118634
Which can cost around Rs 25,00,000 (Shipment, Damaged product,
commission) to the marketplace .
VENDOR SURVEY
Sample Design:
Population: Marketplace sellers
Sampling Method: Judgmental Sampling (Sellers who are
experiencing highest quality returns located in Surat.
Sampling Frame: Voonik Marketplace.
Sampling Timeframe: March 2016
Sample size: 32
Daily business with Voonik.com Returns per month
more than 100
7%
80-100 order
7% 25-50
17%

40-60 order
7% more than 100
28%

50-100
0-20 order
20-40 order 14%
59%
21%
RTO
13%

quality issues
6%

less than 25
Unknown 41%
48%
Late delivery
19%

Reason for returns ( most probably)

Not according to the customer demand
CONCLUSION
 56% of the sellers were getting around 20 orders per day
 25% of sellers were getting more than 100 returns per month
 66% of sellers didn’t exactly know the reason for return
 While 18% believed the returns were due to logistics negligence
RETURNS CLASSIFICATION
Manufact
Vendor Logistics
urer
Information
Raw material Product
Damaged Damage
Product
Color/ Size
workmanship
Issue
Packaging
Mis shipment
Fit and size
Incomplete
PERCENTAGE OF RETURNS

Manufactu
Logistics
rer
=1.3%
=41.4%

Vendor =
15.6%
M+V = 13.2% L+V = 28.35%

Around 58.45% of returns can be controlled by implementing Quality Assurance

WHAT IS QUALITY?

Quality is a perceptual, conditional, and somewhat subjective

attribute and may be understood differently by different people.
Consumers may focus on the specification quality of a
product/service, or how it compares to competitors in the
marketplace.
Producers might measure the conformance quality, or degree to
which the product/service was produced correctly.
Support personnel may measure quality in the degree that a
product is reliable, maintainable, or sustainable.
A quality item (an item that has quality) has the ability to perform
satisfactorily in service and is suitable for its intended purpose.
QUALITY ASSURANCE

 Quality Assurance (QA) is the systematic monitoring and

evaluation of the various aspects of a project, service or facility to
maximize the probability that standards of quality are being
attained by the production process.
 Quality Assurance cannot absolutely guarantee the production of
quality products.
 "Fit for purpose", the product should be suitable for the intended
purpose, and
 "Right first time", mistakes should be eliminated.
QUALITY PLANNING

 Objectives to be attained
 General Requirements
 Creating a quality Control & Assurance team
 Customer Care Team
Real time Customer Feedback

INFORMATION FLOW CHART

Customer Needs related to Product
and Service

Marketing Team
Provides the Customer/ Seller
feedback from Social Media
Track trends and monitor competition
Marketing Plans Operations Team
  •Order Management
•Real time sales and returns
details
Account Management Team •Logistics Details
Seller Wise Data Management •Real time Customer Feedback.
Record of sales and returns per
seller
Catalogue Management
Seller support
Category Management Team Seller personal details
Category Wise Data Management
Record of sales and returns per Category
Record of stock units per style and category

Quality Team
Gather information and prioritize
Scheduling Audits
PROCEDURE
Selection of vendor
Prioritizing the seller
Visit to the Seller
Audit Criteria
Sampling Plan Parameters
Audit Definition
CLASSIFICATION OF
DEFECTS
1. Critical Defect:
2. Major Defect:
3. Minor Defect:
CLOCKWISE INSPECTION
ADVANTAGES OF CLOCKWISE INSPECTION
All garment areas are inspected.
Systematic inspection procedure
No repetition.
Improved quality levels.
Increased efficiency.
Chances of overlooking defects are reduced.
Minimizes garment handling.
AUDIT WOULD BE DONE IN
THREE STEPS:
Inside: To examine any workmanship related defect, Tags or critical
defects, while turning the garment inside-out.
 
Outside: To examine any Fabric related defect, Trim and accessory
work.
 
Measurement: To examine the Measurement of the garment
according to the vendor size chart within the tolerance
ACCEPTANCE QUALITY LIMIT
How to find sampling size ?
Find total lot size on first chart, and move over to appropriate
General
Inspection Level (95% use Level II) to find your letter. Special
Inspection
Levels are only used for special checks or testing.
SAMPLING
STEP 2
Check 2nd chart for corresponding sampling size. For the Standard
0
(critical) /2.5 (major) /4 (minor) allowance of defects, you can see
how
many are allowable and what # will fail.
CORRECTIVE ACTION AND
FOLLOW UP
 When nonconforming conditions are identified, the vendor is requested to
propose and implement a corrective action.
 Implementation and effectiveness of the action are verified by a follow-up audit.
 When the auditing cycle is completed, all nonconformity reports established
during the cycle are compiled and analyzed, and are presented at the
management review meeting.
 Data and information recorded in quality records are compiled and analyzed
periodically to determine trends in the performance and effectiveness of the
quality system and to identify opportunities for improvement.
 Quality Assurance is responsible for coordinating these activities, and for
reporting conclusions and trends to the top management. This is usually done
within the framework of management reviews of the quality system, in
accordance with Operational Procedure, Management Review
CORRECTIVE AND
PREVENTIVE ACTION
 Corrective actions: Corrective actions are used when an actual nonconformity is
identified.
 The need for corrective action is determined on the basis of identified actual
nonconformities. Corrective action requests are typically triggered by such events as a
failed Audit, customer complaint and/or product return, nonconforming delivery from a
supplier, or a quality system audit finding.
 Preventive actions: Preventive actions are requested and implemented when there
are trends of decreasing quality capability and/or effectiveness of the quality system
that create a risk for a potential nonconformity.
 The need for preventive action is determined on the basis of information and data
regarding capability and performance of processes, product nonconformity rates, post
production experience feedback, service records, customer complaints, and quality
system audit findings. Such information and data are collected and analyzed to detect
unfavorable trends that, if not checked, will increase the risk of nonconformities.
 Audit Type Parameter Sample Size Audit Criteria Acceptable level
Visual Fabric Defects General Fabric properties, Aql 2.5 for major
inspection level (ii) Clock wise defects and Aql

AUDIT PROCESS Workmanship

Defects
ANSI/ ASQC Z1.4 Inspection
Clock
Inspection
4.0
wise defects
for
for minor

both inner &

outer side
Finishing Defects Clock wise
inspection for
both inner %
outer side
Dyeing & Printing Visual
Embroidery Visual
Packaging Visual
Trims & Visual
Accessories
Zipper Visual
Button Visual
Miscellaneous Visual Classification
chart
ANSI/ ASQC Z1.4

Information Audit Color comparison Visual Zero tolerance

Fabric comparison (According to
Size Comparison Seller product
catalogue)
Workplace Audit Workplace Audit Visual Score card
Inspection Sheet
INSPECTION REPORT
FINISHED PRODUCT INSPECTION REPORT

VENDOR NAME INSPECTOR NAME DATE COLOR

TRADE NAME CATEGORY STYLE# PRODUCT ID

AQL Level Major defects Minor Defects

allowed allowed
 GARMENT INSPECTION
Visual defects found
Defects Description CRITICAL MAJOR MINOR
FABRIC

WORKMANSHIP

FINISHING

DYEING/ PRINTING & EMBROIDERY

TRIMS & ACCESSORIES

TOTAL ( )
ACCEPTED MAJOR ACTUAL MAJOR
DEFECTS DEFECTS
ACCEPTED MINOR ACTUAL MINOR
DEFECTS DEFECTS

Corrective Action to be Taken:

INSPECTION PASS ( ) FAIL ( ) RE-WORK ( )

OUTCOME

INFORMATION VARIATION ON THE CATALOGUE ACTUAL

DESCRIPTION OF THE
FABRIC

COLOR OF THE PRODUCT

SIZE
PARTS/ FREEBIES WITH
THE PRODUCT

OUTCOME

CORRECTIVE ACTION
 WORKPLACE AUDIT
Poor 0 Good 1 Excellent 2
1 Hygienic conditions while packaging
2 Allowance of food items/ Footwear
3 Sorting of products
4 Sorting of Pack products
5 Removal of unnecessary items
Total Marks Max: 10
VENDOR TRAINING

PROBLEM SOLUTION
Actual quality errors from production Defined QC points for Manufacturer.

Defects during transportation QC check for seller while receiving the

products.

Specification Error/High Customers Product Description/Photo shoot

Expectation

Defects during packing Guidelines for Sellers/Operators

GUIDELINES FOR SELLERS:
 The sellers should have hygienic conditions while packaging of the products.

 Packaging Operators should not be allowed any food items/footwear inside the work area.

 There should be at least two quality checkpoints in seller’s warehouse.

 Once while receiving the merchandise from the manufacture, the other while packaging.
 QC should look for: Defects, damages, holes, weaving defects, stitch issues, stains, oil

marks, spots, black marks, printing error, beads coming out, smell of the fabric etc. After

wash issues should also be dealt by washing samples

 Sellers should keep their stocks away from dust or packed.

 Sellers should upload the product description specific to the product.

 This would help in reducing returns caused high customer expectation. One zoomed view of the

 Fabric should be there for better perception of the product.

 Dimensions of all products should be mentioned very specifically.

LIMITATIONS OF THE STUDY
 Sellers can be advised on any changes in their account page, but
the choice remains with them.
 Audit of samples doesn’t confirm 100% assurance
 Sellers perspective towards quality
The Sales and Returns of the product are also affected by many
other factors like discounts etc.
 Manufacturer responsibilty
SCOPE
 Planning the routes and paths for utilizing time and money
 Vendor rating according to the inspection report
 Quality control at manufacturing level
 Total Quality Management in the company