Optimizing PandaMart’s

Operations: Strategies for Business

Model, Forecasting and Inventory
Management

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Content
Introduction
Background of FoodPanda
Where is FoodPanda right now?
What is Panda mart
Supply Chain Strategy for Panda Mart
Panda mart Generic Strategy
Marketing Techniques and Channels
Panda mart Supply Chain Process
Softwares at Panda Mart
Reverse Logistics of Panda Mart
Plan, Communicate and Influence Demand
Product Life Cycle and Forecasting Errors
Introduction
Ali Tahir Hamza Durrani Kashaf Adnan

Students
Background of FoodPanda
Background of FoodPanda
 Founded in July 2011 by Mr Nauman Sikander Mirza.
 It was a review platform called Food Connection Pakistan.
 Food panda offers exclusive deals and discounts on a vast variety of restaurants.
 Food panda offers two categories involving shops and restaurants.
 In 2015, EatOye merged with food panda.
 Food panda Pakistan was acquired by Delivery Hero in December 2016.
 Delivery Hero is present in 70 countries across four continents.

 Delivery Hero unique selling point is last mile delivery which enhances from the local neighborhood
Where is FoodPanda right now?
Where is FoodPanda right now?
 In food delivery domain food panda have around 18000-20000 restaurants listed and deliver in 35 cities.
 The second domain is Home Chef business specially targeted towards the women.
 The third domain of Food Panda is the concept of Dark kitchens where they currently have 8 of them.
 The fourth domain is concept which are virtual brands which doesn’t exist in the dine inn category.
 The fifth domain is Panda go it is an on-demand delivery service.
 Food Panda have around 50000 riders listed and around 20000 riders are active daily.
 The other vertical is the grocery which have 2 models:
1. Market Place model
2. The Dark Stores
• What is Foodpanda?

• How does Foodpanda makes money?

o Commissions
o Delivery fees
o Subscription fees
o Advertisement
o Affiliate Earnings
o Grocery sales.
What is Pandamart?
o Also called Dark Stores
o 06 Warehouses
o Karachi, Lahore and Islamabad
o Total 44 Stores
Supply Chain Strategy use for
Pandamart
Business, Organizational & Supply Chain
Strategy for Pandamart
• They have Distrubutions Centers (DC) & Dark Stores
• High Demand SKUs are delivered to DC whereas low demand items are directly delivered to Stores
• 70% sales drive through High Demand Items
• Supplier Deliver the stocks to DC from where replinishment done to different stores across the cities
• Replishment done on daily basis in High Demand stores which are in Johar, Buhadarabad, Nazimabad where
as replishment done in every 2-3 days for low demand items
• Karachi is the top contrubutor of sales. Daily of 150,000 units of SKUs are replenishing where as on the time
of sale it can rise upto 200,000 units
Pandamart Generic Strategies
Pandamart Generic Strategies
FOCUS DIFFERENTIATION
• Adding to a lifestyle though app
• Convenient-Focused Strategy
• Not Cost-Driven; Customer willing to pay
premium
• Delivery charges previously free, now increased to
50 & 100 yet customers are willing to pay
Foodpanda Push Pull Strategy
• Stocks Pushed to Dark Stores & Applications
• Pull Strategy is used such as Marketing Techniques to
attract customers
• They use both Mix of Push Pull Strategy
• Marketing Techniques such as Discounts & Vouchers etc.
Marketing Techniques & Channels
• TV commercials, vouchers, social media, push notifications, email marketing, sponsorships
for events and dramas
• Collaborations with brands like Walls (Buy 2, Get 1 Free)
• Discounts offered to make products more appealing
• Market trend analysis to predict customer behaviour
• Highest conversion rates achieved through vouchers, email marketing, and collaborations
• Impulse category products are often ordered spontaneously, so marketing efforts focus on
making them more attractive and available
• Analysis of trends, such as customers who order chocolates are more likely to order snacks,
helps to inform marketing strategies
Some Example of Marketing Techniques
Supply Chain Process of Pandamart
Forecasting and Supplier Planning
• Lays receives a forecast on April 20th for the amount of stock required for May.
• The warehouse has a capacity limit and can't handle the entire month's stock at once.
• Multiple category suppliers need to be managed simultaneously, which is the supplier
planning concept.
• Weekly splits are provided, like 250 units for the first week and 200 units for the second
week.
• Delivery alignment starts on the DCs from the 26th of the month.
• A PO is sent on the 24th-25th, and the stock arrives by the 30th.
• The delivery truck dispatches to different stores on the same day it arrives.
• If there is enough space, the entire stock is delivered at once. Otherwise, it's delivered in
batches.
Store Transfer Planning System
• When DCs send stock to the Dark Store, it's known as ST Planning.
• The company has a complete system for this.
• The warehouse team creates a plan at 6 PM, including which SKUs to send, the transfer, and the quantity
to be sent.
• Dispatches are made to the stores based on demand and availability.
• The plan is uploaded with all quantity, stores, and SKUs.
• Each store gets a separate ST.
• Live data is shared when the truck starts loading, such as the ST number, inbound, and outbound status.
• If the ST is created at 6 PM, it will be completed before 9 AM the next day.
Dark Store Management
• When a customer places an order, the Dark Store manager receives it through the system.
• They have handheld devices that assign orders to the nearest picker automatically.
• The picker collects the order and hands it over to the packer.
• The packer packs the order and sends it to the cashier.
• The cashier dispatches the order and assigns a rider to deliver it.
• The rider takes 5-7 minutes to find the location after receiving the order.
Softwares that Pandamart Uses
Software's that Food Panda Uses
• The company does not use SAP or any other software. Instead, they have their own built-in software.
• The software includes an Inventory Management System and a tool for purchase orders.
• The Inventory Tool provides real-time data on inventory levels, which is 100% accurate.
• The store transfer tool is used to transfer stock between stores.
• There is also a supplier portal where all the vendors' data is available, including their IDs, the store
they have supplied to, the amount, price, and GST of the goods supplied, and other information.
• All stock leaving the warehouse is barcode scanned, so stores can immediately know how much stock is
coming their way and can prepare the necessary space and labour.
• If there is a discrepancy in the inbound stock count, the team will run a cycle count and outbound
count before running another inbound count. If the error persists, they will call the destination store
and ask them to check the SKU count.
• Recounting of inventory is not done.
Reverse Logistics of Pandamart
Reverse Logistics from Customer Side
They do not accept returns, but prefer to give refunds in the form of vouchers.

Reverse Logistics from Supplier Side:

• If the stocks are not selling, the commercial team will contract with the supplier that if they
are taking these stocks and they don't sell, then the supplier will pick them back and the
commercial team will see if they can replace them with running items.
• Commercial team handles things like Reckitt's Mortein, Cherry Blossom shoes, which are
not selling, but are not near expiry.
• Liquidation is requested by the commercial team through promotions or campaigns. This is
usually the case.
• The stocks are lifted from black stores to DC and then suppliers are informed and they lift
them back from the DC.
Plan, Communicate & Influence Demand
Demand Planning Process
• The demand planning team works closely with the supply team for planning purposes.
• The forecasting team receives the data and planning from the demand planning team and
calculates the quantity of stock that will be received at the warehouse next month.
• The forecast team then discusses the demand and manages how many loads they can manage
per week according to the forecast.
• The suppliers are communicated to on a weekly basis, outlining the amount of stock required.
Usually, a three-week forecast is given, but if the product is in high demand, a four-week
forecast may be given.
• The suppliers are communicated to on the 20th of each month, with the weekly split
communicated to them by the 27th or 28th, and the first PO is issued on the 28th for delivery
within 5 days.
• In the case of suppliers with a longer lead time of 10 days, a weekly split PO is issued on the
21st or 22nd of the month.
• The demand is influenced by external factors such as seasons, and campaigns are launched
accordingly to increase demand.
• The daily potential forecast is based on two main factors: availability and sales. The previous
month's data is used to forecast potential demand and make necessary adjustments.
Qualitative and Quantitative Forecasting Methods
• The demand for Pandamart is qualitative because it is based on historical data.
Pandamart has been in operation for three years, and we have three years of data
that we use to determine demand.
• There are no fixed methods like statistical tools. they use a simple formula, which is
availability. Availability is our main KPI, and we ensure that our products are
available at all times, especially those with high sales.
• Their app collects data on SKU availability. For example, if there were 24 hours in
a day, we would know how many hours a SKU was available. If a SKU is out of
stock for even 1-2 hours, it affects their availability.
• Their ideal availability is 70-80%. For example, if a SKU sold 100 units with a 30%
availability, they would project how many sales they would make if they increased
the availability to 45%.
• They have created slabs based on availability. The first slab is 0-25%, the second
slab is 25-50%, the third slab is 50-75%, and the fourth slab is 75-100%. If a SKU
has a 30% availability, they don't immediately take it to 100%. they start with the
45-50% slab, and if it shows growth, they move it to the 3rd slab and so on.
Product Lifecycle and Forecasting
Errors
Measure of Forecast Errors in Panda Mart
In Pandamart, Measure forecast errors using two key metrics:
1. Sales Forecast Accuracy: We calculate the accuracy of our sales forecasts by comparing the
actual sales figures of a given period with the sales figures that we predicted for that period. For
example, if we make a sales forecast on the 20th of this month for the next month, we will
compare the actual sales figures for the next month with our forecast to measure the accuracy of
our prediction.
2. Sales Forecast Bias: We also measure sales forecast bias by analyzing sales figures by category.
This allows us to identify which categories are performing well and which are not. By
understanding the growth potential of each category, we can adjust our forecasts accordingly to
improve accuracy.
Product Lifecyle
• They haven't observed any significant product lifecycle phases where the demand was high
and then decreased, except for during the COVID-19 pandemic.

• During the pandemic, there was a high demand for products like masks and hand sanitizers,
which eventually decreased after the pandemic, as was the case with Dettol.

• Similarly, when beverage campaigns are launched, their demand is extremely high for 10-12
days. However, after the campaign ends, their sales drop significantly, and their demand
returns to normal levels.
That’s it!
Thank You

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