PROJECT REPORT

Study of Supply Chain in E-Retailing for My

Grahak

Submitted in partial fulfillment of PGDM program

2013-15

AMITY UNIVERSITY
(CENTRE FOR DISTANCE LEARNING)
JANAKPURI

Under the guidance of:

By:
Mr. Ankur Iyer

Submitted
Seema Handa
Enroll
no- A19201131743

CERTIFICATE I

This is to certify that the project entitled Study of

Supply chain in E Retailing for My Grahak is a
Bonafide work done by me, Seema Handa, under the
guidance of Mr. Ankur Iyer in fulfilment of requirement of
award of MBA by Amity University ASODL.

Place:
Seema Handa
Date:
A19201131743

Countersigned
Place:
Ankur Iyer
Date:
(Project Guide)

CERTIFICATE II

This is to certify that Seema Handa has planned and

conducted the project entitled Study of Supply chain
in E Retailing for My Grahak under my guidance and
supervision and the report submitted therewith was the
result of Bonafide work done by him..

Place:
Ankur Iyer
Date:
(Project Guide)

DECLARATION
I hereby declare that the project report titled Study of Supply Chain in ERetailing for My Grahak is my own work and has been carried out under
the guidance of Mr. Ankur Iyer, Store Manager (Operations), REI 6 Ten
Retail Ltd. and Prof. Vineet Kakkar, Faculty, Amity University. All care has
been taken to keep this report error free and I sincerely regret for any
unintended discrepancies that might have crept into this report. I shall be
highly obliged if errors (if any) be brought to my attention.
I further declare that this Project Report does not form of any other project
reports or dissertations on the basis of which a degree was awarded or
conferred on an earlier occasion on me or any other candidate.

Thank You.

Place: Delhi
Handa

Seema

Date:
(A19201131743)

ACKNOWLEDGEMENT
The satisfaction, which accompanies the successful completion of the
project, is incomplete without the mention of a few names. I take this
opportunity to acknowledge the efforts of the many individuals who helped
me make this project possible. First and foremost, I would like to express my
heartfelt appreciation and gratitude to my Industry Guide and Mentor, Mr.
Ankur Iyer, Store Manager, REI 6 Ten Retail Ltd. His vision and
execution aimed at creating a structure, definition, and realism around the
project and fostered the ideal environment for me to learn and grow. This
project is a result of his teaching, encouragement and inputs in the
numerous meetings he had with me, despite his busy schedule. He has
helped provide the scope and direct my studies in a manner to make them
most beneficial to me and to the company.
I would like to express my sincere thanks to my Faculty for his guidance and
support throughout my training. My learning has been immeasurable and
working under him was a great experience.
I extend my sincere thanks to all for his splendid support and cooperation
throughout the project.

I am also thankful to my friends who with their valuable advice and support
have contributed for the success of this study.

Seema Handa

TABLE OF CONTENTS

Executive Summary
1) Introduction.
2) Literature Review.
3) Company Profile.
4) Demand Forecast and Inventory Model.
5) Economic Order Quantity.
6) Supplier Selection and Distribution Mode.
7) Research Methodology.
8) Data Analysis.
9) Recommendations.
10) Bibliography.

EXECUTIVE SUMMARY

The project focuses on study of online retailing of grocery, homecare

products and personal care products. REI 6 Ten Retail Ltd has recently
launched e-retailing through their new website MyGrahak.com on test run
basis in Delhi/NCR region and they wish to expand this business on PAN India
basis. My objective was to make a sustainable business model and supply
chain for this new and innovative venture. Since its a new venture, there
was a need to forecast the demand, decide the inventory model and
appropriately select the supply source. In my study I have also conducted a
survey to know the customer buying behavior and accordingly modify the
combo deals. Hence in a nutshell, the main objectives of conducting this
study were:

To decide the inventory model and find out the EOQ and replenishment

period for various SKUs.

To select the supply source and distribution model
To study the consumer buying behaviour and modify the combo deals
To restructure the appearance of website for making it user friendly

CHAPTER 1
INTRODUCTION
INTRODUCTION TO RETAIL INDUSTRY
India is fast becoming the retail destination of the world. According to the
international management consultant AT Kearney, India has emerged as the
leader in terms of retail opportunities. Total retail sales in India will grow from
US$ 395.96 Billion in 2011 to US$ 785.12 Billion by 2015, according to the
Business Monitor International (BMI) India Retail Report for the secondquarter of 2011. Strong underlying economic growth, population expansion,
the increasing wealth of individuals and the rapid construction of organized
retail infrastructure are key factors behind the forecast growth. With the
expanding middle and upper class consumer base, there will also be
opportunities in India's tier II and III cities.
Mass grocery retail (MGR) sales in India are expected to undergo tremendous
growth over the forecast period. BMI predicts that sales through MGR outlets
will increase by 218% to reach US$ 27.67 Billion by 2015. Food and grocery
are the two categories in the Indian retail sector which offer the most
promising opportunities.
Organized retail in India is expected to increase from 5% of the total market
in 2008 to 14-18 per cent and reach US$ 450 Billion by 2015, according to a
McKinsey & Company report titled 'The Great Indian Bazaar: Organized Retail
Comes of Age in India'

However, the face of the Indian retail industry is changing. India is passing
through a retail boom today. A number of changes have taken place on the
Indian retail front such as increasing availability of international brands,
increasing number of malls and hypermarkets and easy availability of retail
space. With the Indian government having opened up the doors for FDI, the
entry of foreign retailers into the country has become easier. India has come
a long way from the traditional Kirana stores and is on its way to becoming a
mall country. The emphasis has shifted from reasonable pricing to
convenience, efficiency and ambience.
CHARACTERISTICS OF INDIAN ORGANISED RETAIL

Infrastructure Woes:

The Infrastructure in India is not as well developed as in other countries.

Many parts of India still do not have roads and need to be delivered through
bullock carts. Hence, any supply chain strategy for tier II and III retail would
need to take all these indigenous factors into account.

Use of 3 PL:

Gap between the expectations and the actual level of service provided, and
prices charged by the 3PLs are the primary reasons why companies are not
looking towards outsourcing their logistics to 3 PLs. Furthermore, the current
service levels of the 3 PLs have a lot to be desired.

Impact of VAT:

VAT system has been recently introduced and not yet implemented in its full
impact. When fully implemented, it would have long lasting consequences on
the way supply chain is being developed. The current form of VAT
encourages retail trade within a single state, with significant implications on
the location of warehouse and accordingly transportation costs.

Supply Base:

Due to the fragmented nature of supply chain in India, the players have to
deal with a wide number of other players. This results in lower margins per
level for the same amount of goods being transacted. Furthermore,
additional levels in supply chain also results in increased overall wastage for
the chain as the number of points, at which wastage may take place,
increases as well.

MAJOR AREAS OF CONCERN

With the Indian Retail still in its developing stage, there are a lot of issues
that need to be addressed.

Due to fragmented supply base and large number of intermediaries,

the product costs get artificially jagged up, resulting in decreased

margins at the retail point of sales

The decision to locate distribution centres is taken keeping the local
tax laws under consideration. However, the operations inside these

centres are not upon the standards leading to unnecessary expenses

Retail industry faces a big problem of forecasting and requirement of
inventory because of lack of proper IT implementation, the historical
data is not available at appropriate time. Even if data is available,
there are not enough technical competencies to handle this data to
derive meaningful insights. This results in increase in number of stock
outs, increased mark downs, low inventory turns and high pilferage

rate
With a fast-paced society and faster-paced technological changes,
customers want new, different, and customized goods now, and they're

not willing to wait

Pricing is very complex. It's no longer enough to be able to stamp a
product's price and forget about it. Modern retailers are changing

prices on goods daily. The benefit of flexible pricing is to be able to

respond to changes in the market as they happen

The future is uncertain as the customer is fickle. Global market
situations can also change the demand of products. And unexpected
problems at warehouse or stores can also affect the supply.

CHAPTER 2
LITERATURE REVIEW
OUTLOOK TOWARDS RETAIL SUPPLY CHAIN
With the growth in retail, not only front end but the entire network of
activities leading to a culmination of a successful retail transaction has
undergone a significant development. Supply chain is no different. After all,
supply chain forms a major part of the sustenance of any retail venture. For
the retail venture to flourish successfully, it should have an efficient and well
established supply chain. In the modern format, when all other aspects of
retail have been discarded as being a differentiating factor, the role of supply
chain has become even more important. Importance of an efficient supply
chain for a retail chain may be assessed from the gamut of areas in which it
helps the chain such as sourcing of material for Private Label, supplying of
SKUs to the distant tier II and III cities, more and more retailers entering into
Food and Grocery segment resulting in need for transportation of perishable
items requiring cold supply chain, etc. Hence it is deemed that from being
just a part of the operations of a network, supply chain is soon going to
become a source of competitive advantage for some firms.
If we look at the global scenario, we already have the example of retail
mammoth, Wal-Mart. Wal-Mart is said to have the best supply chain which
enables it to pursue the EDLP (Every Day Low Pricing) strategy. The Indian

Retail is yet to reach that stage and it will be an amalgamation of huge

investments, government policies, third party intermediation, and fast
changing consumer preferences which will characterize this back end
revolution.
The Indian retail has just started to develop. This is in contrast to the major
international retailing countries where it has already reached the maturity
stage. Due to this, there are still a lot many wrinkles which need to be
smoothened out. The Indian retail is still not as effective as that in the global
markets with the inventory turns being lower and stock outs being higher
than global average.

STATE OF ONLINE RETAILING IN INDIA

The phenomena that world is fast shrinking into a Global Village because of
internet and other communication mediums is not completely reflective in
the Indian context. While developed and fast developing countries have
understood the power of internet, India still has a long way to catch up. The
retail industry canvas has been repainted by internet and the rules of the
game in retailing are fast changing.
Just a few years ago Indian retail was primarily unorganized but, the scene
has been changing fast with emergence of big retail groups like Future
Bazaar, 6 Ten, Shoppers Stop, Reliance Retail, Spencer etc.

INDIAN RETAIL IN NUMBERS

A quick survey of average Indians who have access to internet showed that
most of them hardly could recall 1-2 online retail portals and most of their
responses were travel site. In comparison an average Indian settled in
America could recollect more than 5 online portals. This clearly indicates the
huge gap between the retail setup between India and other developed
countries. Internet penetration rate of 7.1% in India is one of the highest in

world and we have one of the highest numbers of internet users in absolute
terms.
India is considered as one of the prominent IT hubs in the world but, all these
have somehow not translated into positives in the retail space. Retail
industry in India stands at $390 Billion and organized retail is fast catching
up. Many of the big retailers have forayed into the online mode without much
success.

Online retail forms a meager 0.47% of the total retail market. This shows the
plethora of opportunity for online retailing in India. The Indian ecommerce
market at INR 9200 Crores is heavily tilted towards travel sites. More than
75-80% of this market is constituted by travel portals like make my trip,
yatra etc. About 12% of the rest is contributed by online classifieds like
matrimonial and job portals. Our area of focus is the remaining INR 1100+
Crores market which is set to see tectonic growth given the right
environment is built. This market is poised to grow at 30% per annum for

next 5 years but, long term sustainability will depend on how the market
fabric must change. Market players have to be more proactive and
innovative in their approach and offering to make serious inroads.

ONLINE MARKET SETUP

The market setup in India is conducive for the online retail to proliferate.
Internet accessing population in India is very high in absolute numbers
(roughly more than 32 million) and its penetration rate across the country is
also high. There are a handful of online portals in India which have been
around for quite some time. Indians have started using online transactions
for various purposes like paying bills, money transfers, ticket booking etc.
Despite these conditions the online retailing has not picked up. Currently
bulk of the online retailing is done in books, apparels and small electronic
items. This is nowhere close to the online retailing services offered by
Amazon or e-bay. The big question is why the Indian online retail is lagging

behind. Many of the online retail portals are still trying to figure out the
answer and probably they havent right answers.
6 Ten has attempted to come up with a solution by launching their My
Grahak venture, an online grocery shopping portal with an aim to pick up
online retailing in India.

ISSUES PLAGUING THE GROWTH OF THIS MARKET

Slow change in the buying behavior : Indians are still reluctant to buy
online and prefer brick and mortar models. Indians still like to have a feel of
product and spend time in buying.
Inability of online retail players to sway customers from offline
mode

to

online

retail

channel:

Lack

of

proper

marketing

and

advertisement, inability to create a brand image, lack of proper usage of all

possible online means like search engines, paid marketing, online ads, social
networking, blogs etc to reach the customers. Inability of online retailers to
drive the values a customer can derive by shopping on online channels.
Online portals are not up to the mark: There have been few lacunas in
the exiting online websites like poor front ends, website search options are
not good, lack of sufficient information about products and terms and
conditions, slow websites etc.
Lack of seriousness: A lot of online portals have come up in India backed
by major retail distributors but, for many it seems to have been just a
onetime setup. Post this there hasnt been enough drive to propagate the
brand and services of the portals among potential clients.
Issues concerning security and transaction frauds: In addition many
of the web portals dont support all online modes of payments. There are
high occurrence of failed payments and this if often a deterrent for clients to
revisit the portal. As stated above, most of the key issues are already known

by the market participants. Currently the inability of the retail portals to

address these problems is hindering the unraveling of the true potential.

CHAPTER 3
COMPANY PROFILE
COMPANY HISTORY AND PROFILE
REI Agro was established in the year 1994 with a vision to consolidate the
fragmented basmati rice industry & today REI is India's Leading Food Major &
is listed in Bombay Stock Exchange (BSE), National Stock Exchange (NSE),
London Stock Exchange and Singapore Stock Exchange. REI Agro Ltd.
contributes to 22% of country's basmati exports from India. It follows an
integrated business model and is equipped with the latest technology
available globally. The company operates state of the art rice processing

units

supplied

by

world

leaders

in

food

processing

equipments.

REI Agro launched its 6Ten chain of retail outlets in the last quarter of the
fiscal of 2006-07. Through this venture, we endeavor to get closer to the
customers to fulfill their needs. We are committed to provide excellent value

for money maintaining an innovative and responsive operating structure that

delivers quality products and services to customers.
Currently, 6Ten is operating 482 franchised stores in the NCR, Chandigarh,
Mohali, Panchkula, Amritsar, Ludhiana, Jalandhar, Ambala and Nagpur. All the
stores were started on COCO (Company Owned and Company Operated)
basis but in 2010 company moved to FOFO (Franchisee Owned Franchisee
Operated) model. Company is uniquely positioned because of its experience
in the food industry as well as relationship in the supply network.
Presently, the private label products account a major part of sales at 6Ten.
The products are packed in our Real Magic, Mr. Miller, and 6Ten brands.
The companies have already started private labels for most of the products
such as rice, pulses, wheat flour, tea spices, and other staples. FMCG
products such as sauces, chocolates, juices, beverages, jams, biscuits, floor
and toilet cleaners etc. are available under private labels. The private labels
offer quality at prices lower than the national brands

COMPANYS PRESENCE

MISSION

Only a small portion of the retailing market in India is organized. It is

estimated that in the supply chain for fruits and vegetables in India a
substantial part of the products ends up as wastage. 6Ten stores will strive to
organize the retail market in India and to improve efficiencies in the supply
chain in order to offer quality products at attractive prices. Companys
mission is to be the trendsetter in the retail space in India with professional
services making the lives of ordinary Indians easier and more convenient.

VISION
Through an efficient business model in the retailing sector, 6Ten will be a
household name throughout the nation. By enhancing efficiency and
reducing wastage it will ensure substantial savings in the food and vegetable
retailing sector which will be passed on to the customers. The Company
envisages an ideal retailing business model that can cater to the daily needs
of the Indian consumers.

MYGRAHAK OVERVIEW
My Grahak is the freshest venture that intends to delight all households of
India with a promise of enviable online shopping. With a promise of trust and

sincerity, company delivers every product consumers need to maintain

consumers home, through extensive and wholesome online market.
Customers can refill their monthly stores, through an easy onsite shopping or
by placing a telephonic order, reducing their efforts and multiplying their
choices. It can be anything from kitchen groceries to something for
consumers pets, or toiletries like shampoos and deodorant.
Company believes in making life easier and My Grahak is the perfect place to
redefine consumers lifestyle.
What makes customers fall back; with their shopping list is the potential to
find all their required household products, at most reasonable rates, with
complete shopping details, and a delivery right at their door step.
My Grahak is not only the initiator of an online grocery shopping; rather it is
a brand name associated with trust and quality. Besides best value for
consumers money, consumers get a complete leisure of home shopping,
which saves consumers a meaningful time for family, from overbearing
supermarket shopping.
MyGrahak.com has been developed to deliver grocery items to households
across the nation including perishable and frozen goods. Their aim is to help
consumers get the best possible price and products in consumers trolley
while enjoying an easier and more consumer-friendly shopping experience. If
consumers compare it with consumers nearby shop or a super market,
companys only agenda is ensuring that the shoppers get the best value
possible.
Our range of products touches every segment of consumers life, by
including groceries, health & beauty supplies, gift items and several other
food and non food products in our wholesome sale list. We also send care
packages to the students and military personnel (APO and FPO addresses)
and campers, cutting short any inconvenience on consumers part.
MYGRAHAKS WORKFLOW PROCESS

SWOT OF MYGRAHAK

STRENGTHS

Already in retail business through its 6 Ten venture

Well established vendor relations
Private Label Sale own products (Hungry Hungama, Safachat, Real

Magic, Mr. Miller, 6Ten brands)

Large product range
Shopping convenience
Dedicated CRM team

WEAKNESS

Lacking IT infrastructure
Website is not user friendly
Poor inventory control
Fragmented approach to human resource
Staff Lack of knowledge about products

OPPORTUNITIES

Expansion on PAN India basis

Can add more products to product category
No middleman, Vendors Customers

THREATS

Low margins due to intense price competition

Convenience of home delivery to customers from nearby kirana stores
Other retail giants like Future Group is coming up with its online

venture
High operating cost

CHAPTER-4
DEMAND FORECAST AND INVENTORY MODEL

On reaching the conclusion that the company should keep some inventory,
my next task was to decide the Inventory model. In present scenario, it is
necessary to deal with an increasingly uncertain business environment due
to the fast changing economic scenario. Decision-making becomes difficult in
such uncertainty. Needless to mention that the uncertainty in business
environment is due to the complex behavior of market related variables like
demand, market share, peoples perception and factors affecting demand in
the present day as a result of recent policy changes and market forces.
So before deciding an inventory model estimating demand is crucial.
The next challenge is inventory management because too much inventory
means unnecessary cost and too little increases the risk of losing sales. Even
with frequent deliveries, daily information updates may not be in time to
optimize inventory management. Hence we need an inventory system which
can withstand these challenges.

DEMAND ESTIMATE

For estimating the demand I have taken help from the companys marketing
department. They are planning to target various offices for their monthly
office and cafeteria supplies. The companys employees are also being
targeted by offering promotional offers and discount coupons. They are
already in conversation with many companies and few negotiations have
already been done. So taking the past history in consideration and
undergoing future negotiations I have estimated the demand as follows.
I took demand from employees of three companies and considered that 30%
of them will prefer online grocery shopping and will spend Rs700/- to
Rs1200/- per month on an average.

INVENTORY MODEL
E-Retail inventory management is probably one of the most complexes of all
inventory management departments. You can control the inventory levels in

your business to provide a suitable assortment and supply to meet market

requirements while excessive capital is not tied up, excessive space is not
required, and the investment does not force unnecessary borrowing and
interest expense.
In e-retailing, there is a virtual store or online store where one can display a
greater variety of products. Due to this wide variety of SKUs it becomes vital
to adopt an inventory model using which we can optimize the inventory cost
and reduce lost sales. In mygrahak.com the product range is as large as
3000 SKUs and the demand pattern for each SKU varies a lot. Some SKUs are
demanded in high volumes, some in high frequencies and vice versa.
On the basis of sales history, I categorized goods as slow moving, fast
moving, and very fast moving, and further categorizing them as vital,
essential and necessity goods.

Slow Moving SKUs: These are the products which are demanded less

frequently in low or high volume.

Fast Moving SKUs: These are the products which are demanded

more frequently in low or high volume.

Very Fast Moving SKUs: These are the products which are
demanded most frequently in low or high volume.

Further I categorized SKUs based on its utility:

Vital:

compromise with any substitute available for it.

Essential: These are the products for which customer may or may not

compromise any substitute available for it.

Necessity: These are the products for which customer is satisfied with

These

are

the

products

for

which

customer

the substitute, if the desired product is not available.

does

not

Hence out of 3000 SKUs in assortment plan, I selected 575 SKUs whose
inventory should be maintained. These are the goods whose demand
frequency is high but always demanded in low volume. These SKUs can be
considered as Fast Moving and Very Fast Moving.
A Continuous (fixed order quantity) Inventory System should be followed to
keep a continuous check on the inventory level. In a Continuous system, an
order is placed for the same constant amount whenever the inventory on the
hand decreases to a certain level. Whenever the inventory decreases to a
predetermined level, referred to as the reorder point. A new order is placed
to replenish the stock of inventory. The order that is placed for a fixed
amount minimizes the total inventory costs. This amount is called Economic
Order Quantity (EOQ).

CHAPTER-5
ECONOMIC ORDER QUANTITY

Economic order quantity (EOQ) is that size of the order which gives
maximum economy in purchasing any material and ultimately contributes
towards maintaining the materials at the optimum level and at the minimum
cost.
Formula for EOQ calculation:

SKU wise EOQ has been calculated on the basis of March 2012 sales data.

CHAPTER-6
SUPPLIER SELECTION & DISTRIBUTION MODE

IMPORTANCE OF SUPPLIER SELECTION

Vendor selection is one of the important decisions for retailers. There are
many outside influences that affect profitability and a retailer's bottom line.
Setting the right price is a crucial step toward achieving that profit. Retailers
are in business to make a profit, but figuring out what and how to price
products may not come easily. Before we can determine which retail pricing
strategy to use in setting the right price, we must know the costs associated
with the products. Two key elements in factoring product cost is the cost of
goods and the amount of operating expense.
The cost of goods includes the amount paid for the product, plus any
shipping or handling expenses. The cost of operating the business, or
operating expense, includes overhead, payroll, marketing and office supplies.
A retailer simply cannot succeed in business if they continue to sell their
products below cost.
It is very crucial to select the right vendor to gain maximum margins. There
are four different levels of vendors which offer different margins for the same
product. Company can gain maximum margin by procuring from the
manufacturer and least margin from cash and carry.

Margin levels will also vary depending on the distribution mode. Company
can gain highest margin in DTH and varying margins in HUB packing or HUB
Storage.

SUPPLIER SELECTION & DISTRIBUTION MODE

Supplier Selection depends on two factors:
i. Demand Situation: I have categorized demand into three types on the
basis of frequency and number of units demanded.
a. High Units and High/Low Frequency
b. Low Volume and High Frequency
c. Low Volume and Low Frequency
ii. Distribution Mode: Depending on the demand situation there can be
three different modes of distribution.
a. DTH: Direct to home from vendor is preferred when high units and
high/low frequency is demanded
b. HUB Storage: Some SKUs will be stored at warehouse which has high
demand frequency but units demanded at a time is low
c. HUB Packing: SKU's which has very low demand will be procured from
vendor as and when it is demanded and then packed at HUB and delivered.

There are four levels of vendors from where we can procure the products.
Among them first one being the Manufacturer (V1) who offers highest margin
and then Master Franchisee (V2) after that Wholesaler (V3) and least margin
is offered by Cash and Carry (V4).
Now depending on the demand situation distribution mode will be selected.
And for each distribution mode there will be some adjustments in the
margins offered by the vendors.

Case 1: High Units and High/Low Frequency

In this case DTH is preferred mode of distribution.

We can see the different margins from each vendor, highest margin is offered
by Manufacturer and then by Master franchisee. So they are the suitable
vendors if units demanded are high.
Case 2: Low Volume and High Frequency
In this case HUB Storage is preferred mode of distribution.

We can see the different margins from each vendor, highest margin is offered
by Manufacturer. So they are the suitable vendors if units demanded are low
and frequency of demand is high.

Case 3: Low Volume and Low Frequency

In this case HUB Packing is preferred mode of distribution.

We can see the different margins from each vendor, as the volume
demanded is low so the preferred vendor is Wholesaler and then Cash &
Carry. So they are the suitable vendors if units demanded are low and
frequency of demand is also low.

Supplier Constraints:
REI 6 Ten Retail Ltd has 31 vendors. One or more brands are procured by 6
Ten from each vendor. Vendors have certain constraints:

Credit Period: Credit Period varies for brand to brand for various

vendors.
Credit Limit: Credit Limit also varies for brand to brand for various

vendors.
Truck Load: A vendor will supply goods only if there is a truck load.

So these constraints have to be kept in mind will making a purchase order.

COMBO DEALS
Combo Deals are a kind of discount offers, where a customer can select a
bunch of products from a given list and can avail discount on it. Generally, in
retail outlet customers do not have freedom to select products for discount
on their own. But My Grahak (online retailing) can offer this freedom to
customers. Customers can select products from a list.
For example, If My Grahak offers a combo deal for household needs then in
the product list it can mention the category of products available in that deal
and give the freedom of choosing brands and pack size to the customers
accordingly. While preparing the product list, only the products having same
margin levels should be included in the list. For a product category, My
Grahak can offer all those brands and pack sizes which have same margin
level.
For making a combo deal, I need to know customer buying behaviour. Hence,
I conducted a survey in this regard.

CHAPTER-7
RESEARCH METHODOLOGY
STATEMENT OF PROBLEM

Company is facing problem with its cumbersome website of online Retailing.

How to restructure it on the basis of customer preference?
Company also needs to analyze the feasibility of its distribution channel and needs
to design best inventory model in order to cut cost.
OBJECTIVE OF THE STUDY

To suggest an inventory model

To select supply source and distribution mode

To restructure the website and making it user friendly.

SCOPE OF THE STUDY

The study aims to identify whether to run on zero inventory or not and
recommend an inventory model accordingly.

The study also aims to select a vendor to maximize the companys

margin and hence find out suitable mode of distribution.

The study identifies the preference of customers so that company can

provide combo deals and make the website user friendly.

METHODOLOGY
The following procedure was followed for the research study:
i. Deciding upon the objective of the research study and its viability in
current scenario
ii. Developing survey instruments
iii. Collecting responses by sending an online survey via LinkedIn messages
and E-mail to people from various fields
iv. Analyzing the data

DEVELOPMENT OF THE INSTRUMENTS

The questionnaire which was to be filled by the people was developed in the
following manner.

RESEARCH DESIGN
A series of advanced decisions that when taken together, comprise a master
plan or model for the conduct of investigations. A blueprint that is followed in
completing the study:

Formulating objective of the study.

Designing the method of the data collection.

Selecting the sample size.

Collection of data.

Analysis of findings.

Conclusion and interpretations.

Suggestions and recommendations.

DATA COLLECTION
Data

collection

was

done

through

questionnaires

only.

The

questionnaire covered the following:i. Purchase Grocery, Home Care Products, Personal Care Products and
Miscellaneous Products or not
ii. Products purchased together
iii. Buying Frequency
iv. Preference for Organic Food
v. Family Size
vi. Monthly Expenditure
vii. Location
viii. Profession
Questionnaire will be designed on Likert Scale.

COLLECTION OF PRIMARY DATA

The data collection was primarily done through online communication. It
involves questioning respondents to secure the desired information, using a
data collection

instrument called questionnaire.

The responses were

collected in a Google spreadsheet.

I undertook the research activities in the following hierarchy

i. They determined the major requirement of the company and what

information was needed by me to make the appropriate combos.
iii. A questionnaire was designed for people (perspective customers) that can
be filled by them.
iv. Data was collected and put into the excel sheet so that it becomes easy to
interpret.
v. After putting data into the excel sheets I analyzed the data.
vi. On the basis of data analysis I found the number of products purchased at
a time and the combination of products people prefer to purchase together.
vii. Finally the suggestion and recommendations were given to the company.

Sample Design
Sampling is the process of selecting a sufficient number of elements from the
population so that a study of the sample and the understanding of its
properties or characteristics would make it possible for us to generalize such
properties or characteristics to the population element. In a sample survey,
only part of the total population is approached for data.

Sample size

Samples were randomly selected and each of them responded. Sample

consisted of employees who are presently working or house wife.

Questionnaire Design
The questionnaire design was based upon mostly close ended questions and few
open ended questions. The questionnaire had four or five sections, and depending
on the answer of first question the respondent will get the next set of questions. The
last section was compulsory for all the respondents to answer.

CHAPTER-8
DATA ANALYSIS
Q1) Do you visit grocery or departmental store or supermarket for
purchasing groceries?
All the respondents who visit grocery and departmental store are taken for
my study.

Q2) Which grocery items you purchase mostly? (Tick as many as)

When asked from the respondents that what item they go for
purchasing in a grocery store then it was observed that sugar, salt and
tea/coffee were frequently purchased by them.
Whereas products like dalia and dairy whitener and spices were less in
demand by the sample respondents.

Q3) How frequently do you purchase grocery?

Out of the sample respondents it was observed that nobody prefers

purchasing of grocery on daily basis.
Whereas weekly and monthly purchase of grocery was major preferred
from the sample respondents.

Q4) What proportion of your monthly expenditure contributes to grocery

items?

Most of the respondents spend 10%-20% of their total monthly

expenditure on grocery items.
And on the other hand below 10% is very less who spend their monthly
expenditure on grocery items.

Q5) I visit departmental or groceries store to buy_________ (Tick as many as)

Most of the respondents prefer to purchase household items when they

visit a grocery or departmental store.
Out of the total respondents after house hold items they prefer to
purchase personal care products and organic food & vegetables

Q6) I choose a departmental store on following criteria (Rank these criteria)

(Rank 1 for most favourable and Rank 5 for least favourable criteria)

Most of the sample respondents prefer departmental store for their

convenience and least price offered by them.
Also some of the respondents attracted by combo deals and offers
provided by the stores.
Customers were least attracted by customer service given and fast
transaction time provided to them.

Q7) I purchase groceries items for family of _______ person.

It was found that most of the respondents purchase grocery items for
the family of 4 or more than 4.
On the other hand no body purchase grocery items for single person.

Q8) I usually prefer to purchase following household items from a

departmental store. (Tick as many as)

Most of the respondents usually prefer to purchase Detergent

powder from the departmental store.
Aluminium Foil and utensil cleaner were their second demand
after detergent powder.
Whereas toilet cleaner are not frequently purchased.

Q9) I usually prefer to purchase following personal care products from a

departmental store. (Tick as many as)

Shampoo/conditioner were most demanded personal care products

from departmental store.
Whereas other items like tooth paste, face wash, hair oil, Bath soap,
body lotion and deodorant/perfume were in their in regular demand.
It was founded that talcum powder was having lesser demand.

Q10) I usually prefer to purchase following products from a departmental

store. (Tick as many as)

Biscuit & noodles/pasta were preferred by majority of respondents.

Whereas cornflakes & soft drinks were purchased on the regular basis.
It was interesting to found that milk and dry fruits were least preferred
to purchase from departmental stores.

Q11) I usually prefer to purchase following organic foods from dept. store.
(Tick as many as)

Pulses, rice & flour were most demanded organic foods to buy from
departmental store.
Whereas wheat & vegetables were less purchased as compare to the
above mentioned organic foods.

Q12) My monthly expenditure on groceries items increases when best prices

are offered to me.

Most of the respondents agree that their monthly expenditure on the

grocery items.
Only 1 or 2 respondents disagreed that their monthly expenditure on
grocery items increases.

Q13) My monthly expenditures on groceries items increases in case of

It was surprised to see that every discount, buy one get one, combo
deals and weekly or monthly offers attracts customer.

Q14) I choose to visit a supermarket only if I need to purchase large amount

of house hold items.

Most of the respondents agree that they purchase large amount of

household items from supermarket.

Q15 I choose a departmental store on the basis of its convenient location.

Most of the respondents take convenience as their top priority to

purchase it from a departmental store.

Q16) Combo deals and offers influence my purchasing decision.

Most of the respondents agree that combo deals and offers influence their
purchasing decision.

CHAPTER-9
RECOMMENDATIONS

Recommendations for inventory management

The Company should not run on zero inventory, it should keep some

inventory
They should categorise their inventory according to the demand of SKUs

and keep inventory for fast moving and very fast moving goods
They should follow Continuous Inventory Management System

Recommendations for supply source and distribution mode selection

For goods having very high demand volume, DTH distribution mode should be
followed and manufacturer/master franchisee should be selected as the

supply source
For goods having very low demand volume and high frequency, HUB Storage
distribution mode should be followed and manufacturer should be selected as

the supply source

For goods having very low demand volume and low frequency, HUB Packing
distribution mode should be followed and wholesaler/cash and carry should
be selected as the supply source

Recommendations for website and combo deals

In combo offers, only product category should be mentioned and customer

should be given the freedom to choose brands and pack sizes

To make the website more user-friendly, there should be proper use of drop

downs
For same product, images of different pack sizes should not be displayed.
Rather, after choosing the product its available pack size should appear for
selection

CHAPTER-10
BIBLIOGRAPHY

James R. Ogden, Denise T. Ogden, Integrated Retail Management,

Edition 2005, Biztantra

Russell & Taylor, Operations Management, Sixth Edition, Wiley India (P.)

Ltd.
http://www.ideasmakemarket.com/2011/05/supply-chain-challenges-in-

indian.html
http://www.mygrahak.com/
State of Online Retailing in India, report published by Channel Push
Online Services Pvt. Ltd.

ANNEXTURE
Name:Age:Occupation:Contact no:Questionnaire
1

Do you visit grocery or departmental store or supermarket for purchasing groceries?

Yes

NO

Which grocery items you purchase mostly? (Tick as many as)

a) Sugar
b) Salt
c) Edible Oil
d) Rice
e) Pulses
f) Wheat Flour (Atta)
g) Tea/Coffee
h) Dairy Whitener
i) Dalia
j) Spices
How frequently do you purchase
grocery?
a) Daily
b) Weekly
c) Twice a month
d) Monthly
What proportion of your monthly expenditure contributes to
grocery items?
a) Below 10%
b) 10%-20%
c) 20%-30%
d) Above 30%
I visit departmental or groceries store to buy_________.(Tick as many as)
a) House hold items
b) Personal Care products
c) Homes Durables
d) Organic food &
vegetables

e) Others
6

I choose a departmental store on following criteria (Rank these

criteria)

(Rank 1 for most favourable and Rank 5 for least

favourable criteria)
a) Convenience
b) Least Price
c) Combo deals and offers
d) Customer Service
e) Transaction Time
7

10

I purchase groceries items for family of _______ person.

a) 1
b) 2
c) 3
d) 4
e) More than 4
I usually prefer to purchase following household items from a departmental store.
(Tick as many as)
a) Detergent Powder
b) Kitchen/ Utensils
Cleaner
c) Aluminium Foil
d) Sanitizer
e) Antiseptics
f) Toilet Cleaner
I usually prefer to purchase following personal care products from a departmental
store. (Tick as many as)
a) Shampoo/Conditioner
b) Toothpaste
c) Hair oil
d) Bath Soap
e) Deodorant/ Perfume
f) Face Wash
g) Fairness Cream
h) Body Lotion
i) Talcum Powder
I usually prefer to purchase following products from a departmental store. (Tick as
many as)
a) Biscuit
b) Noodles/Pasta
c) Tea/Coffee
d) Juices/Soft Drink
e) Cornflakes
f) Sugar

g) Dry fruits
h) Ready to eat foods
i) Milk
11

12

13

I usually prefer to purchase following organic foods from dept. store. (Tick as many
as)
a) Rice
b) Wheat
c) Flour
d) Pulses
e) Vegetables

My monthly expenditure on groceries items increases when best prices are offered
to me.
a) Strongly Agree
b) Agree
c) Neither Agree nor
Disagree
d) Disagree
e) Strongly Disagree

My monthly expenditures on groceries items increases in

case of
a) Combo-deals
b) Buy one Get one
c) Heavy Discounts
d) Weekly or Monthly
offers

14

15

I choose to visit a supermarket only if I need to purchase large amount of house

hold items.
a) Strongly Agree
b) Agree
c) Neither Agree nor
Disagree
d) Disagree
e) Strongly Disagree

I choose a departmental store on the basis of its convenient

location.
a) Strongly Agree
b) Agree
c) Neither Agree nor
Disagree
d) Disagree
e) Strongly Disagree

Combo deals and offers influence my purchasing

16

decision.
a) Strongly Agree
b) Agree
c) Neither Agree nor
Disagree
d) Disagree
e) Strongly Disagree

Enrollment No:

A19201131743

Name:

SEEMA HANDA

Area of
Specialization:

Operations

Title of the
Project:

Study of Supply-Chain in eRetailing for MYGRAHAK.COM

Statement of
the problem:

Company is facing problem with its

cumbersome
website
of
online
Retailing. How to restructure it on the
basis
of
customer
preference??
Company also needs to analyze the
feasibility of its distribution channel
and needs to design best inventory
model in order to cut cost.

Objectives of
the study:

To suggest an inventory model? To

select supply source and distribution
mode? To restructure the website and
making it user friendly.

Methodology:

Primary Data

Explanation of
the Method:

Explanation of the Project The project

focuses on study of online retailing of

grocery, homecare products and

personal care products. REI 6 Ten
Retail Ltd has recently launched eretailing through their new website
myGrahak.com on test run basis in
Delhi/NCR region and they wish to
expand this business on PAN India
basis. My objective is to make a
sustainable business model and supply
chain for this new and innovative
venture. Since its a new venture,
there is a need to forecast the
demand, decide the inventory model
and appropriately select the supply
source. In my study I need to conduct
a survey to know the customer buying
behavior and accordingly modify the
offers according to their preferences.
Company
Name:

REI 6Ten Pvt Ltd

Company
Profile:

REI Agro was established in the year

1994 with a vision to consolidate the
fragmented basmati rice industry &
today REI is India's Leading Food Major
& is listed in Bombay Stock Exchange
(BSE), National Stock Exchange (NSE),
London Stock Exchange and Singapore
Stock Exchange. REI Agro Ltd.
contributes to 22% of country's
basmati exports from India. It follows
an integrated business model and is
equipped with the latest technology
available globally. The company
operates state of the art rice
processing units supplied by world
leaders in food processing equipments.

Questionnaire
(10 to 15
questions)
1. Do you visit grocery or departmental store or supermarket for
purchasing groceries?
2. Which grocery items you purchase mostly? (Tick as many as)
3. How frequently do you purchase grocery?
4. What proportion of your monthly expenditure contributes to
grocery items?
5. I visit departmental or groceries store to buy_________.(Tick as
many as)
6. I choose a departmental store on following criteria (Rank these
criteria) (Rank 1 for most favourable and Rank 5 for least
favourable criteria)
7. I purchase groceries items for family of _______ person.
8. I usually prefer to purchase following household items from a
departmental store. (Tick as many as)
9. I usually prefer to purchase following personal care products
from a departmental store. (Tick as many as)
10. I usually prefer to purchase following products from a
departmental store. (Tick as many as)
11. I usually prefer to purchase following organic foods from dept.
store. (Tick as many as)
12. My monthly expenditure on groceries items increases when
best prices are offered to me.
13. My monthly expenditures on groceries items increases in case
of
14. I choose to visit a supermarket only if I need to purchase large
amount of house hold items.
15. I choose a departmental store on the basis of its convenient

location.

Number of
respondents:

65

Area of study:

New Delhi

Method you
will use to
classify data:
Method you
will use to
present data:

Data is presented with the help of

graphs, pie charts, bar diagram, line
graph etc. so the complex data can be
easily presented.

References:

*Russell & Taylor, Operations

Management, Sixth Edition, Wiley India
(P.) Ltd. *http://www.mygrahak.com/

Profile of Project Guide

Name:

Ankur Iyer

Age:

30

Educational
Qualification
:

PGDM

Years of
Experience:

Current
organisation
:

6Ten Pvt Ltd

Current
designation:

Manager

Brief profile:
Address:
House No:.

B-114, Sector-1

Street:

Rohini

City:

Delhi

State:

Delhi

Phone
Number

(Residence):
Phone
Number
(Office):
Mobile:

9953789095

Email:

Ankuriyer321@gmail.com

ANKUR IYER
B-114, Sector-1

Mobile No: 9953789095

Rohini
ankuriyer321@gmail.com

Email:

New Delhi-110085

PROFILE SNAPSHOT

Results driven professional over 10 years of experience in the area of

operations.
Proactive and smart planner with expertise in strategic planning, data

analytical, product management.

Hands-on executive, passionate about utilizing technology to improve

business results.
Skilled communicator and quick learner with analytical bent of mind coupled
with zeal to utilize and enhance ideas, knowledge and skills.

Exceptionally well organized with track record that demonstrates self

motivation, creativity and initiative to achieve both personal and corporate
goals.

CORE COMPETANCIES

Leadership
Client Relationship
Project management Skills.
Service management
Expertise in the domain of Windows/AD

CAREER SKETCH
REI 6 Ten Pvt Ltd
Working on day to day on Operational Issues.

PROFESSIONAL QUALIFICATIONS

Masters in Business administration in operations from IMT.

Bachelor in Commerce from Bhagat Singh College (Delhi University).
Done Schooling from Mount Abu Public School.

PERSONAL INFORMATION
Date of Birth: June 30, 1984
Nationality: Indian
Marital Status: Unmarried