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i kozhikode SOM Project Reporti m Operation 2011 Service

at Reliance Fresh Kunnamangalam


Group 9 PGP/14/191 Ambica Prasad Biswas Riddhi PGP/14/236

Sumit Kumar

PGP/14/184 Ajith S

PGP/14/192

SOM Project: Reliance Fresh @ Kunnamangalam

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Table of Contents
Introduction......................................................................................3 Executive summary............................................................................3 Overview...........................................................................................3 Service Strategic Vision.....................................................................3 Service Profit Chain...........................................................................4 Service Blueprint...............................................................................6 Supply Chain.....................................................................................7 Walk Through Audit...........................................................................8 Store Layout......................................................................................9 Site Selection Yard Sticks.................................................................10 Service facility location offerings...................................................10 Recommendations............................................................................13 Reference:.......................................................................................14 Reference:

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Introduction
Service sector takes a lions share in Indias total GDP, contributing 55.2 percent share in GDP and accounted for close to 23% employability in the total workforce. Add to it, service sector is growing by 10% annually and have a high share in FDI and export market. If service sector plays a key role in India and central to its growth, retail itself claims a big stake in service and it can be arguably better understood now than any time before and after when the recent FDI policy of the government has made a news headline from BBC to DD national to pink news papers to the public discussion. This is the first time in Indian history where the corporate has directly voiced their opinion which is a rarity in Indian Industry which generally prefers to duck when political battles send missiles back and forth. This accentuates the importance of retail which has a direct impact of the 650 million rural populations and has a huge lure of about USD 450 billion. It would be sheer premature to write the obituary note on the FDI in retail but the government first flips and then flops and this flip-flop underlines the pressing importance of retail in solving a lot of issues from balancing farm-fork price imbalances to the satisfactory result for the producers and the consumers both and so on and so forth.

Executive summary
It really assumes a great significance to study on a retail shop like Reliance Fresh and an in-depth analysis of this has delivered more insights into the various aspects of the Service Operations Management(SOM) and has also helped us to look into its various service nitty-gritty by combining our class learnings with the Reliance Fresh shops day-to-day activities. We have judged where the shop stands using various framework of SOM. SOM is a very vast subject, so this piece of work has careened through some of the cardinal aspects of SOM and tried to analyse in depth from that template. We have touched upon topics including service profit chain, service strategic vision, supply chain management, site selection criteria et al in addition to briefing about the Reliance Fresh. The work ends with the recommendation having a spectrum of SOM Project: Reliance Fresh @ Kunnamangalam Page 4

pros and cons. The questionnaires used in the WTA have been enclosed herewith.

Overview
Reliance Fresh Kunnamangalam was started in 2006, with 6 other stores in Calicut. It was located opposite to the Bus Stand of Kunnamangalam. It is spread in area of 5,000 square feet. Its total employee strength is 15 and has 1 Assistant Store Manager, 10 Customer Service Associates along with 3 Cleaning Staffs and 1 Guard. Its timing is from 7:30 AM to 9:30 PM. It has 3 shifts and average footfall per day is 350-400 persons. It is found in our survey that the Peak hour is 5:00 PM to 7:30 PM.

Service Strategic Vision


The service strategic vision is formulated to address the unmet needs of a particular customer segment. The basic categories of this vision include target market segment, service concept, operating strategy and the service delivery system. These categories are then integrated using the integrating elements such as positioning, value/cost leveraging and strategy/system integration. The primary target segment for the kunnamangalam reliance fresh is the White collar job holders and local well-to-do families of the surrounding area, students, faculties and staff of IIMK.

SOM Project: Reliance Fresh @ Kunnamangalam

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Service Profit Chain

SOM Project: Reliance Fresh @ Kunnamangalam

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Facilities for employee: Rest rooms,

Employees come in 3 shifts & Jobs divided as billing section, customer care, floor manager, items arrangement and

China cloth bag is provided SAP billing software Customer care Employees recruited from Calicut and nearby places, they are trained to handle the billing and

Star of the month Parameters: Punctuality, Discipline, customer delight, product knowledge Reward: Certificate, badge, gift voucher

The service profit chain links the profitability, customer loyalty and service value to employee satisfaction, capability and productivity. The environment consisting of workplace design (e.g. facility rooms for employees), job design (clear job descriptions), employee selection & development (proper training is given), rewards system (Star of the month award, certificates) etc drives the employee satisfaction which in turn drives the retention and productivity. This quality and productivity improvements yield higher service quality and lower cost. This attractive value drives customer loyalty which results in profitability and growth. SOM Project: Reliance Fresh @ Kunnamangalam Page 7

Good shopping experience Value for money goods

The shop is equipped with centralized A/C The items are placed in order and in groups

Reliance One card: Customers can redeem the points collected

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Service Blueprint
Physical Evidence
Entrance Shelf for bags
Customer carrying a bag

baskets/ trolley No

Items on shelf Search for items on shelf Pick the items required

Bill counter

Bill counter Customer collect items and bill

Shelf for bags


Cust carried a bag @start? Yes

Exit gate Customer Exits Customer collects bag from shelf

No

Customer action

Customer Arrives

No Basketor trolley reqd?

Item Found

Yes

Billing Counter

Yes

Yes

No No No Bill payment made


RelianceOne cardholder?

Line of visibility
Greet and take the bag

Take basket/troll ey from the counter

Ask the staff for help

Payment usingcash?

Yes

On Stage contact person

No Place the bag in shelf Check for items in inventory No


Item located

Yes Customer signs on the payment slip Update points in card Customer collects the card

Yes

Payment using credit/debit card

Line of internal interaction


Back Stage contact person
Order for items Check for availablityof items on shelf

Line of external interaction


Inventory/ warehouse Payment clearance from bank Updation of Reliance database

Support Process
Perishable items from DC
Non perishable items Bangalore DC

Supply Chain
There are 6 Reliance Fresh stores in Kozhikode city, each stores gets its supplies from the Distribution Centre (DC) located in Trichur, Kerala. The fruits and vegetables requirements are met by Warehouse in Palakkad, Kerala. Each day 2 trucks leave from the warehouse in Palakkad and refill all the stores in Kozhikode. Other items like FMCG, groceries are ordered from Trichur DC.

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Reliance Fresh store at Kunnamangalam is equipped with Point of Sale (POS) terminal; it manages the selling process by a salesperson accessible interface. The same system allows the creation and printing of the receipt. Each terminal is equipped with Electronic Data Interchange (EDI), which is connected to the main server in Trichur. The inventory level is automatically counted and the order is placed by the system. Usually the items are replenished twice in a week in all stores in Kozhikode. The items ordered from all the Reliance Fresh stores in Kerala are handled by Trichur DC, which gets its supply from the Bangalore DC. The store follows cross docking methodology, in which the items are transported from different locations to Trichur DC, and from there it is transported to all the Reliance Fresh stores in Kerala.

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Walk Through Audit


A walk-through audit was conducted at Reliance fresh outlet, to capture what actually happens when people interact within and between processes in Reliance Fresh store. A sample of 10 members were selected to fill the questionnaire, the sample consisted of 6 customers, 3 employees and 1 store manager. The responses were filled by the respondents on various heads like

Information Facilities Experience Satisfaction

The ratings for each questions was taken on a 5 point scale. (Strongly disagree, disagree, neutral, agree and strongly agree). The responses from the various stakeholders were mapped on a graph to identify the areas which needs improvement. The graph plotted for Information is plotted below

The graph plotted for questions related to Experience, Facilities and Satisfaction is plotted below:

Store Layout
In service nothing should go unnoticed: from molehills to mountain head everything should be given utmost care and consciousness. And when it comes to deal with retail service very few can match with all are important features of a retail shop. Unlike manufacturing and many other services, the retail store layout wields a very prominent role in easing customer efforts in searching for goods and thus facilitates in satisfying the customer needs and necessities. Our study on the Reliance Fresh has also strengthened this notion except a few slight niggles. All the goods kept on the shelves are, to a good extent, to meet

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the customer requirements and help them in finding out the right items bearing in mind customer cardinal satisfaction.

As an example in the very entrance the customer care desk is decorated with shelves for leaving the personal belongings like helmets, any carrying bags, etc. The daily necessities like vegetables, fruits, grains are kept in the very first block and both the shelves, right and left, are filled with these items that find everyday purchase. Then strategically are kept the FMCG products like shampoo, soap, detergents in the last blocks. The other comparatively less frequently purchased items like footwear, plastic bottles are kept on the last racks. Candy and chocolates are kept in front of the cash counter and fulfils the dual purposes, one is to woo the kids and others who are fond of these stuffs and the second is to sell the products in exchange of the lower denominated rupees e.g.- Re 1, Rs 2 etc, as there may be a paucity of these lower denominations. The store room, changing room and the rest room are also kept at the end or the side for the employee convenience.
Chiller Chiller Footwear,plasticitems Plasticbottles, jarsetc ChangingRoom

Towellsetc Beverages

Detergents Soap, Shampoo, Deo

Beverages Snacks

FMCG FMCG

t i x E

t i x E
Staples Staples Loose Staples Oil, Ghee & Spices Rest Room Office Space

Confectionaries Processed Foods

Processed Foods vegetables

e c a r t n E

Fruits

Cutomer Care

Chiller

Open Chiller

g e V & s t i u r F

SOM Project: Reliance Fresh @ Kunnamangalam

g c n a i p D S e
Exit

f l e h S

z e r F

m R e r o t S

G C M F G C M F
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Site Selection Yard Sticks


Selecting a site is a very important aspect of any business. It is a gateway to receive a cabal of customers. Whenever it comes to deliver service in retail business, the paramount importance of a location is sui generis. A proper strategic location can augur as well as a wrong location can spell doom for the service business. The yardstick of locating a service site is primarily based on the fact that it should be as convenient as possible to the customers, also be easily accessible without much trouble, be an entry barrier and generating demand. In addition to the above, it should also proffer the wide spectrum of flexibility, competitive positioning, demand management and focus. Flexibility refers to the extent the service can react to the changing economic situations. Competitive positioning deals with methods by dint of which a shop can establish itself relative to its competitors. Demand management is the ability of a shop or a firm to maintain quality, quantity and timing of demand irrespective of the sapping or flourishing economy, the day of the week or the season. Service facility location offerings

Keeping this in mind we have pointed out the following criteria and judged Reliance Fresh to see where it stands in those considerations.

Access: The shop is located at the hub of Kunnamangalam and it is well connected by road. Main bus stand is just few metres away and two big institutes are nearby. So, all the customers can easily make an access to the place. All kind of personal vehicles like cars, bikes can easily pass through and enter and exit the place.

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Visibility: Situated behind the other cluster of shops, its not visible from the main road. So for a new comers its poor visibility is a cause of concern. No special banner or placard has been put up to increase its visibility. Traffic: This is an added advantage for this shop. Where so many retail stores are suffering from the traffic snarls and its not uncommon that customers now and then distance themselves for the fear of traffic congestion, this location is all together staunch itself from the curse of traffic volume.

Parking: The parking lot is a deterrent factor. Very few vehicles can be parked at a time and thus customers may be away from shopping as changing lifestyle has made people to drop into for shopping with their personal vehicle. Lack of facility to park cars may keep aloof the customers. Expansion: Now-a-days when a site is considered to a place of business, much care is taken for the possibility of its future expansion. In this regard, Reliance Fresh scores dismally low. Environment: The old clich runs Our environment, the world in which we live and work, is a mirror of our attitudes and expectations. If this holds true, Reliance Fresh scores high in this regard. It is located in such a place that many other shops, kiranas environ it and help to form a perfect congenial atmosphere for business. Competition: Unlike other big cities retail shops, RF runs the race with other unorganized shops, kirana stores, carting vendors, etc. These are the competitors against whom it will have to vie for a big pie of customers. Government: No as such rules and regulations by the government are proved to be a hindrance for burgeoning its business.

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Recommendations
1. Employees, who are from nearby places of Kunnamangalam, should be placed in the morning shift only. Pros The operating hours would be convenient for all both customers and employees also Cons Some dissatisfaction might show up in those employees who have to come early always 1. Regular maintenance of the card swiping machines to ensure proper working. Pros Convenient for customers who generally use credit/debit cards Cons Maintenance cost will increase 1. Employees should regularly check the shelves for proper arrangements of the SKUs Pros Visual impact would be better. Convenient for customers to search for desired items Cons 1. DC. Pros The distance travelled will be less, hence will save on cost. It will cater to all the 6 stores in Calicut. Cons Requirement of new trucks for transportation is also there.
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Workload on employees will increase

The FMCG items should be directly sourced from Bangalore DC instead of Thrissur

The road condition between Bangalore and Calicut is not good. 1. Separate dining area and a new store room should be built by Reliance Fresh on its premises. Pros Increase hygiene for employees. Increase employee satisfaction. Easy access and traceability of items. Avoid hindrance and congestion for item movements in store. Cons High capital requirement for Reliance Fresh 1. Banners and placards should be used to increase the shops visibility. Pros Shops can be easily found out for the newcomers and can be a means to attract other buyers. Sales are likely to go up. Cons A meager investment is required

Reference:
1. Service Operation Management Handbook 2. James A. Fitzsimmons & Mona J. Fitzsimmons, Service Management 3. The Economic Times

Questionnaire for Reliance Fresh


Hello, we are from the Indian Institute of Management, Kozhikode and we are conducting this survey to find out what do people think about the service experience when visiting this Reliance Fresh. Please answer the following questions:

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All information in this questionnaire is strictly confidential!

1. Was it easy getting to Reliance Fresh? o Yes o No 2. Are RFs opening hours acceptable? o Yes o No 3. Did you arrive alone or with others? o Alone 4. Where did you hear about this RF? o Newspaper o Magazine o Friends Customer 5. Did you come here for? o Monthly shopping o Weekly shopping o Others

o Impulse Buying

o Regular

o Daily shopping O 45-60 min o More than 1

6. How much time did you spend in RF? O Less than 15 min o 15-30 min o 30-45 min hour o More than 2 hrs

7. Information a. Signs gave clear information about products location o Strongly disagree o Disagree o Neutral o Agree b. The information provided was in your language o Strongly disagree o Disagree o Neutral c. Keeps its records accurately o Strongly disagree o Disagree o Neutral o Agree o Agree o Agree

o Strongly agree o Strongly agree o Strongly agree o Strongly agree

d. Employee knows what your needs are o Strongly disagree o Disagree o Neutral

1. Experience a. The products were of good value for the money o Strongly disagree o Disagree o Neutral b. Employees are always willing to help customers
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o Agree

o Strongly agree

o Strongly disagree agree c. Employees are polite o Strongly disagree agree

o Disagree

o Neutral

o Agree

o Strongly

o Disagree

o Neutral

o Agree

o Strongly

d. RF gives you individual personal attention o Strongly disagree o Disagree o Neutral agree e. Convenient operating hours o Strongly disagree o Disagree agree f. Satisfied with the billing process o Strongly disagree o Disagree agree o Neutral

o Agree

o Strongly

o Agree

o Strongly

o Neutral

o Agree

o Strongly

1. Facilities a. Appearance of physical facilities is in keeping with type of services provided o Strongly disagree o Disagree o Neutral o Agree o Strongly agree b. Billing counters in place and working o Strongly disagree o Disagree o Neutral c. Card swiping machines were working properly o Strongly disagree o Disagree o Neutral d. Lighting was adequate o Strongly disagree o Disagree o Neutral o Agree o Agree o Agree o Agree o Strongly agree o Strongly agree o Strongly agree o Strongly agree o Strongly agree

e. Proper ventilation or AC was working o Strongly disagree o Disagree o Neutral

f. The objects on display were adequately spaced apart o Strongly disagree o Disagree o Neutral o Agree 1. Satisfaction a. Met your expectations o Strongly disagree o Disagree

o Neutral

o Agree

o Strongly agree
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SOM Project: Reliance Fresh @ Kunnamangalam

b. You would visit again o Strongly disagree o Disagree c. The services met my needs o Strongly disagree o Disagree

o Neutral o Neutral

o Agree o Agree o Agree

o Strongly agree o Strongly agree o Strongly agree o Strongly agree

d. I found the overall service outstanding o Strongly disagree o Disagree o Neutral

e. I would recommend this Reliance Fresh to my friends o Strongly disagree o Disagree o Neutral o Agree

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