"Supply chain has to be adaptable to changes and that can only happen when it’s fully integrated with technology,” highlights Ranjan Sharma, Head – IT & SCM, Bestseller. For Bestseller, technology is the backbone of supply chain and the company is progressing ahead in bringing out fast fashion for its consumers in the shortest time possible to maintain the lead.
It is very challenging and at the same time exciting too, as you continue to innovate every day. Fashion doesn’t change every quarter. In fact, it changes every week for us. This means that we are launching new products every week. Accordingly, we have schedules right from the manufacturing cycles to the store drops, our entire supply chain has been planned and organized in such a way that we adhere to these timelines. Yes, there are issues that crop up in between, but that’s part and parcel of doing business.
We are able to manage supply chain inefficiencies to a great extent by better predictions and involvement at regular intervals. When we start the planning, we start with the launch date at the store front. Then we start going backwards in terms of when and where the product should be manufactured, when should it be ordered, and we order accordingly. We have captive manufacturing units. Most of the manufacturing units across the globe are manufacturing products exclusively for Bestseller. This definitely offers us a lead over others. We have capacity block with most of the manufacturers and it becomes a little easy. But then again, the supply chain needs to be tracked and traced. We are facing issue in that regard. In order to gain complete transparency, we are working towards streamlining our supply chain efficiency. We are working in the direction of complete vendor collaboration to integrate with the supply chain.
We have various check point in terms of quality control where we have in-line quality inspection at production facility to ensure that there is no deviation from the agreed specifications. Hence, we are able to control counterfeits to a great level. As part of sustainable apparel coalition (SAC), today, many companies have their own social audit standards and methods, some with only minor differences, which means that suppliers spend a lot of time and resources on managing the many audits.
We have a very stringent Code of Conduct, which governs the entire manufacturing cycle, which also involves raising labour standards at industry level as we need a feasible way to go beyond compliance.
Bestseller India is a very young organization and everything revolves around ease of use, speed and control. Hence technology is at the fore to deliver the same. As I earlier said, we are working towards devising a solution to connect our suppliers and vendors in the value chain to make it more transparent. We are integrating our back-end supply chain.
We currently have 5 brands in India with all of them having their own ethos and DNA. But at the process layer, we try and maintain a uniformity, which helps the common layer to deliver things efficiently and effectively. Each brand’s thought process is very different from the other.
The challenge is what works for one brand may not work for another. So all these brands demand different strategies as far as store layout, visual merchandising and marketing is concerned. We have tried to keep the core processes similar. There will be variations in terms of store format, visual merchandising. But sourcing, buying and supply chain remain harmonized to keep things simple.
Supply chain across all the brands is a common layer with unified process and technology. Our sourcing happens from multiple countries including India. And there are different processes followed in case of Import and India purchase. Once the merchandise is at DC then the common process kicks in. Each of the brands may have different manufacturing vendors, but the moment they reach our distribution centre, the same process is followed across the group such as order management, pick-pack, logistics, etc.
Most of the best practices coming from our parent company are in the area of backward integration. We haven’t inherited much from the supply chain side from the global company except a lot of quality checks and balances. We have adopted the process of selecting vendors and manufacturers for our products from our parent company following the guidelines in our code-ofconduct.
Not much has been implemented as far as supply chain is concerned owing to diversity of the country, infrastructure availability, etc. Our supply chain is tuned to support the current prevalent conditions rather than going for a highly efficient supply chain network followed globally. Our supply chain is geared up to suit to demands such as various assortments, size variations across different parts of the country, etc.
Being a large global organization, sustainability is at the core of most of our decision making. BESTSELLER FOUNDATION has become shareholder in Lawrencedale Agro Processing (LEAF) that supports small scale farmers at one end and providing top of the range products at the other.
Around 80% of the population in India is involved in farming, but with an average plot size of just under three acres, the farmers as well as the retailers rely on middlemen to buy, transport and process the farm products before they reach the shops. It is LEAF’s mission to change that. LEAF’s business model is designed to re-engineer the supply chain for farm produce in India – empowering the farmers, the retailers and the consumers.
On average fresh produce in India changes hands seven times which results in loss of and damage to produce as well as a reduction in profit at every step. Ultimately that means low profits for the farmer and mediocre products at relatively high prices for the consumer, with minimum profit for the retailer. LEAF’s business model is based on control of every step of the supply chain – from farm gate to shop shelves.
LEAF supplies 300 retailers (and counting) all over Southern India with high quality produce, cleaned and packed. The produce is sourced from 1,500 farmers who receive high quality inputs and training on good farming practices. At harvest time the farmers can sell their produce to LEAF and are thereby guaranteed a profit. From 2014 to 2015, data collected by LEAF shows a 25% increase in average productivity among the farmers. Until 2020/-21, LEAF aims to grow its network of farmers to include over 10,000 farmers.
We use best of the breed solutions with high level of integration with logistics service providers for better visibility. On the sourcing side, we are in the process of finalizing new solutions to bring in seamless processes.
Technology systems will become completely integrated for different processes with a lot of them becoming mechanical and hence giving better visibility and data for decision making. Technology is the backbone of supply chain. If you want to drive efficiency, if you want to improve productivity, bringing in visibility, things have to become much more repeatable so that you reduce manual dependency to make things much more idiot proof. It has to be mechanical in nature rather than running under the dominance of a few people. Supply chain has to be adaptable to changes and that can only happen when it’s fully integrated with technology. There are various partners involved in the supply chain, so if you leave a few people to decide and agree upon a decision, it might become chaotic.
Localization in terms of processes, solutions and support and ease of use are some of the key factors that one needs to consider while implementing technology in SCM. The company should have a strong integration layer with scalability as a strong character.
An ideal supply chain needs to have complete visibility in terms of backward processes, forward processes, and you are able to reduce manual intervention in the distribution centre front, then you can be foolproof. The average lead time to reach the store from the distribution centre is almost three days, and if we can bring that down, it will add up to the overall value. That’s best position to be in. I think the biggest gamechanger in this direction is GST. Road infrastructure needs to be improved significantly. If this is sorted, we don’t need to hold our inventories in our warehouses for long time.
Today more than omnichannel, it’s a hyperlocal market. Everything has to merge towards hyperlocal. You can’t exist in one channel only be it physical stores or online. You have to be available wherever your customers are. You can’t get your customers to store, instead you need to be available as per his convenience and not yours.