Consulting MethodsTerm Project

Submitted by

Amit Gandhi (13PGP017)

Arpit Bajpai (13PGP070)

Avik Chatterjee (13PGP072)

Devasheesh Nautiyal (13PGP014)

Sumit Vaishnav (13PGP114)

BUSINESS PROCESS IMPROVEMENT JABONG.COM

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Table of Contents1. Introduction:..............................................................................................................................2

1.1 Industry Analysis:..................................................................................................................2

1.1.1 Porter’s Five Forces analysis on the e-Retail (e-tail) Industry for Jabong.com:........4

2. Reverse Logistics Management:..................................................................................................7

2.1 Introduction:...........................................................................................................................7

2.2 Participants:............................................................................................................................7

2.3 The AS-IS Process:.................................................................................................................8

2.3.1 Retrieving the list of reverse pick-ups:..........................................................................8

2.3.2 Confirming the defect / shortcoming in the delivery:...................................................8

2.3.3 Initiating pickup from the customer location:...............................................................8

2.3.4 Arrival at the warehouse:...............................................................................................8

2.3.5 Replacement dispatch and case closure:........................................................................9

2.3.6 Refund transfer and case closure:..................................................................................9

2.4 Business Process Diagram for AS-IS Process.............................................................................9

2.5 The TO-BE Process:.............................................................................................................11

2.5.1 Retrieving the list of reverse pick-ups:........................................................................11

2.5.2 Confirming the defect / shortcoming in the delivery:.................................................12

2.5.3 Initiating pickup from the customer location:.............................................................12

2.5.4 Arrival at the warehouse:.............................................................................................12

2.5.5 Physical Checking of the goods: Process improvement...................................................12

2.5.6 Business Process Diagram : To-Be Process......................................................................13

2.5.7 Replacement dispatch and case closure:......................................................................14

2.5.8 Refund transfer and case closure:................................................................................15

2.5.9 Replacement of Damaged Goods:................................................................................15

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1. Introduction:

1.1 Industry Analysis:

The technology and telecom boom initiated by Late Prime Minister Rajeev Gandhi and promoted by the successive governments at the center has placed our country at the edge of a technological revolution. The salient features of the e-commerce business are as follows:

Current figures put total online retail at 2 billion dollars.o 0.5% of total retail in India ($459 bn)o 7.9% of total Organized retail ($32 bn)

CAGR 55% expected to sustain till 2025.

The Indian e-commerce as a sector is gearing up for a big push in the near future. Growing

at CAGR 55%, it is turning out to be a major attraction for many entrepreneurs as well as

established business house.

The enablers of such an extraordinary growth are detailed as follows:

Internet Penetration : With increasing disposable income and reduced cost of internet

access through low cost internet access and economically priced computers and internet

enabled hand held devices India witnessed 137 Million users accessing internet in 2012

which grew to around 200 mn in 2013-2014 expected to hit 300million users by 2015.

Though the number in itself is impressive, what makes the Indian story worth investing in

is that the 137mn users is just 9% of the total Indian population of 1.25 Billion people and

only 17% of the 800mn adults in the country.

Disposable Income: Being the third largest economy in the world at more than $ 5 Trillion

does have a trickle-down effect on the PPP per Capita. Expected to grow at 5.1% annually,

the increase in income is enabling the consumers to engage in non-discretionary

purchasing. As per the report on Indian e-commerce segment by Ernst & Young, this

growth is expected to sustain till at least 2025.

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Figure 1: Increase in the disposable income in India

What encourages e-commerce’s cause in India apart from the aforementioned statistics is

the rise of many successful e-commerce ventures starting with Shaadi.com and the Indian

Figure 2 : e-commerce in India – An Overview

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Railways online ticket reservation portal IRCTC.co.in with the IRCTC website always

overloaded with excess number of users accessing the website during peak hours.

Keeping these indicators in mind, Jabong.com was conceptualized and launched. The

online venture started from scratch with a steep learning curve during which the managers

sought out other avenues of generating revenues through partner marketplaces where

Jabong.com sold its products.

1.1.1 Porter’s Five Forces analysis on the e-Retail (e-tail) Industry for Jabong.com:

The Porter’s five forces model was proposed by Michael Porter in the year 1985 to describe

the forces that affect profitability of a business and the margin that can be gained. The

stronger the forces the lower the margins, hence profitability.

The five forces are:

Competition

Supplier’s bargain power

Customer’s Bargain Power

Threat of a new entrant.

Threat of substitutes

Each of the forces will be analyzed for the e-tailing segment in Indian retail market.

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Competition:The threat from competition is very high for Jabong.com. Initially though there were not many e-tailing stores selling electrical appliances and accessories, lately we have seen well established e-tailers like Flipkart and Amazon (recently forayed into Indian market) also have started selling into the same category as Jabong.com aspires to lead in the future.

This threat needs to be contained.

Supplier’s bargain power:

In e-commerce ventures, the supplier bargain power is significantly reduced. Specifically referring to Jabong.com, the exiting supplier network established by Future Retail Ltd. is leveraged to order products from suppliers. This reduces supplier bargain power against Jabong.com significantly as they would have done with a relatively new owner.

Speaking from an overall industry front, e-commerce ventures also hold a lot of leverage and pressurize suppliers to offer products at reduced costs.

Customer’s Bargain Power:

The saying “Customer is the King” is no longer a cliché when the e-commerce industry is being referred to. Due to the high level of information dissemination through search engines like Google.com, if the customer does not like the product and / or prices in a particular e-tailing website, they simply need to move on to another website and try their products.

Thus the e-tailing merchants try to retain the customers with the widest variety of products at the best possible prices.

Threat of a new entrant:Starting an internet venture is one of the easiest things to do for an entrepreneur. Considering the still nascent stage in which Indian e-commerce is right now, funds are flowing in from venture capitalists for these initiatives. These factors make a very conducive environment for setting up an e-commerce venture in India. In an example, an

Figure 3: Porter's Five Forces Model

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Assamese entrepreneur sets up an e-commerce venture for its tea business, already has commitments from venture capitalists.

For Jabong.com though since it is an electrical and electronics segment specialist. This segment due to its expensive SKUs is capital intensive and thus does not have anyone but the big players vying for the top spot.

Threat of substitutes:Substitutes can be categorized as any of the following two:

Moving to other retail formats like Brick & Mortar or Brick & Click: Though customers have become used to purchasing things online, though there is still some reservation in buying big ticket items like large television panels, ACs etc... This is where the B&M stores are preferred choice of the customers.

Non-Conventional formats like the Brick & Click formats as professed by Dell wherein the customer experiences the product in a Dell Store and orders the same online are also present in the market.

It has been observed that the customers’ trust level has increased as compared to the past. Now

iPhones and small panels are being ordered by the customers which indicates reduced threat from

substitute formats.

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2. Reverse Logistics Management:

The delivery of products may sometimes lead to some exceptions that require retrieving the product dispatch and resend another similar or different product. This process needs to be worked out with great detail and mishandling the situation may deteriorate future relations with the same.

2.1 Introduction:

The reverse logistics management is the part of the Jabong.com operations that handle customer initiated communications regarding pick up of the delivered product from the customer location. The pickup can be initiated because of multiple reasons like.

Defective product delivered (physical / functional). Incorrect product delivered (requested product X delivered Y). Product was not as per specification (colour, range, etc..) Consumer does not want the product because of delay in delivery. Customer changes the order specifications. etc..

2.2 Participants:

Operations Team : Customer Service Team : Warehouse Team : Sales & Merchandising Team (S&M Team) :

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2.3 The AS-IS Process:

2.3.1 Retrieving the list of reverse pick-ups:

The customer requesting reverse pickup calls the customer care center (call center) for Jabong.com and registers her request as either the replacement or cancellation of the order. This request is uploaded in the CRM complaint dashboard.

The operations team retrieves the list of all complaints that require the reverse pickup.

2.3.2 Confirming the defect / shortcoming in the delivery:

Before the pickup, the customer is required to repack the package as per the specifications mentioned by the customer care. Customers also send a mail of the original delivery with the details of defect like damage / different product with images if necessary.

The received information from the customer is forwarded to the S&M team who validated the damage and approve retrieving the product back to the warehouse for replacement by the brand. If the complaint is not validated by the S&M team as authentic, the complaint is not processed any further and is closed with relevant communication sent to the customer.

2.3.3 Initiating pickup from the customer location:

In, case of the orders from Amazon and Jabong.com, the Jabong.com operations team organizes the pickups by coordinating with the logistics partner who in turn pick up the consignment from the customer’s location and deliver the package to Jabong.com warehouse.

2.3.4 Arrival at the warehouse:

On arrival of the product back at the warehouse, the operations team created the reverse sales order for that inventory item to re-induct the item in the system.

This is important to do because unless the defective / not-needed item is re-inducted another product / re-payment cannot be initiated for the same order.

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The warehouse team intimates the receipt of the product at the warehouse, the operations team created the RSO. A return invoice number is generated which helps the warehouse team to inward the inventory to the system.

2.3.5 Replacement dispatch and case closure:

A new sales order is punched for the same order for replacement with the same process involved in order fulfillment like the DC and invoice generation and the order details are manually entered into the SAP system.

The entire process of order fulfillment from the point of receiving the order is followed for the final closure of the order replacement request

The invoice and AWB is generated which is communicated to the customer for his tracking.

Once the RSO is generated the product is shipped within one day for small appliances, for large appliances take 2-3 day.

The CRM tracks the product delivery through the AWB number and satisfactory delivery of the order to the customer.

2.3.6 Refund transfer and case closure:

The request for refund of the price paid for the goods may be initiated by the customer. In this case, once the reverse logistics is initiated and the RSO for the product is generated by the operations team, the commercial team handling the financial transactions for Jabong.com is intimated of the same.

The commercial team initiates the payback process through the pay desk.

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2.4 Business Process Diagram for AS-IS Process

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2.4.1 Sub-process: Pickup by Third party Logistics

2.5 The TO-BE Process:

2.5.1 Retrieving the list of reverse pick-ups:

The customer requesting reverse pickup calls the customer care center (call center) for Jabong.com and registers her request as either the replacement or cancellation of the order. This request is uploaded in the CRM complaint dashboard.

The operations team retrieves the list of all complaints that require the reverse pickup.

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2.5.2 Confirming the defect / shortcoming in the delivery:

Before the pickup, the customer is required to repack the package as per the specifications mentioned by the customer care. Customers also send a mail of the original delivery with the details of defect like damage / different product with images if necessary.

The received information from the customer is forwarded to the S&M team who validated the damage and approve retrieving the product back to the warehouse for replacement by the brand. If the complaint is not validated by the S&M team as authentic, the complaint is not processed any further and is closed with relevant communication sent to the customer.

2.5.3 Initiating pickup from the customer location:

In, case of the orders from Amazon and Jabong.com, the Jabong.com operations team organizes the pickups by coordinating with the logistics partner who in turn pick up the consignment from the customer’s location and deliver the package to Jabong.com warehouse.

2.5.4 Arrival at the warehouse:

On arrival of the product back at the warehouse, the operations team created the reverse sales order for that inventory item to re-induct the item in the system.

This is important to do because unless the defective / not-needed item is re-inducted another product / re-payment cannot be initiated for the same order.

The warehouse team intimates the receipt of the product at the warehouse, the operations team created the RSO. A return invoice number is generated which helps the warehouse team to inward the inventory to the system.

2.5.5 Physical Checking of the goods: Process improvementThe goods brought back by the third party logistics team are checked physically. The agents verify if the conditions for returning are fulfilled; for example is the defect due to customer’s negligence?

If all conditions of return policy are duly fulfilled then the agents clear the goods for refund/replacement and the previously used sub-processes are used.

However if the agents find that there has been violations of the return policy then the return/refund process is stopped. The logistics team is instructed to return the damaged good to the customer with necessary communication.

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2.5.6 Business Process Diagram : To-Be Process

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2.5.6.1 Sub-process: Pickup by Third party Logistics

2.5.7 Replacement dispatch and case closure:

A new sales order is punched for the same order for replacement with the same process involved in order fulfillment like the DC and invoice generation and the order details are manually entered into the SAP system.

The entire process of order fulfillment from the point of receiving the order is followed for the final closure of the order replacement request

The invoice and AWB is generated which is communicated to the customer for his tracking.

Once the RSO is generated the product is shipped within one day for small appliances, for large appliances take 2-3 day.

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The CRM tracks the product delivery through the AWB number and satisfactory delivery of the order to the customer.

2.5.8 Refund transfer and case closure:

The request for refund of the price paid for the goods may be initiated by the customer. In this case, once the reverse logistics is initiated and the RSO for the product is generated by the operations team, the commercial team handling the financial transactions for Jabong.com is intimated of the same.

The commercial team initiates the payback process through the pay desk.

2.5.9 Replacement of Damaged Goods:

The damaged products are usually taken and replaced by the brands where most of the damaged products are replaced. For some of the products that are rejected by the brands, the products are removed from the inventory at low price through activities like internal company sales etc just to cover our costs.

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Conclusion

By including the new sub-process we get the following benefits:

Business can filter out the non-substantiated claims. Business can extend the “return back” policy to more items thereby driving

customer satisfaction Business can do this at marginal incremental cost as the same logistical flow is

maintained.

Thus it is recommended to implement the changes to reap the benefits outlined.

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References

http://www.visual-paradigm.com/