Recently I was invited to spend some time with Flipkart and its sister company Myntra in Bangalore.
Flipkart is an e-commerce company founded in 2007 by Sachin and Binny Bansal. It has its headquarters in Bangalore, Karnataka, India.
Myntra is also an Indian e-commerce company selling fashion and casual lifestyle products. The company was founded in 2007 by Indian Institute of Technology graduates with a focus on personalisation of gift items. In May 2014, Myntra.com merged with Flipkart to compete against Amazon which entered the Indian market in June 2013.
This visit enabled me to witness first-hand the e-fulfilment operational challenges in the city of Bangalore.
Both companies provide same day, next day and standard shipping which can be anything up to 18 days depending on the location of the customer and the nearest fulfilment centre.
The visit
Day one began with a visit to one of Flipkart’s pickup hubs which collects items from local suppliers who have their goods on the Flipkart web site. As a result of Indian law regarding Foreign Direct Investment, companies operating in India must source at least 30% of their products from local suppliers. These restrictions were eased on the 20th June shortly after my visit.
The pick-up hub sends out vehicles and couriers each day to these local suppliers who have received orders from Flipkart’s web site.
The pick-up hub is operated by EKart a subsidiary of Flipkart.
The next visit was to one of those suppliers – a trader in men’s shoes, leisure and sports shoes. The supplier receives the orders and prints off the labels, picks the products and packs them into large canvas bags to be collected by the courier. The bag is checked by the driver’s mate, before sealing and loading onto the vehicle.
Not a great deal of sophistication at the supplier’s warehouse but it seemed to work OK.
Then it was back onto Bangalore’s roads for a journey to the Mother Hub. Bangalore’s traffic is a nightmare and you have to wonder how any courier manages to make a delivery on time. There don’t seem to be any rules. In the early hours of the morning traffic lights are ignored and during the rest of the day you are competing for road space with other cars, bicycles, mopeds, motorbikes, vans, trucks, twk twks and the odd cow or two. There is no lane discipline with cars and bikes zig zagging their way through the traffic to the incessant sound of horns informing other drivers that they are coming through and to please get out of the way. My host said the horns sounded like someone shouting “me, me, me” as it was they who were in a hurry to get somewhere. Miraculously I didn’t see any accidents even with pedestrians also trying to cross these roads wherever they could find a space.
A drive of 7 kilometres regularly takes upwards to one and a half to two hours during peak although peak seems to start at around 7 am and goes through to 11 pm.
The mother hub is where all the product is consolidated from all the sellers in the area and sorted for local, zonal (South India) national eco (by road) and national by air.
This hub has recently introduced conveyors into the building to sort parcels to their respective destinations. Previously everything was carried out manually.
Items are removed from the bags put onto the conveyor systems and sorted into caged trolleys. Once sorted they are again put into bags to be transported to the various transport hubs around the country.
Apart from the conveyors everything else is done manually – loading, unloading, checking and weighing.
Even at this late stage during this process customer orders can be cancelled and the item then has to be rescued and set aside for return to the supplier.
The next day starts with a 5.30 a.m. visit to one of the delivery offices. A 4.30 a.m. alarm call and then off to the transport hub.
We arrive in time to witness the second delivery of the early hours. The plastic seals on the bags have a label denoting which pin (post) code the parcels are destined for. The bags are placed in front of a row of sorting tables where they are opened and emptied onto the table. The parcels are scanned, checked against the system and moved to different piles on the table based on the courier delivery route.
The couriers begin to arrive at around 8.00 a.m. and begin sorting their routes. Each motorbike courier has a large canvas back pack in which he puts up to approximately 35 shipments.
Flipkart’s average shipment size is 1.2 items so the bags are relatively small being made up of small electrical items, mobile phones and fashion items.
Again client orders can be cancelled at any stage of this process.
The couriers are due out at 9.00 am at the latest however, before that, they are briefed on the latest instructions received from Head Office regarding delivery procedures. This time it was all about how to handle the exchange of Apple mobiles. Once briefed the couriers get into a circle and chant the company mantra and then they’re on their way.
We are invited to follow one of the couriers to his first delivery point – a gated community with a block of flats of 10 floors each.
The driver signs in at security, explains who his entourage is – me, my host and a photographer. The courier rings through to the customer but there is no reply however he’s sure that he will be in. We walk to flats which takes about 10 minutes, picking up a very inquisitive security guard along the way.
We arrive at the lifts which thankfully are working and proceed to the 9th floor. We ring the bell and the customer is somewhat surprised to see us as he only placed his order at 6 pm the night before. The item is handed over and the customer signs the PDA to confirm receipt. He tells us that the service from Flipkart has always been good although he does occasionally buy from Amazon and Snapdeal, their main competitors.
Having returned to the entrance to the compound we say our farewells to the courier who has at least another 30 deliveries to make on his first round, some of which will include cash on delivery payments, and make our way to the Flipkart Fulfilment Centre (FC).
As expected the traffic is horrendous and we take ages getting to FC.
On arrival we sign in, as we have done at each of the previous Flipkart locations and before entering the warehouse we handover mobile phones and are searched before meeting the FC manager.
We go to the conference room and are briefed on the operation. Over 200,000 square feet of warehousing with, on average 800 contract staff and 77 Flipkart employees. The warehouse operates 21 hours per day. This is one of 14 FCs throughout India.
We then walk past seven large studios where product shoots are taking place – unfortunately no models this morning apart from a few fridge-freezers.
The warehouse has three mezzanine floors with different products at each level.
At inbound, products are unloaded manually and sent for Quality control, checking and labelling. Then they use system directed put-away to locate the items in the most appropriate location. The picking is done by zone with pickers taking up to 12 orders at a time out with them on their hand-held units. Pickers use wheeled trolleys with baskets to pick into. They are currently contemplating the introduction of roller skates to speed up the process! Once picked the single line orders are sent to a checking area and then on to packing.
Multi-line orders are sent to a consolidation area and then on to checking and packing. They have an error rate of 20 items per million.
One interesting challenge is the fact that shoes and books must never be packaged together.
The orders are passed through to the despatch hub where they are sorted for onward delivery to the transport hubs.
The amount of technology utilised was a welcome surprise and the in-house developed system coped well with the 40,000 average orders received per day.
On leaving the warehouse we are all searched again, removing our shoes and socks ensuring we haven’t secreted any phones, sim cards or other valuable items about our person.
The next visit is across the road to the Myntra warehouse. A similar size operation however with more fashion products and therefore some garment rails amongst the shelving.
This time we have to deposit not only our phones but also watches and jewellery.
We are briefed by the FC manager and then shown around the facility. A similar set up to the Flipkart FC although this time we see that they are preparing for a large sale and the inbound area is pretty full.
Every item received is counted, sorted, quality checked and labelled. Each item not only has a product code but also a unique ID number to allow for traceability. All new products are photographed and dimensions recorded.
Myntra also zone and cluster pick, utilising scanners which not only have a product code and description but also a photograph of the product. Single items are sent directly to the packing benches which have CCTV cameras to ensure both security and the ability to allow investigation at a later stage if an incorrect delivery has occurred.
As a young and forward thinking company Myntra has recently been trialling both put to light for their order consolidation and vision systems for order picking. The competition for on-line customers is ramping up with Amazon purported to be investing $3 million in India and therefore companies such as Flipkart and Myntra must also innovate to stay ahead of the competition.
Having spent time with their management teams I have no doubt that they will succeed and the introduction of their Supply Chain Academy, called Flipskool, will lead to further enhancements and will equip the managers with the skills to compete at the highest level.
Flipskool is also open to other companies operating within India who have a requirement for high class Supply Chain training.
My final two days were spent running a two-day workshop on Warehouse Management for their staff on behalf of the Chartered Institute of Logistics and Transport (CILT).
A thoroughly enjoyable week!