1. “Supply Chain in E-Commerce”
PROJECT REPORT
Submitted in partial fulfillment of the requirements for the award of the
INTERNATIONAL MBA IN SUPPLY CHAIN MANAGEMENT
By
“AKASH SINGH THAKUR”
“UBI/DMBA/OCT11/8264”
Under the guidance of
“ NEHA GUPTA – PGDBM / MA-Journalism & Mass
Communication”
JARO EDUCATION
MUMBAI
“JANUARY 2011”

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Declaration
I, Akash Singh Thakur hereby declare that this project report titled Impact of
ecommerce on Supply Chain submitted in partial fulfilment of the requirement
for the “International MBA in Supply Chain Management” is my original work
and it has not formed the basis for the award of any other degree.
____________________
AKASH SINGH THAKUR
Place: Mumbai
Date: 31/01/2012

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Acknowledgement
I would like to express my special thanks of gratitude to Ms. Neha Gupta (Sr.
Category Manager- govasool.com), my colleagues at emart solutions, as well as
our CEO- Mr. Aditya and COO- Mr. Srikanth who gave me the golden opportunity
to do this wonderful project on the topic “Impact of ecommerce on supply chain,
which also helped me in better understanding of the complexities of supply chain
and i came to know about so many new things. I am really thankful to them.
Secondly I would also like to thank my parents and friends (Mr. Kumar Prashant)
who helped me a lot in finishing this project within the limited time.
THANKS TO ALL WHO HELPED ME.

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Table of Contents
1. Industry profile....................................................................................................................... 4
Supply chain management.......................................................................................................... 4
Electronic commerce................................................................................................................... 4
GROWTH OF RETAIL IN INDIA...................................................................................................... 5
2. Company Profile.................................................................................................................... 7
Marketing: ................................................................................................................................... 7
Human resource:......................................................................................................................... 9
Operations:................................................................................................................................ 10
Finance: ..................................................................................................................................... 10
SWOT Analysis:.......................................................................................................................... 11
3. Need for Study..................................................................................................................... 12
4. Literature Survey................................................................................................................. 13
5. Objectives of Study............................................................................................................. 17
6. Research Methodology ...................................................................................................... 18
7. Analysis ................................................................................................................................ 19
8. Conclusions ......................................................................................................................... 24
9. Recommendations.............................................................................................................. 27
10. References........................................................................................................................... 29
11. Appendix............................................................................................................................... 30

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1. Industry profile
Supply chain management (SCM) encompasses the planning and
management of all activities involved in sourcing and procurement, conversion,
and all logistics management activities. Importantly, it also includes coordination
and collaboration with channel partners, which can be suppliers, intermediaries,
third-party service providers, and customers. In essence, SCM integrates supply
and demand management within and across companies.
The Indian supply chain industry represents $50billion and is growing at a rate of
7 % annually also opening up of the organized retail sector is attracting big retail
chains like Wal-Mart and Carrefour in addition to big Indian retailers like
Pantaloon and Reliance. Thus demand for logistics and supply chain
management services would be largely driven by the growth of the Indian
economy.
Estimated logistics costs represent 15 to16% of China’s GDP and 11 to 13% of
India’s GDP.
Electronic commerce refers to the buying and selling of products or services
over electronic systems such as the Internet and other computer networks.
However, the term may refer to more than just buying and selling products
online. It also includes the entire online process of developing, marketing, selling,
delivering, servicing and paying for products and services.

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Out of the 13.2 million internet users across 26 cities covered in IMRB’s earlier
research of 2006, 14.2% use the Internet to buy travel tickets; 5.5% people do
online shopping especially products like Books, Flowers, Gifts etc. and 5%
people deal in stocks and shares through the internet.
The ecommerce industry in India is all set to touch Rs. 9210 crore by the end of
FY2012. (30% jump from Rs 7,080 crore in ’09).
GROWTH OF RETAIL IN INDIA
 Retailing in India can be traced to emergence of the neighborhood
"Kirana " stores catering to the convenience of the consumers.
 Era of government support for rural retail: Indigenous franchise model
of store chains run by Khadi & Village Industries Commission

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 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S
Kumar's and Grasim first saw the emergence of retail chains.
 1990s saw a fresh wave of entrants with a shift from Manufactures to
Pure Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and
FMCG; Planet M and Music World in music; Crossword and
Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers. Targeted
to provide a complete destination experience for all segments of
society
 Emergence of hyper and super markets trying to provide customer with
3 V’s - Value, Variety and Volume.
Note: It has been observed that interestingly most of the Online Shoppers start
their e-Shopping journey with buying Air/ Railway Tickets in India.

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2. Company Profile
There are two types of merchant companies, those that sell directly to consumers
and those that sell to companies. Each uses slightly different information systems
in the course of doing business. B2C, or business-to-consumer, e-commerce
concerns sales between a supplier and a retail customer (the consumer). A
typical information system for B2C provides a Web-based application or Web
storefront by which customers enter and manage their orders (i.e.,
Govasool.com, Amazon.com, Flipkart.com). The term B2B, or business-to-
business, e-commerce refers to sales between companies.
eMart Solutions is both B2B and B2C company. The company is doing B2B sales
through their loyalty programs and Corporate gifting business and B2C through
its website www.govasool.com
Marketing:
 Product Portfolio: Govasool.com basically is into e-commerce business
wherein it shares a huge market in Home and Kitchen appliance products
providing the customers best prices across the country. The website
provides products in various categories such as Flowers, Gifts, Home
appliance, Kitchen appliance, Home theatre systems, Mobile phones,

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iPads, etc. The main focus of the firm is basically to concentrate on market
share.
 Distribution network: The operational and distribution network of the firm
has been into diverse areas and geographic regions across the country.
Major distribution network is into cities like Bangalore, Mumbai, Delhi,
Chennai, Hyderabad and Kolkata. The company also has a specific model
through which it operates and handles the inventory and distribution
across the country.
 Sales force: The Company consists of a strong and dedicated sales force
which is totally focused into the up gradation and growth of the company
by using the best of their skills and the provided resources. The various
branches of the firm into different cities have led the company to create a
well groomed sales force.
 Pricing: Govasool.com is a major platform to provide the best prices
across the country in the industry and also providing the products with
best qualities.
 Promotion Strategy: Promotion has been one of the major tools which
Govasool.com has focused upon in order to create a better positioning in
the customers mind. Company uses various promotional tools like Social
networking websites, Banners across major cities, TV ads, print ads in
major newspapers, etc.

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 Customer service: Customer service is one of the major factors that is to
be focused upon in order to create a positive perception in the customers
mind for a long term relationship with customers. Govasool.com is focused
to a large extent on the after sales service which leads to become a major
player in the industry.
 Market Share: As the e-commerce market is growing at a very high rate
across the globe so the firm is dedicated towards creating a better market
share in the market by applying various strategic tools.
 Competition: The growth of internet users across the country has led to a
boom in the e-commerce industry which has created an opportunity in the
market for big players to gain more n more market share. The major
competitors in the industry are such as flipkart.com, letsbuy.com,
koovs.com, indiatimes.com, etc.
Human resource:
The Organization structure of govasool is more likely to be a horizontal structure.
The structure is such that it consists of top level CEO & COO. Then there are
High level managers in the field of Marketing, IT, Finance & HR.
Each managers have subordinates which work under them consisting of
supervisors and the sales force. The total strength of the firm is 70 employees.

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The training & development in the company is handled by well skilled HR
managers who train the employees in such a manner that they work for the firm
with full commitment and dedication.
The company has well-nourished HR policies which are very much helpful in the
appraisals of the employees based on their work and the type of dedication
towards their job. There is an also well working retention policy which ensures
that the employees join the firm as a long term perspective and make the most
out of it.
Operations:
Operation department is one of the major strength of the company.
Govasool.com as a firm is very much focused and consists of work force of major
talents across the country. The operation managers keep control on all the
operational activities that takes place in the distribution and inventory
management in the firm.
Finance:
Govasool has seen a huge growth in the recent times. The annual turnover of the
company is Rs 8 crores. The growth that it has experienced in the past years has
been near about to 200%. The performance of the company is basically judged
based on the market share that it creates and the total gross profit that it makes
each and every year.

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As the company is majorly focused into e-commerce business so the major
customers are the online purchasing customers who visit the website
govasool.com and place orders. The company also plays a major role in doing
Loyalty programs for big companies across the country. The major customers are
such as P&G, J&J, Unilever, Lenovo india, Bayer corps, Essilor india, etc. The
major competition the company faces is in the e-commerce industry. The major
compititors are like flipkart.com, letsbuy.com, etc.
SWOT Analysis:
The major strength of the company is the Price at which the firm provides
products on the website. The company is a major leader in the market in Home &
Kitchen appliance products.
The major weakness of the company is in other categories like Mobile phones
and i-pads where the prices are quite high as compares to other online portals.
In the e-commerce industry there is a great opportunity in order to gain market
share and grow more into different categories. As the increasing number of
internet users across the country there is a great scope of growth and more
business. The major threat can be from the big players in the industry. In order to
eradicate the threats the company needs to focus more upon the prices as
compared to other market players.

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3. Need for Study
In the fast growing and busy world, noone has time to go and shop even their
daily required products from the shops. The cost of fuel and heavy traffic takes a
major time of people and thus comes the need for a fast and efficient way of
retailing which is expected to be the future trend.
But, like every other process this also has got lots of barriers and thus to
undertand the process involved in e-commerce becomes an important thing.
Thus this research has been carried to understand the Supply Chain processes
involved in an E-Commerce firm. As E-Commerce is a fast growing trend and is
expected to be the future of retailing.

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4. Literature Survey
In this section we present the definition of Logistics, SCM and E-Commerce as
well as their relationship among others that are very crucial for the logistics
operations.
A. Logistics and SCM
Logistics is defined by the Council of Logistics Management as the process of
planning, implementing and controlling the efficient and effective flow and
storage of goods, services and related information from the point of origin to point
of consumption for the purpose of conforming to customer requirements. It
includes inbound, outbound, internal, external movement and the return of
material and goods as well as order fulfilment.

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B. Logistics Framework
Figure shows the physical and information flows from raw material to the final
distribution of the finished products. It starts with the procurement activity where
the process of selecting the suppliers and draw a purchase agreement take
place. It refers to raw material, components, imported material, bought-in parts
and supplies bought from outside organizations to support the company’s
operations. It also involves the process of assigning task for the production
process, sub-assembly as well as work in progress.

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Logistics framework
Next is the material management activity where determination of quantities and
time points for all items. The goal is to achieve the efficient material flows,
delivery services and utilization of resources. Attention is directed to which items
must new orders be planned, what quantity in the order must be stated for each
item, when must the order of each item delivered to stock, directly to production
or directly to the customer.
Final activity that involves in the logistics is the distribution process where the
final receivers are the customers and end users. An additional and very important
factor is that of reverse logistics where the flow of products and packaging back
through the system.
C. Relationship between SCM and logistics

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Figure shows a simple supply chain that can be broken into three major parts:
upstream, internal and downstream. The upstream supply chain includes the
activities of a manufacturing company with its suppliers and their connections
with their suppliers. The supplier relationship can be extended to the left in
several tiers, all the way to the origin of the material. The major activity is
procurement. The internal supply chain includes all in-house processes used in
transforming the inputs received from the suppliers into the organization’s output.
It extends from the time the inputs enter an organization to the time that the
products go to the distribution outside of the organization. The major concerns
are production management, manufacturing and inventory control. The
downstream supply chain includes all the activities involved in delivering the
products to the final customers. Attention is directed at distribution, warehousing,
transportation and after-sale service.
D. Logistics and E-Commerce
E-Commerce is defined as technology- mediated exchanges between parties
(individuals, organizations or both) as well as the electronically based intra- or
inter-organizational activities that facilitate such exchanges.
E-Commerce also can be defined as the process of buying, selling, transferring
or exchanging products, services or information via computer networks, including
the Internet.

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5. Objectives of Study
The main objective behind this research has been a curiosity to understand the
changing pattern of retailing.
• Compare e-commerce to traditional commerce
• Understand e-commerce concepts
• Relate the concept of supply chain to e-commerce
• Identify ways (Processes) to carry out supply chain activities through e-
commerce.

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6. Research Methodology
Most of the research being done is based on physical interviews being done with
Industry Experts with good experience in supply chain, logistics and ecommerce
industry.
 Primary Research: Interviews of employees at eMart Soluitons
(Govasool.com)
 Secondary Research: Websites and Books
eMart solutions is a startup B2B and B2C Private Ltd. Firm. Being a part of Order
Management team in eMart has in itself given a lot of experience in supply chain
and ecommerce industry.

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7. Analysis
The Analysis of research and interviews is the thorough understanding of the
process involved in supply chain, logistic activities involved in ecommerce
business which is as follows:
There are three types of supply change activities in
ecommerce business (eMart Solutions)
 First Type
Process involved:
1- Company (eMart) issues PO (Purchase Order) to vendor (By
Finance Team/Through CRM or Automated)
2- Vendor delivers product to eMart office
3- Vendor provides invoice (original) to concerned person
4- eMart gives GRN(Goods Receipt Note) (Prepared by Operation
Team)
*Points to be considered before issuing the GRN
A- Quantity of Product
B- Model No. of Product
C- MRP of Item
D- Input Price of Item (from vendor)
E- Tax rate (%)
5- Vendor credit starts from GRN date (Credit term of payment)

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 Second type
Process involved:
1- eMart issues PO (Purchase Order) to vendor by ........ pm (eg. 2
pm) (PO prepared by Finance Team/Through CRM or
Automated )
2- eMart will issue delivery request by.................. pm (eg. 5-6 pm)
to Courier Company (Like Bluedart, Aramex) in agreement with
eMart (By Operations Team through Email)
*Email will include
A) Pick up details (Name, Address and Phone No of the
concerned vendor of the product ordered online)
B) Delivery details (Name, add and Phone No. of the online
customer)
C) Product details (Product Name and Model No.)
3- Vendor keeps ready the product by ....... pm (eg 5pm)
4- Vendor courier the invoice to Emart (Hardcopy of invoice for
record)
5- eMart will verify invoice and issue GRN (Done by Operations
Team)
 Third Type
Process involved:
1- eMart will issue the PO (Purchase Order) to vendor (Prepared by
Finance Team/Through CRM or Automated)

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2- Vendor delivers stock to client directly without Invoice
3- Vendor couriers invoice copy to eMart
4- eMart gives GRN(Goods Receipt Note ) (By Operation Team )
*Area of Consideration before issuing the GRN
A- Quantity of Product
B- Model No of Product (like television etc.)
C- MRP of item
D- Input Price (Provided by vendor)
E- Tax rate (%)
5- Vendor credit starts from GRN date (Credit term of
payment from eMart)
Other Innovative Processes:
 Automated Reminder on Stock updates to all the vendors
1- A regular reminder to all vendors at 6 PM through CRM (By
Category Management Team)
2- Vendor will revert on Catagorysupport@gmail.com and
Operation@govasool.com (Access will remain with category
Management and operations Team respectively)
3- CM (Category Manager) has to send the mail on regular basis
to the concern vendors
4- After receiving the reverts, updation of stock on Govasool and
Emart catalogue has to be done.

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5- In case of no response from vendor reminders should send to
them
 Automated Reminder on Price Updation to all the vendors
1- 15 days reminder will send to all vendors through CRM (By
Category Management Team)
2- Vendor will revert on Catagorysupport@gmail.com (Access will
remain with category Management)
Responsibilities of CM
CM has to send the mail on 15 days basis to the concern vendors
After receiving the reverts from vendors, they have to update the
prices on Govasool and Emart catalogue. In case of no response
from vendor reminders should send them again n again
 Automated Reminder on Invoice/invoice Latency to all the
vendors
1- A Reminder to vendor will send to all vendors through CRM (By
Operations Team)
2- Vendour will revert on Operation@govasool.com with scan copy
of Invoice or with AWD Details (Access will remain with
operations Team)
3- Verification of the invoice on CRM on the following basis: (By
Operations Team)
A- Quantity
B- Model No.
C- MRP of Product

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D- Input Price
E- Tax rate (%)
4- Operations will inform Category Team and Vendor regarding the
incomplete invoice with details
5- A new reminder will send to the vendor regarding the
incomplete invoice with the details (By Category management
team)
6- Then payment will issued to the vendor (By Finance Team)
7- Technical Support Needed
8- Creations of the Email Id’s Catagorysupport@gmail.com and
Operation@govasool.com
9- Provisions on the CRM
10- Automated Reminders as per the above details

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8. Conclusions
Through Primary research done by interviews following points were concluded:
 Major triggers of e-commerce in India are:
 Saves time and efforts
 Convenience of shopping at home
 Wide variety / range of products are available
 Good discounts / lower prices
 Get detailed information of the product
 You can compare various models / brands
 Major barriers of e-commerce in India were:
 Not sure of product quality
 Cannot bargain/Negotiate
 Not sure of security of transactions / Credit card misuse
 Need to touch and feel the product
 Significant discounts are not there
 Have to wait for delivery

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 Factors for growth of online retail sector
 Growth of Indian Economy: Second fastest
 Emerging opportunities in service sector
 Capital no longer a constraint – easy loans
 Increase in the young working population
 Hefty pay pockets
 Nuclear families in urban areas
 Changing Cultural Habits
 Middle class dwelling revamped
 Multiple drivers leading to a consumption boom:
 Favourable demographics
 Growth in income
 Increasing population of working women
 Raising aspirations: Value added goods sales
 Challenges for Indian Logistics Companies
 Competition from Indian and Foreign logistics companies. (Like
Amazon)
 Technology to keep pace with demand for real time information.
(3G – 4G Technology)

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 Corporatization and lack of skill sets.
 Shedding local mindset and move to a global mindset.
 Integration of services and value added services.
 Funds to fuel expansion & growth.
 Inadequate infrastructure and complex tax laws.
 Potential Benefits of B2B E-commerce
 Lower administrative costs
 Lower search costs for buyers
 Reduced inventory costs
 Increasing competition among suppliers (increasing price
transparency)
 Reducing inventory carried
 Lower transaction costs:
 Eliminating paperwork
 Automating parts of procurement process

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9. Recommendations
 The Indian government should making efforts by
 Privatizing ports and airports.
 Increasing the number of gateway ports
 Investing in highway projects
 Streamlining customs and excise procedures
 Implementing EDI systems
 Improving the rail network.
 The government plans to invest $17 billion in transport
infrastructure between 2006–2010.
 Strategies for Successful E-Commerce: Developing
an Effective Web Presence
 Decide which tasks the site must accomplish
 An effective Web site creates an attractive presence and meets
the needs of its visitors
 It may be necessary to redefine your site’s business model to
capture new business opportunities
 Efficient Supply Chain

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10. References
 Chopra, S. and P. Meindl, Supply Chain Management: Prentice Hall
 E-Commerce and E-Business: Zorayda Ruth Andam
 www.wikipedia.org
 www.marketwatch.com/
 The Economist
 http://www.ecommercetimes.com
In the end, all business comes down to Supply Chain vs. Supply Chain
-Robert Rodin, CEO, Marshall Industries

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11. Appendix
Growth of B2B Commerce 2002–2013 (In US)