Report on Industrial Excursion

At

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR

THE AWARD FOR POST GRADUATE DIPLOMA IN MANAGEMENT

Submitted By:
AYUSH TIWARI-15DM043
AYUSH VIJAYVERGIYA-15DM044
CHANCHAL GUPTA-15DM047
DANISH PRINJA -15DM049
DEEPAK YADAV-15DM050
DEEPESH SHARMA-15DM051
DIVYANSHU SHAHI- 15DM053
EKTA KANSAL- 15DM054
 ACKNOWLEDGEMENT

On the very outset of this report, we would like to extend our sincere & heartfelt obligation
towards all the personages who have helped us in this endeavour. Without their active
guidance, help, cooperation & encouragement, we would not have made headway in the
project.

We are extremely thankful and pay our gratitude to BIMTECH faculties for this valuable
experience and learning in a big industrial firm like Decathlon.

We extend our gratitude to Birla Institute of Management Technology for giving us this
opportunity.

At last but not least gratitude goes to all of our friends who directly or indirectly helped us
to complete this project report.

Any omission in this brief acknowledgement does not mean lack of gratitude.
INTRODUCTION

ABOUT DECATHLON:
Decathlon is one of the world's largest sporting goods retailers. Decathlon started with a
store in Lille, France in 1976, founded by Michel Leclercq. It started to expand abroad a
decade later, toGermany in 1986, Spain in 1992, Italy in 1998, Portugal, the United
Kingdom in 1999, China in 2003, India in 2009 and Southeast Asia in 2012. Today, there are
more than 850 stores in 22 countries. The company employs more than 60,000 staff from 80
different nationalities.

The retailer stocks a wide range of sporting goods, from tennis rackets to advanced scuba
diving equipment, usually in large superstores which are sized at an average of
4,000m². Decathlon Group also owns 20 brands, with research and developmentfacilities all
over France to develop the latest innovative designs, registering up to 40 patents per
year. Each brand represents a different sport or group of sports, with a dedicated product
development and design team.

In India, Decathlon products can be bought directly through their stores subsequent to
change in India's FDI policy and approval for Decathlon in February 2013. In addition to this,
Decathlon products are also available online through their partners like snapdeal. The
company currently caters to the demands of entire India through Bengaluru Warehouse.
The transportation activities are being handled by DHL. All such practices of selling through
exclusive stores and online selling leads to lower costs. The retailer develops and sells its
own brands. Each sport or group of sports has a separate brand name.
OBJECTIVE
The objective of this report is to analyse the supply chain management of Decathlon. We
will be discussing in detail how they are expanding in India from brick and mortar stores to
online stores. We will be analysing how they are able to minimize their cost and providing
good quality products at a very cheap price than their competitors by optimizing their
inventory.

LITERATURE REVIEW

Inventory Management and Its Effects on Customer Satisfaction by Scott Grant Eckert:

There are different costs associated with inventory. The holding cost is when the inventory
comprises of raw materials, work in process, or finished goods. The inventory cost is in the
range of 20 to 40 percent of annual inventory in dollars. Another variables associated with
the holding cost is the opportunity cost, which comprises of any increase in rents due to the
need for more space for inventory, higher rates for insuring the inventory, and the cost of
goods that are outdated. Manufacturers and retailers can incorporate technology to assist
in the managing of this inventory (Atkinson, 2005)….

Analysis of Inventory Control Techniques; A Comparative Study Tom Jose V*, Akhilesh
Jayakumar*, Sijo M T*:

So inventory control is vitally important to almost every type of business, whether product
or service oriented. Inventory control touches almost every facets if operations. A proper
balance must be struck to maintain proper inventory with the minimum financial impact on
the customer. Inventory control is the activities that maintain stock keeping items at desired
levels. In manufacturing since the focus is on physical product, inventory control focus on
material control…
Inventory Management- Introducing a framework to access Operational performance by
Guido van Heck:

A good performance measurement tool is needed to provide a structured way to gain

insight in inventory management’s business processes by monitoring relevant metrics. Such
a tool would also complement existing Business Intelligence literature. Here lies the
challenge of this research and therefore the corresponding research goal was formulated as
follows:

The research goal is to design a tool for assessing inventory management’s performance

Besides the goal stated above, this research also entailed a first attempt to actually find
quantitative proof for the possible improvements yielded by ERP…

Reverse Logistics: Overview and Challenges for Supply Chain Management by Sergio Rubio
and Beatriz Jiménez-Parra:

Successful implementation of RL networks requires many decisions relating to different

hierarchical levels: strategic, tactical, and operational. However, the design of the RL
network can be considered crucial in the decision making process. In practice, numerous RL
networks can be observed that depend on the nature of the returned product (EoU, end-of-
life, etc.), the recovery process (remanufacturing, reuse, recycling), or the forward channel
structure (centralized, decentralized). This way, the design of the RL network becomes a
strategic issue in the context of SCM, and it is actually difficult to find a supply chain where
RL is not present at least to some degree. Several contributions to this issue have provided a
basic description of RL networks by identifying commonalities among them and indicating
critical elements in their design and implementation…
Reverse Logistics: The Way Forward by COGNIZANT:

A focus on logistics and supply chain, as well as building flexibility in serving customers, is
important to retailers as they seek to create leaner processes and increase cost savings.
Traditionally, retailers have placed greater attention on moving goods and materials
forward in the supply chain, but a prevailing challenge is to move backwards. The backward
flow of goods is referred to as “reverse logistics;” the concept is premised on moving goods
and materials from the point at which they are purchased or consumed, or moving them
back to a previous supply chain point to recapture value.

Within the retail industry, reverse logistics plays a critical role in consumer returns and how
retailers process returns efficiently. While this may appear to be a simple process of moving
goods from customers to returns centers, retailers face numerous operational challenges.
For instance, hazardous waste and related disposal methods place stringent restrictions on
the management of reverse logistics.
BRANDING IN DECATHLON:

Aptonia - Nutrition and Healthcare

Artengo - Racket Sports

B'Twin - Cycling

Caperlan - Fishing

Domyos - Fitness, Gym, Yoga, Dance, Martial Arts

Fouganza - Horse Riding

Geologic - Target Sports such as Archery, Darts and Pétanque

Geonaute - Sports Electronics

Inesis - Golf

Kalenji - Running

Kipsta - Team Sports

Nabaiji - Swimming

Newfeel - Walking and Urban Wear

Orao - Eyewear and Optical Accessories

Oxelo - Rollersports, Skating and Kick Scooters

Quechua - Hiking, Camping and Outdoor Gear

Simond - Mountaineering

Solognac - Hunting

Tribord - Watersports

Wed'Ze - Skiing and Snowboarding

METHODOLOGY

The Decathlon plant is divided into three chambers:

The first two chambers cater to standard products which make up to 80% of their business
products.

The dimension of box size is fixed, i.e. 60x40x40.

There is a limit of 25Kg/box for a standard cell for transportation purposes.

The third chamber caters to Non-Standard products such as Bicycles, Gym utility machines
and treadmills.

The Box sizes are of various dimensions depending upon the product.

The handling cost of Non- Standard items is greater than that of Standard items

The division of Standard and Non Standard items is done in the ratio of 2:1 so as to optimize
utilization of space in the warehouse.

The transportation of both kinds of goods takes place together.

The colour marking scheme is also implemented in the warehouse:

 Red Logistics mean loose stock

 Blue Logistics indicate picking of boxes (in lots)

There are two types of Decathlon warehouses:

 CAC (Continental Warehouse)

 CAR (Regional Warehouse)

30% of the products present in warehouse are being exported.

The Decathlon plant has a daily manager who are responsible for the safety of the
warehouse and are being appointed in shifts.

The movement of products takes place in the following cycle:

Production CAC CAR

ONLINE
STORES RETAILERS
B2C

The activity of picking up of orders is dependent upon yesterday sales + safety stock which
leads to the decision makers on deciding as to how many to pick for fulfilment of orders.

Every night a report is generated in accordance to the picking and delivering activities.

Decathlon follows Backward Logistics process.

This process involves moving goods from their typical final destination for the purpose of
capturing value, or proper disposal. Remanufacturing and refurbishing activities are
included in the definition of reverse logistics. The reverse logistics process includes the
management and the sale of surplus as well as returned equipment and machines from the
hardware leasing business. Normally, logistics deal with events that bring the product
towards the customer. In the case of reverse logistics, the resource goes at least one step
back in the supply chain. For instance, goods move from the customer to the distributor or
to the manufacturer.
When a manufacturer's product normally moves through the supply chain network, it is to
reach the distributor or customer. Any process or management after the sale of the product
involves reverse logistics. If the product is defective, the customer would return the
product. The manufacturing firm would then have to organise shipping of the defective
product, testing the product, dismantling, repairing, recycling or disposing the product. The
product would travel in reverse through the supply chain network in order to retain any use
from the defective product. The logistics for such matters is reverse logistics.

WHY FOLLOW BACKWARD LOGISTICS?

In today's marketplace, many retailers treat merchandise returns as individual, disjointed

transactions. "The challenge for retailers and vendors is to process returns at a proficiency
level that allows quick, efficient and cost-effective collection and return of merchandise.
Customer requirements facilitate demand for a high standard of service that includes
accuracy and timeliness. It’s the logistic company's responsibility to shorten the link from
return origination to the time of resell. By following returns management best practices,
retailers can achieve a returns process that addresses both the operational and customer
retention issues associated with merchandise returns.Further, because of the connection
between reverse logistics and customer retention, it has become a key component within
Service Lifecycle Management (SLM), a business strategy aimed at retaining customers by
bundling even more coordination of a company's services data together to achieve greater
efficiency in its operations.

Reverse logistics is more than just returns management, it is "activities related to returns
avoidance, gatekeeping, disposal and all other after-market supply chain issues".Returns
management—increasingly being recognized as affecting competitive positioning—provides
an important link between marketing and logistics. The broad nature of its cross-functional
impact suggests that firms would benefit by improving internal integration efforts. In
particular, a firm's ability to react to and plan for the influence of external factors on the
returns management process is improved by such internal integration. In a firm's planning
for returns, a primary factor is the remaining value of the material returning and how to
recover that value. "Returned goods, or elements of the product, could even be returned to
suppliers and supply chain partners for them to re-manufacture".

Third-party logistics providers see that up to 7% of an enterprise's gross sales are captured
by return costs. Almost all reverse logistics contracts are customized to fit the size and type
of company contracting. The 3PL's themselves realize 12% to 15% profits on this business.
CONCLUSION & RECOMMENDATION

Decathlon has expanded its share of authorized capital from Rs77 crore in June 2014 to
Rs275 crore in May 2015 =as part of expansion plans in the country.

Decathlon won government approval for 100% foreign direct investment (FDI) in single
brand retail in 2013.Decathlon has doubled the store count in India in the past 14 to 18
months. In May 2014, it had 13 stores. Stores in newer markets, such as Guwahati, were
added this year, taking the store count to 24.

Another dozen stores are planned across the country by the year-end.

The company’s initial investments were meant to add 60 stores over five years with the aim
of doubling its sourcing for local operations over the next few years. As of 2014, Decathlon
had sourced 21% of goods sold locally, apart from exporting them to other European
markets. A typical Decathlon store sells goods related to more than 40 sporting activities
through its private labels.

Latent demand for local and international sporting goods is seen to be picking up in the
country, driven by more corporate participation in sporting activities such as the Indian
Premier League (IPL), the Hockey India League and the Indian Badminton League (IBL).

To be sure, the sports goods sector is largely unorganized. Future Group-promoted Planet
Sports is the only other large sports goods dealer in the country with over 40 stores.
However, most large online retailers, such as Snapdeal, Flipkart and Amazon, have added
sports goods as a category.

Last year, Decathlon has also sought the government’s permission to push sales of goods
online for consumers. Currently, Decathlon has tied up with Snapdeal for selling of its goods
and increasing sales.

Currently, the online shop allows only sale of goods to other retailers or large institutions.

The application was stalled as foreign investment laws do not yet permit single-brand
retailers to sell goods online.
REFERENCES

 http://www.cognizant.com/InsightsWhitepapers/Reverse-Logistics-The-Way-
Forward-Part-1-of-2-codex986.pdf
 http://www.ijsrp.org/research-paper-0313/ijsrp-p15107.pdf
 http://www.scap.pk/article/Inventory%20Management%20and%20Its%20Effects
%20on%20Customer%20Satisfaction.pdf
 http://www.tbm.tudelft.nl/fileadmin/Faculteit/TBM/Over_de_Faculteit/Afdelinge
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catie_Technologie/medewerkers/jan_van_den_berg/news/doc/GvHeck_THESIS_FI
NAL.pdf
 http://www.livemint.com/Companies/93bNW9ZviZcmsq7Z5rcElJ/Decathlon-hikes-
share-capital-as-part-of-India-expansion-pla.html
 http://articles.economictimes.indiatimes.com/2014-05-29/news/50182288_1_60-
stores-east-india-100-stores