Flipkart’s supply chain planning: The journey beyond checkout
Ever wondered how that eagerly awaited package finds its way to you?
In this article, we pull back the curtain a little bit to reveal the strategic planning and combined efforts that power our commitment to delivering your orders on time. (and how digital product builders play a role in making this happen)
A tale of two worlds
Let’s begin with a short story about Anshika, a young aspirational girl from Vizag, Andhra Pradesh. She’s been saving up for months, and finally, during Flipkart’s Big Billion Days, she decides to treat herself to the latest smartphone her heart desires for 🎉
On the other side is Navjot Singh, a proud Flipkart Seller based out of Amritsar, who has been with the platform for eight years. He is thrilled that Anshika chose his Listing.
Navjot primarily stocks up his inventory in his own Amritsar Warehouse, and also stocks up some inventory in Flipkart Warehouses situated across the country to maintain faster delivery speed in all regions.
However, the specific colour chosen by Anshika is solely available at the Amritsar warehouse.
If Navjot had also stored this product at the Chennai warehouse, we could have facilitated a much faster delivery and considerably reduced transportation costs.
Nevertheless, Navjot proceeds to label the order as ready for pickup by Flipkart Logistics (eKart), starting the journey of Anshika’s package.
The package exchanges multiple hands in the process:
An eKart field executive picks up the package from the seller’s warehouse using their bike, transporting it to Flipkart’s pickup hub. From there, the package embarks on a journey through various Flipkart warehouses, utilizing pickup vans, trucks, and flights. The final destination is Vizag’s delivery hub, where another field executive takes charge for the last-mile delivery.
At this stage, we send a notification to Anshika, letting her know that her phone is now out for delivery.
Finally, Anshika’s package arrives at her doorstep in just 4 days — a delightful surprise, beating our initial commitment by a day! 🚀
The challenge of scale
The above journey is just one example, as you read this thousands of such orders are being placed on Flipkart every single minute, creating a beautiful yet complex network.
Thousands of seller locations are being connected to millions of customer locations every single day via the Flipkart platform.
Fun fact:
We once delivered more than 8 million orders in a single day during our flagship sale: Big Billion Days 🚀
We were operating on peak capacity :)
And mobile phones is just one of the hundreds of categories we sell on Flipkart. [Fashion, Home Appliances, Furniture, Beauty…] You name it!
The challenge of variable demand
Now keep Flipkart’s scale in mind and picture this:
It’s September, and demand on our platform is ticking along at a moderate pace. Then, in the blink of an eye, October arrives with Diwali shopping, and a flood of orders come crashing in.
How do we ramp up our operational capacity across the nation to cope with this surge?
Because failing to do so would result in missed opportunities and lost business. (We obviously cannot buy new trucks and build new warehouses for this temporary demand)
Now, fast forward to November, and demand drops down sharply as most people are done upgrading their phones, have already bought gifts for the festive season, have had their fashion needs met, and so on.
How do we ensure that most of our assets remain active and not idle?
After all, having idle resources would mean losing money.
Additionally, the variability we encounter among the various product categories we offer complicates the challenge furthermore.
For Example, Electronic items are fragile and need a more precise logistical handling when compared to Books as a category.
How do we make sure we have sufficient logistical support present at the right time in the right place?
How do we tackle these challenges?
- Predicting Future Demand:
Using data points such as past sales data, market trends, upcoming holidays, and location-wise demand trends, machine learning models are employed to make predictions about future demand. - Smart Inventory Management:
Based on our predictions of high-demand and supply for different items across geographies, we recommend our sellers to plan their inventory accordingly.
[Remember Navjot’s story who had failed to stock up the product in the correct warehouse, in real life we tell our sellers “Don’t be Navjot” 😂 ] - Optimizing the Supply Chain:
To handle surges in demand, especially during festive seasons and sales, we seamlessly integrate temporary third-party services into our operations. We also leverage the forecasting insights to refine our long-term supply chain investment strategies, including fulfillment centers, manpower, transport, etc.
Role of Product and Design
To build these strategies and to put them into action, we count on digital products that gather data and combine the strengths of both machine and human intelligence.
The Product and Design team’s effort goes into building these digital products and solutions needed by the planning teams and inventory managers to navigate these complexities, ensuring that Flipkart continues to meet customer expectations and business goals.
As a product designer at Flipkart, I’m consistently driven to create products that optimize our supply chain, contributing to the achievement of key objectives:
- Reduction in overall operational costs
- Higher customer satisfaction and retention rates that come as a result of Faster Deliveries (It gives us a competitive advantage over other marketplaces)
- Minimizing our carbon footprint and contributing to a more sustainable e-commerce ecosystem
This article provided an introduction to how the supply chain operates at Flipkart and the challenges we face in our quest to enhance its efficiency.
However, this is just the tip of this iceberg :)
In the coming days, we’ll dive deeper into the details, taking you through the transformation of legacy processes into modern platforms, redesigning supply planning procedures, and much more.
Stay tuned… 🚀
If you have any questions about planning products at Flipkart or simply want to chat about life at Flipkart, feel free to connect with me on Twitter (I still haven’t gotten accustomed to X) 🙈
