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 staf from 80 diferent 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 4,000m. 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 diferent 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 diferent 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

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 managements 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
managements 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 Jimnez-Parra:
Successful implementation of RL networks requires many decisions
relating to diferent 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-oflife, 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 Ptanque
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:

Productio
n

CAC

CAR

STORES

ONLINE
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-efective collection and return of merchandise. Customer
requirements facilitate demand for a high standard of service that
includes accuracy and timeliness. Its 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 aftermarket supply chain issues".Returns managementincreasingly being
recognized as afecting competitive positioningprovides an important
link between marketing and logistics. The broad nature of its crossfunctional impact suggests that firms would benefit by improving internal
integration eforts. 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 remanufacture".
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 companys 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 Grouppromoted 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 governments 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/ReverseLogistics-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
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df
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