Home Supply Chain Case Studies VALUE STREAM MAP FOR E-COMMERCE FBOR MODEL

VALUE STREAM MAP FOR E-COMMERCE FBOR MODEL

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You can download the E-Commerce FBOR Value Stream Map case study below:




Alvis Lazarus wrote this case (Case Ref# H18-SC1805V) solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.

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ABOUT THE BUSINESS

EBook Limited is an Online Retailer of story books. They are based out of Bangalore, India. EBook Ltd is 100% market place but they follow the hybrid business model of Fulfillment by Online Retailer (FBOR) as explained below:

EBOOK LIMITED OPERATIONS

EBook has 100 vendors in their online portal and they have a total of 10,000 active SKUs (stock keeping units). All these 10,000 SKUs as stocked at EBook’s main distribution centre at Bangalore. Total stock at Bangalore distribution centre is 1,50,000 Books. The lead time between the stock transfer request from EBook to vendors and the receipt of material at EBook’s main distribution centre is 6 days since most of the vendors are from North India. On an average, EBook handles 2500 shipments per day. EBook’s customers place order through EBook’s online portal and E-Book operate on 100% digital payments to their bank account and there are no Cash on Delivery option available. The preface of every book is available in the online portal and returns are accepted only on damages or wrong shipments. Each book in an order is considered as a shipment. EBook operates at an undelivered of 10%, Returns of 8% and Order cancellations after placing order of around 15%.

The orders are received throughout the day and the order cut off for the day is 12am and all these orders are serviced as per the timeline given in Annexure – 1: The lead times are clearly visible on the online portal once the order is placed. The received orders approved by 12am and pushed to the fulfillment system.

Orders are picked, segregated, packed and invoiced. All the deliveries are handled by a 3PL provider and orders have to be handed over to 3PL by 5am; 3PL processes all the orders from the EBook’s main distribution centre itself and product delivery starts by 6am. Products are delivered to the customers as per Annexure – 1.

PROCESS DETAILS

Picking starts at 12am sharp; Picking productivity is 80 shipments per hour per person. Total manpower available for picking is 10 pickers. Picking is done in batches and after all the picks are done they are pushed to the packing area.

Segregation is done by the lane wise and then it is allocated to the concerned packing table. 20 people work on the segregation and movement to packing area. The segregation and movement takes a total of 3 Hours. Once all segregation is done, then the books are moved to packing area in pallets.

Packing is done by single piece and it takes 10 seconds per book per person. Once packing is done the invoice is stuck on the packing in the slot available in the external cover by the packer. It takes 5 Seconds per book. There are a total of 5 packers.

PROBLEM

EBook’s Supply chain and operations are in a Chaos missing on all the metrics. If they continue the current way, they will be out of business in a quarter. EBook has hired you as a Supply Chain Consultant to find out all the issues in the Supply Chain. Use value stream mapping as a tool to document the current state of EBook, identify all the potential bottlenecks and provide solutions.

Annexure – 1

EBook’s delivery timelines are as below:

Bangalore – Same day delivery

South Indian States – Within 5 days delivery

North Indian States – Within 7 days delivery




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