Operation Strategy

Strategic reorganization of the supply chain

Student Name
Student ID
Executive Summary
The present study focuses on discussing the concept of supply chain taking Swiggy an
Indian food delivery company as an example. In the recent times, the organization has been
taking steps to reorganize and restructure the supply chain and operational values of the
company to accomplish its set goals and objectives. Supply chain process can impact customer
satisfaction, so it is significant for businesses to have an improvement regarding the same. They
can resolve issues of the supply chain with consideration of reorganization of the supply chain.
Swiggy has also focused on the reorganization of the supply chain so that corrective
measures can be considered and implemented to improve the overall efficiency of the
organization. The supply chain of Swiggy shows that at the initial level the customer discovers
for the restaurant on the application or web in order to place the order. The company has
recently invested in technological developments to improve supply chain sustainability. Swiggy
has also tried to enhanced customer service support through providing live tracking option on
the mobile application. Restaurant relationship model has also been introduced to improve the
supply chain standards.
Contents
1 Introduction.............................................................................................................................4

2 Company Overview..................................................................................................................4

3 Descriptive review of Swiggy and its supply chain..................................................................5

3.1 Pestle Analysis...................................................................................................................5

3.2 Porters Five Forces............................................................................................................6

3.3 Swot Analysis.....................................................................................................................8

3.4 Supply chain of Swiggy......................................................................................................9

3.5 Problems and its impact on supply chain.......................................................................10

3.6 Factors considering strategic reorganization of supply chain.........................................11

3.7 Implementation Plan.......................................................................................................12

4 Recommendation...................................................................................................................13

5 Conclusion..............................................................................................................................14

6 Appendix................................................................................................................................15

6.1 Appendix 1: Market Share...............................................................................................15

6.2 Appendix 2: Value Chain.................................................................................................15

6.3 Appendix 3: Diamond Model..........................................................................................16

6.4 Appendix 4: Generic Theory...........................................................................................16

6.5 Appendix 5: Pestle Analysis.............................................................................................17

6.6 Appendix 6: Customer Type Matrix................................................................................17

1 Introduction
“Supply Chain are in every organization even a corner store has a supply chain, they
just might not know it yet” a quote from famous Nadia Kassam[CITATION Che15 \l 16393 ].
Supply chain process plays a critical role in the success of every business firm because it allows
management to reach customers in an effective and efficient manner. By having an effective
consideration of supply chain, the businesses are continuously increasing their customer base
and market share. A strong supply chain benefits an organization in multiple folds and leads to
success. To have a better understanding of the supply chain, Swiggy has been taken into
consideration.

2 Company Overview
Swiggy is among the fastest growing start-ups in the food and beverages industry in
India[ CITATION Ani18 \l 16393 ]. The company head quartered in Bangalore, India is into
delivering food and beverages from restaurants to end consumers for enhanced customer
experience. Swiggy has provided the customers with an online platform from which they can
order food from their favourite restaurant at their locations [CITATION Man18 \l 16393 ]. At
present, Swiggy is operating in over 28 cities of India. Swiggy has its operations using the
website and mobile application. Users can easily access the menu for alliance restaurants using
desktop and mobile application[CITATION Anu17 \l 16393 ]. Once the order is placed the
delivery person of Swiggy ensures the delivery of food to the customer so that comfort in food
orders can be promoted. Different payment modes are being adopted by the organization such
as cash on delivery, net banking, debit cards and payment wallets such as Paytm, Mobikwick
etc. The process of Swiggy consist of three major stages which are order process, delivery of the
order and then consumption of the food which is being delivered.
 Figure 1: Swiggy Process

(Source: www.swiggy.com)

3 Descriptive review of Swiggy and its supply chain

3.1 Pestle Analysis

Political: Swiggy as an organization is taking advantage of Digital India Campaign, an initiative
which is being propagated by the Government of India which focuses on organizations using and
taking advantage of digital tools and solutions. The campaign has enabled Swiggy to maximise
the usage of internet and penetrate in the Indian economy which helped Swiggy to enhance
business opportunities [ CITATION Ras18 \l 16393 ]. However, competitors of Swiggy are also
taking advantage of current market conditions that might create high competition for the
company.
Economic: India being a developing nation has seen a lot of reforms in past few decades have
been benefiting startups such as Swiggy. The recent event of demonetization which led to a
tremendous increase in the usage of digital platforms of ordering and payment also behaved as
a catalyst in the growth of usage of food ordering platform provided by Swiggy.
Social: A changing trend has been observed in the lifestyle pattern of the citizens of India, which
has enabled the organization to lead a sustainable development over the past couple of years of
existence. Swiggy also plays a critical role in social change because effective marketing of online
food ordering influences the perception of customers and attract them to buy services offered
by Swiggy. In recent years, the trend of online food ordering and online transactions has
enhanced over the past few years [ CITATION Car16 \l 16393 ]. Another scheme which the
company has taken advantage of is customer loyalty schemes which has increased the customer
base of the company.
Technological: Swiggy has witnessed an impressive development in terms of technology which
has benefitted the organization significantly. In terms of technology, Swiggy is using internet and
different online platforms to provide its customers with an opportunity to order and track food
online. The technology has also provided Swiggy with an opportunity to introduce live online
food tracking for its customers [ CITATION Anu17 \l 16393 ].
Legal: Swiggy has given effective consideration on legal values to promote operational efficiency
abiding with the rules and regulations of the food and beverages industry in India. Better
regulatory control in business activities has also been improvised continuously for ethical
working environment [ CITATION Chr16 \l 16393 ]. Swiggy has recently improved its policies in
order to ensure that legal policies of government are being followed significantly.
Environmental: Swiggy is also focusing on environmental aspects, so they have reduced the use
of plastic bags in the delivery process. Also, in the current situation there is no significant impact
on the environment from Swiggy operations (refer to appendix 5).

3.2 Porters Five Forces

Bargaining
power of
suppliers:
Low Threat of
Rivalry: High new entry:
Low

Bargaining
Threat of
power of
Swiggy substitute:
customers:
Low
High

Figure 2: Porters Five Force (Swiggy)

Rivalry: Swiggy is facing a high ratio of competition from its rivalries that can affect the market
ratio and growth of the company. Currently, the cost of storage is low that help its competitors
to have operations in a competitive manner. The fast growth of industry also supports its rivals
like Zomato to enhance its existence in the market. Also, operational barriers in the sector are
low that also enhances the risk of rivalry [ CITATION Nus16 \l 16393 ]. Other relevant
competitors of Swiggy are Uber eats, Food Panda, Jugnoo, etc. It is necessary for Swiggy to
change and enhance it's supply chain and operations activities to stay ahead of its competitors.
Bargaining power of suppliers: It can be considered as low because there are various suppliers
in the market that can be accessed by Swiggy to have enhanced benefits. Low cost
of switching suppliers, also enables the organization to switch to better supplier without
effecting the cost. Production inputs of all suppliers are same, so the company can easily switch
other suppliers if it is required.
Bargaining power of customers: It is high because the customer satisfaction in the industry is
critical that can impact the operations of Swiggy. A large number of customers can bring
complexities that might affect the overall operations. Customers can easily provide a negative
review on applications if service standards are not accurate that also creates an issue for the
business entity[ CITATION Pra18 \l 16393 ].
The threat of substitute: The factor can be considered as low for Swiggy. In the current scenario
the number of substitutes offering similar services are low in the market. However, the
company needs to consider the growing number of take away restaurants which can be
considered as an indirect substitute as the base objectives of functioning for both the models
are different. It has been noticed that existing competitors are also offering the same kind of
services, so the existence of a substitute is very low. It can benefit the Swiggy to attain long term
sustainability.
The threat of new entry: Entry of any new business is limited in the sector because operations
require high investment ratio that is not an easy task for new entrants. Operations require
advanced technological implications that cannot be managed in limited funds. The industry also
demands economies of scale that means the Swiggy has a less negative impact[ CITATION Sup18
\l 16393 ].
3.3 Swot Analysis
Strength Weakness
 The company supply chain is  Delivery is limited that means the
impressive that helps in quick delivery customer can only order food from the
of the order. restaurant of zone selected.
 The brand image of the company is  Price differences are identified in menu
well maintained that attracts and app prices that impact customer
customers easily perception.
 Training is being offered to delivery
boys in order to ensure standards
 Wide ranges of restaurants are
associated with the business model.
 Increase in number of delivery
executives has supported the supply
chain.
Opportunities Threats
 Swiggy can expand business in other  The customer base is getting saturated
cities of India to promote opportunities in major cities that might create an
 Market share can be increased using issue in terms of financial ratio.
potential customers (Ganapathy, 2016).  Increase in health consciousness can
 Cost effective model can also be affect the numbers of outside food
introduced to control supply chain. orders.
 Quality and tracking services standards  Negligence of potential rivals can also
can be improved in a continuous influence the business entity.
manner.  Local state regulations does not allow
 New modes of delivery can also be Swiggy to have independent
introduced such as on call orders. operations that affects the expansion
opportunities.
3.4 Supply chain of Swiggy

Figure 3: Swiggy Supply Chain

(Source: Swiggy Bytes, 2017)

In initial years of business, the supply chain of Swiggy was framed with consideration of
supply chain process that assists in accomplishing goals and objectives. By having an improved
consideration of the supply chain management process, the business is improving its supply
chain on a regular basis. The supply chain of Swiggy covers five key factors such as plan, source,
execute, deliver and return. It means the simple supply chain process is being followed by the
company in order to meet the expectations of customers[ CITATION Tar18 \l 16393 ]. In the first
stage of Swiggy’s supply chain management process, the customer is required to select food
from his/her favorite restaurants which have been registered on Swiggy. In the second stage,
the customers are required to place the order for the food and confirmation is provided to the
customers and restaurant regarding the same. Food is being cooked under this process and the
delivery boy picks up the order to deliver it to the customer. Once the delivery accomplished,
the successful order notification has been generated.

Figure 4: Supply Chain Management Process

(Source: Holisol, 2018)

The mentioned above figure outlines that the supply chain management process of
Swiggy primarily consists of five major stages which are planning, sourcing, execution, delivery
and return.
In supply chain process the company is focusing more on technological developments so
that an integrated supply chain process can be developed. It is also a reason that the company
has changed various features in its application so that better support can be offered to
customers and restaurant partners. Swiggy is required to carry out continuous improvement in
its supply chain management process so that fast, effective and accurate services and products
can be delivered to the customers[ CITATION Sin17 \l 16393 ]. The strategy of continuous
improvements is also contributing a lot in the overall success and growth of the brand.

3.5 Problems and its impact on supply chain

There are the number of issues that Swiggy is facing with regards to the supply chain
process which is directly affecting the overall business outcome. It is necessary for Swiggy to
understand the issues in an adequate manner so that the strategic reorganization of the supply
chain process can be implemented in an efficient and effective manner. The primary concern
which is being faced by the organization is the increasing cost of operations. The issue has been
the primary concern for the management as the profit margins for operations have been
drastically affected the profit margins. Furthermore, the increasing fuel prices have added to the
burden of the operational cost.
Another factor which has affected the supply chain for Swiggy is the increasing retention
rate of the delivery employees. The business model for Swiggy is highly dependent on the
delivery executives and the retention rates have been affecting the overall efficiency and
effectiveness of the company. One of the primary reasons for the retention of the executives is
the low satisfaction rate [ CITATION Sin17 \l 16393 ]. At present, the company is also facing
several issues in context of attracting skilled and effective employees or delivery executives to
deliver food to the customers. The problem is crucial because the business is required to
maintain appropriate balance between technology and employees to carry out smooth flow of
all its operations and activities [ CITATION Mah18 \l 16393 ].
Technological changes are rapid in Indian market as previously orders were accepted
through desktop websites, but now mobile application is a trend. These kinds of changes in
technology forces Swiggy to change its process that also influences on supply chain of company
[ CITATION Dup18 \l 16393 ]. Manager’s precept that technological improvement in the supply
chain can assist in the delivery process, along with efficient training. Swiggy offers training in
terms of presentation and dealing with the customer. However, a raising concern is being
noticed with the delivery executives not being able to track client location delaying of orders. It
also impacts the customer experience and satisfaction levels which needs to be taken into
account by the management. Another factor being the dissatisfaction in the experience of
restaurant partners with regards to the delivery pick up standards and timing [ CITATION Sin17 \l
16393 ].

3.6 Factors considering strategic reorganization of supply chain

In order to resolve the issue related to supply chain, Swiggy has decided to bring the
strategic reorganization of the supply chain. Managers of Swiggy have decided to improve the
supply chain standards in terms of diverse factors such as customer service, cost control,
planning & risk management, restaurant relationship management and talent.
Swiggy has analyzed issues in terms of supply chain and classified its supply chain in three
segments such as service strategy, reports and dashboard and service improvement. The
company has decided to implement the process on a continuous basis so that long term
objectives can be accomplished. Key factors that are being referred in supply chain
reorganization are classified as service catalog, service desk, incident management, problem
management, change management, project management, asset management, policy and
procedure management[ CITATION Ser18 \l 16393 ]. It is essential for the business firm to have
effective consideration of strategic options so that overall performance can be improved.
Through having a consideration of strategic developments in the supply chain, the issues can
also be resolved in the desired manner.

3.7 Implementation Plan

Strategic development can be termed as the major area upon which the management of
Swiggy is focusing on with an objective to reorganize the supply chain. In order to bring
improvement to the supply chain of a company is focused on carrying out restructuring of the
entire supply chain management process. Here, the brand has emphasized on three key areas
which are customers, restaurants and Swiggy. The company has used the same structure as the
previous one for customers because it maintains the usability. Through considering various
aspects like service catalog, service desk, incident management, asset management, policy and
procedure management the company has designed an in-house supply chain. It is the process
that is currently being used by Swiggy and restaurants to manage orders. It also impacts
positively on the coordination and collective working so that objectives can be accomplished
[ CITATION Goo18 \l 16393 ].
For effective development of supply chain and reorganization, the management has
designed behind the scenes supply chain. It allows business firm and restaurants to track the
order in the proper manner. It also helps in effective allocation of the delivery executive who are
present at the nearby locations minimizing the fuel cost. The additional facility being provided
to restaurant partners such as automatic order confirmation which enhances the
experience[ CITATION Exo18 \l 16393 ]. Customer preferences are being analyzed properly
before taking final action so that customer service standards can be well maintained. It has
enabled Swiggy to improve customer satisfaction and enhances the overall development in a
critical manner. Along with this, the minimum time of delivery is being framed through taking
feedback from restaurant partners. Minimum 30 minutes delivery time has been set up so that
restaurant partners can get proper time for preparation of cooking. In order to maintain better
relationships with the partners Swiggy has appointed relationship executives. The key role of
relationship executive is to have daily communication with restaurant partners [ CITATION
Liv18 \l 16393 ]. Monthly basis feedback is also being taken from restaurant partners so that
supply chain issues can be identified. Based on feedback, the executives forward the
information to top-level management so that using supply chain reorganization can be
promoted considering factors of supply chain process.
In order to improve the supply chain process, Swiggy has also attracted investors like
Naspers and DST Global enabling Swiggy to quickly ramp up its supply chain network and
expand to new markets[ CITATION Zee18 \l 16393 ]. It has allowed the business firm to bring
various changes in the mobile application such as live tracking of the delivery executive has
been introduced. For better operations and supply chain systems the Swiggy has also enhanced
its technology headcount. These kinds of improvements are facilitating business firm in a
diverse manner.

4 Recommendation
It has been identified that Swiggy has carried out reorganization of its supply chain
management to improve the same and attain high degree of satisfaction of customers and
restaurant owners. However, it can be argued that still there are certain things which Swiggy can
improve to enhance the effectiveness of its supply chain. The recommendations for
improvement are mentioned below as:
• Swiggy must introduce its re-time inventory management system in order to monitor its
supply chain. It will allow improving the standards and enhancing the sustainability of supply
chain.
• Monitoring of vendor performance can also be considered so that issues in terms of
supply chain can be identified.
• Data insight application is also beneficial for Swiggy because it will make understand
about the delivery time of order.

5 Conclusion
As per the above study, it can be concluded that the supply chain process of Swiggy has
been reorganized that helps the business firm to attain various benefits. Considering key
measures of supply chain process and technological development the company continuously
has been improving. It also assists in attaining better customer satisfaction and leads to business
success.
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7 Appendix

7.1 Appendix 1: Market Share

(Source: Livemint, 2018)

7.2 Appendix 2: Value Chain

(Source: Jurevicius, 2013)

7.3 Appendix 3: Diamond Model

(Source: Business to you, 2018)

7.4 Appendix 4: Generic Theory

(Poerters generic strategy, 2018)

7.5 Appendix 5: Pestle Analysis

(Source: Pestle Analysis, 2017)
7.6 Appendix 6: Customer Type Matrix
(Source: Customer type matrix, 2018)