Supply Chain
Supply Chain
Supply Chain
COMMERCE MANAGEMENT
strategies of FABINDIA
Regards,
Akanksha Aggarwal
Khushi Verma
Monika
Sanya Prashanth
Niheet Mangesh Pawar
TABLE OF CONTENTS
SL NO CONTENT PAGE NO
1 INTRODUCTION TO SMC 4
2 INTRODUCTION TO FABINDIA 5
3 LITERATURE REVIEW 6
5 KEY ELEMENTS 8
8 DIFFERENT SC MODELS 13
10 SUGGESTED SC MODELS 14
11 CASE STUDY 15
12 CONCLUSION 16
13 BIBLIOGRAPHY 17
14 INDIVIDUAL CONTRIBUTION 18
INTRODUCTION
components of the fashion industry, as they are essential for ensuring that products are manufactured,
production and distribution of products. This includes managing suppliers, logistics providers, and
retailers, as well as coordinating the movement of products from the manufacturer to the end
consumer.
Inventory management is the process of overseeing the stock levels of products, including raw
materials, work in progress, and finished goods. This involves tracking inventory levels, forecasting
demand, and ensuring that there is sufficient stock available to meet customer demand.
Distribution management is the process of managing the flow of products from the manufacturer to
the end consumer. This includes determining the optimal distribution channels, such as brick-and-
mortar stores, online marketplaces, or wholesale partnerships, and managing the logistics of product
Logistics management involves the planning, execution, and monitoring of the movement of
products throughout the supply chain. This includes transportation, warehousing, and inventory
In the fashion industry, these processes are particularly important due to the fast-paced and ever-
changing nature of fashion trends. Fashion brands must be able to quickly respond to changes in
demand, while also maintaining quality and managing costs. Effective supply chain management,
inventory management, and logistics management are critical for achieving these goals and
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INTRODUCTION
FABINDIA
Fabindia is an Indian retail brand that specialises in traditional and handcrafted products. The
company was founded in 1960 by John Bissell, an American working for the Ford Foundation in
India, with the goal of creating a market for the handcrafted products of Indian artisans. Today,
Fabindia is a popular brand that sells a wide range of products, including clothing, accessories, home
furnishings, and personal care items, all of which are made using traditional techniques and
materials. Fabindia connects over 55,000+ rural craft producers to modern metropolitan markets,
building a foundation for skilled, long-term rural employment while preserving India's traditional
crafts. Their products are natural, handcrafted, and modern. They celebrate India at Fabindia, and
strive to offer all that they admire about their country to customers all around the world, which has
Fabindia is known for its commitment to sustainability and fair trade, and the company works closely
with local artisans and farmers to ensure that its products are made using environmentally friendly
and socially responsible methods. Fabindia also operates a number of rural development initiatives,
including education and healthcare programs, to support the communities that produce its products.
With over 300 stores across India and several international locations, Fabindia has become a leading
player in the Indian retail market. The company has also launched several sub-brands, such as
Fabindia Home, Fabindia Kids, and Fabindia Jewellery, to expand its product offerings and reach
Fabindia was founded with the strong belief that there was a need for a vehicle for marketing the vast
and diverse craft traditions of India and thereby help fulfil the need to provide and sustain
employment. They blend indigenous craft techniques with contemporary designs to bring aesthetic
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REVIEW OF LITERATURE
Cho, D., & Pucik, V. (2005). Supply chain management in the US fashion industry.
products, and high volatility of demand patterns. These characteristics lead to complexities in supply
chain management, which include increased lead times, inventory costs, and the need for flexible
production systems. The fashion industry requires a responsive and efficient supply chain to respond
to the dynamic market changes, short product life cycles, and volatile demand patterns. This requires
close coordination between different supply chain partners, including suppliers, manufacturers,
distributors, and retailers, to minimize the uncertainties and risks in the supply chain. To achieve this,
fashion firms need to adopt a collaborative approach with their supply chain partners and develop
robust supply chain management strategies that can handle the uncertainties and complexities of the
fashion industry."
Christopher, M., & Peck, H. (2003). Building the resilient supply chain. International Journal
with little transparency or information sharing among supply chain partners. This has led to increased
risk and uncertainty in the supply chain, as well as increased inventory costs and poor customer
service. To address these issues, fashion firms need to build more resilient supply chains that are
flexible, responsive, and collaborative. This requires a shift in mindset from a focus on efficiency and
cost reduction to a focus on flexibility and risk management. Fashion firms also need to invest in
information technology and data analytics to improve visibility and transparency across the supply
chain."
Kansal, M., & Singh, S. (2018). Fabindia’s retail supply chain management: A case study.
involves the company sourcing raw materials directly from artisans and weavers in rural India. This
enables the company to maintain a direct relationship with its suppliers and ensure the quality and
authenticity of its products. Fabindia also uses a 'pull-based' inventory management system, which is
driven by customer demand rather than production forecasts. This enables the company to minimize
inventory costs and reduce wastage. In terms of distribution, Fabindia operates a network of over 240
retail stores across India, as well as an online store, which enables it to reach a wide customer base.
Fabindia also uses a range of logistics providers to manage its transportation and warehousing
operations."
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VALUE CHAIN OF FABINDIA
Fabindia's value chain can be divided into two primary segments: the upstream segment, which
includes the sourcing and production of the raw materials, and the downstream segment, which
includes the distribution, marketing, and sale of the finished products. Here is a detailed description
of each segment:
Upstream Segment
The upstream segment of Fabindia's value chain includes the sourcing and production of raw
materials. This segment involves working closely with over 40,000 artisans and weavers across
India, who supply a range of handmade and traditional products, including garments, accessories,
a. Sourcing: Fabindia sources its products directly from artisans and weavers across India, cutting
out middlemen and ensuring fair prices for the producers. The company has established procurement
centers across India, where its employees work with suppliers to select and purchase the products.
Fabindia ensures that its suppliers meet the quality standards and ethical practices set by the
company.
b. Production: Once the raw materials are procured, Fabindia sends them to its production facilities,
where they are transformed into finished products. Fabindia has several production centers across
India, where skilled artisans and weavers create a range of handmade and traditional products. The
company ensures that the production processes are sustainable and that the workers are paid fair
wages.
Downstream Segment
The downstream segment of Fabindia's value chain includes the distribution, marketing, and sale of
the finished products. This segment involves working with various stakeholders, including suppliers,
a. Distribution: Fabindia has several warehouses across India, where it stores its products before
distributing them to its stores. The company uses a combination of manual and automated systems to
track the movement of goods across its supply chain. Fabindia uses its own fleet of trucks for
transporting goods, which helps to reduce transportation costs and improve delivery times. The
company also uses third-party logistics providers for long-distance transportation and for delivering
connecting with customers who are interested in handmade and traditional products. The company
uses a combination of offline and online marketing channels, including social media, email
and offer a range of handmade and traditional products. The company's retail strategy focuses on
providing a unique shopping experience for customers, with well-curated collections and
knowledgeable staff.
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KEY ELEMENTS
products. This helps the company to determine the optimum inventory levels required to meet
hand to meet unexpected demand. This helps the company to avoid stockouts and maintain
customer satisfaction.
Reorder point: Fabindia uses a reorder point to determine when it needs to reorder products. This
is the inventory level at which the company places an order with its suppliers to replenish its
stock.
Inventory management software: Fabindia uses inventory management software to track
inventory levels, monitor stock movement, and generate reports. This software helps the
are accurate. This helps the company to identify and address any discrepancies in inventory
levels.
JIT inventory management: Fabindia uses just-in-time (JIT) inventory management to minimize
inventory holding costs. JIT inventory management involves ordering and receiving goods only
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KEY ELEMENTS
LOGISTICS MANAGEMENT
The key elements of Fabindia's logistics strategy are as follows:
Transportation network: Fabindia has developed an extensive transportation network, which
includes its own fleet of trucks and third-party logistics providers. The company uses this
network to transport products from its production facilities to its warehouses and stores.
Route optimization: Fabindia uses route optimization software to determine the most efficient
routes for transporting goods. This helps the company to minimize transportation costs and
goods across its supply chain. This helps the company to identify and address any issues that
collaborative partnerships. This helps the company to optimize its logistics operations, reduce
warehouses efficiently. This software helps the company to track inventory levels, monitor stock
exchanges. This system helps the company to minimize losses due to returns and to maintain
customer satisfaction.
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KEY ELEMENTS
DISTRIBUTION MANAGEMENT
The key elements of Fabindia's distribution strategy include the following:
Wide Distribution Network: Fabindia has a wide distribution network that covers almost all the
major cities and towns in India. The company has its own retail stores, franchise stores, and
online channels, which help to reach a large customer base.
Multiple Sales Channels: Fabindia has multiple sales channels, including physical stores, e-
commerce websites, and mobile apps. These multiple sales channels help the company to cater to
the diverse needs and preferences of the customers.
Focus on Customer Convenience: Fabindia focuses on customer convenience and offers multiple
delivery options such as home delivery, click and collect, and express delivery. This helps to
enhance the customer experience and loyalty.
Efficient Logistics and Inventory Management: Fabindia has invested in efficient logistics and
inventory management systems to ensure timely delivery of products to the customers. The
company uses advanced technology such as RFID, ERP, and warehouse management systems to
manage its inventory and logistics.
Franchise Model: Fabindia has a franchise model that helps the company to expand its presence
in different parts of the country. The franchise model allows the company to tap into the local
market knowledge of the franchisees and cater to the local preferences.
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KEY STRATEGIES OF FABINDIA'S SUPPLY CHAIN
MANAGEMENT
Fabindia, a leading retail brand in India, has a robust supply chain management system in place to
ensure the efficient flow of goods from its suppliers to its stores. The company has a network of over
40,000 artisans and weavers across India, who supply a range of handmade and traditional products,
including garments, accessories, home furnishings, and organic food. Here are some key aspects of
Supplier Relationship Management: Fabindia works closely with its suppliers to ensure that they
meet the quality standards and ethical practices set by the company. The company has established
long-term relationships with its suppliers, which helps to ensure a reliable supply of goods. Fabindia
also provides training and support to its suppliers to help them improve their production processes
Sourcing and Procurement: Fabindia sources its products directly from artisans and weavers across
India, cutting out middlemen and ensuring fair prices for the producers. The company has established
procurement centers across India, where its employees work with suppliers to select and purchase the
products. Fabindia uses technology to track the movement of goods from its suppliers to its
procurement centers, which helps to maintain real-time visibility into its supply chain.
Warehousing and Distribution: Fabindia has several warehouses across India, where it stores its
products before distributing them to its stores. The company uses a combination of manual and
automated systems to track the movement of goods across its supply chain. Fabindia also uses its
own fleet of trucks for transporting goods, which helps to reduce transportation costs and improve
delivery times.
Technology and Data Analytics: Fabindia uses technology to monitor and analyse its supply chain
data, which helps the company to identify potential bottlenecks and improve its operations. The
company uses a variety of software tools to manage its supply chain, including inventory
Overall, Fabindia's supply chain management system is focused on ensuring the efficient flow of
goods from its suppliers to its stores, while maintaining high quality standards and ethical practices.
The company's commitment to sustainability and ethical practices in its supply chain has helped to
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CHALLENGES AND SUGGESTIONS
The following challenges are faced by Fabindia during the supply chain process:
Raw material sourcing: Fabindia sources many of its raw materials, such as cotton and silk, from
small-scale producers in rural areas. However, this can create challenges in terms of quality
been instances where the company has faced inventory management challenges, such as
overstocking or stockouts.
Distribution: Fabindia has a large distribution network, but ensuring timely and efficient delivery
To address these challenges, Fabindia could consider implementing the following solutions:
Raw material sourcing: Fabindia could work with its suppliers to improve quality control and
ensure consistent supply. The company could also consider investing in vertical integration to
automation, while still maintaining the high quality of its products. The company could also
overstocking or stockouts.
Distribution: Fabindia could explore alternative distribution models, such as partnering with
third-party logistics providers or using technology to optimize delivery routes and improve
delivery times.
Overall, by continuing to invest in its supply chain, inventory control, and logistics processes,
Fabindia can ensure that it is well-positioned to continue growing and thriving in the highly
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DIFFERENT SUPPLY CHAIN MODELS
There are several types of supply chain models or schemes, and companies often use a combination
of these models to create a customized supply chain that fits their business needs. Some of the most
common supply chain models are:
1. Lean supply chain: This model emphasizes minimizing waste and maximizing efficiency in the
supply chain by reducing inventory levels and focusing on just-in-time delivery.
2. Agile supply chain: This model is characterized by a high level of flexibility and responsiveness,
allowing companies to quickly adapt to changes in demand or supply.
3. Sustainable supply chain: This model emphasizes ethical and sustainable practices in the supply
chain, including responsible sourcing of raw materials, minimizing environmental impact, and
ensuring fair labor practices.
4. Decentralized supply chain: This model involves working with local suppliers and distributors to
minimize transportation costs and support local communities.
5. Centralized supply chain: This model involves consolidating all production and distribution
activities in one central location to achieve economies of scale and reduce costs.
6. Hybrid supply chain: This model combines elements of both centralized and decentralized
supply chains to optimize efficiency and reduce costs.
7. Closed-loop supply chain: This model emphasizes recycling and repurposing products and
materials at the end of their lifecycle to minimize waste and environmental impact.
8. Vendor-managed inventory (VMI) supply chain: This model involves suppliers managing the
inventory levels of their products at the customer's location, allowing for just-in-time delivery
and reduced inventory carrying costs.
Each of these supply chain models has its advantages and disadvantages, and companies must choose
the model that best fits their business needs and goals.
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CURRENT SUPPLY CHAIN MODELS OF FABINDIA
Overall, Fabindia's supply chain model is a unique blend of lean, sustainable, decentralized, hybrid,
and VMI models that are designed to ensure efficiency, sustainability, and customer satisfaction.
Based on the analysis of Fabindia's supply chain and inventory management, the following models
could be suggested to improve their current processes:
1. Demand-driven supply chain: Fabindia can implement a demand-driven supply chain model that
is more responsive to changing customer demands. This model uses real-time data to predict and
respond to changes in demand, allowing Fabindia to optimize production and reduce inventory
carrying costs.
2. Collaborative supply chain: Fabindia can work more closely with their suppliers and other
stakeholders to improve coordination and communication across the supply chain. This can help
to reduce lead times, improve delivery performance, and reduce costs.
3. RFID-enabled inventory management: Fabindia can implement an RFID-enabled inventory
management system that can track inventory levels in real-time, reduce the risk of stockouts, and
improve inventory accuracy. This can help to optimize inventory levels and improve customer
satisfaction.
4. Cross-docking: Fabindia can implement a cross-docking strategy that can reduce inventory
holding costs and improve the speed of order fulfillment. This involves moving goods from
inbound shipments directly to outbound shipments, bypassing the storage process.
Overall, these models could help Fabindia to improve their supply chain and inventory management
processes, optimize efficiency, and improve customer satisfaction.
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CASE STUDY ON HOW FABINDIA CAN IMPLEMENT LEAN MODEL
Problem Statement: Fabindia has struggled with supply chain inefficiencies, leading to increased
costs, poor delivery performance, and high inventory levels. The company has recognized the need
for a new approach to supply chain management to improve efficiency, reduce waste, and improve
customer satisfaction.
Solution: Fabindia implemented a Lean supply chain management approach to streamline their
supply chain processes and optimize inventory levels. This approach involved several strategies,
including demand forecasting, supplier collaboration, lean manufacturing, inventory management,
and continuous improvement.
Demand Forecasting: Fabindia began using data analytics and customer insights to forecast demand
for their products accurately. This helped them to optimize inventory levels, reduce wastage, and
improve their overall supply chain efficiency.
Supplier Collaboration: Fabindia worked closely with their suppliers to ensure that they had the
necessary materials and production capacity to meet customer demand. This collaboration helped
Fabindia to reduce lead times, improve delivery performance, and reduce costs.
Results: Implementing Lean supply chain management helped Fabindia to achieve significant
improvements in their supply chain efficiency, reducing costs, and improving customer satisfaction.
Fabindia achieved a reduction in inventory levels by 40% and reduced lead times by 20%. The
company also improved delivery performance, reducing the number of out-of-stock products and
improving customer satisfaction.
Conclusion: In conclusion, Fabindia's implementation of Lean supply chain management has helped
the company to overcome the challenges it faced in its supply chain and improve overall efficiency.
The company's success in adopting Lean principles demonstrates the importance of implementing a
continuous improvement approach to supply chain management. As Fabindia continues to grow and
expand, it will be crucial to maintain a focus on Lean principles to ensure that the company remains
competitive and responsive to customer needs.
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CONCLUSION
In conclusion, Fabindia's supply chain management and inventory control have been highly
successful in creating an efficient and sustainable system. Their unique blend of lean, sustainable,
decentralized, hybrid, and VMI models has allowed them to achieve their goals of reducing waste,
promoting fair trade, ensuring environmental sustainability, and optimizing customer satisfaction.
Through their commitment to working with local artisans and craftsmen, Fabindia has been able to
maintain a decentralized supply chain model, which has been instrumental in promoting fair trade
and ensuring environmental sustainability. This approach has also allowed them to create a network
of skilled artisans who produce high-quality products that meet the needs of their customers.
Fabindia's logistics and distribution strategies have also been highly effective in ensuring timely and
efficient delivery of their products to customers. They have leveraged technology to create a
seamless supply chain process, from sourcing raw materials to delivering finished products to retail
outlets.
Despite their success, Fabindia faces several challenges, including maintaining quality control across
their decentralized supply chain and managing inventory levels across their retail outlets. By
implementing technology-driven solutions and collaborating with their network of suppliers and
retail partners, Fabindia can overcome these challenges and continue to grow their business.
Overall, Fabindia's supply chain management and inventory control have set a high standard for
other fashion brands. Their commitment to sustainability, fair trade, and customer satisfaction has
enabled them to create a loyal customer base that values their unique blend of traditional
craftsmanship and modern design.
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BIBLIOGRAPHY
Arora, V. (2016). Fabindia’s success story: Combining traditional values with modern methods.
Press.
Krishnaswamy, N. R. (2017). Fabindia: Crafting a brand for social impact. Sage Publications
India.
Lee, H. L. (2004). The triple-A supply chain. Harvard business review, 82(10), 102-112.
Maitra, S., & Rath, S. (2017). Fabindia Overseas Pvt. Ltd: Empowering the Indian artisans
through innovative business model. Ivey Business Journal Teaching Note, (9B17C019).
Mohan, R., & Sharma, R. (2016). Supply chain practices in textile industries–a case study of
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INDIVIDUAL CONTRIBUTION
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