Backing back-end operations

Retailer: How Lohia Warehouse is connected with modern retail?  What made you  foray into the supply chain space?

Piyush Lohia (PL): Lohia Warehouse is a part of the Lohia Group of Industries and was started with the motto to serve the modern retail industry in the country.  Ever since its inception in 2007, it has been successfully and closely following the modern retail growth in India by providing back-end services to it, which includes logistics, warehousing, merchandising, product sourcing and vendor financing. We ensure that our activities aim at bringing efficiency to the back-end of the supply chain.

We are from an export background and our company Designco happens to be the largest exporter of handicrafts to all the major retail chains in the United States. It was during the early part of this century that India was slowly opening up to modern retail and we conceived the idea of starting this company with the thought to cater to all the back-end needs of the retail industry. So, any retailer will approach us for the merchandise or the products that they want to keep on the shelves.

For instance, if Bharti WalMart wants to buy some imported potato chips, they will come to me and give me a brief idea about the kind of product specification or packaging they would be looking for. Our merchandising team will then start scanning for vendors and suppliers from all across the globe. During this whole exercise, the team will ensure that there is a quality product that is being delivered and that the deadline of the retailers is met. After sourcing the product, we manage the entire supply chain including the logistics.  We have a huge array of product lines, ranging from food, furniture to cookware and apparels.

Retailer: Who are the major retailers you are serving at present? Do you have your own warehouses?

PL: Currently we are working with almost all the major national retail chains of the country. Bharti WalMart, Reliance Retail, Carrefour, Vishal Mega Mart, Metro AG and More are some of our key customers. We are also in talks with other retailers.

We have our warehouses in Delhi and plan to open two more in the coming year. We also have our warehouse in China that works as our distribution centre. The goods from different manufacturers and suppliers from China are received here, undergo a quality check and then are shipped to India.

Retailer: Do you have any services for e-tailing? How SCM for e-commerce takes place?

PL: We are in talks with a couple of e-tailers like bigshoebazaar.com and ebay.com for e-tailing activities, but nothing has materialised so far.

The SCM for e-tail will work in two ways. An e-tailer will either have his warehouse wherein all the goods and merchandise are shipped in and are then individually parcelled to the customers; or there can be another model wherein we will share our stock details to the e-tailers. Supposedly, there is a requirement from a customer for 10,000 articles and they will place an order to the e-tailer. The e-tailer in turn will place an order and ask us to directly ship these to the customer.  So, in this case, the logistics will bypass the procedure of sending goods from our warehouse to the e-tailer’s warehouse, and in this way, he saves on the overall overhead costs.

Retailer: Are you also involved in cross docking activities? How do you carry out the whole operation?

PL: We are into cross docking and it is done depending on the nature of the product. It is completely dependent on the product or the time by which the retailer or the manufacture wants.

After the sampling of the product is done, the buyer approaches the product. We then place orders to the factories, ensure the merchandise is of a good quality, get the products shipped to India into our warehouse and subsequently shipping it to the different delivery centres of retailers.  Like Bharti WalMart has three distribution centres (DCs) in India. We will be shipping merchandise to their DCs and sometimes even to their stores. Once the delivery is made to the DC, they either cross dock it to the stores directly or keep it in the warehouse for a certain period of time, as per their requirements.

Retailer: What important role does technology play in modern SCM?

PL: Technology does play a big role in ensuring an effective SCM, but considering the fact that the industry is still at a nascent stage, we have not invested heavily on technology as yet. Even today you will find most of the merchandise unpalletised. So, at this point, when the logistics industry is still in the growing stage, using technology becomes a little tough as there are many other issues that need to be addressed first. Technology takes a back seat when you consider other issues.

Retailer: What are your future plans in terms of expansion and investment?

PL: Lately, we have set up our China operations, which is helping us in sourcing better quality products at a better price to the retailers. We are also tying up with a number of manufacturers and retailers who do not understand the retail model that well. We are in the process of tying up with manufacturers of various other product lines that we have not been dealing with so far. We are trying to ensure that they are able to deliver good quality merchandise on time and this has been possible by the various trainings that we impart from time to time. We also provide funding at times to these manufacturers to set up their factories.