Procurement Strategy: Reliance Fresh And Retail

Introduction
Reliance Fresh is part of Reliance Retail - it is the convenience store format that sells fresh fruits and vegetables, staples, groceries, fresh juice, bars and dairy products. Currently there are 1691 Reliance Fresh outlets India and last year Reliance Fresh alone accounted for Rs.3928 crores of the total revenue. A typical Reliance Fresh store is about 3000–4000 square feet and caters to the needs of the people in a 2–3 km radius. Recently, Reliance Retail has decided to reduce its exposure in the fruit and vegetable business due to political reasons and also as it is unable to create a strong supply chain.
Procurement Strategy:
Reliance Fresh buys directly from the farmers thus being able to provide for a 15-20% reduction in

The supplier is then immediately provided with a payment slip confirming the transfer of money to their account for the produce. At the end of the day, the team loads the vegetables bought from different farmers in the region into a refrigerated truck that travel to the distribution centers (DC). Here, they are sorted and graded and all the data in inputted into a SAP system so as to make the tracking process simpler. Then the demand is estimated for the consecutive day and the order is generated for the next day’s requirement. Next, based on what goods are available and their quantity, they are delivered to stores in the nearby cities to stock the shelves before the stores open in the morning.
Various models for procuring fruits and vegetables:
Contract model:
In this model, the supplier and the company pre-agrees on the price, buying quantity, expected level of quality. Different kinds of vegetables like onions, carrots, cauliflower, cabbage etc. are procured through this model.
Some of the advantages of this model are
• Ability to access various reliable