Satish Shukla: In today’s episode, we are privileged to host a distinguished industry leader who has been at the forefront of supply chain automation in the retail sector for the last three decades. He has been a pioneer in implementing some of the most innovative and novel robotic and automation solutions across warehouses in India. Please welcome Mr. P. V. Sheshadri, Executive Vice President at Reliance Retail, the biggest retail company of India. Welcome to the show!

PV Sheshadri: Thank you, Satish. Thank you so much for inviting me here. I’ve been part of the industry for about the last three decades and did a lot of things, learned a lot of things from people like you and also still learning in the process. But yeah, it’s something which I have learned over a period of time, wherever I get an opportunity to share with people so that I can pass on those learning to them and in return, when we get into a conversation, most of the time I’ve also taken something away from them. Thank you so much again and happy to be here.

Satish Shukla: Very well said, learnability is the most important trait to succeed in any trade or profession. So, there is one thing that I would like to ask at the beginning itself. So retail is a very operations heavy sector and in retail supply chain is said to be one of the most non-glamorous sectors. So how did you end up or how did you join this supply chain domain, especially in retail?

PV Sheshadri: I got into this function by accident. So, when I started my career, there never used to be something called supply chain as a concept being practiced. And in the manufacturing, there used to be two major functions. One is the procurement function which generally buys, another function which is nothing but stores and keeps supporting maintenance or maybe process product in any manufacturing industry. I happened to be there in the first part of it, that is in the procurement part of it and then after that, in many industries, I switched out because in any young individual at that point in time, wants to build their career. So, I was also looking for larger exposure, etc. from a small city of Bangalore at that point in time, not today. So, I… (Today it’s the Silicon Valley.) Then it was not. I am talking about the late 80s and mid-90s. So, at that point in time, I decided to get into a large enterprise to get more and better exposure. So that is how I left Bangalore looking for a better opportunity and I continued my career in procurement, I went into the steel industry and then after that, I went into the textile processing industry and all of them were in the procurement part of it. One fine day, sitting in some years, I realized I think I need to really, because at that point in time, I was trying to upgrade my academics by going through materials management courses. Supply chain was something which was mentioned somewhere in the curriculum, but not practiced in detail. And I thought, there is something which is definitely going to happen and probably I need to look for an opportunity to get out of this hardcore tagged, procurement professional. That is the time when I left a very comfortable cozy place in a small town in Madhya Pradesh near Ujjain and left for a crazy place, a mad town, Bombay. So, I was quite nervous at that point in time, but that is the time there was an opportunity in one of the largest textile companies in India, they were trying to get into a retail venture. There they wanted to really practice supply chain as a concept very seriously. So that is how I got introduced to supply chain as a concept. and I of course, I did not plan it so well the way it is sounding, definitely not. It is by chance and by God’s grace and maybe my destiny, I just landed over there at the right time in Mumbai. So, within a span of maybe 2 – 2 and half years, I just got an opportunity to work for one of India’s probably the largest retailer at that point in time in hardcore retail. In 2001, this concept was really getting very familiar and popular, supply chain as a concept and in 2003, I really got into retail supply chain, that is something which is definitely been challenging because when you actually get into a modern retail store what do you expect? Look and feel and touch and feel and everything, right. So, everything has to be there in place and you don’t look at your choices, your options in mass you want it to be there in place in the same quantity and wide range of options which are required to be available to you, to make that wide range available to you with 20, 30, 40,000 SKUs. There is something which is actually going on, very hard work which is going on at the back end to ensure that you know these products are there on the shelf. So that is how I got into retail supply chain then it started exciting me and all because it is real madness there, real madness I am talking about 2003 and 2004, just imagine you have no technology to support today we call it as whatever we have at least reasonable and talking about non-automated warehouses at least you have some technology support which is called WMS that is Warehouse Management System. At that point in time, we had only one system which is called BMS that is brain management system. There is a lot of hard work used to go into it a lot of people specialized skilled person Ram is a specialized person for a category men’s in that formal he knows where the core is kept, where the fashion is kept, where the solid is kept where strip is kept that is how the retail supply chain used to operate in 2003 and 2004, those used to be hard days very hard days you know the fill rates just to be at what maybe on 60 50. Wow, we used to celebrate. So anyway, those are the difficult days but yes, that is how I started my career in retail supply chain and after that, you know never look back.

Satish Shukla: That is a very comprehensive journey indeed. In fact, destiny plays a very important role and it is a very eventful journey from Bangalore to Madhya Pradesh to then Bombay and then working with one of the biggest retailers of that time, definitely. You have mentioned that you were actually working with brain management system so you have seen this retail and supply chain landscape evolve since liberalization and we have moved from mom and pop shops to the plush retail centers in modern trade in the malls that you have mentioned. So, what are some of the key robotic and automation technologies that you have adopted in the supply chain vertical during this time?

PV Sheshadri: I still remember that the first trip we made was to Dubai and we just wanted to have a look and feel of the warehouses large big warehouses, (big boxes) absolutely and Dubai at that point of time supposed to have a good chunk of modern retail there in all the formats right grocery electronics etc. and we are quite impressed because things are kept in a very organized manner so shelving, racking, storage all grocery, case storage, each storage everything fine. So that is how our exposure to the technology that is a learning phase for us so we wanted to learn that is how our exposure started with a simple good nice looking buildings, good storage systems, and the basic technologies to support them with an attempt to moving towards paperless operations, that is how the whole things started and we came back and I said you know I think we understood the building part of it and at that point of time in India fortunately you had no buildings to even support this kind of high-racking storage because to have those kinds of buildings you need good flooring and India at that point of time I still remember that you know the rentals for 6 rupees, 7 rupees per square foot and in 6 rupees 7 rupees per square foot you cannot expect someone to give you a 6 metric ton flooring which is high-grade flooring where you can operate MHE s and still expect the floor will not crack, so we thought you know okay just getting a building is fine fantastic and then we realized just not getting a high building floor is such an important aspect of any warehouse, just not getting a 12-meter building an 8-meter building floor is also so important so learning number one came is that it’s not about just building it’s also about it’s about the floor to go high and use the volume cubic (so instead of just the surface area utilize) optimize the storage and bring in more efficiency of the building so that’s the time we said you know we’ll have to go and learn how to build a building (wow) so that the whole building and your whole entire operation is very efficient so we learned the building part of it when we were moving out of that when we were actually in Chicago I think I remember that I visited crafts you know it’s about a million square foot single box and which had almost kilometers of conveyor in that, high-speed sortation system, cross belt sorters, etc., then we came back to India we started focusing we started collaborating with the developers then when we got the building we said you know we need to make use of height and we got matching material and equipment which is suitable for that and after some time the next phase we said how do you churn out 2 x 3 x kind of throughput from the same warehouse know storage is not important what is important is that how can you make that building more productive every time not first time every time you have complexity of thousands of SKUs and also within that old season SKUs, all put together new season SKUs put together your hundred thousand SKUs to manage, and you get a request from the stores, and probably you have to pick and sort and store and the volume which we could actually throughput was becoming very difficult because we realized the same SKU is required for 200 stores for example, and then it used to be 200 hours which is to get created and one person can maximum pick 10 to 15 orders 20 people used to get deployed there to pick that I think this is not going to work but the technology is available to make that less complex, easier, so then do a batch be concerned same as to use it but for 200 stores right and bring it to one particular place pick at a time so we explored the first level of technology which is called put to light, that is how automation came into our life I think probably that was maybe the first distribution center in this country for retail which adopted a first basic level of technology and automation that (which was put to light) and we started doing batch pick so that is how the overall introduction of automation happened in retail.

Satish Shukla: That’s a very interesting take on seeing the technology and then adopting it the learning curve is very different obviously when you have to learn at your own cost then the ball game changes a lot so were you at any time afraid of failures so there is no precedent right you were putting up these boxes or these technologies for the first time in India, so at any point in time did it bother you or how did you get over that feeling, like okay what if this technology doesn’t work?

PV Sheshadri: Satish, the best part is that you know we were very positive that is something which we never used to even discuss never you didn’t think of it I said if this technology has worked worldwide and this technology should work here also implementation and execution could be an issue with us we know it very well it’s not going to be easy but we are very well convinced we are not going to fail it might be a matter of time it might take little more time to achieve those objective which was set for but it is definitely going to be sure short win there it is not going to fail. So we had good team together within our supply chain at that point of time when we were introducing this I was heading operation, a gentleman was heading design part of it, a gentleman was adding IT part of and all of us together as a team we did kept the morale up and we faced a lot of problems a lot of problems and the only best part is that I always believe that I am still suggest and advise people there is nothing happens if you think about this the success has to come you sitting there in your chair especially if you are supply chain professional, please forgive that. I’ll still say that you know you have to be on the ground at some point of time may not be all the time some point of time to ensure that there are certain thing which is visible to you may not be visible to the people who are working here on the ground we should be prepared to be there and contribute to that extent so at that point of time we were all there on the ground before the first warehouse took us almost like three to four months to (go live) go live at the next six warehouse took us only four months (wow) so see that is what (that is the power of learning components) also the confidence and also in spite of it is a running business, in spite of that is being only one warehouse which stores also, in spite of that, we never gave up. See if you are confident the people on the ground will always follow you and never allow negativity to flow into the system, which is very bad, you must have actually seen our recent implementation a large warehouses, large automation that is not a small task right yeah at no point we allowed anyone to come out with any kind of negativity in the overall approach.

Satish Shukla: Yeah, this is a classic playbook of early adopters you have to be convinced you need to have courage in most importantly you need to have a team that will fully back you up. So, you have you have been a user of technology in supply chain in retail so how do you decide when do you want to go for automation and when do you need robotics?

PV Sheshadri: I need an automation one is just three, second is for the consistency, third is the reliability there are three things which determines and the different weightages which allow you to make a decision on the environment automation in today you know if you have a thousand pieces and tomorrow if you require 200 thousand pieces you can’t open four warehouses right, you have to find out to achieve those numbers, so you need probably if automation can be an answer yes and the second thing is reliability, it is very important see automation it’s all about machines and of course, I don’t say it’s 100% machine it’s a combination of you know man and machine I always call it as man machine so with a lot of respect to human beings I would say that reliability is always being a question mark, and the people who are required to be to be there in the way also to perform those particular tasks to support the business if you don’t have people your field rate that day is 70%, your 30% loss besides that you have unhappy customers there coming to your stores. So reliability was very important for us so that is something probably an automation and robotics can answer and certain things are consistency you do a particular task, it has to be done in a similar way even 100,000 times can a human being perform that. I would challenge anybody come back and tell me, prove me to that human being can actually perform that it’s not possible if it is a repeated task consequently need to be performed I don’t think you will find a consistency to that you know but we have (humans are not programmed to go that way) perfect but humans are really helpful in programming (these robots) I think that is this strength and property that’s that is where we got it so let’s make the best use of that so that is where your automation decision gets post-dated. So you get into such decision and we have always looked at such opportunities and started introducing automation into the system. They have really helped us even today we deploy robots some of our warehouses you must have definitely seen that complex task get very easy they are very mundane task it’s nothing, but they do moving from here to there, very autonomous moving here to there they do a job which 3x the speed of what a human being can do. Achieved, the objective is achieved. One point is really important it’s not about your commercial decision it’s not about your ROI decisions and of course in my opinion with high regards to CFOs and financial professionals I would say it should always be left to business decisions so unfortunately in India if we start looking at our ROIs probably you may not be able to make decisions. I think in India the adoption of robotics is also to cater to the scale rather than our why) so my yes my next point was that. Now the way we associated with Addverb we are trying to bring in a technology at the very affordable cost. You can’t compare your technology adoption and technology cost to human beings, it’s very unfair to compare so ultimately, it is definitely going to be a business call (it’s a very interesting thing that it is very unfair to compare the costs) It is unfair, if you’re not really thinking about the future and also if you have this business very clearly you’re seeing that your business requires you to bring in a level of automation (so if you’re building for the future you need to go for technology) absolutely

Satish Shukla: Very well said, so as you mentioned that there are a lot of problems that can be solved with technology one of the things that I came across was that return handling in e-commerce is a very tedious process and it can go up to as much as 35 or 40 percent of the entire fulfillment costs, the entire return management costs is it really true and is it really true is return handling back bring a pain? and how does technology help in addressing this return management?

PV Sheshadri: First of all when a product gets delivered to the stores it gets delivered in a fantastic condition, and second it gets delivered through a lot of technology intervention like a product gets picked using a technology but when it comes back, it is filled in a multi SKU carton probably one carton might have 30 SKU imagine such 10 cartons coming from one store and such returns coming from 300-500 stores and that important is that you know how do you sell that back, earlier I think I’ve seen that now people used to sell that at the very high level markdown prices and even for putting them back you require that to be sorted and ensure that it goes and sits in the right place so that it’s available for the next pick that’s a very tedious and painful job here, first of all you’ve to at least sort them into hierarchies which your business requires and then after that place it in a place and make it available for the next pick so to make that product again available and visible alongside, you have to do a lot of work at the back end. Here what we have really achieved significant progress in this stage. You must have seen Zippy are helping us a lot (yeah) so we have we know almost 70, 80 Zippy which is deployed there and they track the name itself it’s a zip zip zip this sort product to the to specific you know category specific size and of course where you’re supposed to go in terms of specific location, I think we have a fantastic solution situation there. So I think the pain return pain to a great extent get really sorted otherwise sorting them is going to be very difficult and imagine if the same product when it’s coming back and is made available for sale again in a matter of maybe around 30-40 minutes (tremendous value on law) absolutely absolutely because the amount of time you save the lesser the markdown would be.

Satish Shukla: Very well said so since you have been delivering through supply chain a lot of products across different formats retail e-commerce modern trade etc., if you had to go for shopping what kind of a robot or automation solution would you prefer in that outlet?

PV Sheshadri: I don’t want anyone to accompany me when I’m actually walking in the aisles for shopping. I don’t want to that extent but expectation, it’s very important the painful part is that you can come back standing in the queue, you queue up there (that’s a big pain) a u queue up there for billing purpose is a pain. Imagine that day it’s I pick up I’m put that or maybe a robot walking with me or maybe after that it accompanies me, I put my all products, the technology exists there yeah and I just check out in the same speed and speed I’ve entered the store, I think that is the day which I’m looking at. Many of them are not able to I think reliance is planning to experiment some of the retailers are trying to experiment that (so that’ll be a knockout value proposition) absolutely because that is a very impatient moment for me and I’m by nature it’s a very restless and you expect me to pick up all my stuff and product and then hold it in and stand there waiting for my turn. I still believe that in almost the retailers are very work on this kind of a technology and something which I would love to experience.

Satish Shukla: So, thank you thank you for your time that was a very interesting conversation and we got to learn a lot about how retail is transforming and robotic and automation is helping me to transform. Thank You!

PV Sheshadri: thank you Satish, thanks Addverb they have added a lot of value to our supply chain show and that’s the reason India’s greatest and largest retailer cannot be just by chance unless it has great systems processes technology supporting them. I think this is where supply chain has also played a role, I think that is where Addverb has given us a lot of support.

Satish Shukla: Thank you, sir. Thank you.