NEW DELHI: Call it the Wal-Mart effect. In the first gear shift since its launch last year, Reliance Retail is overhauling its management structure and changing operational heads.

From an industry vertical structure, the company has decided to move towards a store format-based structure with effect from May 1 to expedite the rollout of its ambitious retail venture and make it more accountable with separate profit and loss accounts.

Senior operational and functional chiefs such as Raghu Pillai (head of store operations), Gunender Kapur (head of Reliance Fresh), Sanjeev Asthana (head of agri) and Bijay Sahoo (head of HR) are likely to be moved up to the newly-created central leadership team, which will supervise the retail activities of Reliance Retail.

A new set of operation heads will manage the various retail formats. Bhavdeep Singh will take over as head of Reliance Fresh from Mr Kapur while S Radhakrishna will head hypermarkets, likely to be named Reliance Hyper Marts. Ajay Baijal will head Reliance Digital, the consumer electronics and IT store. The heads of other speciality chains will be decided at the time of their launch.

Another critical function of the retail industry—human resources—is also changing hands with Uday Bhende taking over as head from Mr Sahoo.

All format heads will report directly to Reliance Industries chairman and managing director Mukesh Ambani, said a source.

Mr Singh has been hired recently from the US, where he was working in a retail chain while Mr Bhende has been roped in from Siemens. Mr Radhakrishna joined Reliance Retail from retail chain Spencer’s last year and Mr Baijal was poached from Reliance Communications as a replacement for Rajeev Karwal.
Reliance’s new structure is a clear departure from its earlier one, which was managed as verticals, each under a CEO, with the front-end divorced from the back-end. “The structure was centralised and the merchandise and sourcing teams were independent from the actual retail business. That may end now,’’ said a source.

Veteran Reliance watchers compare this considerable change in the management structure to a similar exercise undertaken by the then Mukesh Ambani-controlled Reliance Infocomm, after the failure of the Dhirubhai Ambani Pioneer scheme.

Despite repeated attempts, the Reliance Retail spokesperson could not be contacted. While some professionals in Reliance Retail’s central leadership team are likely to play an active role, there will be some who will get sidelined in the process. While it’s not clear as to what prompted the development, analysts say growing urgency to usher in effective supply-chain co-ordination could have triggered the move.

“With each vertical working across more than one format, the company may have foreseen the problems it would lead to as the retail venture rolls out nationally,” said a source close to Reliance Retail.

Some call it a “hit-and-trial” approach to arrive at the right combination so as to gear up for the mega competition when the likes of Wal-Mart and Tesco enter the market.

Reliance Fresh just opened its 111th outlet, and the first Reliance hypermarket is likely to be set up in Ahmedabad next month while the first digital store is likely to open in Delhi on April 19.

 

economictimes