Supply Chain Management in Retail

By

Ashish Tagade

Concept of SCM

Those activities associates with moving goods from the raw materials stage though to the end user. It not only includes the manufacturer and suppliers but also transport, warehouse, retailers and customer also. These all activities are monitor by the information system.

Cycle I

Cycle

II

Cycle III

Cycle

IV

Customer

Distributor

ManufacturerSupplier

Retailer

Objective of SCM in Retail

Example of Supply Chain in Retail

Information Flow

Raw Materials

RETAILERFACTORY DISTRIBUTOR WHOLE SELLER

SUPPLIER

Finished Goods

Need of SCM in Retail

Cost Cutting

Time Saving

Customer Satisfaction

Increase Profit Margins

Need of SCM in Retail

Physical Flows

Information Flows

Financial Flows

Integrated Supply Chain Management

SCM is an integrated process where every activity is interrelated with the system for efficient flow of material from supplier to the end users.

Supplier Manufacturer Distributor Retailer Customer

Benefits of Integrated Supply Chain

Achieving the best delivery performance.

Reduction in inventory

Lower supply chain cost

Improvement in overall productivity

Accuracy in forecast

Concept of supply chain could be

thought of as a loop

SCM starts with the customer and ends

with the customer

Customer could be an internal customer or an external customer

Process View Of SCM

Process View Of SCM

Push View of SCM

• A push-based SCM takes longer to react to the changing market place.

• In a push-based supply chain, production decisions are usually based on long-term forecasts.

• In push-based strategies,SCM experience increased transportation costs, high inventory levels and high manufacturing costs .

Process View Of SCM

Pull View of SCM

• In a pull-based supply chain, manufacturing is demand driven so that it is coordinated with actual external customer demand rather than a forecast.

• Lead-time reduction occurs as the variabilities are better monitored in pull-based SCM.

• Pull-based systems are often difficult to implement when lead times are so long that it is impractical to react to demand information.

Module 1:Supply Chain Management

Evolution Of Scm

• Conventional Approach

• Modern Approach

Conventional Approach

Sales & Distribution(Demand)

Manufacturing(Capacity)

Procurement(Material)

CUSTOMER

Optimize to Mfg objectives

Optimize toLogistics obj

Optimize toSales & Mktg obj

Modern Approach

• Just In Time (JIT) Inventory Management Model

• Total Quality Management (TQM) Model

• Efficient Consumer Response (Ecr) Working Group.

Innovation in SCM

• Vendor managed inventory

• Collaborative planning forecasting and replenishment.

• Cross docking

Functions of Retail Supply Chain

• Physically movement of goods from one outlet to another.

• Stocking the good at the outlets where needed.

• Management of the entire process.

Retail Logistics

Retail logistics is the organized process of managing the flow of merchandise from the source of supply to customer.

The main objective of logistics management is to reduce the inventory – holding cost and improve profits

Benefits of Retail Logistics

New Emerging Concepts of Logistics

• Third party logistics

Supply of logistics related operations b/w traders by an independent organizations. ex- Federal Express, DHL, Maersk Logistics.

New Emerging Concepts of Logistics

Fourth Party Logistics

It refers to the evolution in logistics from suppliers focused on ware housing and transportation to suppliers offering a more integrated solution.

New Emerging Concepts of Logistics

Reverse Logistics

Process of moving goods from their typical final destination, for the purpose of capturing the value or proper disposal .

Stands for all operations related to the re use of products & materials