retail management
- 1. Retail Management and Supply Chain Management AMRITA SAJEEV Roll no : 11 MBA(IB)
- 2. Supply chain management • Supply chain management is defined as the systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.
- 3. • Excellent retail supply chain management revolves around understanding and balancing three key dimensions of availability, inventory and cost. Managing these trade-offs efficiently can result in supply chains that improve business performance and drive competitive advantage.
- 4. Goals of SCM • Decrease inventory costs by matching production to demand. This goal is consistent with the concept of JIT8 inventory management. • Reduce overall production costs by streamlining the products flow within the production process and improving information flow between business partners. • Improve customer satisfaction by offering increased delivery speed and flexibility through the seamless cooperation with the distributors and vendors.
- 5. Path to Retail management • Convergence of macro economic and structural trends created new pressures and new opportunities for retailers. • Barriers to global trade have tumbled. Tectonic shifts in demographics have created an aging population in North America and Europe and a rising middle class in other parts of the world. • These trends create opportunities for market expansion and cost advantages through the application of global sourcing strategies, which also create unpredictable consumer spending patterns and a complex supply chain , difficult and costly to manage.
- 6. Merchandise Financial Planning • As the retail industry evolves to adopt the latest technological advances to meet the needs of increasingly fickle consumers, and to manage economic fluctuations, marketplace competition has reached new heights. • Success requires an easy-to-execute, closed-loop advanced planning process that enables retailers to realize sales and inventory improvements while delivering a superior shopping experience to customers.
- 7. Buying and Assortment Management Retailers must adhere to customer-centric strategies to protect and grow market share. Such strategies demand unprecedented precision, speed, and coordination in anticipating customer needs—down to the store level. Success in executing customer-centric merchandising strategies requires a new- generation approach to buying and assortment management.
- 8. Allocation and Replenishment Management Retailers must differentiate by providing a superior shopping experience. Whether customers walk away satisfied—or have to look elsewhere to make their purchases—hinges directly on a retailer’s in-stock positions. A new-generation allocation and replenishment management solution is necessary for retailers to meet increasing expectations for in-stock levels and inventory productivity.
- 9. Cycle Time Optimization Cycle Time Optimization is designed to reduce concept–to-store cycle time. The solution can create capacity constrained product plans to synchronize with in-store assortment plans, pre-position key raw materials and optimize inventory (finished and raw material) throughout the value chain, and reduce distribution and handling costs. The entire value chain is connected through the cycle time optimization solution using an integrated retail and supply chain planning process.
- 10. Major challenges in retail management • Lack of organization and cooperation means retailers and suppliers pay higher shipping and handling costs than required. Even with industry shipping standards, lack of compliance means managing shipments takes extra handling and administrative work. Ordering inefficiencies make shipping inefficient, which requires more equipment, people, and time to meet demand. Rapid replenishment causes smaller, more frequent shipments at higher per-pound rates. • Although business-to-business e-commerce is available, lack of standardized systems creates information-transfer inefficiencies. Many suppliers manually re-enter retailers’ electronic orders or take orders by phone or fax, increasing retailer and supplier administrative costs. • Supplier-direct e-commerce hampers retailer receiving, requiring more in- store handling and manual POS updates and transaction reconciliation and payment. • Inconsistent product-category code use and product information affect sales reporting, ordering, warehouse operations and pick-and-pack, and transaction reconciliation and payment—all wasting time, money, and resources.
- 11. How do retailers take that first step to begin effective trading-partner cooperation? • Be a good retailer-do retail well—the buying and selling, financial and inventory management, merchandising, training, etc.—then you can effectively link and cooperate with trading partners for added efficiency and cost reductions. • Use your technology-Key supply-chain related capabilities—such as cycle counting, core-inventory tracking, returns, and electronic ordering and receiving—are much quicker and more accurate with technology.
- 12. • Computerize your inventory-. Integrating inventory and ordering on the computer ends manual phone and fax ordering, and eventually will lead to totally automated transactions. New standardized e-commerce initiatives through Pubnet will mean electronic orders eventually will be received with a bar-code scan to update POS inventory, reconcile purchase orders, and let retailers receive and reconcile electronic invoices.
- 13. • Do cycle counting: Cycle counting ensures data accuracy for accurate ordering and inventory analysis and tells upstream trading partners what customers are. • Track core inventory: Core inventory is first-level customer engagement, the product your customers vote for. Having core-inventory data for your store gives upstream partners strategic information for production and distribution. Aggregated industry core-inventory data helps retailers create better offerings for customers and maximize inventory investment return. Sharing inventory data among trading partners also improves freight management.
- 14. • Minimize returns: As sales data makes customer demand more visible, production and distribution can be better coordinated to meet demand and avoid waste. Linking production more closely to demand could reduce freight and returns costs. • B2B E-Commerce: EDI network for supply-chain services means retailers and suppliers soon may enjoy totally automated transactions—from purchase order to invoice with automatic POS pricing and inventory updates. EDI has obstacles, but this robust technology, in use for more than 20 years in major industries, can significantly reduce order processing and reconciliation time.
- 15. key decisions and activities areas in the integrated supply chains • Configuration of product and network, which covers the decisions concerning the main rules of cooperation. • Formation of the production network, mainly the choice of production facility and warehousing locations as well as their capabilities. • Product design with involvement the research and development abilities of suppliers.
- 16. • Process optimization in order to reduce cycle times and inventory level in the cost- effective way. • Delivering raw - materials, parts or modules for the final goods producers. • Delivering customer goods to wholesalers or selling small quantities of this goods to the final customers.
- 17. • Providing transportation and forwarding services. • Manufacturing goods and providing other services for market niches • Trading under well known brand name of large distribution networks (franchising).
- 18. Scope of changes Hierarchical supply chains Polycentric supply network Competences and skills Narrow in particular technological or functional areas Wide based on process orientation, ability to performance evaluation and outsourcing Flexibility Low or middle Middle or high Role of small retailers Low and passive Increasing and active Key intermediary Wholesaler or large retail network Brokers or third party logistics providers Dominant logistics services model Self- or combined- service model Public logistics service providers Small truck companies Large number of independent firms Subcontractors dependent on market leaders
- 19. The Seven Principles of Supply Chain Management • Segment customers based on service needs. • Customize the logistics network. • Listen to signals of market demand and plan accordingly. • Differentiate product closer to the customer. • Source strategically.
- 20. • Develop a supply chainwide technology strategy. • Adopt channel-spanning performance measures.
- 21. • Translating Principles into Practice :Companies that have achieved excellence in supply chain management tend to approach implementation of the guiding principles with three precepts in mind. Orchestrate improvement efforts Recognize the difficulty of change Reaping the Rewards of Excellent Supply Chain Management
- 22. Role of Supply Chain in Indian Organized Retail Sector • The Indian Supply Chain Council have been formed to explore the challenges that a retailer faces and to find possible solutions for India. • The role of supply chain in the organized retail sector in India should be a shelf- centric partnership between the retailer and the manufacture for this will create supply chains that are loss free. • It is the supply chain that ensures to the customer in all the various offerings that a company decides for its customers, be it cost, service, or the quickness in responding to ever changing tastes of the customer.
- 23. • The infrastructure in India in terms of road, rail, and air links are not sufficient. And so warehousing plays a major role as an aspect of supply chain operations. • the Indian retailer is trying to reduce transportation costs and is investing in logistics through partnership or directly. • There is also need for the supply chain to be more cost efficient and collaborative to win the immense competition in this sector
- 24. Effective SCM enables • Realistic ordering lead-times: Suppliers are not surprised by the next order. Retailers respond better to demand spikes, minimize forced markdowns and avoid obsolete- inventory costs. • Averting problems: Stores easily identify potential stock-outs and request replenishment before the inventory drops to zero. Deciding to de-list or replace a product is easier.
- 25. • Facilitating resource planning and allocation: Product forecasts and supply schedules are easily converted to perform space planning, establish staffing needs and organize inbound/outbound shipments. Financial experts can plan cash flow and analyze margins into the future. • Four R's of SCM: 4 `R's of SCM -Right time, Right place, Right price, Right quantity .
- 26. • Cold Chain The booming retail sector has set off growth in the cold chain segment as well. It is a highly specialized service and caters to time sensitive and perishable items. The cold chain industry is growing at 20-25 per cent. However, there is an urgent need to establish the necessary infrastructure for an effective cold chain.
- 27. In order to enable to grow in these complex and highly competitive environment retailers must focus on : • Provide a high quality, differentiated customer experience by carrying the right products, at the right price and by reducing out of stocks • Streamline and take cost out of the supply chain to maintain margins and competitiveness by improving asset utilization, inventory visibility, and by ensuring that each division and supply chain partner has access to a uniform source of product and supply chain data
- 28. • Identify ways to grow revenue beyond simply opening more stores by providing assortments that are tailored to specific stores • Rapidly execute an advanced planning process that enables a differentiated superior shopping experience, customized to the store-level and capable of enabling course corrections in- season, while simultaneously driving inventory productivity
- 29. • Optimize the structure of the supply chain to support global sourcing and lean supply chain strategies, and also execute these strategies in the most cost efficient manner in order to protect and grow margins