Retail-supply chain management - PowerPoint PPT Presentation

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Retail-supply chain management

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Title: Retail-supply chain management


1
Retail-supply chain management
  • Def- SCM in retail is an end to end process in
    merchandise planning and movement, from planning
    the inventory (preparing the purchase order) to
    the point of reaching the merchandise to the
    customer.
  • It is an integrated process where every activity
    is interlinked with the system for information
    throughout the cycle time of each step of the
    process so that timely action can be taken.
  • Individual activities of the SCM process-i. e..-
    warehousing, distribution , transportation both
    for inbound and outbound movement of merchandise
    which were handled separately in the past are now
    carried out in logical sequence fallowing a
    specific time table i.e. Logistics.
  • Managing continuous supply of right products, at
    right time from different entities is the
    challenge of managing supply chain.
  • Information technology tools has helped retailers
    in greatly reducing cycle times and attaining
    efficiency.

2
  • operational and quality management and control
    initiatives like JIT, TQM, ZI (0-inventory)ECR
    (efficient consumer response) and VMR (vendor
    managed inventory) all these fragmented
    approaches have now been integrated within the
    domain of SCM process.
  • Supply chain is a network of facilities and
    distribution options that performs the functions
    of procurement of materials. transformation of
    these material in to intermediate and finished
    products and distribution of these products to
    the customers.
  • Objective of SCM is to ensure reaching right
    product at right place at right time and for the
    right price and profit for the retailer (fig).
  • Product and information flow from stage of
    procurement till finished product reaches to
    store customer feed back of info from store to
    vendors. (fig)
  • Simple supply chain existed in past (fig) changes
    due to expansion of organized retail industry in
    dynamic , which now links demand management
    resource management supply management. (fig)
    Demand change as per fast changing consumer
    buying habits a short life cycles for products
    and inventory. Cost of holding inventory ay
    restrict store to provide reasonable prices as
    funds locked up. in inventory

3
  • Demand change to b handled in SCM-due to 1-short
    life cycle of products and inventory, 2-cost of
    holding inventory,3-no of suppliers large in
    retail and vary as per consumer demand patterns,
  • So sourcing, vendor management and logistics big
    role in for all rights-time, place, and form
  • SCM evolved due to cost pressures and so
    optimization with efficiencies in procurement,
    logistics etc with various models like jit-
    inventory management model, t q m each model
    oriented to optimization of sub part of system.
    Integration needed SCM.
  • Quick response-(QR)- share information/data
    thru scanning, EDI (electronic data interchange),
    for inventory UPC ( universal product code) ,QR
    information of promotion, discounts, and forecast
    in supply system and meets required availability,
    low inventory investments and logistics expenses.
    Vendor supply floor ready merchandise-direct to
    store than thru DC can eliminate secondary
    transport cost.
  • .

4
  • ECR- (efficient consumer response)- working
    groups evolved mainly in grocery stores to
    expedite and quick/accurate flows in store
    enabled DC and distributors/suppliers, an
    improvement for edi and pos systems.
  • MRP( material requirements planning) real
    beginning of SC practice fallowed by JIT in
    manufacturing and finally SCM evolved (fig)
  • Construct- framework in scm implementation
    (fig) of issues like- base level implementation
    functional structural strategic.
  • Integrated supply chain planning-
  • Demand mgt resource mgt supply mgt in retail
    store means mktg team works for sales data, ways
    to meet targets etc merchandise team works for
    designing matching C needs purchase dept work
    for getting best price for materials.

5
  • Each dept excels with aim but share common
    approach and info between each dept suppliers
    vendors
  • Nature of retail influences supply chain and
    logistics e.g. grocery has 1-short life
    cycle,-seasonal,perishable,2-high
    volatility-demand varies vagaries of weather, not
    stable,3-low predictability-difficult to forecast
    with accuracy.4-high impulse purchase,
  • To handle above uncertainty quality forecast
    helps but need to focus on lead time reductions.
  • shorter lead time means low risk due to short
    horizon of forecast.
  • Three types of lead time- 1-time to market
    period taken from identifying mkt opportunity to
    translate it in to product /service to bring it
    to market 2-Time to serve- period between
    capturing order and deliver it to retail
    customers satisfaction,3-time to react- between
    adjusting output to meet volatile demand,
  • -time to market-Not to miss out opportunity
    that may not b repeated, rtc, rte products,
  • -time to serve between mfr to retail, may b jit
    to reduce costs, - time to react
  • -time between seeing real demand and
    replenishments-fashion merchandise.

6
  • The lead time gap-
  • the difference between time of sourcing r.m
    converting it in to product movement to mkt i.e.
    logistic pipeline and customer order cycle
  • challenge for logistic mgt is to find ways to
    reduce if not close gap
  • Many retail cos r agile and r able to capture
    consumer demands/imaginations and simultaneously
    achieve twin 1-reducing logistics lead time,
    2-capture info timely abt C demand.
  • Vendor managed Inventory (VMI)
  • vendor undertakes the inventory management of
    the stores. Also called quick response inventory
    system (QRIS ),thru EDI,ECR systems eliminating
    paper work , reducing lead time, reducing vendors
    reordering errors.
  • It increase product availability and low
    inventory investments. low logistics expenses. QR
    systems enables direct delivery to store than
    thru dc thus reducing cost of dc and secondary
    transport.

7
  • VMI partnerships supplier may b mfr, distributor
    reseller decides abt order quantity, shipping
    timings etc and monitors buyers inventory
  • Collaborative planning forecasting and
    replenishment (CPFR) Aligning forecast of
    retailer and vendor thus reducing inventory
    investments and stock outs and increasing
    opportunities in stock positioning, gross margins
    and sales.
  • It is based on managing forecasts and
    inventory levels by alerting participating org to
    potential problems.
  • It is business practice that reduces inventory
    costs while improving product availability across
    the supply chain.
  • process starts with agreement between trading
    partners to share information and collaborate on
    planning with ultimate goal of delivering
    products based on true market demand.

8
  • Cross Docking
  • A system and a function of warehouse or
    distribution centre. Vendor ships merchandise to
    a DC prepacked in quantities required by each
    store. and then is stored on one side of DC and
    floor ready merchandise is then transferred to
    other side of Dc for delivery to store.
  • Merchandise goes from delivery to
    shipping/transportation dock so the term cross
    docking. The DCs r equipped with laser guided
    conveyors which reads UPC,s of incoming cases and
    direct them to right truck for delivery to
    stores. extensively used by wall mart.
  • Food and grocery supply chain- role of APMC. (ex)
  • Retail logistics-
  • Def-It is that part of supply chain process, that
    plans , implements and controls ,the efficient,
    effective ,forward and reverse flow and storage
    of goods , services and related information
    between the point of origin and the point of
    consumption in order to meet customers
    requirements.
  • Main objective of logistics management is to
    reduce inventory holding costs and improve
    profits

9
  • Efficient logistics system needs strong systems
    for information transport, DC and handling
    capabilities
  • A logistics system has to b built to suit the
    needs of the retail organization keeping in mind
    the kind of products, and competition.
  • Retail logistics is the process of managing the
    flow of merchandise from the source of supply to
    the customer.
  • It involves 1-physical movement fro mfr/dc/store
    ,2-stocking, 3-entire process management.
  • Reverse logistics- the process of planning
    implementing and controlling the efficient ,cost
    effective flow of raw materials, in-process
    inventory, finished goods and related information
    from point of consumption to the point of origin
    for the purpose of recapturing value or proper
    disposal.
  • A process of moving goods from their final
    destination for the purpose of capturing value or
    proper disposal. It is more than reusing and
    recycling .It includes redesigning packaging to
    use less material or reducing the energy and
    pollution from transportation or pollution as
    Green logistics.
  • It no goods r being sent backward the
    activity is not a reverse logistics.
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