supply chain management in retail

8/22/2019 Supply Chain Management in Retail

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Supply Chain Management in

Retail

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The Basic Supply Chain

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RETAILER

Supplier

Raw/Pkg Matl

Warehouse

Stock Manufacturer

Manufacturer

Warehouse

Stock

Retailer

Warehouse

Stock

Retail

Store

Capacity CapacityStock Stock Stock Stock

Flow of orders

Flow of goods

Consumers

Feedback

Products


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Supply Chain Objectives

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Right

Deliver

Product

Place

Time

Price & Profit


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Typical Supply Chain

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Suppliers Manufacturing DistributionCenter(s)

Customers

Physical flows

Information flows

Financial flows


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Pressures

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Compet i t ion

Prices

Environm ental Concerns

Technology

Product Li fecycles


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Supply Chain Management

Three Key Links

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SupplyManagement

ResourceManagement

DemandManagement


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Benefits of Supply Chain Integration

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Cost Quality

Lead

Time Service

Levels

Value


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Need for SCM in Retail

Short Life Cycles

High Volatility

Low Predictability

High Impulse Purchase

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Lead Times

Time to Market

Time to Serve

Time to React

The Lead Time Gap

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Innovations in SCM

Cross docking

CPFR(Collaborative Planning,Forecasting and Replenishment)

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Retail Logistics

Logistics - the french word loger.

Retail logistics incorporates the following functions :

Thephysical movementof goods

The holdingof these goods at stock holding points The holding of goods in quantities required to meet

the demand from the end consumer

The management and administration of the

process.

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Retail operations

DC

Stores Consumers

New Product

Development/

Selection

Raw

Materials/

Components

Sourcing

Plants

Buyer/Planner

Forecast Demand

Set Inventory levels

Pricing & Promotion

Lead time

management e.g.

when to use air

freight

Buyer & Designer

Assortment planning

Store Manager

Execution e.g.

product display,

customer service

POS price

changes

Accuracy of

inventory data

Goal = Max Profit = revenue variable cost (cost

of goods, inventory holding and obsolescence)


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Scientific retailing

DC

Stores Consumers

New Product

Development/

Selection

Raw

Materials/

Components

Sourcing

Plants

Sales & Inventory by

SKU/Store

Loyalty Card Information

Determine

Optimal Inventory,

Price and

Promotion over

Time for Season

Estimate

Demand Density

Track Data Accuracy

Data Warehouse for model calibration

-seasonality, price elasticity,

size mix, store differences


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Product Life Cycle PlanningMerchandise

TestRead & React

PeriodReplenishment / Model

Stock Setting

Phase Down / End

of Life / Markdown

RetirementPregnancy Middle ageYouth

Forecast initial

demand

Survey experts

Mall intercepts

Prior products

Merchandise test

Initial buy

Prepositionmaterials

Traditional

long life cycle

replenishment

set target

stock levels

for each sku-

store

Read early sales,

update forecast

and reorder as

needed

Expedite

resupply?

Rollout to more

stores or drop

stores?

Manage down

replenishment

flow

Drop product in

selected stores

Markdown price

or transfer to

outlet stores


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Good logistics cuts costs, speedswork and improves customer

service.


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Logistics management

The core of SCM is in logistics management.

Logistics strategy can either be pull strategy or a

push strategy.

At the heart of logistics is the distribution centre.Itserves several functions from co-ordinating inbound

transportation ,receiving ,checking , storing ,cross

docking and coordinating outbound transportation.

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Reverse Logistics

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supply chain management in retail

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