Supply Chain Management in Retailing

October 19, 2013

What you should know

Be able to define supply chain management in retailing Describe the channel elements and value contributions Understand the logistics and the functions of back end merchandising management How has supply chain management improved efficiencies

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Supply Chain Management (SCM)

It is an end to end process in merchandise planning and movement. Process starts from planning the inventory to the point the merchandise reach the customers. It is an integrated process where every activity is interlinked with the system. Information is required throughout the cycle time so that timely action can be taken. Process include warehousing, distribution, transportation (inbound / outbound) Information backbone (technology) process, support retailers in reducing the cycle time and attain efficiencies
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Efficient Inventory Planning (EIP)

EIP enables the retail organization to achieve its strategies and benchmark standards of the customer delivery. EIP also reduces the supply chain expenses. Forward Planning: is carried on by forecasting sales at the beginning of the month (BOM) and end of the month inventories (EOM) for specific periods, and prepared the Open to Buy (OTB) plans. EIP optimizes the purchasing controls through OTB so that planned stock turns are achieved for the store with Just In Time (JIT) inventories for freshness and achieving customer satisfaction through the 7 rights or merchandising Pre Purchase Order (PPO) and Purchase order (PO): PPO is a tentative plan of season for order placement and PO is confirmed order for supply
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Integrated Supply Chain

The end to end integration of all supply chain elements and functions are achieved by applying interlinked packages for perfect information management Designing stage at vendor level consumer response at retail stage Benefits include Achieving the best delivery performance Reduction in inventory Faster fulfillment of cycle time Accuracy in forecasting Lower supply chain cost Improvement in over all productivity Improvement of capacity utilization
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Integrated Supply Chain

Vendor management Selecting the right vendors capable of giving the right quality of merchandise and meeting delivery deadlines Ability to deliver the right quantities Get the right hit ratio ( gap between delivery and purchase orders) and eliminate backlog in deliveries In chain store scenario, direct delivering to stores in important element in attaining good supply chain efficiency. This eliminated the inventory carrying cost

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Integrated Supply Chain

Electronic Data Interchange (EDI)

The system helps in establishing an efficient information flow on stock movement and the vendors get to know sales and inventories instantly Reorder supplies are immediately planned and executed by vendors following norms The process eliminates the time taken to exchange documents for placing orders to achieve just in time inventory management EDI is conducted through web enabled servers which may / may not be linked with ERP (Enterprise Resource Planning) system of the vendors and organization

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Integrated Supply Chain

Warehouse management : Many functions are performed by warehouse management or the distribution centers including

Receiving ordered stock Checking for the right quality Quantity and price Temporary storing and docking Tagging with MRP and security tags Re organizing the merchandise Receiving goods returned from retail stores Resending products to vendors or the manufacturers

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Integrated Supply Chain

Good Received Note (GRN) It is prepared when stocks received from suppliers / vendors is checked and matches with relevant purchase order (PO) Conducted after certifying all the elements of quality, quantity, packaging etc GRN marks the stage when authorization for payment to the vendor by finance / accounts department

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Efficient Consumer Response (ECR)

This is a demand driven replenishment system to link all parties in the logistics channel to create a flow through the distribution network Replenishment depends on consumer demand and through Point of Sale (POS) information An integrated supply chain enables the free flow of information, merchandise and services through the system

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End

Name
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Retail management Quiz # 1 Date

Question: How has supply chain improved the over all working of the organization
List atleast 5 key points and explain with examples

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