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Retail Supply Chain

Management

Presentation
Group Members
 Zeeshan Maqbool L1F16BBAM0011

 Abdullah Farooq L1F16BBAM0010

 Rabeel Fariq L1F16BBAM0002

 Muhammad Ali L1F16BBAM0008


Agile or Adaptive Supply Chain

 Focuses on being responsive and flexible to changing customer needs while


simultaneously hedging against supply disruption risks.

Goal
 Quickly respond to changing supply and demand conditions

https://www.supplychainquarterly.com/topics/Logistics/20191023-how-to-respond-faster-to-changing-customer-needs/
Agile: Development
Fisher LEE
 Varying conditions of  Varying supply uncertainty
demand uncertainty. should also be considered.

Johansen, Søren. (1999). Lot sizing for varying degrees of demand uncertainty. International Journal of
Production Economics. 59. 405-414. 10.1016/S0925-5273(98)00107-8.
Factors of Uncertainty in demand

 Quality of the product of competitors


 Price of the product of competitors
 Natural disasters
 Life cycle of product
 Availability of the Product in Market
 Variation of Lead time
 Seasonal Effect

IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 12, Issue 6 (Sep. - Oct.
2013), PP 70-77
Why do we need to be agile?

 Global Competition is intensifying

 Mass markets are fragmenting into niche markets.

 Cooperation among companies is becoming necessary, including


companies who are in direct competition with each other.

 Very short product life-cycles, development time, and production lead


times are required.
(Anuziene & Bargelis)
Relationshi
p
Flexibility

Sensitivity
Agile Supply
Chain
Informatio
n
Innovative
process
Rodney Thomas Associate Professor (479) 575-7674
rthomas@walton.uark.edu
Relationship
 High Collaboration

 High Coordination

 High Communication

 Team Synergies culture

 Rapid Partnership formation


Sensitivity

 High alertness

 Market sensing

 Quickly identify changing conditions

Rodney Thomas Associate Professor (479) 575-7674


rthomas@walton.uark.edu
Innovative process
 Capacity/Inventory buffers

 High process Integration

 The Use Of Internet And Information Technology For The


Real-time Sharing Of Data Between:
• Customers • Buyers • Suppliers
• Planners • Manufacturers • Distributors

Basu R, Wright JN. Total supply chain management. Routledge; 2010 May 14.
Information
 High Information sharing

 High Connectivity

 Electronic Commerce

Rodney Thomas Associate Professor (479) 575-7674


rthomas@walton.uark.edu
Flexibility

 Ability to quickly change

 Modify operations to meet


new demand

 Responsive to
volatile business Environment

Rodney Thomas Associate Professor (479) 575-7674


rthomas@walton.uark.edu
Benefits of Using Agile
Supply Chain
 Best approach to cost, Service
and time trade-offs under uncertain conditions.

 Minimize adverse effects of uncertain demand and supply conditions.

Amoozad Mahdiraji, Hannan & Razavi Hajiagha, Seyed Hossein & Pourjam, Rouzbeh. (2011)
Competitive Advantage

 Integration of organization, people and technology into a coordinated interdependent system

 An agile supply chain responds rapidly to changes in the business environment; align with the
firm's competitive strategy to improve competitive performance, hence gain competitive
advantage.

 Supply chain agility is manifested through a company’s ability to quickly detect changes,
opportunities, and threats (alertness), quickly access relevant data (accessibility),make resolute
decisions about how to act (decisiveness), quickly implement those decisions (swiftness), and
modify its range of supply chain tactics and operations to the extent needed to implement its
strategy (flexibility).

https://www.supplychain-academy.net/boosting-supply-chain-agility-for-competitive-advantage
When to use Agile Supply
chain Strategy
Innovative Products
 Difficult to Forecast the product demand

 Short selling season of a product

 High Inventory cost

 High profit margin

 Lower volume per SKU

 High Stock out cost of a product

 High risk of obsolescence

Rodney Thomas Associate Professor (479) 575-7674

rthomas@walton.uark.edu
Evolving Supply

 Vulnerable to breakdown

 Variable Lead time

 Potential quality problems

 Limited Supply sources

 More Process Change

 Potential Capacity constraints

 Difficult to changeover
Rodney Thomas Associate Professor (479) 575-7674
rthomas@walton.uark.edu
Real life Example

Zara’s Supply Chain

Rachel Smith • Framingham Contributor October 5, 2017


ZARA’s competitive advantage

As Zara has a competitive advantage due to its supply chain.

 They procured its raw material from ITALY, SPAIN and


GREECE.

 They only procured fabric in 4 colors.

 They cut the fabric in house by using high tech cutting facilities.

 Cutted fabric supplied to the factory.


HOW ZARA MOVE IT ?
 Zara has a distribution center known
as “Cube”.

 Factory is connected with that cube by


the underground monorails system.

 Monorails system move that cutted


fabric for the production of desired
clothes.
How ZARA KNOW THE DEMAND ?

 Sales staff has wireless handsets which provide data to the


store manager.

 Store managers update the head office every day.

 So that’s why Zara hire store managers very carefully.

 This thing reduce the bull wipe effect.


DESIGNERS

 Company provide new designed products in its stores in 4-5


weeks.

 Designers team come up with 1000 designs every year.

 Zara unique selling proposition is to create latest trend within


2 weeks.
STORES

 After manufacturing, finished products move back to the


cube.

 And then transferred to the stores as per demand.

 Cube is fully automated with two levels one for hang and the
other for packed.
Comparison of Lean and
Agile Supply Chain
Lean Verses Agile Supply Chain

 A Lean supply chain defines how a well-designed supply chain should


operate, delivering products quickly to the end customer, with minimum
waste.

 An Agile supply chain is a system of product distribution concerned with


doing things quickly, saving costs, being responsive to market demands,
maintaining flexibility, and keeping productivity high.

Vitasek, Kate & Manrodt, Karl & Abbott, J.. (2005)


Vitasek, Kate & Manrodt, Karl & Abbott, J.. (2005)
Leagility and Pareto Curve
 Leagility is the combination of leanness and agility within a total
supply chain strategy using a decoupling point so as to best suit the
need for responding to the downstream volatile demand while
providing level scheduling upstream from the market place.

 Pareto is used mainly in companies for determining different strategies


of materials control or for applying 6 sigma concepts.

Amir, Faiza. (2011). Significance of Lean, Agile and Leagile Decoupling Point in Supply Chain Management. Journal of Economics and Behavioral Studies. 3.
10.22610/jebs.v3i5.282.
Conclusion

 The difference between lean and agile is the fluidity with


response to the market. A lean supply chain focuses on
cutting costs by producing high volumes of products with
low variability. An agile supply chain focuses on
responding to the market demand with smaller,
customizable batches of items.
Thank You
References
 https://www.supplychainquarterly.com/topics/Logistics/20191023-how-to-respond-faster-to-changing-
customer-needs
 Johansen, Søren. (1999). Lot sizing for varying degrees of demand uncertainty. International Journal of
Production Economics. 59. 405-414. 10.1016/S0925-5273(98)00107-8.

 IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume
12, Issue 6 (Sep. - Oct. 2013), PP 70-77

 Professor Hau Lee, Stanford University


 Rodney Thomas Associate Professor (479) 575-7674 rthomas@walton.uark.edu

 Vitasek, Kate & Manrodt, Karl & Abbott, J.. (2005). What makes a lean supply chain. Supply Chain
Management Review. 9. 39-45.
References

 https://www.supplychain-academy.net/boosting-supply-chain-agility-for-competitive-advantage

 Amoozad Mahdiraji, Hannan & Razavi Hajiagha, Seyed Hossein & Pourjam, Rouzbeh. (2011). A Grey
Mathematical Programming model to Time- Cost Trade-offs in Project Management under
Uncertainty. 10.1109/GSIS.2011.6044123.

 Johansen, Søren. (1999). Lot sizing for varying degrees of demand uncertainty. International Journal
of Production Economics. 59. 405-414. 10.1016/S0925-5273(98)00107-8.

 Amir, Faiza. (2011). Significance of Lean, Agile and Leagile Decoupling Point in Supply Chain
Management. Journal of Economics and Behavioral Studies. 3. 10.22610/jebs.v3i5.282.