Supply Chain Management in

Retail

By
Ashish Tagade
Concept of SCM
Those activities associates with moving goods
from the raw materials stage though to the end
user. It not only includes the manufacturer and
suppliers but also transport, warehouse,
retailers and customer also. These all activities
are monitor by the information system.
 Cycle I

Supplier
Manufacturer

Customer

Retailer Distributor

Cycle III
Objective of SCM in Retail
 Example of Supply Chain in
Retail
SUPPLIER FACTORY DISTRIBUTOR WHOLE SELLER RETAILER

Raw Materials
Finished Goods

Information Flow
 Need of SCM in Retail
Cost Cutting

Time Saving

Customer Satisfaction

Increase Profit Margins

 Need of SCM in Retail

Physical Flows

Information Flows

Financial Flows
 Integrated Supply Chain
Management
SCM is an integrated process where every
activity is interrelated with the system for
efficient flow of material from supplier to
the end users.

Supplier Manufacturer Distributor Retailer Customer

 Benefits of Integrated Supply
Chain
Achieving the best delivery performance.

Reduction in inventory

Lower supply chain cost

Improvement in overall productivity

Accuracy in forecast
Process View Of SCM

Customer could be an internal customer or an

external customer
 Process View Of SCM
Push View of SCM
• A push-based SCM takes longer to react to the
changing market place.
• In a push-based supply chain, production decisions
are usually based on long-term forecasts.
• In push-based strategies,SCM experience increased
transportation costs, high inventory levels and high
manufacturing costs .
 Process View Of SCM
Pull View of SCM
• In a pull-based supply chain, manufacturing is
demand driven so that it is coordinated with actual
external customer demand rather than a forecast.
• Lead-time reduction occurs as the variabilities are
better monitored in pull-based SCM.
• Pull-based systems are often difficult to implement
when lead times are so long that it is impractical to
react to demand information.
 Evolution Of Scm

• Conventional Approach

• Modern Approach

Module 1:Supply Chain Management

Conventional Approach
Procurement Manufacturing Sales & Distribution
(Material) (Capacity) (Demand)

C
U
S
T
O
M
E
R

Optimize to Optimize to Optimize to

Mfg objectives Logistics obj Sales & Mktg obj
 Modern Approach
• Just In Time (JIT) Inventory Management
Model

• Total Quality Management (TQM) Model

• Efficient Consumer Response (Ecr) Working

Group.
 Innovation in SCM

• Vendor managed inventory

• Collaborative planning forecasting and

replenishment.

• Cross docking
 Functions of Retail Supply
Chain
• Physically movement of goods from one outlet
to another.

• Stocking the good at the outlets where needed.

• Management of the entire process.

 Retail Logistics
Retail logistics is the organized process of
managing the flow of merchandise from the
source of supply to customer.

The main objective of logistics management is to

reduce the inventory – holding cost and improve
profits
Benefits of Retail Logistics
 New Emerging Concepts of
Logistics
• Third party logistics

Supply of logistics related operations b/w

traders by an independent organizations.
ex- Federal Express, DHL, Maersk
Logistics.
 New Emerging Concepts of
Logistics
Fourth Party Logistics

It refers to the evolution in logistics from

suppliers focused on ware housing and
transportation to suppliers offering a more
integrated solution.
 New Emerging Concepts of
Logistics
Reverse Logistics
Process of moving goods from their typical
final destination, for the purpose of capturing
the value or proper disposal .

Stands for all operations related to the re use of

products & materials