SUPPLY CHAIN MANAGEMENT IN THE RETAIL SECTOR

Abstract

Efficient supply chain management has a cascading impact on all aspects of retail – from sourcing of raw materials based on demand forecast and then speeding up the production to getting the product to the store and finally to the consumer, everything depends on the supply chain. Experts unanimously agree that besides infrastructure and complications in taxation, it is the efficiency of manpower and adoption of technology that gives a huge boost to supply chain management. However, it still remains to be seen whether the Indian Retail Industry has actively invested in the smooth running of its backend supply and logistics. India is going through a retail revolution. All the big business houses are entering this Sector and it is growing at a very past pace. International giants in this sector are also trying to enter the Indian market. Retail is offering tremendous opportunities in employment. Supply chain management can be a difficult maze. In the retail sector, this maze involves getting products from the right vendors to the right customers, while minimizing inventory levels, warehousing and transportation cost. Retail sector must walk the very thin line of having enough inventories to avoid stock outs, while at the same time keeping inventories low enough to minimize carrying costs and respond to ever-changing consumer demands. There is a solution; it is the utilization of pool points for distribution, which is sometimes referred to as cross-docking. supermarkets with high and quick flow through may also refer to this type of distribution as mixing centers. For supermarkets, the pool point process starts by figuring out where to source the products you want to sell. Many products are being sourced offshore, which require longer lead-times and larger amounts of inventory. The goal can be to have the offshore product containerized so it could arrive at a deconsolidation center to be delivered directly to store through the network of pool points. Or on the domestic side, the goal may be to have the vendor pull product and palletize the orders by store so those products could be optimized for store direct delivery through pool points. Think of what the cost savings would be if they could reduce or eliminate the need to carry inventory in their distribution centers.