retail supply chain a brief overview prof. r. sathyanarayanan
TRANSCRIPT
Retail Supply ChainRetail Supply Chain
A Brief Overview
Prof. R. Sathyanarayanan
Retailing World’s largest private
industry- US$ 6.6 trillion sales annually
Indian retailing Largest employer after
agriculture - 8%* of population
Highest outlet density in world - Around 12 mn outlets Still evolving as an industry
- Long way to go
Retailing: An overview
Weekly MarketsVillage FairsMelas
Weekly MarketsVillage FairsMelas
Convenience StoresMom and Pop/Kiranas
Convenience StoresMom and Pop/Kiranas
PDS OutletsKhadi StoresCooperatives
PDS OutletsKhadi StoresCooperatives
Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls
Exclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping Malls
Traditional/Pervasive Reach
Government Supported
Historic/Rural Reach
Modern Formats/ International
Evolution of Indian retail
Source of Entertainmen
t
Neighborhood Stores/Convenie
nce
Availability/ Low Costs /
Distribution
Shopping Experience/Efficie
ncy
Types of Retail Outlets
The emergence of new sectors has been accompanied by changes in existing formats as well as the beginning of new formats:• Hyper marts, typically 8,000 sq.ft and more• Large supermarkets, typically 3,500-5,000 sq. ft.• Mini supermarkets, typically 1,000-2,000 sq. ft.• Convenience stores, typically 750-1,000 sq. ft.• Discount/shopping list grocer
SUPPLY CHAIN – PUSH vs PULL MODEL
RETAIL SUPPLY CHAIN
– UNCERTAINTY FRAMEWORK
UNCERTAINTY FRAMEWORK
&
MATCHIMG SCM STRATEGIES
TYPICAL REVERSE LOGISTICS PROCESS IN RETAIL
INFORMATION TECHNOLOGY
THE BACKBONE
RFID Technology
What is RFID ?
• Radio Frequency Identification
• A micro-chip in a label used to transmit data when the label is exposed to radio waves
RFID BasicsWhat are the main components ?
• RFID Tags
• RFID Reader – Antena and transceiver(reader)
• Host Computer
• Major players: IBM, Texas Instruments
Integrated chip
RFID in Retail Supply ChainAutomate the Supply chain process
RFID TAG
Reader
RFID in Retail Supply Chain
Benefits at a glance
• Decrease in lost stock
• Faster locating stock
• Lower labour requirement
• Reduction of out-of-stock
• Low safety stock level
Retail: Wal-Mart's Business Case
$180 millionImproved visibility of where products are in the supply chain in Wal-Mart’s DCs and supplier’s warehouses offers reduced inventory and costs of carrying this inventory
Product Visibility
$300 millionImproved tracking of the more than 1 billion pallets and cases moving through DCs annually
Tracking
$575 millionReal-time product monitoring reduces warehouse shrink, administrative errors and vendor fraud
Shrink
$600 millionSmart shelves monitor on-shelf product availabilityOut-of-Stock
$6.7 billionEliminating bar code scanning on pallets and cases in the supply chain and on items in-store can reduce labor costs by 15%
Scanning
Source: eWeek, September 15, 2003
Potential Annual Saving
SavingsFunction Execution Savings
Total $8.355 Billion
• Vital to Wal-Mart's successful retail model are the tremendous Walmart distribution centers that serve the thousands of stores across the states. Georgia, for example, is home to five Walmart distribution centers-Statesboro, Macon, LaGrange, Monroe, and Douglas.
• A typical Walmart distribution center is more than one million square feet, or the equivalent of 10 Wal-Mart retail stores. More than two hundred and fifty dock doors serve the fleet of Walmart distribution center trucks that wait in the vast parking lots surrounding the buildings. The aforementioned LaGrange distribution center, which serves stores in Georgia and Alabama, loads and ships over five hundred tractor-trailers of merchandise a day from the one Walmart distribution center alone.
• A majority of the merchandise one sees in a Wal Mart store goes through a Walmart distribution center first. This enormous volume necessitates the twenty-four hour a day, seven day a week schedule.
