Retail Supply ChainRetail Supply Chain

A Brief Overview

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

Convenience StoresMom and Pop/Kiranas

PDS OutletsKhadi StoresCooperatives

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 /

DistributionShopping

Experience/Efficiency

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 TECHNOLOGYTHE BACKBONE

RFID TechnologyWhat 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 ChainBenefits 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.

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