| Role of Supply Chain in Indian Organized Retail Sector | | | | indeed leverage the brand to a great extent. The |
| Introduction: | | | | main asset retailers realize is that knowing what is |
| | | | | selling and what is not can improve the inventory |
| The | | | | processes. Inventory is the biggest cost factor, and |
| role of supply chain in Indian organized retail is very | | | | if not managed well, it can also be the biggest drain. |
| significant for on it depends the growth of this | | | | That's why retailers and their trading partners today |
| sector. The Indian Supply Chain Council have been | | | | set store by the inventory process and its impact. |
| formed to explore the challenges that a retailer faces | | | | Effective SCM enables: |
| and to find possible solutions for India. | | | | Realistic ordering lead-times: Suppliers are not |
| The role of | | | | surprised by the next order. Retailers respond better |
| supply chain in the organized retail sector in India | | | | to demand spikes, minimize forced markdowns and |
| should be a shelf- centric partnership between the | | | | avoid obsolete-inventory costs. |
| retailer and the manufacture for this will create | | | | Averting problems: Stores easily identify potential |
| supply chains that are loss free. This will also give rise | | | | stock-outs and request replenishment before the |
| to top and bottom line growth. In the organized retail | | | | inventory drops to zero. Deciding to de-list or replace |
| sector in India the presence of fresh produce | | | | a product is easier. |
| (vegetables and fruits) is very small. This is so for the | | | | Facilitating resource planning and allocation: Product |
| nature of supply chain is very fragmented. This | | | | forecasts and supply schedules are easily converted |
| shows the important role of supply chain in the | | | | to perform space planning, establish staffing needs |
| organized retail sector in India. | | | | and organise inbound/outbound shipments. Financial |
| In the | | | | experts can plan cash flow and analyse margins into |
| organized retail market in India, the role of supply | | | | the future. |
| chain is very important for the Indian customer | | | | Four R's of SCM: |
| demands at affordable prices a variety of product | | | | Follow the 4 `R's of SCM — Right time, Right |
| mix. It is the supply chain that ensures to the | | | | place, Right price, Right quantity — to reap the |
| customer in all the various offerings that a company | | | | advantages of: |
| decides for its customers, be it cost, service, or the | | | | The key players in the logistics |
| quickness in responding to ever changing tastes of | | | | industry are gearing up to meet the challenges by |
| the customer. | | | | initiating both organic and inorganic growth to |
| The infrastructure in | | | | leverage the retail opportunity. Logistics firms have |
| India in terms of road, rail, and air links are not | | | | also started focusing on related services such as |
| sufficient. And so warehousing plays a major role as | | | | Customs clearing and forwarding, inbound |
| an aspect of supply chain operations. To overcome | | | | warehousing, labeling and packaging, fleet |
| these problems, the Indian retailer is trying to reduce | | | | management, order picking and inventory |
| transportation costs and is investing in logistics | | | | management. |
| through partnership or directly. The Indian organized | | | | Cold Chain |
| retail sector is growing so the role of supply chain | | | | The booming retail sector has set |
| becomes all the more important. It should become all | | | | off growth in the cold chain segment as well. It is a |
| the more responsive and adaptive to customers | | | | highly specialized service and caters to time sensitive |
| demand. There is also need for the supply chain to | | | | and perishable items. The cold chain industry is |
| be more cost efficient and collaborative to win the | | | | growing at 20-25 per cent. However, there is an |
| immense competition in this sector. | | | | urgent need to establish the necessary infrastructure |
| The role of supply chain | | | | for an effective cold chain. |
| in Indian organized retail has expanded over the | | | | Excellent retail |
| years with the boom in this industry. The growth of | | | | supply chain management revolves around |
| the Indian retail industry to a large extent depends | | | | understanding and balancing three key dimensions of |
| on supply chain, so efforts must be made by the | | | | availability, inventory and cost. Managing these |
| Indian retailers to maintain it properly. | | | | trade-offs efficiently can result in supply chains that |
| Supply chain and retail: The means to the end | | | | improve business performance and drive competitive |
| A retail revolution is | | | | advantage. |
| happening in the country. For global giants looking at | | | | In order to enable to grow in these |
| newer markets, India presents exciting opportunities | | | | complex and highly competitive environment retailers |
| on account of its vast middle-class and a virtually | | | | must focus on three key strategy imperatives: |
| untapped retail industry. | | | | - Provide a high quality, differentiated customer |
| The Indian retail sector has seen | | | | experience by carrying the right products, at the |
| unprecedented growth in the last few years. The | | | | right price and by reducing out of stocks |
| KPMG report, `Consumer Markets in India: the next | | | | - Streamline and take cost out of the supply chain to |
| big thing has predicted that the organized retail | | | | maintain margins and competitiveness by improving |
| sector is expected to grow at rate higher than GDP | | | | asset utilization, inventory visibility, and by ensuring |
| growth in the next five years. The AT Kearney's | | | | that each division and supply chain partner has access |
| 2006 Global Retail Development Index positions India | | | | to a uniform source of product and supply chain data |
| as a leading destination for retail investment. | | | | - Identify ways to grow revenue beyond simply |
| The success in this competitive | | | | opening more stores by providing assortments that |
| and dynamic sector depends on achieving an efficient | | | | are tailored to specific stores |
| logistics and supply chain, which can be provided by | | | | Everyday, best-in-class retailers all over the world are |
| professionals, as they combine the best systems and | | | | using i2's retail software solutions to power strategies |
| expertise to manage a ready flow of goods and | | | | that enable a superior, differentiated customer |
| services. | | | | shopping experience, supply chain efficiency, and |
| The retail boom promises to | | | | revenue growth. i2's retail solutions are scalable, |
| give an impetus to a host of allied sectors and the | | | | designed to wrap around a retailers unique business |
| logistics industry, as the backbone of the retail | | | | process, and are modularized to enable sensible |
| sector, stands to gain the maximum. | | | | and rapid implementations. With i2's retail solutions, |
| In India, the logistics market is | | | | retailers can: |
| mainly thought to mean transportation. But the major | | | | - Rapidly execute an advanced planning process that |
| elements of logistics cost for industries include | | | | enables a differentiated superior shopping |
| transportation, warehousing, inventory management, | | | | experience, customized to the store-level and capable |
| courier and other valued-added services such as | | | | of enabling course corrections in-season, while |
| packaging. | | | | simultaneously driving inventory productivity |
| The logistics costs account for 13 | | | | - Optimize the structure of the supply chain to |
| per cent of GDP. The industry is currently on an | | | | support global sourcing and lean supply chain |
| upswing and is poised for a growth of 20 per cent in | | | | strategies, and also execute these strategies in the |
| the coming years. | | | | most cost efficient manner in order to protect and |
| With the expansion of retail, | | | | grow margins |
| supply chain will take on an increasingly important role. | | | | Rapidly, and cost effectively, implement and change |
| With the end consumer becoming more demanding | | | | planning and supply chain business processes that |
| and time conscious, the need for just-in-time services | | | | span organizations both inside and outside the four |
| is increasing. In retail, where competition is intense | | | | walls of the enterprise in order to stay ahead of the |
| and stakes are high, customer satisfaction is | | | | competition. |
| paramount. | | | | Conclusion: |
| Network critical | | | | |
| Industry experts opine that in India | | | | The role of supply chain in Indian organized retail has |
| too the large retail chains will follow the global model | | | | expanded over the years with the boom in this |
| of outsourcing their logistics so as to better manage | | | | industry. The growth of the Indian retail industry to a |
| complex supply chains and focus on their core | | | | large extent depends on supply chain, so efforts |
| business. | | | | must be made by the Indian retailers to maintain it |
| For the retail chains in | | | | properly. |
| agri-produce, efficiency of logistics is critical and can | | | | |