Retail Supply Chain

A Brief Overview
Prof. R. Sathyanarayanan

Retailing: An overview

Retailing Worlds 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

Evolution of Indian retail

Historic/Rural Reach Traditional/Perva sive Reach Government Supported

Modern Formats/ International

Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls

PDS Outlets Khadi Stores Cooperatives Convenience Stores Mom and Pop/Kiranas

Weekly Markets Village Fairs Melas

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 Basics
What are the main components ? RFID Tags
Integrated chip

RFID Reader Antena and transceiver(reader) Host Computer Major players: IBM, Texas Instruments

RFID in Retail Supply Chain

Automate 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

Function
Scanning Out-of-Stock Shrink Tracking Product Visibility

Execution
Eliminating bar code scanning on pallets and cases in the supply chain and on items in-store can reduce labor costs by 15% Smart shelves monitor on-shelf product availability Real-time product monitoring reduces warehouse shrink, administrative errors and vendor fraud Improved tracking of the more than 1 billion pallets and cases moving through DCs annually Improved visibility of where products are in the supply chain in Wal-Marts DCs and suppliers warehouses offers reduced inventory and costs of carrying this inventory

Savings Savings
$6.7 billion $600 million $575 million $300 million $180 million
Potential Annual Saving

Total
Source: eWeek, September 15, 2003

$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.

THANK YOU

profsathya@gmail.com