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

Savings
Savings

Execution

Scanning

Eliminating bar code scanning on pallets and cases

in the supply chain and on items in-store can
reduce labor costs by 15%

$6.7 billion

Out-of-Stock

Smart shelves monitor on-shelf product availability

$600 million

Shrink

Real-time product monitoring reduces warehouse

shrink, administrative errors and vendor fraud

$575 million

Tracking

Improved tracking of the more than 1 billion pallets

and cases moving through DCs annually

$300 million

Product
Visibility

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

$180 million

Total
Source: eWeek, September 15, 2003

Potential Annual Saving

$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