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SUBMITTED TO Brig. s.k dubey, vsm TANDON deputy director 2009-2014 BBA+ MBA A3923009011
SUBMITTED BY SANJITA AMITY SCHOOL of business CLASS OF
SANJITA TANDON DATE: . Dr. I too have a purpose to express my gratitude towards those individuals without whose guidance the report would not have been possible. I also take this opportunity to express a great sense of gratitude towards Brig. Himanshu Mohan and other members of the organization for their support and providing the required information.K Dubey for providing me vital inputs to co-relate the present project work and hence provide a sound base to the report structure. The experience that I have garnered has had a profound impact on my career choices and has helped me realize what is requisite for success in the corporate world. UTTAR PRADESH. UTTAR PRADESH SECTOR 125. INDIA ACKNOWLEDGEMENTS Words put on paper are mere ink marks. NOIDA . I am thankful to our Director.AMITY SCHOOL of BUSINESS AMITY UNIVERSITY. A special word of thanks also goes to all the teaching staff of my institute and my Friends.201303. but when they have a purpose there exist a thought behind them. S.
2. 6.NO 1.S. 3. TOPIC INTRODUCTION LITERATURE REVIEW METHODOLOGY DISCUSSION CONCLUSION BIBLIOGRAPHY PAGE NO. 4. CONTENTS . 5.
Supply chain and Retail A retail revolution is happening in the country.g. Food being perishable item. Tesco and Carefour are also trying to enter the Indian market. our country also poses a big challenge to organized large retailers particularly in food sector. For global giants looking at newer markets. e. However.Abstract India is going through a retail revolution. or the quickness in responding to ever changing tastes of the customer. The infrastructure in India in terms of road. be it cost. The Indian organized retail sector is growing so the role of supply chain becomes all the more important. and air links are not sufficient. Under these circumstances it is interesting to find out how large organized retailers are coping up with these problems. The challenge comes from a number of factors. huge size and population of our country. The Indian Supply Chain Council have been formed to explore the challenges that a retailer faces and to find possible solutions for India. The growth of the Indian retail industry to a large extent depends on supply chain. There is also need for the supply chain to be more cost efficient and collaborative to win the immense competition in this sector. very poor infrastructure like improper roads. `Consumer Markets in India: the next big thing has predicted that the organized retail sector is expected to . India presents exciting opportunities on account of its vast middle-class and a virtually untapped retail industry. ware-housing etc. the Indian retailer is trying to reduce transportation costs and is investing in logistics through partnership or directly. The Indian retail sector has seen unprecedented growth in the last few years. for the retailer to be successful the key is proper supply chain management. the role of supply chain is very important for the Indian customer demands at affordable prices a variety of product mix. It is the supply chain that ensures to the customer in all the various offerings that a company decides for its customers. lack of proper cold chain facility like refrigerated transportation. Retail is offering tremendous opportunities in employment. All the big business houses are entering this Sector and it is growing at a very past pace. rail. bad connectivity between production centers and markets. It should become all the more responsive and adaptive to customers demand. varied culture and hence varied taste. so efforts must be made by the Indian retailers to maintain it properly. Introduction The role of supply chain in Indian organized retail is very significant for on it depends the growth of this sector.Mart. In this paper we would retail operational strategies in complex supply chain. And so warehousing plays a major role as an aspect of supply chain operations. The KPMG report. International giants in this sector like Wal. service. The role of supply chain in Indian organized retail has expanded over the years with the boom in this industry. In the organized retail market in India. To overcome these problems.
With the expansion of retail. Effective management must take into account cording all the different pieces of this chain as quickly as possible without losing any of the quality or customer satisfaction. customer satisfaction is paramount. win those who better operate their supply chain. The power of supply chain management is its potential to include the customer as a partner in supplying the goods or services provided by sc.grow at rate higher than GDP growth in the next five years. as the backbone of the retail sector. stands to gain the maximum. as they combine the best systems and expertise to manage a ready flow of goods and services. The AT Kearney's 2006 Global Retail Development Index positions India as a leading destination for retail investment. supply chain will take on an increasingly important role. flexibility. warehousing. Criticality of Supply chain management in Retail Industry In the last few years there has been a flood of new retail space. . not only there are more stores. Companies pursue different competition capabilities within the generic strategies of competing on cost. Managing supply chain requires retailers to perform a delicate ―balancing act‖ that simultaneously meets multiple needs. the logistics market is mainly thought to mean transportation. A basic retailer’s role in supply chain management is to provide and sell products to customers for their personal or family use. among rivals. or product differentiation. but many offer similar products. where competition is intense and stakes are high. quality. Supply chain management has also another goal and that is customer satisfaction. Today. Reduced inventories. courier and other valuedadded services such as packaging. Supply chain management seeks to enhance competitive performance by closely integrating the internal functions within a company and effectively linking them with the external operations of suppliers. But the major elements of logistics cost for industries include transportation. The retail boom promises to give an impetus to a host of allied sectors and the logistics industry. Efficiency of a supply chain can be obtained through the interaction of all members of a particular sc. The success in this competitive and dynamic sector depends on achieving an efficient logistics and supply chain. the need for just-in-time services is increasing. In India. With the end consumer becoming more demanding and time conscious. retailers now take an active role in planning and coordinating supply chain activities. Literature review Supply chain management and effects of supply chain management Supply chain management in retailing context is the delivery of economic value to customers through the management of the flow of physical goods and associated information from vendors to customers. In retail. while still keeping costs down. same brands. Retailers have to satisfy needs of ultimate consumers and that’s why info that retailers gain is a key element in successful supply chain management. Due to modern economic activities like consolidation and emergence of large and operational fit national retailers. lower operating costs. product availability and customer satisfaction are all benefits which grow out of effective supply chain management. without this the whole thing of applying the supply chain strategy could be costly and futile. customers and other channel members. time. inventory management. which can be provided by professionals.
distribution center and store handling capacity. To remain successful companies need organization-wide buy-in to supply chain excellence and some will need to re-evaluate their current processes and performance with these key trends in mind: • Demand Planning as an imperative • Globalization • Increased competition and price pressures • Outsourcing • Shortened and more complex product life cycles • Collaboration between stakeholders Companies that reevaluate their business and how the current supply chain structure supports the business—from a strategy. business processes. Reduces stakeouts cannot be achieved without close relationships with their customers/consumers. to support the goods and products that make them most distinctive to their customers. An inefficient and poorly functioning supply chain can negatively impact every aspect of an organization.To survive in such competitive market. Six key trends changing supply chain management today Developing. Retailers need to focus on effective logistics with an effective information system as well as good transport. Sa means that is obtained in long term and that is difficult to initiate. SCM technology investment and the overall approach to supply chain management must change and keep pace. Logistical expertise should be used not only to survive. process. co-packers. not just the functional supply chain organization. It is a new business strategy designed to optimize the flow of info and merchandise b/w channel members and increase customer satisfaction through the implementation of technologies such as electronic data interchange. . So retailers need to design their logistics to give them real competitive advantage. Efficient supply chain management provides 2 benefits to customers: reduced stakeouts and tailored assortments. bar coding and point-of-sale data capture. Retailers are in unique position to collect purchase information customer by customer. transportation providers and stores. That info has led to development of new skills in supply chain management known as quick response. transactions by transactions. jeopardizing the long-term performance and success of a business. Not all retailers are able to achieve a competitive advantage from their sc. manufacturing and selling a product can challenge the best organizations in the best of times. which requires the best possible logistics efficiencies & processes. retailers can obtain profit by strategic planning and delivering consumer satisfaction. To succeed. it is no longer enough to buy the right goods at the right price but it also should be at the right place. Developing any supply chain is expensive in terms both of capital and the accumulated expertise that comes with managing any highly complex and evolving system. technology and organizational perspective— must focus on keeping their supply chain aligned with the overall business strategy. The entire supply chain needs to be integrated as managing logistics requires close coordination across the network of suppliers. distribution centers. companies must embrace Supply Chain Excellence as a core competency at all levels throughout the company and recognize that supply chain management is executed in many areas. manufacturers. As a company’s business driver’s change. at the right time with right operational costs. Strategic advantage through supply chain management In the competitive business environment. The link b/w the retailers internal capabilities and control of the manufacturer and their customer is vital for supply chain effectiveness and gaining competitive advantage for the firm. but also to sustain real competitive advantage.
Research papers. journals. The study depends mainly on the published research paper. etc. books. Booklets.METHODODLOGY Objective of the Study To study about retail operational strategies in complex supply chain Methodology The methodology of the study will be based on the secondary data. etc Discussion Strategies for Improving Inventory Management . Research Methodology Adopted Research Instrument : research papers. books. journals Source of Data Secondary Data : Journals.
an area where the category of inventory optimization software comes in to play. and have a formal schedule for monthly Sales and Operations Planning (S&OP cycle). While S&OP delivered a ―one number forecast‖ that the company could act on.Across Complex Networks There obviously is no single bullet for improving inventory management in the face of these network challenges. and many companies continue to chase increasing forecast accuracy as a key weapon – and one often especially resistant to improvement. This safety stock and inventory policy management challenge becomes even greater when a company considers the multi-echelon aspect. this means senior company executives need to set the direction based on a given plan as to what the trade-offs are going to be b/w . Meeting that challenge well is almost impossible to do manually today and really requires a new level of technology support. supported by a high level supply plan that is capable of meeting that demand plan. Leading companies both review products and policies more frequently. as we discuss in the last section. In effect. as we discuss in the next section. It is not uncommon to see 10-12 dimensions being used in best-in-class companies. as this is a relatively uncommon skill set. consumption patterns. velocity. That usually meant middle managers were responsible for inventory decisions that could have impact on sales or cost in the millions of dollars. and several others. The more dimensions a company uses. Get Much More Granular with Safety Stock Management Many companies today continue to use rather simplistic means to determine safety stock levels at different echelons of the supply chain. many have pushed use of the new term Sales. Many companies in effect hold redundant safety stocks at each level of this report. and in some cases actually increasing safety stock levels for SKUs that are regularly experiencing out-of-stock conditions. it is only in the past 5 years or so that there has been widespread recognitions that specific inventory decisions were often left out of the S&OP process. These attributes can include lead times. Still. Add Inventory Planning to the S&OP Process While Sales and Operations Planning has been successfully employed as a process discipline by some through their S&OP evolution. and in understanding how to best apply differentiated inventory policies. 2. companies have taken their safety stock policies much further in terms of both granularity and cycle times. the greater the precision a company will have in managing inventories. This more granular segmentation also clearly requires some level of skill in terms of identifying the appropriate attributes to use for the groupings. specific inventory decisions related to those plans were often left out of the S&OP decision process. supply and demand variability. inventory management challenge. but then also look at higher level demand and variability data quarterly and may tweak certain inventory parameters on a weekly basis. 1. The most common is a simple SKU segmentation approach in which products are put into three or policies are then set the same across each of these categories. Many companies also lack insight into where in a complex supply chain inventory buffers should optimally be held. Here outside expertise may be required if a company is looking to make the move to higher level of safety stock management. The most common of the process improvements is to use many more attributes associated with each SKU to in effect create a much larger number of item classes to which different policies are assigned – well beyond the standard three or four levels most companies still use. criticality. This obviously requires a lot more work. both in terms of upfront analysis and tweaking of the policy settings over time. Recognizing that gap. Inventory & Operations Planning (SIOP) to more forcefully drive home the need for the process to make policy decisions on target inventory levels needed to support the demand and supply plans. but can pay rich dividends in terms of both reducing inventories for the SKUs for which excessive safety stocks are held.
and suddenly manufacturers face challenges that are so complicated they warrant re-thinking the fundamental principles of supply chain management that have guided businesses for years.excess inventory levels and some amount of risk that there will be insufficient that have a lot of complexity in their product ―mix. In other words. There are many case studies of companies which have transformed their processes from a traditional S&OP basis to an SIOP one with added steps related to inventory targets and which have achieved impressive results.such as the earthquake. manufacturers need to proactively meet complex supply chain issues head-on by making better use of data to enable greater manufacturing intelligence through the use of expanded flows of information. This technology is usually in the form of ―workbenches‖ and exception-based decision-making that provide supporting data for the supply and demand plans.‖ Some have argued that these inventory-related decisions were always inherent to the S&OP process. while keeping an eye on quality and customer demand. multi-tier suppliers for critical components. the smaller . especially as businesses increasingly rely on global. and importantly. if you have a performance issue. Add to this the threat of unexpected natural disasters . but was clearly often not the case in the actual monthly practice of S&OP. Do you need to know information on every factory every minute? Certainly not. most companies ultimately find that a strong level of technology support becomes necessary for robust S&OP performance. allow managers and executives to conduct a series of scenario analyzes to understand options and how they would play out across supply. But the growing complexity of products and diversity of suppliers are now generating record volumes of information for manufacturers to deal with. where greater visibility and responsiveness is now needed to just maintain "status quo. This has created a greater need for manufacturing intelligence coupled with a need for better systems to manage the "flow" of information. Managing the flow of operations data from manufacturing operations and suppliers. However. especially as decisions about inventory levels are added to the mix. Maintain Quality in a Complex Supply Chain With Better Information Management The growing complexity of products. has made the supply chain more sophisticated and difficult to manage than ever before. collecting operations data at the end of the week or the month will no longer suffice. demand and financial results. These changes have also significantly impacted the supply chain. tsunami and nuclear crisis in Japan last year . driving higher quality and responsiveness standards. information overload and rising quality levels are driving fundamental changes across a number of industries. Streamlining the Flow of Information Today's factories increasingly rely on data from multiple sources along the supply chain to produce their output. in part by getting senior company executives more engaged in the inventory planning process. As a result. That may be true from a theoretical perspective. along with the continued globalization of business. supply issue or supplier quality challenge. But. but it is a necessary change to take some steps forward and to set a platform for other initiatives. SIOP is not a cure all for the challenges of inventory management across complex networks. Increasing complexity. Moving to SIOP in practice if not in name is a process improvement that at one level is fairly easy to accomplish. then the faster you can respond and take corrective action. ideally on a more real-time basis." in order to respond within a reasonable time frame to today's dynamic market and customer requirements. with the right level of expertise in terms of how the new elements to the S&OP cycle will be added. is a delicate balancing act.
in the automotive industry. The brand damage that has resulted over the past few years due to low quality products has been substantial. It must now also be possible to take immediate corrective action to contain any potential fallout from a quality issue. Vehicles have a vast range of options from Bluetooth capabilities. With steadily increasing quality standards. it may be possible to quickly adjust the production process to accommodate for this delay. Naturally. Little wonder that industry analysts at Gartner recently found the data explosion to be one of the "top three challenges" for the world's CIOs. causing a ripple effect of challenges. Winners will know what is going on faster. complex supply chain has become increasingly challenging. It's not going to get any easier. Moving faster creates sustained competitive advantage by better meeting the needs of tomorrow's customers a "must have" advantage to compete in the future. the ability to intelligently process and use an ever-increasing volume of information. It's critical that plant managers have an immediate view of production and supplier so that information can be factored into the process as quickly as possible. For example. Increasing Quality Standards Along the Supply Chain Quality has taken on a whole new level of importance for manufacturers. With today's tight production schedules and Just-In-Time inventory strategies. As new processes are created. Today's workers needed to be "un-tethered" from their desktops for greater movement around the shop floor. Industry estimates suggest volumes of information are now growing worldwide at a minimum of 59 percent per year. but to simply manage effectively without potentially crippling many manufacturing operations in the future. will be an important differentiator between the companies that succeed and those that fail in a global business environment. maintaining a highquality level in a global. to automatic parking and voice-based commands. a quality problem along the supply chain left unchecked can quickly balloon into a very serious issue . both quickly and efficiently. with base models requiring up to one-and-a-half million lines of code per vehicle. the complexity involved in making an automobile is unprecedented.your problem becomes and the less of an impact on your customers. in order to ensure efficient operations are maintained. The software required to activate these new options is staggering. Although technology has already streamlined factory operations and relationships along the supply chain a great deal. they must also be managed and measured. in order to access real-time information from suppliers so that the production process can be optimally managed. such as iPads and tablets. if a plant manager becomes aware of a delay from a supplier. However. this involves . the IT systems supporting production processes must be capable of continuous improvement. or performing necessary equipment maintenance in a way that minimizes downtime to keep operations running smoothly. For example.one that significantly impacts brand integrity and the bottom line. this can mean equipping plant managers with mobile handheld devices. resulting in no impact in scheduled output. and are typically also capable of implementing change quicker. This might mean modifying production. With today's technology. No longer is it sufficient to simply identify a quality problem. The size of large data warehouses is almost tripling every two years. Balancing this information flood is becoming increasingly difficult to not only sort and analyze. Plant managers need access to this same data also. Global supply chains and high-volume factories function in real time.
Offsetting visibility challenges will need to be met with more standardized processes and standardized data. a higher degree of analytics can be performed on a wider scope of operational processes. The recent economic crisis has also forced many manufactures to closely monitor their suppliers' economic viability . many manufacturers must now consider new ways to generate efficiency. In order to strike the delicate balance between quality. This includes streamlining operations. ideally through a business process management-based architecture for their production processes will be better able to operate over globally distributed environments. These leaders have put contingency plans in place. resulting in better analytics. Building an Agile Supply Chain The following are some of the best practices that manufacturers are implementing today to increase their operational flexibility. With ready access to more data. Build a Flexible Process Framework: Factories will need to be more flexible in the way they manage supply chain operations in order to adjust quickly to new product demand. Create a Supply Chain-Centric Data Warehouse: Instead of pushing all data into the corporate data warehouse. especially. ideally through "close to" real-time viability. reduced costs and greater profitability. Manufacturers need to empower managers with the right systems. based on cost. This added complexity has made quality control more difficult. each of these activities requires a higher level of visibility into a company's manufacturing operations and. it might not make sense for it to be located within operations processes or equipment on the factory floor. Collaborate Locally and Globally: Companies need to recognize that as the pool of data continues to expand. Industry leaders have learned how to tightly monitor their supplier's operations.In some case suppliers were forced to shut down completely. essentially into what can become a "data tomb. which includes better use of data and analytics to function more quickly and effectively. leaving manufacturers with giant holes in their product supply chain. Sophisticated data archiving techniques exist such that data can be made available in "near" real-time without impacting operational performance. However. performing continuous improvement checks and improving the way they work with suppliers and partners all over the world. tools and information in order to respond quickly to new. it could also slow down production. faster. This scenario illustrates a fundamental challenge for manufacturers and points to the reason why steadily increasing data requirements have become the modern manufacturing challenge. enabling faster response to change. which can be leveraged to start automating responses to common circumstances in any . developing situations as they occur. selective data can be collected and stored as an embedded component of an actual business process." companies should maintain the data critical to their business in a central location. providing clear operational benefits. those of its suppliers and partners. These strategic actions provide an ideal role model for the factory of the future. This will better empower those in manufacturing to have rapid access to the key data they need. Importantly. Those that embrace a platformbased approach. cost and managing product complexity. material availability and ability to deliver to corporate standards. Increasing the number of quality checks along the supply chain may improve product quality. To further streamline the collaborative process. so it is easily accessible by managers and manufacturing personnel. resulting in increased labor and inventory costs in an environment that calls for greater speed and efficiency. leading to performance improvement.coordinating with multiple suppliers for the procurement of highly specific electronic components.
in order to make improvements in operation. and how they are going to get advantages over its competitors. retail SCM executives are moving forward with numerous initiatives to meet this dual goal. The visionary companies that understand the need for greater visibility into their manufacturing performance now have the opportunity to gain significant market share in the future. Supply chain leaders realize that they must meet customer expectations of continuous product availability while simultaneously rationalizing inventories and reducing waste. Complexity. While the vast majority of retailers recognize the critical role of SCM. Despite the external uncertainties. Hence there is a need to continuously review & revive the standard operating practices (SOPs) that are used to document & audit process implementation. Besides. asset utilization. Investments to refine supply chain capabilities and enhance internal alignment are being made. This will help improve performance and efficiency without sacrificing agility. . Their intent is to create competitive advantage in these areas through greater supply chain agility and responsiveness. With the support of top management. For example. this is rarely possible in real life given the pace at which the industry is expanding. Integrate Processes into the Business: Greater integration of business processes spanning multiple operations will further contribute to the ability of a manufacturer to respond faster to change while retaining the necessary visibility of manufacturing intelligence. such that information can be applied to many decision points along the process. and shaping multi-channel capabilities. agile factories can achieve. given the speed and efficiency benefits that more digitally-driven. Companies have to make good planning and control in its capacity. quality and data overload are driving the need for greater manufacturing intelligence. Ideally retail supply chains need to be designed to be lean & defect free prior to implementation of the processes. It is important for a company to have an operational strategy because it establishes the types of goods and services the company will offer to its target market. dependability. Even if this is done & processes designed optimally the rapidly changing market dynamics soon make them ineffective. flexibility and cost. Supply chain leaders are taking on manufacturing roles. Conclusion Overall. A well designed lean six sigma initiative helps in continuous process redesign in order to ensure efficiency & accuracy despite changing operating conditions. any company’s Supply Chain Management Strategy is its long-term goal. Fortunately. technologies exist to begin to address these challenges. Any remaining paper processes should ultimately be eradicated from the production flow. which in turn is driving fundamental changes across the manufacturing industry. However. helping to potentially curtail an "out of spec" quality part. innovative organizations are expanding the sphere of SCM control. strategic partners. the strategic focus has shifted from all-out cost cutting to a balanced perspective where supply chain service and cost are equally prioritized. As supply chain complexity continues to increase. speed.factory around the globe. engaging in store operations with shelf-driven SCM. Supply chain leaders are working closely with merchandising and store leadership in pursuit of greater cross-chain agility. a quality check that fails could automatically trigger an increase in the frequency of quality checks instantly. and visibility. companies will be tasked with even greater data and process visibility demands in the years to come by customers. Manufacturers should fully consider evaluating their business processes holistically. shareholders and employees alike. they should measure quality. supply chain and quality.
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