SUPPLY CHAIN

MANAGEMENT
CONTENTS
 SCM- Concept
 Cyclic View of SCM
 Objective of SCM in Retail
 Need of SCM in Retail
 Integrated Supply Chain Management & its Benefits
 Process View of SCM
 Evolution of SCM
 Innovation in SCM
 Functions of Retail Supply Chain
 Retail Logistics & its Benefits
 Emerging Concepts of Retail Logistics
 Food and Grocery Supply Chain
 Bibliography
Concept of SCM

Those activities associates with moving

goods from the raw materials stage
though to the end user. It not only
includes the manufacturer and suppliers
but also transport, warehouse, retailers
and customer also. These all activities
are monitor by the information system.
 Cycle I

Supplier
Manufacturer

Cycle II
Cycle IV

Customer

Retailer Distributor

Cycle III

Module 1:Supply Chain Management

 Example of Supply Chain in Retail

SUPPLIER FACTORY DISTRIBUTOR WHOLE SELLER RETAILER

Raw Materials
Finished Goods

Information Flow
Need of SCM in Retail
 Cost Cutting

 Time Saving

 Customer Satisfaction

 Increase Profit Margins

Need of SCM in Retail
 Physical Flows

 Information Flows

 Financial Flows
 Integrated Supply Chain Management

 SCM is an integrated process where every

activity is interrelated with the system for
efficient flow of material from supplier to the
end users.

Supplier Manufacturer Distributor Retailer Customer

Benefits of Integrated Supply Chain

 Achieving the best delivery performance.

 Reduction in inventory
 Lower supply chain cost
 Improvement in overall productivity
 Accuracy in forecast
 uld SC
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Customer could be an internal er r
customer or an external customer

Module 1:Supply Chain Management

 Push View of SCM
A push-based SCM takes longer to react to the
changing market place
In a push-based supply chain, production decisions
are usually based on long-term forecasts

In push-based strategies, SCM experience

increased transportation costs, high inventory
levels and high manufacturing costs Pull View of SCM
In a pull-based supply chain, manufacturing is demand driven
so that it is coordinated with actual external customer
demand rather than a forecast

Lead-time reduction occurs as the variabilities

are better monitored in pull-based SCM
Pull-based systems are often difficult to implement when lead times
are so long that it is impractical to react to demand information

Module 1:Supply Chain Management

 Conventional Approach

 Modern Approach

Module 1:Supply Chain Management

Conventional Approach

Procurement Manufacturing Sales & Distribution

(Material) (Capacity) (Demand)

C
U
S
T
O
M
E
R

Optimize to Optimize to Optimize to

Mfg objectives Logistics obj Sales & Mktg obj
Modern Approach
 Just In Time (JIT) Inventory Management Model

 Total Quality Management (TQM) Model

 Efficient Consumer Response (Ecr) Working Group.

Innovation in SCM

 Vendor managed inventory

 Collaborative planning forecasting and

replenishment.

 Cross docking
Functions of Retail Supply Chain
 Physically movement of goods from one outlet to
another.

 Stocking the good at the outlets where needed.

 Management of the entire process.

Retail Logistics

Retail logistics is the organized process of managing

the flow of merchandise from the source of supply to
customer.

The main objective of logistics management is to

reduce the inventory – holding cost and improve
profits
Benefits of Retail Logistics
New Emerging Concepts of Logistics

 Third party logistics

Supply of logistics related operations b/w

traders by an independent organizations. ex-
Federal Express, DHL, Maersk Logistics.
Contd….

Fourth Party Logistics

It refers to the evolution in logistics from suppliers

focused on ware housing and transportation to
suppliers offering a more integrated solution
Contd…

Reverse Logistics
Process of moving goods from their typical final
destination, for the purpose of capturing the value
or proper disposal .

Stands for all operations related to the re use of

products & materials
Conclusion
 A supply chain is a network of facilities and
distribution options that performs the functions of
procurement of materials, transformation of these
materials into intermediate and finished products
and the distribution of these products to the
customers.