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Supply Chain Management in Retail
By
Ashish Tagade
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
Cycle
II
Cycle III
Cycle
IV
Customer
Distributor
ManufacturerSupplier
Retailer
Objective of SCM in Retail
Example of Supply Chain in Retail
Information Flow
Raw Materials
RETAILERFACTORY DISTRIBUTOR WHOLE SELLER
SUPPLIER
Finished Goods
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
Concept of supply chain could be
thought of as a loop
SCM starts with the customer and ends
with the customer
Customer could be an internal customer or an external customer
Process View Of SCM
Process View Of SCM
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 .
Process View Of SCM
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
Evolution Of Scm
• Conventional Approach
• Modern Approach
Conventional Approach
Sales & Distribution(Demand)
Manufacturing(Capacity)
Procurement(Material)
CUSTOMER
Optimize to Mfg objectives
Optimize toLogistics obj
Optimize toSales & 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.
New Emerging Concepts of Logistics
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.
New Emerging Concepts of Logistics
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