Supply Chain Management in Retail: Challenges and Strategies

Student ID :00311228
Supply Chain Management (Retail)
Report
MODULE: Global Supply Chain Management

Supply Chain Management (Retail)
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Executive Summary
A supply chain is worthless if there is no proper distribution channel in the organisation that
delivers the product to its end-customer. The success of retail organisations very much
depends on its supply chain management process. Now, in these days there are large numbers
of retail business organisations that provide each and everything to its customer by the
distribution channel. It requires effective management of logistics and supply chain of the
products and maintains the quality of product up to the mark. It is therefore increasingly
interesting how retail business organisations face the rapid change in technology and demand
of customers.
An effective supply chain management is a crucial factor in a retail business. Wide product
variety with instant availability, high accuracy in information flow, and the advantages of
inventory optimisation are the positive attribute of SCM in retail sector while it has some
negative attribute that shows hot it enhance the cost of maintaining high level of inventory
and how it enhance the competition in local market. The flow of the product, the flow of
information, and the flow of cash are the three major elements of any SCM. This has been
discussed as positive attributes of the supply chain. Where the main problems with the supply
chain management are to handle the big inventories and maintain the quality of the product as
per standards is a challenge for the retail business organisation.
To maintain the efficiency of the supply chain it is essential for a business organisation to
focus on continuous improvement in the supply chain and its logistics part that has been
shown in the GAP analysis of supply chain management. This is most crucial part of supply
chain management where it evaluates whether the customer demands are meet at the expected
level. The gap analysis shows that evaluation of improvement process is an essential part of
supply chain improvement. The gap of expected standard of performance with actual supply
chain performance should be identifying at priority level and corrective action should be
taken to reduce it. However, it can be said that the continuous changes in technology and
preference of customers force the retail giants to think about creative and cost-effective ideas
to deliver the product to its end customer on time and solve the issues of the customer with
effective and quick compliance policy.

Supply Chain Management (Retail)
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Supply Chain Management (Retail)
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Table of Contents
Executive Summary...............................................................................................................................1
1. Supply Chain Management (SCM).................................................................................................3
2. Retail SCM.....................................................................................................................................3
2.1 Positive attributes related to Retail SCM...................................................................................4
Wide product variety with instant availability...................................................................................4
Information Flow...............................................................................................................................4
Inventory Optimization......................................................................................................................5
Flexibility...........................................................................................................................................5
Customization....................................................................................................................................5
Compliance and visibility...................................................................................................................5
2.2 Negative Attributes Related to Retail SCM................................................................................6
Cost of maintaining high level of Inventory.......................................................................................6
Lack of corporate understanding.......................................................................................................6
Strong competition among local retailers..........................................................................................6
Information collection challenges......................................................................................................6
Risk related to managing a high level of inventory and large numbers of customers.......................7
3. Gap Analysis between Evaluation and Implementation in Supply Chain Improvement................7
4. Global Issues in Retail SCM............................................................................................................8
Global management of large and diverse supply flows.....................................................................8
Cost optimization of supply chain......................................................................................................8
Product Un-availability......................................................................................................................9
Handling of Large Inventories............................................................................................................9
Low-Profit Margins............................................................................................................................9
5. Strategies to meet these challenges............................................................................................10
Increase Profitability........................................................................................................................10
Collaborative supply chain...............................................................................................................10
Responsiveness................................................................................................................................10
Proactive compliance......................................................................................................................10
Integration in the supply chain process...........................................................................................11
Conclusion...........................................................................................................................................11