Retail Supply Chain A Brief Overview Prof. R. Sathyanarayanan

Retailing World’s 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 Retailing: An overview

Weekly Markets Village Fairs Melas Convenience Stores Mom and Pop/Kiranas PDS Outlets Khadi Stores Cooperatives Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Traditional/Pervasiv e Reach Government Supported Historic/Rural Reach Modern Formats/ International Evolution of Indian retail Source of Entertainment Neighborhood Stores/Convenience Availability/ Low Costs / Distribution Shopping Experience/Efficiency

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 RFID Reader – Antena and transceiver(reader) Host Computer Major players: IBM, Texas Instruments Integrated chip

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 $180 million Improved visibility of where products are in the supply chain in Wal-Mart’s DCs and supplier’s warehouses offers reduced inventory and costs of carrying this inventory Product Visibility $300 million Improved tracking of the more than 1 billion pallets and cases moving through DCs annually Tracking $575 million Real-time product monitoring reduces warehouse shrink, administrative errors and vendor fraud Shrink $600 million Smart shelves monitor on-shelf product availability Out-of-Stock $6.7 billion Eliminating bar code scanning on pallets and cases in the supply chain and on items in-store can reduce labor costs by 15% Scanning Source: eWeek, September 15, 2003 Potential Annual Saving Savings FunctionExecutionSavings Total$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.

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