Retailer supplier partnerships final ppt


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Retailer supplier partnerships final ppt

  1. 1. SUPPLY CHAIN MANAGEMENT Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Parties involved.
  2. 2. STRATEGIC ALLIANCES An alliance is cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts
  3. 3. TYPES OF STRATEGIC ALLIANCES Third Party Logistic: 3PL is the use of an outside company to perform all or part of the firm’s material management and product distribution functions. Retailer-Supplier Partnerships: It’s the formation of strategic alliances between the retailers and their suppliers. Distributor Integration: This appreciates the value of the distributors and their relationship with the end users and provides them with the necessary support to be successful.
  4. 4. RETAILER SUPPLIER PARTNERSHIPS Types of Retailer-Supplier Partnerships  Quick Response Strategy  Continuous Replenishment Strategy Or Rapid Replenishment  Advanced continuous replenishment strategy  Vendor-managed Inventory System.
  5. 5. Alliance type Decision maker Inventory New skills ownership required by vendorsQuick Retailer Retailer Forecastingresponse skillsContinuous Contractually Either party Forecastingreplenishment agreed-to levels and inventory controlAdvanced Contractually Either party Forecastingcontinuous agreed-to and and inventoryreplenishment continuously control improved levelsVendor Vendor Either party Retailmanaged managementinventory
  6. 6. REQUIREMENTS FOR RSP Advanced information systems Top management commitment  Information must be shared  Power and responsibility within an organization might change. Mutual trust  Information sharing  Management of the entire supply chain  Initial loss of revenues
  7. 7. ISSUES IN RSP IMPLEMENTATION Inventory ownership Performance measures: Fill rate, inventory level, inventory turns Confidentiality Communication and cooperation
  8. 8. ADVANTAGES OF RSP  Fully utilize system knowledge (retailer)  Manufacturer may predict demand better  Focus on retailing rather than logistics.  Reduce bullwhip effect (vendor)  Reduced inventory and/or increased service level  Ability to coordinate replenishments to different retailers.
  9. 9. DISADVANTAGES OF RSP  Expensive advanced information technology is required.  Supplier/retailer trust must be developed.  Supplier responsibility increases.  Expenses at the supplier often increase.
  10. 10. EXAMPLE In 2003, Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%, against the industry average of 57.8%. Vendor management became an important area as Maruti attempted to improve operational efficiency. Maruti procured components worth about Rs.5,000 crores every year.
  11. 11.  The companys top 10 vendors accounted for about 34 % of its aggregate purchases of components from vendors in India. Maruti was working on a 3.5% per annum reduction in vendor prices by 2004-2005. Maruti streamlined the sourcing and stocking of materials and components through its Delivery Instruction system, one of Suzukis best practices.
  12. 12.  This system provided details of Marutis component requirements for every 15 days, across the different variants of the various models, to its vendors. Web initiatives helped Maruti to bring down procurement time and costs.