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Retail Supplty Chain Presentation To Be Given

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  • 1. PRESENTED BY:- Sunil Giri & Shiv Shankar PRESENTED TO:- Prof:- Arpita Shrivastav SUPPLY CHAIN MANAGEMENT IN RETAIL
  • 2. Content
    • Objective.
    • Definition of SCM.
    • Why SCM is critical factor in Retail.
    • Changing consumer requirements.
    • Supply channels & there types.
    • Traditional V/S New supply chain.
    • Factors driving changes in SCM.
    • Integrated Supply chain.
    • Supply Chain Processes.
    • SCM Software.
    • Supply Chain Measurements.
    • Tanishq & Mc-Donald Supply chain.
  • 3. 11/12/09 Objective of a SCM
    • Maximize profit.
    • Manage Product, Information and Fund flow.
    • Minimizing uncertainty.
    • Reducing lead times.
    • Minimizing the number of stages.
    • Improving process quality.
    • Managing demand.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR It was coined by Keith Oliver in 1982.
  • 4. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 5. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 6. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 7. 11/12/09 Supply channels
    • It is the total process by which product reach the end consumer.
    • By this we can do following things:-
    • # Reduce inventory & storage investment in the chain.
    • # Improved end user & customer service benefits through productivity & effectiveness faster order cycle time.
    • Develop strong relational links & strong chain for competitive advantage.
    • Lower procurement , transportation & unit costs which can be used to price more competitively & to increase value added benefits.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 8. Types of Supply Chain
    • Global Supply chain.
    • Pull based supply chain.
    • Push based supply chain.
    • Farm to fork model based supply chain.
    11/12/09 Presentation by:- Sunil & Shiv shankar
  • 9. PRESNTATION BY:- SUNIL & SHIV SHANKAR DENIM JEANS EXAMPLE DENIM JEANS EXAMPLE
  • 10. Global SCM Factors
    • Managing extensive global supply chains introduces many complications
      • Geographically dispersed members - increase replenishment transit times and inventory investment
      • Forecasting accuracy - complicated by longer lead times and different operating practices
      • Exchange rates - fluctuate, inflation can be high
      • Infrastructure issues - like transportation, communication, lack of skilled labor, & scarce local material supplies
      • Product proliferation - created by the need to customize products for each market
  • 11. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 12. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 13. 11/12/09 Push based supply chain system . Demand forecasting Order Placed to supplier Placed in shelf for customer Goods sold Goods not sold retailer bear the loss PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 14. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 15. Factors driving changes in SCM
    • Greater choice of what & where to buy, leading to a fragmented market.
    • Margin erosion.
    • Longer supply chains as a result of worldwide sourcing .
    • Expanding product ranges .
    • Globalization of the retail industry.
    • Adoption of new product categories by industry market leaders.
    • Need for real-time visibility .
    • Entry into new markets.
    • Growth in multichannel sales .
    • Legislation (such as the Directive on Waste, Electrical and Electronic Equipment in Europe) .
    • Transportation (fuel costs, shortage of drivers) •
    • Creation of larger, collaborative supply chain.
    • JIT.
    • Globalization.
    • Shorter product life cycle.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 16. Integrated Supply chain
    • It is integration of all supply chain elements and functions are achieved by applying interlinked packages for perfect information management.
    • It starts from the design stage at the vendor level to the time when there is consumer response at the retail stage .
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 17.
    • Manufacturer’s Goals
      • #Reduce costs
      • #Reduce duplication of effort
      • #Improve quality
      • #Reduce lead time
      • #Implement cost reduction program
      • #Involve suppliers early
      • #Reduce time to market
    11/12/09
    • Supplier’s Goals
      • #Increase sales volume
      • #Increase customer loyalty
      • #Reduce cost
      • #Improve demand data
      • #Improve profitability
    Requirements for integrated SCM
      • Analyzing the whole supply chain.
      • Starting by integrating internal functions first ( Processing, purchasing, planning, quality)
      • Integrating external suppliers through partnerships.
  • 18.
    • Coordinated workflow, production and operations, procurement
      • Production efficiencies
      • Fast response
      • Improved service
      • Quicker to market
    • Adopt new business models and technologies
      • Penetration of new markets
      • Creation of new products
      • Improved efficiency
      • Mass customization
    Supply Chain Integration (cont.)
  • 19.
    • Achieving of best delivery performance .
    • Reduction in inventory.
    • Faster fulfillment of cycle time.
    • Accuracy in forecasts.
    • Lower supply chain costs.
    • Improvements in overall productivity .
    • Improvements in capacity utilization.
    Benefits of integration PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 20. Supply Chain Processes PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 21. Suppliers
    • Plays important role in the supply chain.
    • for Eg:- Mc –Donald.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 22. Bullwhip Effect
    • Occurs when slight demand variability is magnified as information moves back upstream
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 23. Counteracting the Effect
      • Change the way suppliers forecast product demand by making this information available at all levels of the supply chain.
      • Share real demand information.
      • Stabilize pricing
    PRESNTATION BY:- SUNIL & SHIV SHANKAR 10-
  • 24. Collaborative Planning, Forecasting, and Replenishment
    • # Process for two or more companies in a supply chain to synchronize their demand forecasts into a single plan to meet customer demand
    • # Parties electronically exchange
      • 1:-Past sales trends
      • 2:-Point-of-sale data
      • 3:-On-hand inventory
      • 4:-Scheduled promotions
      • 5:-Forecasts
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 25. E-Procurement
    • 1:-Direct purchase from suppliers over the
    • Internet
    • 2:- Products go directly into production
    • process
    • 3:- E-marketplaces
      • #web sites where companies and suppliers conduct business-to-business activities
    • 4:- Reverse auction
      • #A company posts orders on the Internet for suppliers to bid on.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 26. Distribution 11/12/09
    • Encompasses all channels, processes, and functions, including warehousing and transportation, that a product passes on its way to final customer
    • Often called logistics
    • Logistics
      • Transportation and distribution of goods and services
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 27. 11/12/09 Distribution Centers and Warehousing
    • DCs are some of the largest business facilities
    • More frequent orders in smaller quantities is a new trend.
    • Automated material handling
    • Final assembly and product configuration may be done at the DC
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 28. 11/12/09
    • Highly automated system that runs day-to-day operations of a DC
    • Controls product, picking, packing, and shipping
    • Features
      • 1:- Transportation management
      • 2:- Order management
      • 3:- Yard management
      • 4:- Labor management
      • 5:- Warehouse optimization
    Warehouse Management Systems PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 29. PRESNTATION BY:- SUNIL & SHIV SHANKAR 10- Collaborative Logistics and Distribution Outsourcing It create greater economies of Scale. Internet-based exchange of data and Information. Significant decrease in inventory levels and more efficient logistics Companies focus on core competencies PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 30. Transportation
    • Rail
      • low-value, high-density, bulk products, raw materials, intermodal containers
      • not as economical for small loads, slower, less flexible than trucking
    • Trucking
      • main mode of freight transport .
      • small loads, point-to-point service, flexible
      • More reliable, less damage than rails; more expensive than rails for long distance
    PRESNTATION BY:- SUNIL & SHIV SHANKAR 10-
  • 31. Transportation (cont.)
    • Air
      • most expensive and fastest, mode of freight transport
      • lightweight, small packages
      • high-value, perishable and critical goods
      • less theft
    • Package Delivery
      • small packages
      • fast and reliable
      • increased with e-Business
      • primary shipping mode for Internet companies
    PRESNTATION BY:- SUNIL & SHIV SHANKAR 10-
  • 32. Transportation (cont.)
    • Water
      • low-cost shipping mode
      • primary means of international shipping
      • waterways
      • slowest shipping mode
    • Intermodal
      • combines several modes of shipping-truck, water and rail
      • key component is containers
    • Pipeline
      • transport oil and products in liquid form
      • high capital cost, economical use
      • long life and low operating cost
    PRESNTATION BY:- SUNIL & SHIV SHANKAR 10-
  • 33. Internet Transportation Exchanges
    • Bring together shippers and carriers
    • Initial contact, negotiations, auctions.
    • Examples
      • www.nte.com
      • www.freightquote.com
  • 34. In 1970s, Wal-Mart first used hub-and-spoke system. Under the system, goods were centrally ordered, assembled at a massive warehouse, known as ‘distribution center’ ( hub ), from where they were dispatched to the individual stores ( spoke ). The hub and spoke system enabled Wal-Mart to achieve significant cost advantages by the centralized purchasing of goods in huge quantities & distributing them through its own logistics infrastructure to the retail stores. Hub & Spoke Model PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 35. Cross-docking
    • Make distribution process more efficient.
    • In this finished goods were directly picked up from the manufacturing plant, sorted out and then directly supplied to the customers.
    • This reduces the handling & storage of finished goods, eliminating the role of distribution centers & stores.
    • Manufacturer directly forward goods to a place called the “staging area.”
    • Goods were packed here according to the orders received from different stores & then directly sent to the respective customers.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 36. Inventory Management
    • IT & communication systems are used effectively to track sales & merchandise inventories in stores.
    • When there is large number of stores a good communication system is required.
    • New technology should be used such as satellite communication system.
    • By this companies were able to reduce unproductive inventory by allowing stores to manage their own stocks, reducing pack sizes across many product categories, & timely price marking.
    • Instead of cutting the inventory across the board,made full use of its IT capabilities to make more inventories available in the case of items that customers wanted most , while reducing the overall inventory levels.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 37. 11/12/09 Using EDI for Procurement The computer systems were connected to suppliers. EDI enabled the suppliers to download purchase orders along with store-to-store sales information relating to their products sold. On receiving information about the sales of various products, the suppliers shipped the required goods to Wal-Mart’s distribution centers.
  • 38. Inventory Management …
    • Employees at the stores had the “Magic Wand,” a hand-held computer which was linked to in-store terminals through a radio frequency network.
    • These helped them to keep track of the inventory in stores, deliveries, and backup merchandise in stock at the distribution centers .
    • The order management and store replenishment of goods were entirely executed with the help of computers through the Point-of-Sales (POS) system.
    • Through this system, it was possible to monitor and track the sales and merchandise stock levels on the store shelves.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 39. Voice-based Order Filling (VOF)
    • Used first by Wal–Mart in 1998.
    • Person responsible for order picking was provided with a microphone/speaker headset, connected to the portable system that could be worn on waist belt.
    • They were guided by the voice to item locations in the distribution centers.
    • It also verified quantities picked, and could respond to a variety of requests such as providing product detail (type, price, barcode number, etc.)
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 40. PRESNTATION BY:- SUNIL & SHIV SHANKAR 10- I.T A Supply Chain Enabler PRESNTATION BY:- SUNIL & SHIV SHANKAR
    • Information links all aspects of supply chain
    • E-business
      • replacement of physical business processes with electronic ones
    • Electronic data interchange (EDI)
      • a computer-to-computer exchange of business documents
    • Bar code and point-of-sale
      • data creates an instantaneous computer record of a sale
    • Radio frequency identification (RFID)
      • technology can send product data from an item to a reader via radio waves
    • Internet
      • allows companies to communicate with suppliers, customers, shippers and other businesses around the world, instantaneously
  • 41. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 42. RFID PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 43. Current Trends in SCM
    • Increased use of electronic marketplace such as
      • E-distributors – independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchases
      • E-purchasing – companies that connect on-line suppliers to business who pay fees to join the market, usually for long-term contractual purchasing
    • Increased use of electronic marketplace such as
      • Value chain management – automation of a firm’s purchasing or selling processes
      • Exchanges – marketplace that focuses on spot requirements of large firms in a single industry
  • 44. Supply Chain Uncertainty
    • Negative effects of uncertainty
      • lateness
      • incomplete orders
    • Factors that contribute to uncertainty
      • inaccurate demand forecasting
      • long variable lead times
      • late deliveries
      • incomplete shipments
      • price fluctuations and discounts
      • inflated orders
  • 45. Supply Chain Measurements
    • Measuring supply chain performance
      • Traditional measures include;
        • Return on investment
        • Profitability
        • Market share
        • Revenue growth
      • Additional measures
        • Customer service levels
        • Inventory turns
        • Weeks of supply
        • Inventory obsolescence
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 46. Key Performance Indicators: Example
    • Cost of goods sold: $425 million
    • Production materials and parts: $4,629,000
    • Work-in-process: $17,465,000
    • Finished goods: $12,322,000
    • Total average aggregate value of inventory (2+3+4): $34,416,000
    Inventory turns = $34,416,000 $425, 000, 000 Days of supply = ($425,000,000)/(365) $34,416,000 = 12.3 = 29.6
  • 47. TANISHQ
    • Division of Titan industries ltd.
    • It is India’s only fine jewellery brand with a national presence.
    • Sold exclusively through a company controlled retail chain with over 108 boutique store spread over 61 cities.
    • This network is supplied and supported by a network of 32 CFA’s.
    • But due to growth complexity they contacted with Wipro InfoTech to help them in this problem.
    • They designed a web based soln called GOLDMINE to facilitate the flow of information b/w various distribution entities.
    • GOLDMINE offered a platform for sales ,management & factory teams of Tanishq to monitor key activities & parameters along the distribution chain.
  • 48. Challenges for Tanishq
    • Reducing cycle time.
    • Increasing efficiencies
    • Reducing costs in the areas of tracking movements of goods and sales
    • To know order status, sales visibility ,communication (reports) and exception reporting.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 49.
    • New system had provided details about goods dispatched from the factory to CFA and to the boutiques.
    • Helped in tracking of stock return cases from both.
    • Helped organization to track goods in transit and monitor loss of goods.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR Goods in transit
  • 50. Intending
    • Ordering of goods is automated.
    • Stores can refer to online product catalogues and price lists before placing orders .
    • Help in online intending for replenishment .shop specific indenting as well as customer specific indenting
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 51. Order status
    • Help to know about the order placed by boutiques.
    • This is made possible by daily synchronization b/w the oracle system at the factory and web based solution.
    • Now boutiques no longer have to send e mails or call up to find out the status of there orders
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 52.
    • Now sales information flows from software visibility os sales from each boutique is improved.
    • Management now can track the effectiveness of marketing programs and promotions at boutique level according to category and price brands.
    • Best seller information is available on demand
    Sales visibility PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 53. Communication and exception reporting
    • Communication transfer is made better.
    • Information about the local gold rates , market information, promotion schemes details and product catalogues are transmitted in real time.
    • Company have 40000 product variants so this information is important
    • Help to solve queries from customers at boutiques
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 54. Mc Donald Supply Chain
    • Mc Donald product are economic because of there best supply chain & location
    • Through it’s unique cold chain Mc Donald is able to cut down operational wastage as well as maintain the freshness and nutritional value of raw material & processed food.
    • This involved all SCM activities at controlled temperature.
    11/12/09
  • 55.
    • It had developed good SCM with over of time.
    • Have better SCM hen other food chain such as Kentucky Fried Chicken.
    • Supply chain work had started four year before of its operation in India in 1996.
    • They have identified the farmers for there each product & provided them the product specification they will require.
    • It have one of the best logistics network which include.
    Early start to ensure product compliance. PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 56. Continue….
    • Quality assurance :- To maintain consistency & quality of it’s products, Mc Donald’s ships all the raw materials to a cold storage close to the main market.
    • Demand based delivery:- based on daily demand the required amount of raw material is transported to individual outlets.
    • Centralized warehousing:- Mumbai based Radhakrishna food land Pvt. Ltd is distribution agent it act as a hub for all vendors. From this all the material is transferred to the required places.
    • Cold chain maintenance :- The semi finished material is transferred at a particular temperature to ensure freshness & moisture
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 57. Vital links in Cold chain.
    • Supplier’s have to maintain standards of Mc Donald.
    • As ingredients moves they are checked by quality inspection program at 20 points.
    • This help organization to reduce the operational wastages.
    • Focus more on prevention than detection through Hazard Analysis Critical Control Point.
    • HACCP is done twice in the year.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 58. Relationship with the suppliers
    • To maintain good relation suppliers are given opportunity to expand their business.
    • They were given latest food technology, exposure to advance agriculture practices & ability to grow & expand.
    • Some of the suppliers are :-
    • # Trikaya agriculture supplier of Telangana & Maharashtra.
    • 1:-A specialized nursery with a team of agriculture
    • experts.
    • 2:- Drip & sprinkler irrigation in raised farm beds with
    • fertilizers mixing plant.
    • 3:- Post harvest facilities such as cold storage.
    • 4:- Refrigerated trucks for transportation.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 59.
    • # Vista processed foods Pvt. Ltd of chicken & vegetable.
    • 1:- Separate processing lines for chicken & vegetable foods.
    • 2:- Capability to produce frozen foods at temperature as low
    • as 35 degree Celsius to retain total freshness.
    • 3:- International standards, procedure & support services.
    • # Dynamix Dairy Supplier of Cheese Maharashtra.
    • 1:- Fully automatic international standard processing facility.
    • 2:- Capability to convert milk into cheese , butter/ ghee, skimmed milk powder etc.
    • 3:- stringent quality control & continuous R&D.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 60. Special vegetarian eggless souce (from MNS Bector specialiyt foods ,Phillacer Punjab. Buns (shan bector & sons, Khopli,Maharastra & Cremica Industries Noida.) Butter & breading (cremica industries Ludhiana Punjab Fresh iceberg lettuce (Trikaya Agri Talegaon Maharastra; Meena Agritech Delhi; ootyfarms,ooty) Cheddar cheese (dynamic dairy Baramati Maharashtra) Vegetable patty :- made from fresh peas ,carrots, green beans,red capsicum,potatoes &rice (vista processed foods Pvt.Ltd . Tajola. Maharashtra)
  • 61.
    • # Amrit Food supplier of long life UHT milk & milk products for frozen desserts.
    • 1:- Fully automated machinery requiring no human contact with product for total hygiene.
    • 2:- Installed capacity of 6000 liters/hr for producing homogenized ultra high temperature processed milk & milk products
  • 62. Summary
    • Supply chain management is the heart of retail operations
    • It reduces cycle times & speeds up operations .
    • It enables the supply of right merchandise to the end consumer at the right time
    • An efficient supply chain management system reduces operations costs.
    • Information management is the key to attain efficiency in supply chain management.
    • Using the right technology ,information flow will help dynamic decision making across functions
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 63. Continue….
    • A planned and documented process flow will ensures efficiency in the supply chain .
    • Process need to be audited to improve cycle times and attain cost efficiencies
    • Innovative and new technologies should be adopted as soon as they are avialable.
    • The efficiencies of the entire supply chain process depends on how retailers seek , understand , assimilate and respond to consumer responses.
    • Retail automation plays a significant role in ensuring timely operational deliveries and achieving efficiencies.
    PRESNTATION BY:- SUNIL & SHIV SHANKAR
  • 64. 11/12/09 THANK YOU