Logistics Retail Chains

1. Industrial Engineering Management Systems Approach to the Enterprise Vision
L | C | LOGISTICS
ENTERPRISE SUPPLY CHAIN MANUFACTURING & COMMERCIAL LOGISTICS OPERATIONS ….
_____ _ PROCESS INNOVATION-OPTIMIZATION & ENGINEERING PROJECTS MANAGEMENT….
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INDUSTRIAL ENGINEERING MANAGEMENT FUNDAMENTALS AND HOW IT WORKS
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Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management
Chapter VI RETAIL CHAINS LOGISTICS

2. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Supply Chain Management (e-commerce logistics, B2B logistics,
Intranet, e-mail, e-social media, smart phone, website clouds)
Focus their attention on revenue generating infrastructure
projects, rather than on cost-efficiency or competitive-edge
infrastructure projects, all measured in added margin %’s

3. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Abstract:
Retailers business is a mix of the Department Store real state space rental,
together with consignment merchandise and the merchandise owners’
sales staff working process
When a Retailer buy merchandise from vendors on credit the payment
credit terms and gross margins covers all the space rental cost, sales staff
and work process management
Retailer’s logistics infrastructure projects emphasis are on gross margin
value added. A project creates a service and it is sold to vendors to increase
competitiveness and improve operational efficiencies, reducing costs and
waste all together

4. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
The reduced costs are then translated to gross margin percent and shared
between the retailer and the vendors. Then the supplier pay back in the
form of additional merchandise gross margin to the Retailer through the
buying process
Traditional communications between the Retailers and the vendors have
been by fax, telephone, EDI, and e-mail. Recently intranets-extranets and
the use of the Internet technology web pages, and android smart phones
social media technology are the main ways of communication between
Retailer and supplier paying a network access fee

5. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Purchase Orders to Vendors
The key factors are data accuracy, easy retrieval access, cross-functional
documents flow, and data processing
Perceived value is minimum, as most retailers depend on intensive low cost
administrative staff, low cost PC’s, and a centralized IT department
operation
Their Logistics are focused on receiving merchandise, store mark downs
merchandise, store merchandise returns, store merchandise transfers, store
documents issuing, store merchandise stocking, and vendors documents
data tally with the Retailer purchase orders by their accountants

6. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Purchasing and Inventory management:
Buyers, planners analyst, merchandisers, over the counter sales
staff, and inventory control administrative staff are mainly the
people determining what, when and how much to buy, most of the
times also from whom and at what price and payment terms

7. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Their typical backbone system, is a general retail business software, which
at best might include a single forecast model to help them to evaluate their
required purchases quantities
There are no links with the total financial cost of their decisions in regards
to transportation cost, stocks transfer cost, cost of capital, handling cost,
display stocks holding cost, markdowns cost, shrinkage cost, advanced VAT,
storage cost, excess inventories cost, shortages or out of stock cost

8. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Their logistics at best is focused on freight forwarding and
customs clearance proceeds for their imports, and on their
department store branches receiving merchandise from their
vendors on credit and on consignment
The manufacturer –> supplier -> department store –>
consumer logistics chain in most cases is not linked among
them, as they operate as single entities, even if they have
business partnership

9. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Deliveries
Most Department store retailers focus their delivery
service to customers on minimizing their delivery cost
and to get maximum delivery volumes with constraints
in delivery date, destination, handling mode and
documentation

10. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Warehousing
Storage space utilization, labor intensive kitting, co-
packing operations and documents handling are the
focus of the logistics for most companies, supported
by WMS software

11. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Logistics Sub-products:
Achieve revenue and margin’s target (projects can be focused on the
integrated logistics costs and supply chain cost reduction opportunities)
Business ‘strategic solutions (projects include distribution mode and
distribution channels coverage, customer base expansion, information
access services and data exchanges)

12. Systems Approach to the Enterprise Vision
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RETAIL CHAINS LOGISTICS
Business process improvement
(projects to enrich the skills and abilities of their
intensive administrative staff, in areas of purchase
orders and other administrative documents data
processing, electronic documents flow and tracking,
physical distribution planning and operations,
warehousing operations, other activities related to
transportation traffic)

13. Systems Approach to the Enterprise Vision
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RETAIL CHAINS LOGISTICS
Logistics Re-engineering
(projects to link manufacturer- vendors – retailer’s
own logistics, fine tune the coordination of related
activities and commercial documents integration,
both physically and electronically)

14. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
Supply Chain process infrastructure (projects to map
the existing process, analysis and new process design
with operations implementation)
Basically it covers the research diagnosis steps, data
surveying, analysis, evaluation and
recommendations with operational details for the
new operational process implementation
Study the total supply chain cost for all merchandise
categories

15. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
3rd PARTY WAREHOUSE AND TRANSPORT OPERATORS
Some Brand owners companies introduce their high
value products, such as cosmetics, pharmaceuticals,
medical supplies and others none high value
merchandise such as apparel, sports gear and
equipment, with the support of 3rd party accounting,
warehousing and transportation operators

16. Systems Approach to the Enterprise Vision
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RETAIL CHAINS LOGISTICS
In this way, the Brand owner’s management and staff
concentrate their efforts in marketing and sales activities
There are basically two types of operators, one providing
warehousing facilities and other kitting and co-packing
services based on intensive labor
The other operator offers transportation services, and at
times the two operators work together to service the
same client, integrating the services of warehousing and
deliveries

17. Systems Approach to the Enterprise Vision
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RETAIL CHAINS LOGISTICS
In some cases the client will have their own administration staff and
computer system installed at the operator’s warehouse admin office,
in order to receive their customers orders, process their invoice for
picking and delivery control and to control their stocks movements
and balances
Otherwise, the warehouse operator will be prepared to offer the
administration services to the client and also to manage the transport
operator on behalf of the client

18. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
In any case, the client will have a manager or
supervisor dedicated to look after the operation and
services provided by the operators, besides the staff
from the accounting department, tracking every bill
and expenses claimed by the operators
The services are charged as per each activity, such as
receiving stocks, moving to storage, picking or
retrieving from storage, loading into trucks, kitting
and co-packing, issued warehousing stocks activities
reports

19. Systems Approach to the Enterprise Vision
Chapter VI
RETAIL CHAINS LOGISTICS
The delivery transportation charges are normally charged
per delivery drop within a route, per round trip, per half or
full day deliveries within the city
Cost is calculated on an open book bases plus margin and
efficiency performance is evaluated on a job-by-job results
Followed by a complain whenever there are costly mistakes

20. Industrial Engineering Management Systems Approach to the Enterprise Vision
L | C | LOGISTICS
ENTERPRISE SUPPLY CHAIN MANUFACTURING & COMMERCIAL LOGISTICS OPERATIONS ….
_____ _ PROCESS INNOVATION-OPTIMIZATION & ENGINEERING PROJECTS MANAGEMENT….
Industrial Engineering Management E-Book
INDUSTRIAL ENGINEERING MANAGEMENT FUNDAMENTALS AND HOW IT WORKS
January 2015
Expertise in Process Engineering Optimization Solutions & Industrial Engineering Projects Management
Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management
THANK YOU
Chapter VI RETAIL CHAINS LOGISTICS