SCM of largest retail store of South America and their practices in SCM

1. SUPPLY CHAIN MANAGEMENT:
S.A.C.I. FALABELLA
SEPTEMBER 2018
Seminar Series: Supply Chain Management

2. Outline
 Background
 Supply chain management
 Core competencies
 Reasons for success
 Reasons for failure
 Comparative Analysis
 Reasons for Best supply chain
 Conclusion

3. Background
• Chile-based multinational company engaged in the retail sector.
• Operates the largest department store chain
• Running in a number of Latin American countries
• Origins date back to 1889; as the first large tailor shop in Chile.
• Incorporated in 1937
• Became a publicly traded company in 1996
• Manufactures and services through various subsidiaries.
( Department Stores, Home Improvement stores, Supermarkets, Promotor, Real Estate, manufactures
textile fabrics, travel agency services and offers financial services)

4. Supply Chain Network

5. Supply Chain Management
Strategy of company:
o Improve Communication Talk with customer and suppliers regularly
o Collaborate with Suppliers Use of continuous improvement tools and talks
about trends
o Track Inventory Precisely Using GPS and Bar codes
o Keep Inventory in Transit Reduces inventory cost

6. Supply Chain Management (Contd…)
o Use postponement Centers Delay product assembly avoid filling ware house
o Mix Shipments to Match Needs Match delivery precisely to customer needs
o Don’t wait in line at customs Reduce the time spent in custom

7. Core Competencies
 Focuses on delivering value
 Accessible and prime locations
(90 department stores, 200-plus Sodimac home improvement stores, and about 90 Tottus
supermarkets)
 Outstanding customer service
(Wide array of product under a single roof)
 Ensures high quality and delivery performance
 Ambience and atheistic
 Offer store-branded credit cards (provide financial services)

8. Reasons of Success
 Innovative and up-to minute idea
(Example. Credit in the form of mortgages and auto loans in small offices located within the stores
in late 90s’)
 Human Capital
(Trained and experienced human resources with minimum rate of turnover)
 Shopping Culture
 Better convenience, ease of use and functionality
 Customer Loyalty
 Retail Branding
 Expanded and diversified their businesses

9. Other Issues
 Global Competition
 Increasingly complex pattern of customer demand
 Intensity of Competitive Rivalry
 Change in shopping style i.e. online shopping in trend
 Socio- Political, Legal and other barrier
 Local chain stores

10. Reason for best supply chain
• Acquires enough knowledge of the local market and its peculiarities People
• Connects with its customers to find out what people need Customer
• High degree of concentration in the market Place
• Focused on the idea of good added value Cost
• Wide array of product within single place Time
• Maintains high quality and engage in continuous improvement Material, Quantity
• Supports product life cycle Condition
SCM 7 R’s

11. Conclusion
• Goodwill among consumers
• Values ethics and good business practices
• Constantly innovating, improving
• The company is diversifying and
creating joint ventures

12. Comparative analysis
Basis
S.A.C.I. Falabella SA SM Investments Corp J. C. Penney Co.
Logo
Based Region Latin America Philippines United States
Approach Of SCM Substituting Information for
Inventory Stragety
Same Same
Feature
Financial facilities under same
roof
Easy entrant in South Asia-
East Market
Eases shopping research for
consumers
History /
Competitiveness with
each other
High level of competitiveness
Strong in Latin region
Dominant player in retail with
208 stores in Philippines
Strong in U.S.
Chile case: Fail to compete
Decided to get out and move
into other markets

13. Thank
You !
Seminar Series: Supply Chain Management