This document discusses retailer-supplier partnerships (RSP) in supply chain management. It describes RSP as a type of strategic alliance where the supplier is linked to the retailer's point of sale data to help with forecasting and planning. There are three main types of RSP: quick response inventory, continuous replenishment inventory, and vendor-managed inventory. The document provides details on each type and how they work to improve information sharing and inventory management between retailers and suppliers. Benefits and some potential drawbacks of RSP strategies are also summarized.

1. RSP MODEL
SOUMYA JASH
(B.Tech & PGDM)
SUBJECT:- SUPPLY CHAIN &
LOGISTICS MANAGEMENT

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ABOUT
STRATEGIC ALLIANCE
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Strategic Alliance is a type of
partnershipinsupplychainmanagementwhichrefersA
relationship formed by two or more organizations that
share (proprietary), participate in joint investments, and
develop linked and common processes to increase the
performanceofbothcompanies.
Many organizations form strategic alliances to increase
the performance of their common supply chain. This
increases ability and dependability of various stages
involvedinthesupplychain.

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TYPES OF STRATEGICALLIANCES
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Third Party Logistic
Retailer-
Supplier Partnerships
Distributor Integration

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ABOUT RSP
RSP stand for Retailer Suppliers
Partnership. RSP is a part of strategic
alliance and it has multiple sides to it and is
a big term in the supply chain world. It
refer that In one scenario the supplier is
linked to the Point of Sale of the vendor
and is continuously aware of the sale that is
happening in the retail store which
basically helps the supplier plan its own
forecasting and scheduling.

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TYPESOFRSP
There are 3 types of RSP and those are: -
Quick Response Inventory
(QRI) Strategy.
Continuous Replenishment Inventory
(CRI) Strategy.
Vendor-
Managed Inventory (VMI) Strategy.

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QRI Strategy
Suppliers receive Point of Sale (POS) data from the
retailers and use this information to synchronize their
production and inventory activities with actual sales
at the retailer.
But also the retailer still prepares individual
orders, and the POS data are used by the supplier to
improve forecasting and scheduling and to reduce
local time.

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CRI STRATEGY
Continuous Replenishment Inventory is a
supply chain strategy in which frequent
replenishment takes place from the
supplier to the retailer or distributor in
order to maintain better flow in supply
chain and minimize bullwhip effect.

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• Continuous replenishment is a supply
chain practice that's being pioneered
by European companies such as Tesco
in the United Kingdom. Instead of
delivering weekly or even daily to
restock store shelves, a retailer or
manufacturer performs multiple daily
runs. By doing so, the company makes
sure that the consumer will always find
what he or she wants at a store.
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Example:

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VMI STRATEGY
Vendor Managed Inventory (VMI) is an
arrangement where the supplier, not the
customer, decides when and how much of
the customer's stock is replenished.
It is a way to cut costs and keep inventory
levels low throughout the supply chain

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This type of relationship is being
used inWal-Mart and P&G,
whose partnership began in 1985.
It has dramatically improved
P&G’s on time deliveries toWal-
Mart while increasing inventory
turns less.
Example:

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Characteristics of Retailer-Supplier Partnership
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THE TECHNOLOGY BACKBONE OF
CRI & VMI
The most widely used technology in CRI &VMI is
still EDI.
In the CRP-VMI process, these EDI
messages can usually be seen: -
 Inventory report ·
 Sales forecast ·
 Order response ·
 Dispatch advice ·
 Sales report ·
 Invoice.

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BENEFITS OF RSP
Supplier benefits:
 Visibility to the customer's point-of-sale data simplifies forecasting. ·
 Promotions can be more easily incorporated into the inventory plan. ·
 Customer ordering errors, which in the past would often lead to a return, are reduced. ·
 Stock level visibility helps identify priorities (replenish stock versus a stockout). ·
 The supplier can see the potential need for an item before the item is ordered.
Customer benefits:
 Fill rates from the supplier, and to the end consumer, improve. · Stock outs and
inventory levels often decrease.
 Planning and ordering costs decrease since the responsibility is shifted to the supplier. ·
 The overall service level is improved by having the right product at the right time. ·
 The supplier is more focused than ever on providing superior service.

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DRAWBACKS
Some possible drawbacks of VMI might include: ·
 EDI Problems: - EDI sometimes creates a challenge due to the many different
standards in use. This makes it difficult to communicate and translate information
between companies. If manufacturers are to assume stock keeping responsibility, they
must be able to communicate in real time with their (retail) partners in a uniform way.
 Employee Acceptance: - All employees involved in the process must fully understand
and accept this new way of doing business. It's not enough to simply sell the concept to
senior management. All employees who are involved must be willing participants.
 Trust among supply chain partners:- RPS can also fail when setting up rules for how
the relationship should work. For example, the supplier and the customer must agree on
how to deal with overstocks, ordering errors and obsolete stock. Finally, both parties
must understand that this is a learning process that takes time. Equally important as
time is trust. Many retailers and consumer goods firms are naturally reluctant to share
information in advance, fearing that the information will somehow fall into the hands
of competitors or they will lose control in some way.

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 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.
• The company 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 Suzuki's best practices.
• This system provided details of Maruti component requirements for every 15 days, across the different
variants of the various models, to its vendors.

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