How To Handle The Supply Chain Of Retail Business

Supply chain is the flow and management of resources across a retail enterprise for the purpose of maintenance of operations. Professionals say that it is the management of a network of all retail business processes involving procurement of raw materials, manufacturing and distribution of finished goods to the end user. According to managementstudyguide, it is the art of providing the right product, at the right time, at the right place and at an affordable price to the customer. A well-structured retail chain management will have a distribution network configuration based on location, network of suppliers, distribution centres, production centres, warehouses and customers. Experts say that a distribution strategy should include control of operations, delivery scheme, mode of transportation replenishment strategy and transportation control, and that the activities should be coordinated to achieve the lowest total logistics costs. They suggest that at every stage of the planning and execution of purchases, their distribution, and onward selling to customers, the supply chain management strategies need to be applied. They also note that performance gaps are always evident in a faulty supply chain management process. These can be manifested through high expenditure, customer complaint or low patronage. Whether you are driven by the need to reduce costs or inventory, need to improve customer satisfaction, or want to increase the speed to respond to market changes, performance gaps are top challenges that need to be addressed. To bridge the performance gap and define the ideal vision of an organisation, experts say a total system change is required. This change may be a major growth or expansion to becoming a global company or it may be restructuring, redesigning, and building an integrated supply chain. It might also be a turnaround of an unprofitable or low-performing business or agency. According to a report by Cognizant, titled, ‘Adaptive Supply Chains’, the rise of mobile and social technologies, has effect on demand planning, research and development practices to improve their supply chain operations. It adds that declining product lifecycle which is placing more pressure on supply chains to deliver products more quickly; the need to address the risks inherent in supply chain globalisation, such as compliance exposure and variable logistics costs coupled with the shifting supply chains and organisational effects of multichannel commerce are factors to contend with. Adopt advanced technology The report notes that the adoption of new technology is enabling manufacturers and retailers to create more adaptive supply chains that rapidly adjust to changing requirements based on real-time demand signals generated by conventional systems of record, as well as non-traditional sources, such as social media. It says that companies are infusing their new product development and field service processes with real-time information collected from customers and prospects. The report states, “Technology is fundamentally changing the supply chain equation. Virtual platforms are enabling real-time collaboration between team members, regardless of time or place. The emerging SMAC stack, consisting of social, mobile, analytic and cloud capabilities, is reshaping the organisational computing model and transforming marketplaces and supply sources.” Rethink supply chain strategy Cognizant notes that revenue growth is presently a top priority on corporate agendas and organisations are grappling with challenges such as entering new markets and attracting new customers, identifying which new channels to tap in each segment and geography, and determining how to penetrate deeper and wider into the existing customer bases. Of utmost importance are the retailers who are fostering new, more intimate relationships with consumers as well as manufacturers especially consumer packaged goods companies which are interacting with consumers and discovering new prospects via mobile apps and social media. It says, “Identifying the most profitable approach and determining the most loyal or productive customers and the most advantageous products are important supply chain-related tasks. In our experience, retailers that want to achieve breakthrough improvements have had to redesign some of their core warehouse processes, optimise store backroom processes and modernise their IT infrastructures in order management, warehouse management and transportation management. The report suggests that retailers should change management initiatives to ensure a successful transformation for these new approaches. Choice of suppliers A business manager, Mr. Kunle Ogundipe, says that supply chain managers should develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. He adds that the managers can put together processes for managing their goods and services inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorising supplier payments. According to him, data mining can come in handy in the forecasts for sales orders for different categories of products. He adds that the process involved should consider the data on expected demand as well as current supplies, delivery periods, storage or production capacity and inventory management policies. Improve on products delivery Experts note that the logistics required in products delivery requires companies to coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments. In addition, Ogundipe says that data mining and knowledge discovery techniques are untapped and their application has been found in the transport and logistics sector of the economy where performance can be optimised. However, experts note that businesses can gather all the data in the world, but it will be meaningless unless the right questions are asked. IFE ADEDAPO writes on new technology adoption for effective and faster supply chain Source:punch