Ss Chain & Is in Retail

Information Systems &
Supply Chain
Management
satyam
Topics
• Concept, Need and Evolution of supply
Chain Management
• Supply Chain integration (Innovations )
• The physical flow of merchandise.
• Unique Needs & Importance of IT in Retail
• Factors affecting use of technology
• Applications of Technology
Supply Chain Management
“It is the integration of business processes
from end user through original suppliers that
provides products, services, and information
that add value for customers.”
by: Douglas M. Lambert
“ Encompasses every effort involved in

producing and delivering a final product,
from the supplier’s supplier to the customer’s
customer.”
by: Supply Chain Council
Supply Chain
• Exists in both service & Manufacturing
Organizations.
• Aims at integrating activities across the entire
merchandise flow to achieve quick response in
supplying products and services to customers
who need them.
• Members of supply chain are:
– Wholesalers
– Manufacturers
– Transportation Companies
Basic Supply Chain
Flow Of Orders
Raw Retailer
Manufacturer Retail
Supplier Packaging Manufacturer Warehouse Consumers
Warehouse Store
Ware House Stock
Flow Of Goods
Physical Flows
Information Flows
Financial Flows
Strategic Advantage Gained
Through SCM
1. Improved product availability
- Fewer Stock-outs
- Assortment of merchandise that
customer wants, where they want.
Benefits Greater Sales High

inventory
turns
To meet wide variety needs of
Customers, Retailers are carrying
More SKU’s Lower Mark
Downs for Retail
Less SKU’s-----------More SKU’s
Strategic Advantage Gained
Through SCM
2. Improved ROI (Return On Investment)
Return on assets = Net Profit margin * Asset Turnover
Net Profit = Net Profit * Net Sales

Total Assets Net Sales Total Assets
Retail Supply Chain Process Model
Supplier P.O P.P.O Goods

Returned
Receipt
Checking I.T.N
(OUT) Reverse
Document
To a/c for I.T.N
Payment G.R.N
Warehousing Sales Goods
Inward
Goods
Bar coding Returned Checking
Receipt
I.T.N At Store
• PPO = Pre purchase order
• PO = Purchase order
• EDI = Electronic Data Interchange
• GRN = Goods Received Note
• ITN = Inter-Transfer Note
Supply Chain Decisions
• Nature of the industry that the retail
organization operates in also influences supply
chain and logistics decisions.
– Short Life Cycles
– High Volatility
– Low Predictability
– High Impulse purchase
Lead Time
• Amount of time between the recognition
that an order needs to be placed and its
arrival in the store, ready for sale.
• 3 Types of Lead Time

– Time to Market
– Time to Serve
– Time to React
Supply Chain - Challenges
• Having decided from where to source the products, the key
Supply Chain challenge lies in ensuring that the right
product reaches the right place at the right time in right
quantity in the most economical manner. This challenge
can have many facets:
Establishing an effective transportation system – in-house Vs. outsourced
Establishing an effective warehousing/DC system –
• Where to establish
• How many to establish
• How large should these be
• What kind of systems/ process should be installed therein

– Establishing an effective Returns management system
– Striking the right balance between over-stoking and stock-out to ensure

consistent product availability with minimum funds blocked in inventory
Establishing an efficient information and communication system for –
• Ensuring smooth information flow in both directions from Store to

Supplier through the Buyer, and from Supplier to the Distribution
Centre through the Buyer
• Ensuring enhanced visibility of the location and movement of

inventor
Technology in Retail
• Accurate information
is to captured and Store
made available to:
Buyer Accurate Warehouse

Information
Manufacturer Distributor
“The Right Data, in the Right form to the
Right set of people at the Right time, is
one of the greatest tools in the hands of
the retailer.”
(Information is always with reference to a

particular time frame)
Unique Needs of Technology in
Retail
• Needed in Product Identification
• Need for quick Billing
• Settlement of Bills Electronically
• Specialized logistics application
• Data warehousing for trend analysis
• Specialized solutions for SCM
Single Customer Transaction
Marketing
&
Promotions Inventory
Reordering Management
Merchandise
Customer
Transaction Sales
Analysis
Warehouse
Credit
Customer Card
Database Payment
Importance of IT in Retail
1. Efficient stocking of Merchandise
a. Sales Analysis
b. Decision on replenishment
c. Re-ordering
d. Merchandise Planning
2. Collection of Data
About Consumers, their Purchases - Brand Preference,
frequency of Buying & typical Basket Size
• Preferences of brands
• Reward loyal customers
• Promotional Offers
Importance of IT in Retail
3. Efficiency in Operations
a. Process gets automated
b. Time involved in Tasks reduce
4. Helps Communication
a. Within the organization
b. With vendors, suppliers etc
Factors Affecting Use of
Technology
1. The Scale & Scope of operations

2. The Financial resources available with
organization
3. The nature of business
4. Human Resource available
Applications of Technology
• EDI (Electronic Data Interchange)
– CPFR (Collaboration, Planning, Forecasting &
Replenishment) – Inventory management system
using EDI
• Data Warehousing
• RFID (Radio Frequency Identification)

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Information Systems &

“ Encompasses every effort involved in

Benefits Greater Sales High

Return on assets = Net Profit margin * Asset Turnover

Net Profit = Net Profit * Net Sales

Supplier P.O P.P.O Goods

• 3 Types of Lead Time

Establishing an effective transportation system – in-house Vs. outsourced

Establishing an effective warehousing/DC system –

• How many to establish

• How large should these be

• What kind of systems/ process should be installed therein

– Striking the right balance between over-stoking and stock-out to ensure

Establishing an efficient information and communication system for –

• Ensuring smooth information flow in both directions from Store to

• Ensuring enhanced visibility of the location and movement of

Buyer Accurate Warehouse

(Information is always with reference to a

1. The Scale & Scope of operations

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