6/25/2012 1 Supply Chain Management for Retail in India Anil Chinnabhandar AGENDA • Introduction to SCM Practices in various sectors of Industries • Review of SCM practices being followed in India Industries • Application of IT Tools ERP, RF, Web • Application of IT Tools ERP, RF, Web • Best practices - case studies • Vendor/Supplier management • Logistics related issues such outsourcing, 3PL etc • How to tune supply chains to get better Performances?
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6/25/2012
1
Supply Chain Management for Retail in India
Anil Chinnabhandar
AGENDA
• Introduction to SCM Practices in various sectors of Industries
• Review of SCM practices being followed in India Industries
• Application of IT Tools ERP, RF, Web• Application of IT Tools ERP, RF, Web
• Best practices - case studies
• Vendor/Supplier management
• Logistics related issues such outsourcing, 3PL etc
• How to tune supply chains to get better Performances?
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Supply Chain Management
What consists of SCM?
• Planning
• Procurement
• Customers
• Warehouses• Procurement
• Production
• Warehousing
• Distribution
• Transportation
• Stores
• Warehouses
• Retailers
• Transporters
• Investors
• Manufacturers
• Suppliers
Supply Chain Management model courtesy: media.wiley.com
Evolution of SCM practices in industries
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Supply Chain Management model courtesy: media.wiley.com
Supply Chain Management model courtesy: media.wiley.com
Evolution of SCM practices in industries
OLD v/s NEWOLD v/s NEW
Choice for consumer in India
• Huge gap between demand – supply
o Chetak, Fiat
• Now flood of choices
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Retail boom driven sales in India
• Modern retail in India providing new market formats
• Consumer good manufacturers to cash in on new distribution opportunity
• Firms are inadequately prepared to tackle the conflict that may arise between • Firms are inadequately prepared to tackle the conflict that may arise between
the conventional distribution channels and modern-retail players
• Moon Bum Shin, managing director, LG Electronics India Pvt Ltd, said,
“We are relatively weak in the organised retail segment. We are working on
strengthening our presence in the segment and would target 30% of the
distribution through modern retail in the coming years
Retail boom driven sales in India
• Maharaja Appliances Ltd plans to introduce premium product variants
specifically targeting modern-retail outlets
• The company will also become original equipment manufacturer taking the • The company will also become original equipment manufacturer taking the
• The company is in talks with players including Big Bazaar on this account
• Modern retail is yet small in the country and it is too early to worry, says Eric
Braganza, chief operating officer, Electrolux, Videocon Industries Ltd. However,
the company will not want to miss the opportunity, he adds
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Retail boom driven sales in India
• The biggest cause for concern for consumer-durable manufacturers is that
modern retail is considered undesirable competition by traditional distribution
channels. Harish Kumar concedes that organised retail may become a threat to channels. Harish Kumar concedes that organised retail may become a threat to
conventional distribution.
• “The profit requirements of the different channel partners are different. LG has
evolved a new supply chain system for modern retail and is devising plans to
strengthen all channels,” said V Ramachandran, director, sales and marketing,
LG
Retailing of Consumer goods in India
• Indian organized retail to grow at 33 % in the coming 5 years.
• Most attractive retail destination for global retailers as per AT Kearney's Global Retail Dev Index
• By 2015, food, grocery, apparel, consumer goods, home décor & furnishing be • By 2015, food, grocery, apparel, consumer goods, home décor & furnishing be
the most attractive retail categories based on TSMG1 analysis
• 2nd fastest growing economy; 4th largest Purchase power parity (PPP)
• Youngest countries - @ 70 % population <35; Younger population growing fast• Youngest countries - @ 70 % population <35; Younger population growing fast
• Rising disposable incomes; Per capita doubled from US$460(01) - US$797(07)
Changing trendz
• Cultural Habits changing- global lifestyle; Pubs , clubs , coffee bars, fast food...
• Spending on grooming & lifestyle; Dual income encouraging
• Rising income levels, guilt free spending
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Retail in India - opportunity
SectorIndia Retail (US$ mil)
Org Retail (US$ mil)
Penetration Org Ret (%)(US$ mil) (US$ mil) Org Ret (%)
• Greater visibility on operations through Reports & Alerts
• Increased Business intelligence through Data Analysis
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Internet
Technology in Supply chain
EDIEDI
EDIBar code/RFID
InternetInternet
EDI
RFID technology - video
MRP/ERP
Technology in Supply chain
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EDI parts
• EDI is a inter company PC-to-PC bus info exchange
• EDI std: Industry standards evolved over a period
Technology in Supply chain
• EDI std: Industry standards evolved over a period
• EDI software: Data extract/format/send – rcv/format/integrate
• EDI com mode: VAN (Intranet)
• EDI Benefits
o Responsiveness
o Time & money
o Accuracy
o Relationships
o Quality decision making
Technology in Supply chain
Future super market - video
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Technology in Supply chain
Voice picking, Vocollect, Pick to Light
Technology in Supply chain
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• Best practices being followed by Global Leaders (case studies)
o What is best practice and why?
o Best practices in Supply chain – specific to Consumer goods & retail
Best practices in Supply Chain
o Best practices in Supply chain – specific to Consumer goods & retail
o Benefits of best practices – live examples – India & Asia
o Best of breed SCM applications
Best practices in Supply Chain
What is Best practices
• Best practice is an idea that asserts that there is a technique, method, process,
activity, incentive or reward that is more effective at delivering a particular activity, incentive or reward that is more effective at delivering a particular
outcome than any other technique, method, process, etc.
• The idea is that with proper processes, checks, and testing, a desired outcome
can be delivered with fewer problems and unforeseen complications.
• Best practices can also be defined as the most efficient (least amount of effort)
and effective (best results) way of accomplishing a task, based on repeatable
procedures that have proven themselves over time for large numbers of peopleprocedures that have proven themselves over time for large numbers of people
• Transformation at Port of Tyne – Video case study
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Why Best practices
• Become business buzzword?
• To describe the process of developing and following a standard way
Best practices in Supply Chain
• To describe the process of developing and following a standard way
• Multiple organizations can use for management, policy and
• Especially software systems
• Organizations have begun using "best practices" to refer to
� Business logic
� Functionality
� Comparability
Retail Best practices
• Processes
• Practices
Best practices in Supply Chain
• Practices
• Systems
• Benchmarking
• Information
• Informed decision-making
Best practices are not necessarily best for ever…….
What is RFID - video
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Best practices engagement includes:
• Comprehensive review of operations
• Identify current challenges
Review
ChallengesMeasure
Best practices in Supply Chain
• Identify current challenges
• Identify process gaps
• Recognise improvement opportunities
• Redefine processes flows
• Realign infrastructure/system
• Lead the change management
Challenges
IdentifyChange
Measure
• Monitor/measure benefits Redefine
FORECASTING-RELATED BEST PRACTICES AND PRINCIPLES
• Value based criteria – 80:20 rule – ABC classification of inventory
• Supply – demand matching
Best practices in Supply Chain
• Supply – demand matching
• Demand Shaping is an execution process; Dell strives to recover from excess and
short inventory positions; similar to retailers mark downs to remove surplus stocks
- Dell workers daily meet to see inventory at warehouses & manufacturing plant
- team will change plans based on promotions on the web site
- prices and deliveries times to steer customers
Logistics Simulation - video
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Case study
Samsonite
• Factory in Nasik
• Has tie ups with Maruthi Gougoan & Hyundai TN• Has tie ups with Maruthi Gougoan & Hyundai TN
• Uses return trips of large scooter bodied trucks
• Normal truck – 350 suitcases, 15-17K (Del-Nas)
• Maruthi trucks can carry – 700 suitcases
• Win-Win for both
Questions
BEST PRACTICES
is not a destination!
but a direction!
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• Vendor/Supplier management
o Vendor management basics - selection criteria
o Vendor/Supplier services - advantages, challenges and how many to have
Technology in Supply chain
o Vendor/Supplier services - advantages, challenges and how many to have
o vendor rating, performance tracking and management
o System driven Collaborative vendor management – case studies