Quick Response Logistics

PRASAD CHANDRAN P S
Roll No: 29, MBA FT 3rd Semester School Of Management Studies CUSAT, Kochi-22 Email: cusat.prasad@gmail.com
Abstract: The concept of JIT has been transferred to the world of Logistics, and this has resulted in the new concept of quick response logistics. The basic idea behind QR is that in order to reap the advantages of time based competition; it is necessary to develop Logistics systems that are equally as responsive and effective.QR is about ensuring the right product is in the right place at the right time Essentially the logic behind QR is that Demand is captured in as close to real-time as possible and as close to the final consumer as possible. All this has been made possible by the development of information technology and in particular the rise of electronic data interchange (EDI), bar coding, the use of electronic point of sale (EPOS) systems and laser scanners, RFID and ERP systems.

Key Words: Quick Response System; Electronic data interchange (EDI), Just in time (JIT), electronic point of sale (EPOS) ,forecasting,focus forecasting, Distribution resource planning.

1.0 INTRODUCTION

The QR is a management concept created to increase consumer satisfaction and survive increasing competition from new competitors. It intends to shorten the lead time from receiving an order to delivery of the products and increase the cash flow. The concept of a quick response system cannot be easily separated from those of efficient consumer/customer response systems (ECR), agile systems or other variations on the theme. The Council of Supply Chain Management Professionals (CSCMP) definition of Quick Response (QR) is A strategy widely adopted by general merchandise and soft lines retailers and manufacturers to reduce retail outof-stocks, forced markdowns and operating expenses. These goals are accomplished through shipping accuracy and reduced response time. QR is a partnership strategy in which suppliers and retailers work together to respond more rapidly to the consumer by sharing point-of-sale scan data, enabling both to forecast replenishment needs (Supply Chain Management Terms and Glossary 2009). Although originating in the apparel industry, the QR concept appears to have broader implications than just this field. Efficient Consumer Response, although focused more on the grocery sector, is characterised as a process that tightly integrates demand management, production scheduling, and inventory deployment to allow the company to better utilize information, production resources, and inventory (Weeks and Crawford 1994).Christopher and Towill (2008) describe agility as a supply chain philosophy with six dimensions: marketing, production, design, organization, management and people. They define agility as a business-wide capability that embraces organisational structures, information systems, logistics process and in particular, mindsets. The common theme across QR, agile and ECR is the effective rapid sharing of information using information and communication technology to deal efficiently with market volatility. Rapid changes in technology allow industry to continuously adapt its view of traditional ways of doing things. Given the major financial return of effective supply/demand chain management for quick response to market changes, this is an obvious target for the use of new technologies. However this is an area in which these technologies have radically changed the way in which we view the management of the flow of materials and information from the raw material supplier to the final customer. Although the traditional term is supply chain the move to provide more customer focus refers to these as demand driven supply chains, demand-driven value chains, demand chains or demand networks (Almirall et al.2003). The principle here is that customer demand should be fuelling the need for supply fulfilment.

2.0 THE MOST COMMON MISTAKES BEING MADE TODAY TO ACHIEVE QUICK RESPONSE IN LOGISTICS.
The three common mistake areas have to do with: Order Processing, Forecasting and Inventory Management:

2.1

Order Processing

Quick Response, to many people, means doing everything quickly to ship the customer's order. Quite often people begin with improvements to order processing, believing customer orders must be processed quickly for them to be shipped quickly. It is very common for order processing to be automated using Electronic Data Interchange (EDI). Often companies upgrade their order processing system to improve quick response performance. Unfortunately, the effort to automate the current process has minimum benefit toward reaching the goal of quick response. What operations needs is advance notice of what the customer is

about to order so that it can be made available when he orders it. A quicker transfer of a customer order or a new order entry system still leaves operations with the need fill the order from an inventory or from a very flexible manufacturing operation. Inventory built in anticipation of future orders relies on the accuracy of the forecast. Because there is no such thing as an accurate forecast, failure in achieving quick response is almost guaranteed. Another approach often taken is to make manufacturing more flexible using the latest quick setup or change over techniques. Until operations is flexible enough to meet any. customer demand, there needs to be an alternative strategy. The best alternative strategy companies have found is to replan frequently making small changes often as customer demand becomes known.

2.2

Forecasting

Some of the most common approaches used to develop a sales forecast do nothing to support quick response. Here are three of the more common mistaken approaches used in industry today. 1. Aggregate forecasts. A common approach is to develop an aggregate forecast for the business and then to use historical or projected percentages to calculate detail forecasts. Unfortunately, customers buy what they want and not necessarily what is budgeted. A budget forecast is good for budgeting but it is not good for logistics forecasting. Logistics forecasts must identify by stock keeping unit what is expected to be sold. 2. Computer aided forecaster. A second very common approach is to use a computer to generate a forecast and then to have a person review and analyze the forecast. This is a way of using procedure to change the forecast. This approach is very subject. It assumes forecasting is an art and not a science. It also tends to encourage second guessing throughout the organization. If you have to change the forecast numbers from the forecasting system, you need a new forecasting system that people believe in. 3. Forecasts from field sales. The third common approach is to ask the sales people or key customers what they think future sales will be for each item. Sales people and customers have many reasons for purposely raising the forecast or lowering the forecast. For example sales people are measured on sales and may give an optimistic forecast simply to encourage higher inventories to protect against out of stocks. Sales people are measured against targets and may purposely minimize the forecast in order to look good when actual sales exceed forecast. If sales people do not purposely forecast too high or too low, the enormous task of forecasting every item on a frequent basis will quickly take second priority to the main priority of selling. It is a fallacy that the best person to forecast sales is the sales person in the field. When business is good sales people are not worried about forecasting sales and it is something "we need to get around to". When business is poor, sales people are not worried about forecasting

sales because their main effort has to be to get more sales and the last thing they want to tell their boss is that they are working on a forecast. In fact, most common sales forecasting approaches are doomed for failure because companies have defined the need for accuracy incorrectly. Specifically, how accurate will be defined later in this presentation. A more accurate forecast is a good thing for companies but something more is needed. A closer look at many business operations reveals the need for better distribution inventory planning.

2.3

Inventory Management

There are three common inventory mistakes. 1. Get it on order as soon as possible. The thinking is the sooner product is put on order the sooner it is shipped, the more likely the distribution center will have product available to ship to their customers. Unfortunately, it is more difficult to order product needed for future months than for future weeks because it is more likely the forecast will be wrong the farther out in the future sales are forecasted. The result is a lot of items on order and in inventory and a lot of emergency orders to get what is really needed. 2. Increase inventory on the hard to forecast items because they are more likely to be out of stock. The logic is that hard to forecast items need additional inventory to protect against forecast error. Unfortunately, carrying extra inventory on these items ensures there will be a significant amount of slow moving inventory and a greater possibility for out of stocks popular fast moving items. The reason this is true is that forecast error can be positive or negative. The extra inventory on all the slow moving items will protect all of them against positive forecast error and will leave half of them with excess inventory. To make up for this extra inventory, lowering the inventory on popular items means when there is an out of stock it a larger amount of sales that will be lost. The real objective is to minimize lost sales dollars not to minimize the number of items out of stock. 3. When there is an out-of-stock or an overstock, check the forecast accuracy. This would make sense if the following problems were extremely unlikely: suppliers who shipped late or who short shipped, inventory record errors, open order errors, inability to accurately know what is intransit, failure to communicate discontinued items or new products, inability to manage use up of the discontinued inventory before the new inventory is shipped to customers.

3.0

FOCUS FORECASTING

Here are the forecasting requirements for quick a response competitor. They are conveniently shaped around the very popular Focus Forecasting strengths. Most people would agree they are an excellent place to begin.

The forecast must be: 1. As accurate as possible 2. Easy to understand 3. Require very little maintenance 4. Quickly generated If the forecast is not accurate people will not use it. People have got to believe they have the very best forecast possible. One very effective way to convince people the forecast system does provide accurate forecasts is to compare forecasts of different systems or different strategies for past periods and determine what is the best forecasting strategy or system. The forecast system you choose should be the most accurate strategy or system available. Notice there is no need to set a specific accuracy percentage. Playing can you outguess Focus Forecasting is one way to convince people Focus Forecasting is more accurate than a person's judgement. Comparing how Focus Forecasting and other forecasting systems would have forecast sales is another way to convince people that Focus Forecasting provides a more accurate forecast. People need to understand how the forecast was developed in order to believe in it. Focus Forecasting quickly compares the forecast accuracy of fifteen formulas using past sales history for each item in order to select the best formula for each item. Focus Forecasting uses the formula it found most accurate in the past to forecast the future. The formulas are simple. Formulas used by Focus include: sales will be an average of the past twelve months, sales will be the same as last year, sales will be the same as last year plus ten percent, etc. Focus Forecasting requires almost no maintenance. Detail forecasts are reviewed on an exception basis and usually to help develop estimated sales during promotion periods or to add some other marketing intelligence amendment to the forecast. These amendments to the forecast are called special requirement quantities and are added to the forecast to become gross requirements for Distribution Resource Planning. Because there is no need to review forecasts, the person responsible for managing the forecasting process can spend time gathering outside information such as promotions, price changes, new markets, new customers, new product introductions, product phase outs, the effects of competitor actions, etc. Competing with quick response performance means there is not a lot of time to analyze the data. Inventory management decisions are being made daily and whether or not the forecast has been finalized makes no difference. Focus Forecasting will forecast thirty-two thousand items in under 4 minutes.

4.0.

DISTRIBUTION RESOURCE PLANNING

Here are the inventory management requirements for a quick response competitor. The inventory management process must: 1. Frequently revise customer replenishment plans. 2. Connect and then summarize customer replenishment plans with supplier replenishment plans. 3. Identify exceptions where current replenishment plans need to be modified to prevent lost sales or excess inventory conditions. 4. Quickly create a transportation unit, i.e. truckload, shipping container, using item minimum and multiple order quantities and allow management to control the number of periods of supply in inventory for all items. Distribution Resource Planning replaces customer orders and aggregate forecasts with customer replenishment plans. Today with so much personal computing power available it becomes easy to frequently revise customer replenishment plans. We did not have the ability,in the past, to replan frequently. Today, frequent replanning is a competitive advantage. Connecting customer replenishment plans means using a computer to add up what your customers plan to order in detail by week, by item for as far into the future as you care to know. This summarized plan is used to plan supplier inventory replenishments in detail by week by item. Current manufacturing and purchasing schedules and projected inventory plans automatically adjust quickly to customer replenishment plans or at least provide an exception message. Distribution Resource Planning presents exceptions to the inventory manager suggesting current management plans for item replenishments be expedited or delayed. Messages identify specific items, orders, dates and quantities that need to be revised to respond quickly to current customer plans. Distribution Resource Planning gives the inventory manager the ability to make a transportation unit order that includes those items most needed as well as enough weight or cube to make full transportation units. Using safety time the inventory manager can equalize the number of periods of supply for all items and order each item in minimum and multiple order quantities by item.

5.0

PERFORMANCE MEASURES

Companies are in business to make profit and the best way to make profit is to ship products to customers and get paid for them.

1. Shipping extra product to customers "just in case" ensures that they will be paid for more slowly. 2. If a customer wants a product now that is not available this ensures a lost sale. In the first instance we shipped too much and in the second instance we did not ship enough. To measure these two activities we can use two familiar performance measures: inventory turns and projected fill rate. If inventory is turning over quickly, operating costs are less since not only are customers helping by paying quicker but there is less need for storage facilities, material handlers and the quality of products is improved because there is less opportunity to damage the product. A projected fill rate is the percentage of planned sales that can be filled from inventory. If the projected fill rate is high, there are less likely to be lost sales due to lack of product availability. Most people would have to agree that inventory turns and fill rate are much more important than forecast accuracy. Forecast accuracy is only one factor that can affect fill rate and inventory turns measures. It is only because we have told ourselves for too long that our problems are forecast related that we tend to want a more accurate forecast. Without the ability to replan frequently there would be a need to have a very accurate forecast. Today we can replan very frequently. Factors affecting fill rate and inventory turns: inventory accuracy, order accuracy, frequency of inventory review, minimum and multiple order quantities, frequency of re-distribution of slow moving in inventory and many more factors

6.0 NEW BUSINESS PARTNERS

Businesses need to more than automate their past practices and need to work smarter by utilizing the logistics tools of the twenty first century, Focus Forecasting and DRP. As ustomers and suppliers connect their sales plans, replenishment plans and inventory plans the goal becomes quick response through the supply chain to meet customer demand. Only by trading information for inventory can businesses achieve quick response. These tools enable businesses to connect to each other in such a way as to ensure they are both working to achieve quick response. Electronic Data Interchange (EDI) is the technology that allows for the quick transfer of information between partners. DRP and Focus Forecasting are the new tools that can turn this information into a competitive advantage.

7.0 ELECTRONIC DATA INTERCHANGE AND POINT OF SALES

Electronic data interchange (EDI) software is designed to automate interorganizational communication and thus improve the effectiveness of QR program. EDI is the use of standard electronic formats for the creation, transmission, and storage of documents, such as requisition, quotation, purchase orders, and invoices. EDI connects the databases of different companies. For example, order placed by a company is transmitted directly from the companys system to its suppliers system. Suppliers system then transmits the billing information directly to the ordering companys system. In its early use, EDI allowed companies to utilize material requirements planning (MRP) to inform suppliers of the upcoming orders by providing them with access to the database of planned orders. Although this approach was innovative at that time, it still represented only a limited sharing of information between the

supply chains. In supply chain management, EDI is a means of sharing information among all members of a supply chain. Additionally, shared databases can ensure that all supply chain members have access to the same information, providing visibility to everyone and avoiding problems such as the bullwhip effect. Moreover, EDI system contributes to cutting lead times by reducing the portion of the lead time that is linked to order processing, paperwork, stock picking, transportation delays, and so on. POS, on the other hand, is an integral part of EDI system. POS data transfer system provides a distributor/manufacturer with real-time information on what is selling at the retailers. POS data are viewed by many as the answer. The major benefit of using POS data is that it reflects the true sales. This leads to a more efficient inventory replenishment, which ultimately leads to customer-driven replenishment (CDR). POS also allows companies to employ more responsive and real-time pricing strategy. The Beer Store, for example, is using POS data to automatically alert their system to modify their pricing for in-stock brand or package configuration of beers when particular item is out of stock. sharing POS data is insignificant since the manufacturer can utilize available order history to forecast the demand.

8.0 EXAMPLE:-

QUICK RESPONSE SYSTEM IN TEXTILE/FASION INDUSTRY

8.1 Trouble within traditional supply chain volatile demands

Different supply chains have been used by different firms. Normally, the fashion chain that leads to a new season takes near about eighteen months. Designer show is taking place one year ahead of its related season. Decisions are already taken on colors and fabrics months before these designer shows. But, the supply chain of the garments is very short. Near about sixty six weeks were taken as the average lead-time in the apparel industry from raw materialsto consumers in the eighties. For manufacturing, eleven weeks and for warehousing and transit forty weeks were considered. The garments were just waiting in the store for the final fifteen weeks. At present, it is common to use twelve months lead time that leads to sales forecast errors of about forty percent. This error margin is reduced to twenty three percent by shortening lead-time to nine months. An additional reduction of this error margin with about four percent is lead by each additional minimizing of the lead-time with three months. So near about ten percent errors are still evident at the beginning of the season.

Figure 1. A traditional supply chain

For an important part of the value systems, most fashion firms rely on other partners. So, finetuning with these partners should be increased to shorten the supply chain. This is still the main objective for some firms that are dealing with only the fashionable short-season items. Different procedures, protocols, systems and structures that are designed to compete may increase very much complexity for the manufacturers. Unnecessary increase in manufacturers finished goods stock and mark downs may come forward due to increase problems of transfer of inventory holding from the retailers to the suppliers. So, long term strategic planning should be developed for re-shaping the supply chain pipeline and at the same time new and revolutionary ways should be found out to adjust to the paradigm shifts.

8.2 QR Implementation Elements, FMS, Pos Tracking

The retailers are using QR in different segments. Retailers and vendors are developing QR partnerships very quickly between each other. Some retailers are implementing QR during using EDI(electronic data interchange) for the transmission of purchase and shipping information, while a few are using QR throughout their products logistics.

The concepts of partnerships, bar-coding, EDI, PoS (point of sales) tracking, flexible manufacturing system, seasonality and benchmarking with their flexible adaptation in the supply chain must be combined together for the useful implementation of QR. Equal Added Value Assessment (AVA) for pipeline integration, minimum order rescheduling of minimum order, collaboration of upstream supply chain agents, more elastic retail control, data storage, EDI & interfacing formats, fundamental change in business attitude and Quality Management (QM) with better code of behavior development and standards these are some important factors that must be obtained in the pipeline for holistic QR implementation.

QR evaluation largely depends on partnerships and alliances. In order to create supply chain synergy all process duplications must be eliminated & infrastructures should be reformed which will lead to attain amplified profitability, efficiency and market share. For energetic

involvement of all the agents in the pipeline with controlled QR element execution it is necessary to apply special QR programs.

Merchandise bar-codingis also very indispensable. UPC (Universal Product Code) and NRF (National Retail Federation) ensure proper transaction and inventory management. PoS scanning at the tear-off sections of the retails make certain speedy communication. It is possible to exchange of business documents like purchase orders, invoices and schedules under a common web platform by using EDI. It is very much essential for QR as it saves time, cuts error and improve chance to form deliberate relationship.

The complexity of dealing can be minimized by using Value Added network (VAN) as it provides innumerous computer systems and software, security and conformance to standards. PoS Tracking has greatly been expandedin the recent years which is helping in the progress of QR with better inventory control, re-orders processing, SKU management & reduction of cost. There should be a connection between QR responses and the production system to make it more flexible. Modular production system or Vendor Managed Inventory (VMI) may be the example of flexible manufacturing system which is crucial to react to the requirements of QR ensuring minimum order lead-times, additional productivity and effective use of resources.

In order to have complete system redesigning, rapid designing and product development process, process simulators and Line Balancing Decision Trainers 3-Dimensional Concurrent Engineering can be followed. The product seasonality should be understood for the better implementation of QR philosophies. Depending upon the shelf life, products could be Basic, Seasonal or Fashion. As these merchandise have different characteristics they have unlike QR requirements. There seems marginal demand variation with firm requirement throughout the year in case of Basic products. This scarcely caters the necessity to apply QR responses for such products although the growth of PoS tracking, inventory management and sharing of information are rather fundamental to be implemented. The organizations require to go for multi season assortments in case of Seasonal products that indicate the necessity of QR management.

QR implementation is difficult for single season goods as it requires spreading out of manufacturing schedule and inventory procedures. On the other hand, inventory management requirements & spaced product sales have made the QR application easy for multi product lines. A lot of research is to be expected to correctly determine the strategies for Fast Fashion products. In order to fulfill the high speed changing customer demand, QR is an essential requirement to streamline the design, manufacturing and logistics- processes. Full QR implementation also requires benchmarking that helps to alter corporate mindset and measure as per the standards. ATC and AAMA benchmarking may be the best example for sustaining QR.

8.3

Advantages And Disadvantages Of QR Implementation

Implementation of QR strategies provides a lot of advantages.Economic benefits and advantages to both the retailers and to the supply chain members have been obtained because of QR implementation.

The benefits of QR implementation can be tabulated as follows:

Suppliers benefits

Retailers benefits

-Reduction of buying mistakes -Minimization of stock holding -Quick tracking of merchandise

-Improvement of communication -Improvement of planning systems -Quick access to sales information -Easy tracking of products -Security of getting more orders -Improvement of manufacturing systems

-Higher stock turn

-Improvement of cash flow -Increment of customer service -Very higher level of profit -Enlarged competitive advantages

-High volume of production

-Reduction of stock holding -Higher level of sales

-Good profit margin -Getting of competitive advantages -Enhanced customer satisfaction & loyalty

Table 1. The benefits of QR implementation

The typical disadvantages of implementing QRsystems for the suppliers are: Installing of IT systems increases the cost. Increased retailer demands may erode the margin. 8.4 QR As A Strategy And Culture For Operations

The implementation of efficient consumer response (ECR) systems & demand driven supply chains in the grocery area and QR in the apparel field provide advantages across the supply chain, both for its members and the consumers. In recent years, firms have implemented different types of automatic replenishment (AR) systems. AR systems generate inventory restocking by identifying the sales and the demand of the store. The suppliers may reduce costs and build their brands and retailers may get profit from having lower stock holdings and fewer stock-outs if partnerships are developed between them through collaboration, planning, forecasting and replenishment (CPFR).

The retailer may buy and stock more of the producers goods in case of successful partnerships. QR is a form of AR system that is predominantly suitable for the clothing industries. ECR systems have been developed for the industries dealing with fast moving consumer goods (FMCG) and they have considerably changed functions within these divisions. Fashion retailers and their suppliers have accepted QR response to the fast fashion trend. Retailers are allowed to store and replenish stock using customer demand. Production is also made as demand driven.

But, information should be shared between retailers and suppliers about sales data based on stock keeping units with specifications about order schedules and deliveries. At the same time, the suppliers must be of the same mind to keep this information secret The principle of introducing a QR strategy is to lessen surplus stock holding in the supply chain and to diminish

the risk in forecasting about the type and quantity of the product that to be produced to meet the consumer demand. Forecasting risks can be decreased by reducing dependency on forecasts. Lead time management may be improved to get better response to consumer demand which ultimately reduces the forecasting risk.

8.5 Chain

Future Of Qr That May Change The Future Of Supply

a) Short term

It is thought that within the next one to two years, the industry will be pushed to extend the use of EDI to all producers, retailers and other suppliers for establishing better linking among them. Value Added Networks (VANS) may have a vital role in resolving problems lying in the QR supply chain with the technical expertise to achieve modification among the suppliers. The competitive environment among the VANS will intensify the trafficking of electronic data. It will help to establish a price- commodity business. In the future, VANS will supply quality information products with high delivery speed. The present training approach to software and solutions will have to be altered to an educational approach for proper utilization of VANS. In 1991, Commerce Institute was started by Sterling to offer educational courses in supply chain business matter. These courses are dealing with themes that are not offering any IT solution but are giving ideas and an image of changed business practices leading to operational payback. By the way, there must be a champion ownership in the supply chain through the value added applications to support the proper application of VANS. This type of ownership will be needed more if the new coordinating technologies are not able to open the door to a different kind of competitor who will blend computers and telecommunications. VANS are offering different software packages such as, the bar-code detector which is very much helpful to reduce UPC errors. The lessening in retail inventories is arising problems for both the short and the long term. The reason of the problems is not understood properly. But development is going on to solve the problems and contribution to retail profits has already been obtained. So, the idea of an information field should be employed as it will be more and more vital as QRwidens in future. For claiming as security reason, textile producers and the better dye houses do not supply CIE co-ordinates of colors. But they will have to assess the color of their fabrics in routine basis and they should deliver CIE co-ordinates.

b) Long term

It is really very tough to assume about the advancement of QR over the next five-plus years though the QR paradigm has become more and more clear and a number of proposals have already been taken into action. If the retailer can know the methods to balance lead times, stock outs and vendor lead times, he will be able to inspect the end-of-season markdown mix

of seasonal goods with its margin loss. He will also be able to set up processes for reestimation of demand and the correct reorders.

A number of problems are coupled with fashion merchandise and sometimes they create complexity. To solve these problems complicated techniques of fashion and color trends will have to be built up. A successful manufacturer will be able to use PoS data. He will have the talent to guess shifts from buyer projections and also he will look forward to seasonal demands by keeping inventory level to a minimum value. At the same time, he will keep other suppliers informed of own necessities. Computing costs and speeds will be improved. Within a short period, everyone will reach at the point where the clothing business will be more prominent on a high scale. The utilization of CAD will be extended and the customer with the retailer will be incorporated for the interactive designing of garments.

Now, it takes a long time and lots of efforts to make sample garments and to supply them to the buying offices. By reviewing and modifying the CAD images electronically as per style & color this time will be greatly minimized. Even the garments design will be added in the pricesales catalogue as a result of which sales preference data series to be established. It will also increase the opportunity of true color and style forecasting to open up. The manufacturer! retailer systems will have to use reliable PoS data so that the industry can be attached into the very complicated up-stream systems to support the demand-activated production. Strategic mechanism will be required to increase the rate of acceptance of EDI in all industries.

8.6

QR and Value Chain Management

QR plays a vital role in value chain management. It helps to link the supply side with the demand side efficiently as follows: The buyer-seller relationship is more prominent with the connection between distribution and purchasing. QR offers higher production, efficient packaging & proper distribution with quality in inventory management. The producers offer to supervise cautiously the customers inventory levels to be able to execute future demand more proficiently. This may lead to minimize the inventory costs of the customers. QR provides manufacturing with variety of planning. Consumer demand categories of the products are observed by the supplier and the retailer. The delivery performance of the suppliers has been increased due to this alliance which is expressed as CPFR (collaborative planning, forecasting and replenishment). Now, the supplier can supply the product to the end consumer directly, as for example, Dell is selling computers in this way. It is followed not only by manufacturers-retailers but also by designerretailers who do not have own production plants.

8.7 CONCLUSION

The idea of QR was invented because of very high competition in logistics in all business. The protectionist theories of legislation and new technology could not work properly as the safeguard of the industry. QR culture introduces a typical enterprise with rising virtual networking for strong relationships that are devoted to consumers. This furnishes the enterprise to be remarkably flexible and miscellaneous ensuring agile commitment. The business must be focused outwardly to form networks and coalition in-line with demand so that inter-organizational information can be moved to set up a permanent relationship. Information shows the way of gaining the knowledge of development, access, retrieval and sharing which can eventually encourage escalating the flexibility in the organization. But a decentralized, unwrap network co-ordination with integration and cross-functional processes marked with leadership styles should be employed so that the management processes can be linked up with the involvement of QR strategy. It will lead to proficient dealings of the total system with the environment. At the same time, it will help to build the capacity for changes.

9.0

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