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Retail Management

Welcome

Course plan
Books to read Evaluation pattern Name cards
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Retail Management

Course plan: Overview Institutions Understanding customers Market strategy Financial strategy Store location/ site evaluation Organizing for retail Merchandise management
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Retail Management

Course plan: Store management Store layout Customer service Retail selling Logistics and information systems Careers in retailing

Retail Management

Books to read Why we buy: Paco Underhill The call of the Mall: Paco Underhill The Nordstorm way: The Walmart Way Made in America: Sam Walton Retail management : Berman Evans

Retail Management

Books to read Pour your heart into it: Howard Schultz Leading By design: Ingvar Kamprad Like No other store: Marvin Traub It happened in India: Kishore Biyani Retail Management: Gibson Vedamani

Retail Management

Evaluation patterns: Project 10 + 10 Case 10 Quiz/test 10 Class participation: 10 ( weighting subject to variation)

Retail Management

Overview:

Alice in Wonderland- looking through the retail prism Reducing queue size - TESCO

Retail Management

Benefits to the customers:

Breaking bulk Providing assortment Holding inventory After sales service Providing information

Retail Management

Benefits to the companies:

Greater revenue More reach Eyes and ears of the retailer Obsolescence: physical/ technological/fashion Some pioneers: bombay dyeing , Raymonds, S Kumars (!) and Grasim, Digzam (!), Binnys (!), Mafatlal, DCM
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Retail Management

Some statistics (interview purpose) In India, retailing accounts for 10% of GDP, 8% of employment Annual growth rate: 20-30% Current size: Rs. 800,000 crore

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Retail Management

Factors behind growth in retailing Economic growth/urbanization, consumerism, brand profusion, availability of real estate Retailing environment: Economic legal (FDI)- debate , property regulations, real estate ( rents, taxes- car batteries) labor laws ( walmart )
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Retail Management- overview

Technological

competitive

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Retail Management- institutions

Theories of retail life cycle 1. Wheel of retailing a. Entry phase b. Trading up phase (life style, trinethra) c. Vulnerability phase ( disruptive change) 2. Dialectic process: two institutional forms with different advantages modify their formats till they develop a third format combining their advantages
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Retail Management- institutions

Theories of retail life cycle 3. Retail accordion continuous movement from general- specialized- general 4. Natural Selection: firm should be flexible enough to adapt to the changing environment and should adapt its behavior

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Retail Management- institutions

Lessons from life cycle:

Expand during introduction


In maturity, administration skills and operations are critical

Adaptation is essential at the end.

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Retail Management- institutions

Retailer classification: Store based Independent store Chain store (disadvantages) Franchise store Master franchising McDonalds OR Area development franchising Exclusive showrooms- world of Titan Product/trademark franchising- pierre cardin Business format franchising
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Retail Management- institutions

Retailer classification: Store based Leased department Consumer cooperative ( NTPC, SAIL, samabayikas)farmer coops- India, Poland, ( Turkey, Italy, Belgium, mid-west Europe- slow food)

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Retail Management- institutions

Retailer classification: US Defn. of a department store: 1. Minimum fifty people 2. 20% of total revenue from apparel and soft goods 3. Should carry: furniture, home furnishings, appliances, radio/tv/ household products 4. Annual sales under $10 million ( single product line not more than 80%)
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Retail Management- institutions

Retailer classification: Convenience stores ( 7/11, spencers daily) Supermarkets: focus on food and household maintenance ( where to put milk?) Departmental store- pantaloons. Hypermarkets- combination of a discount store and food based supermarket Guerilla retailing- Isaac Mizrahi
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Retail Management- institutions

Retailer classification: Category killers ( power retailers) Toys r Us, Staples, Sports Authority, Home Depot ( Villager Hardware??), Builders Square, Lowes, Blockbuster Chroma, musicworld , home town Why are traditional departmental stores dead ? ( infants in India)
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Retail Management- institutions Emergence of specialty and discount store Designer labels have not increased store loyalty Specialty chains have stronger supply chains Too big and unproductive Scrambled merchandising from food retailers Reacting to suppliers Leveraged buyouts- debt-poor cash flow, limited funds for store renovation.

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Retail Management- institutions Factory outlets A) mfg. controls location- out of the way of distributors B) can be profitable low rent, variety, service and NO margin for distributors C) proper disposal of discontinued items D) brand factory

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Retail Management- institutions Retailer classification: Non-Store based Direct marketing- the international scenario A) company reputation- earlydays/ geography B) shop when you like Assortment Brand names carried Toll free number ( cost of shopping) Credit card acceptance Speed of promised delivery time Comparable store prices Satisfaction with past purchases

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Retail Management- institutions

Retailer classification: Non-Store based Direct marketing- the international scenario a) Increased competition b) Dual distribution channels c) New use of catalogs- specialogs, carry complimentary product ads, sell the catalogs d) New use of TV: shopping networks and infomercials
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Retail Management- institutions

Retailer classification: Non-Store based Direct marketing- the Indian scenario ( is there an opportunity- discussion) Global direct marketing- (assignment- eddie bauer, lands end, sharper image, williams-sonoma) Challenges: lack of standards, different currencies, wide variations in postal rates, uniformity for mass mailing
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Retail Management- institutions

Retailer classification: Non-Store based Direct selling- relatively slower growth, for telemarketing rules check www.ftc.gov/bcp/telemark/rule.htm Network marketing Some retailers also have direct sales force: J C Penny decorator consultants

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Retail Management- institutions

Retailer classification: Non-Store based- online retail Reasons for not shopping on the web privacy security, seeing/touching products, need to talk, not enough information
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Retail Management- institutions

Retailer classification: Non-Store based- online retail Reasons for not shopping on the web Knowing the address Clutter of websites Easily bored Slow sites ( rich sites)- Hasbro Customer service Coordinating web-based selling with stores
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Retail Management- institutions

Retailer classification: Non-Store based- online retail- types of web Brochure web site Commerce site- full scale selling, BUT not integrated with database Integrated site purchasing, inventory and accounting. Out of stock items removed , ordered immediately
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Retail Management- institutions

Retailer classification: Non-Store based- online retail- types of web webified store
web connectivity to POS terminals- customer directed to other stores if item out of stock Provides information from manufacturers site Site integrated with manufacturer systems Has all information for collaborative sales Mfg automatically replenishes fast selling merchandise- SHIP directly to consumers 30

Retail Management- institutions

Retailer classification: Non-Store based- online retail- types of web How will a TOP LUXURY RETAILERs webpage look like? PRADA ( check site)

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Retail Management- institutions

Retailer classification: Non-Store based- online retail- types of web In Prada we always like to have a different way with everything. We look to the trend and then ask how we could do it another way. That is the way to add value, so long as you do it intelligently.

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Retail Management- institutions

Retailer classification: Non-Store based Vending machines: (www.refreshment.aramark.com) Generally beverages and food items Why high priced items do not sell? Video kiosks- potential- Virgin Are smart cards better options than coins? Airport retailing dubai, india/ station retailing ? 33

Retail Management- institutions

many retailers have grown accustomed to shifts in what the consumer wants and are well acquainted with economic cycles. Even as they shutter unprofitable stores, they are opening newer, profitable formats and converting existing units to these formats.
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Retail Management- understanding customers

Demographics is dead ! Age distribution of population ( Eddie Bauer) US scenario (33% above 50) - products Income 1980 to 2000 (why Walmart succeeded), disappearing middle class

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Retail Management- understanding customers

Urbanization The shrinking household The working women Diversified minorities ( black Santa)

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Retail Management- understanding customers

Demographic analysis The limited ( www.limited.com) has Express (young women) Structure (for men) Bath and Body Works( toiletries)/ Health and glow Victorias secret ( lingerie) Henri Bendel (upscale womens clothing) Lane Bryant (full-figured womens clothing)
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Retail Management- understanding customers

Geography analysis (BB Gujarat)


Regional market: Metro geography- spending priority
West Grocery Eating out Books/music Personal care North Grocery Personal care Eating out Books/music South Grocery Eating out apparel Books/music east Grocery apparel savings Personal care

savings

savings

savings

Eating out
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Retail Management- understanding customers

Consumer buying behavior What they buy, how much (ability, willingness and authority- the didero effect)

Look out for factors like shopping distance, working women spend, time spent, priority list

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Retail Management- understanding customers Buying centers- who buys?( for whom?)- diapers Buying influences- why do they buy?- shopping as antidepressant Psychological factors: Personal factors- self concept Social factors- class, culture, reference groups How do they buy stimulus/ problem awareness/ information search/ evaluation of alternatives/ purchase/post purchase Pharma retail reactive well and worried well ( how will store design vary?)
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Retail Management- understanding customers

Types of consumer decision making: Extended, limited and routine Buying scenes: where do they buy fromgroceries, fish, vegetables Food and grocery mainly from kirana ( atta chakki, open edible oil (BB Sangli)- food bazaar as a destination)

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Retail Management- understanding customers

Memetics- a way of understanding the customerMemes are cultural genes Application shoes with adjustable soles, tees with customizable graphics ( If interested, read The Selfish GeneRichard Dawkins)
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Retail Strategy

In retail, you are either operations drivenwhere your main thrust is towards reducing expenses and improving efficiency- or you are merchandise driven. The ones that are truly merchandise driven can always work on improving operations. But the ones who are operations driven tend to level off and begin to deteriorate

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Retail Strategy

Check www.sba.gov Elements of strategy : ( Honda) 1. Situation analysis ( mission, alternatives, goods category)- ikea, movie halls, archies

Product based/ need based Leader/follower

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Retail Strategy

2. Objectives: can refer to sales, profit, customer satisfaction and image

3. Consumer identification: mass marketing, concentrated marketing, differentiated marketing

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Retail Strategy

3 generic strategies: Operational excellence- McDonalds, dominos uses this as a differentiator Product differentiation: Westside, sheetal design studio ( hemant trivedi)/qwikys
Price strategy- loss leader pricing strategy

Customer intimacy : CRM- barista, shoppers stop, customer loyalty programs, Nordstorm
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Retail Strategy

Other strategies: Ansoffs product market expansion grid Entry barriers in the form of culture baskin robbins, barista, starbucks

paradigm of 1

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Retail Strategy

Analyzing retail performance: Payback period analysisRentals : Rs. 30 per sft for supermarkets ( 5000 sft): Rs 50 per sft for departmental storesInitial investments: Rs 800 per sft/ Rs 1200 per sft Employee cost: Rs 5000 per month Electricity: Rs 10 per sft Income from brand promotion
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Retail Strategy

Analyzing retail performance: Importance of stock turns ( annual sales / year end inventory)- increasing stock turns increase incremental ROCE helpful in funding growth of new outlets through internal accruals Reason why many retailers fail: leveraged expansion and low stock turns ( shoppers stop/ Trent in 2000), barista early days
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Retail Strategy

Things to remember when investing in a retail chain: a. A long gestation business, 5-7 years before stabilizing b. Making EACH store profitable is very imp. c. if you are making lossesa. consider going public b. Go public, raise money, pay debt and go forward AND c. Stop/control expansion till that time.
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Retail operations

Retail operations include: 1. Customer service/ accommodation 2. Retail selling 3. Store staffing and scheduling 4. Retail floor and shelf management 5. Store administration and facilities management 6. Warehousing and supply chain management 7. Loss ( shrinkage) prevention

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Retail operations

Retail operations include: 8. Pos/ cashiering process 9. Visual merchandising and displays Dipstick parameters: a.Customer transactions- at different points of time

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Retail operations

b. Customer conversion ratio (percentage yield rate/ walk to buy ratio) c. Returns to net sales d. Transactions/ hour e. sales/transaction f. Hourly customer traffic: multi-department stores g. Stocks ( av selling price/ stock price)

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Retail operations

Stock turnover /inventory turnover ratio: Net sales/ average value of inventory If daily sales account for 2% of the stock, whats the ratio? Percent inventory carrying cost (Inventory carrying cost / net sales)

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Retail operations

Gross margin return on inventory Gross margin/ average value of inventory Markdown percentage shrinkage to net sales

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Retail operations

Space productivity:
Occupancy cost per square foot selling space ( gives estimate of gross margin required for multi unit retailers) Sales/square foot Stock/per foot Percentage selling space

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Retail operations

employee productivity:
Net sales/employee Customers served/employee Gross margin per employee ( measure employees performance)- useful for buyers Quantity or value purchased per buyer (buyers performance depends upon number of suppliers, no. of SKUs as well as replenishment cycles involved)
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Retail operations

The strategic resource model of retail

SRM measures three resources- inventory, labor and space inventory GMROI Space GMROF Labor GMROL If overall retail performance is to remain unaffected: PRICE CUT IMPLIES IMPROVED increased sales and space and labor
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Retail operations

The strategic profit model of retail

Return on net worth (RONW) =profit margin (net profit/net sales) x Asset turnover ( net sales/total assets) x Financial leverage ( total assets/net worth) pantaloon- 4, bata (3.09), archies 21.64 Westside 7, Raymonds 24.1 RONW gives good indicators for future expansion
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Retail operations

The strategic profit model of retail

3 tools to manage performance:


Profit management Asset management Debt management

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Retail operations

The strategic profit model of retail

Profit management: Involves sales productivity and cost control (Tuesday morning) Price increase- dos and donts (HBR article on pricing cues) Cutting costs without cutting corners ( use of technology, scm )
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Retail operations

The strategic profit model of retail

Asset management: Discount stores have higher asset t/o than department stores ROA ( net profit/assets) is a common indicator Inventory control is critical- steps for better inventory performance: Right quantity/ fewer suppliers/ control systems/ managing slow moving items
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Retail operations

The strategic profit model of retail

Debt management: Pros and cons of leverage ( interest rates)using franchising when in trouble ( barista) Short term, intermediate ( refurbishment, new equipment ..) and long term finance Short term finance may be inevitable for seasonal retailers Setting performance objectives
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Store planning, design and layout

Learning objectives: a. Process of store planning and location selection b. Some location assessment formats c. Details of store design and image mix d. Retail space management e. Issues related to store layout/ circulation

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Store planning, design and layout

Trading area analysis:

How trading area is related to promotions


trading area overlap- 2 stores in the same mall can have different trading areas

Use of GIS (Eicher, Mapinfo)


Primary, secondary, fringe trading areas

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Store planning, design and layout

Trading area analysis:

Destination store Parasite store ( flower shop in a hospital) Use of store records Consumer profiling (reliance retail) Can we have a shopper stop at shankarpally Analog model similarity analysis
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Store planning, design and layout

Trading area analysis:

Regression model: using equations ( sales vs. population size, traffic ..) Gravity model: considers
Distance between consumers and comp Distance between consumers and chosen site Store image

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Store planning, design and layout

Trading area analysis:

Reillys law: gives the point of indifference


Huffs law of shopper attraction: considers product assortment, travel times, sensitivity between the two

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Store planning, design and layout

Trading area analysis: main factors Population size and characteristics Availability of labor Closeness to source of supply Promotion facilities Economic base Competitive situation Availability of locations regulations
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Store planning, design and layout

Trading area analysis: buying power Effective buying income (EBI)- disposable income Buying power index = 0.5 ( areas % of national EBI) + 0.3 ( area% of national retail sales) + 0.2 ( area % of population)

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Store planning, design and layout Store planning includes location planning and site selection Location planning: 1. high street location ( high eyeball rate) 2. destination/freestanding location 3. mall location

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Store planning, design and layout


Factors to consider during site selection Adjacent occupants Commercial viability Taxes/ legal issues Number of floors Other nearby facilities Parking Terms of contract etc.

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Store planning, design and layout

Location selection issues for a supermarket No. of offices, buildings within a 50 m radius No. of kirana store within 1 km radius Competitor premises nearby

Customer flow data: (weekdays)

Lean/medium/peak Residents/people in transit, students, professionals.


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Store planning, design and layout

Customer flow data: (weekends) Extra factors No. of footfalls expected

Expected conversions
Expected sales per day in the area Average basket value The kishore biyani way ( hit movies/ lower parel Phoenix Mill)
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Store planning, design and layout

Site selection some pointers Balanced tenancy Ownership vs. leasing

Sale-leaseback

Lease types: straight lease/ graduated lease % lease ( specified minimum/ maximum) Lease covering increase in maint Net lease ( retailers pay for facilities)
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Store planning, design and layout

Site selection some pointers How pantaloon kolkata store was selected gut feel, location, no stairs, agreement with SS Dhanuka, % of daily sales as security

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Store planning, design and layout

Store design and image Employee type and density (saree shop one per 100sft/ DP: one/ 400 sft) Merchandise type and density s/market has a higher density than dp/stores Fixture type and density (boltless racks) wood/marble/granite in jeweler Metal and plastic in sports shop
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Store planning, design and layout

Store design and image Sound type Odour type (coffee/ flowers for men/cosmetics)

Visual type and factors:


Yellow for gold/ day tones for garments Yellow and red increases pulse rate (impulse goods) Pastels/soft tones for places requiring long time for inspection and selection (watches and jewelers)
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Store planning, design and layout

Store design and image the space mix Idea is to optimize selling space The selling area is used to present the merchandise Non-selling part is accounted for by circulation space, aisles, staircases, lifts, facilities (60:40) Staple goods: store USP:55% of store offering-generally towards the back (shirts and trousers/ grains and sugar )

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Store planning, design and layout

Convenience goods: basic merchandise- 30% of the store- bought in multiple units (white tshirts)

Impulse purchase merchandise- 15% of the storegiven maximum exposure ( candies/socks)near cash counters and exits Different categories- different places
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Store planning, design and layout

retail space management: a. Ensuring smooth and efficient customer flow b. Helping customers reach and access merchandise c. Creating a feeling of comfort in their minds d. Aesthetics of a well planned floor triggers a come back feeling e. Helps in selling more effectively and retain customers

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Store planning, design and layout

store layout: the circulation plan a. Lighting and displays have a pinball effect b. Dp store highway is six feet wide/ 3 in sm

a. b. c. d. e.

Free flow circulation: boutiques Grid circulation: typically in supermarkets Race track circulation: subiksha/ikea Herringbone- typically in a narrow store Spine herringbone without side roads
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Store planning, design and layout

floor space management a. Sales / sft b. Margins/sft c. Stock / sft

Space audits:
Hot spot analysis Selling space to non-selling space
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Store planning, design and layout

golden rule for retail space planning: Customer comes first! Only browsers can turn into buyers Optimize trading space Appeal to customers five senses

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Visual merchandising

enhances shopping experience Is a communication tool Role of Presentation

Helps customer in making buying decision


Store atmosphere Using a theme for VM
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Visual merchandising

VM will differ for lifestyle retailing (aspiration) and value retailing

Signage- imp in larger stores

Job of a VM Planning the theme and create displays Arranging props for displays Arranging fixtures and lighting Setting up stores before opening Working with floor plans Training Organizing merchandising units

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Visual merchandising

Displays- window (exclusive / open window) Live display kids kemp Marquee display

Island displays
Counter displays ( backlit watches) Brand corners ( shelves and gondolas) End cap displays ( the boomerang effect) Cascade/waterfall display
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Visual merchandising

Some more points on signage: Message should be zone specific Where to put signs in a shoe store? In a multi-storied mall ? Banner in the cash area Smart sign placement intercepts shoppers line of vision Look for areas where people have time ( forced to wait- maruti)
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Visual merchandising

Some more points on signage: Signage in restaurant you are looking for the waiter & then the restroom sign near a restroom ? McDonalds: 75% of customers read menu AFTER ordering Table tents Deeper areas require longer messages What's common to bank, p/o and fast food joints ?
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Visual merchandising

Some more points on signage: Putting backlit signage beneath a table in post office? Separate strategies for shoppers walking in and walking out Shifting bill boards/ moving bill boards/ video bill boards/ rotating arena

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Visual merchandising

Prada, one of the highly coveted luxury fashion retailer, has decided to open a one of its kind store in New York, Barcelona and Berlin. What ideas you will give to prada, to create a unique customer experience ? the shop will carry mainly womens dresses -

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Visual merchandising

$40 million, 23,000 sft store

The stores never really been about maximizing the per-square-foot sale space. We wanted to be seen to waste space. Which is another form of luxury

rem koolhas

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Visual merchandising

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Visual merchandising

Interactive dressing rooms: Glass changes from transparenttranslucent-transparent Lighting- day/night/evening Closet touch screens- RFID closet Staff devices: all-in-one/ catwalk videos Magic mirror- see your back/ slow motion Use of human factor specialists

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Personal selling in retail

Role of a retail salesperson: Resource for information Value counsellor PRO Merchandise custodian Explaining benefits and not features Keeping complaints to the minimum Develop loyalty
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Personal selling in retail

Checklist for sales Test of attitude Test of skill Test of knowledge ( shoppers stop)

Test of integrity
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Personal selling in retail

The sales process Connect with the customer ( beyond smilingIndian scenario) Probe needs subtly Presenting merchandise Handling objections Recognizing buying signals Trial close and add-ons- up and x-selling Suggestive selling closing 97

Personal selling in retail

A sample training tip: Greet the customer Listen to their needs Know your products Lern to juggle several shoppers Pack merchandise carefully Refer customers by their name Stress hassle-free return policy
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Personal selling in retail

Lessons from a successful sales associate: First 10 minutes Offers delivery/ travels to customers office / home Sends hand written note about latest trends Key customers receive bags/ chains on birthdays/ anniversaries

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Personal selling in retail

Lessons from a Nordstrom legend: Dont think about sales Calling customers when new stocks arrive Accepts new opportunity Bad opening day cold calls 7 years to perfection Arrive early and do difficult things first Using the telephone EARNING trust
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Personal selling in retail

Lessons from a Nordstrom legend: Choose your role time saver/ confidante/ teenage counselor/ know-all People love to talk about themselves Never judge by appearance Talk less about price- get your judgment Dont take a decision on his behalf Multiple sales Follow through- stunning effect
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Merchandising

Learning points:

Category management Assortment planning process Setting financial objectives Product mix trends

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Merchandising

Category hierarchy: Division (apparel) Department (mens.,) Category (shirts..) Sub category: full sleeve formals Brand: arrow Style: button down collar Options: size(4), color (5), design (3), price (3)
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Merchandising

Category is a distinct , manageable group of products and services, perceived by customers to be interrelated and/or substitutable mens and girls jeans

C-M involves managing all SKUs within a category satisfying customers and increasing sales e.g. color plus in mumbai

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Merchandising

Responsibility of category manager Vendor interaction Merchandise selection Merchandise pricing Working with ad department Role of merchandise planner: Purchasing the right quantity of product Assigning merchandise to stores Monitoring sales and suggesting markdowns
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Merchandising

The C M process: Category definition Category roles:destination, routine, convenience and seasonal Category assessment Category scorecard: developing bottomline and setting targets Category strategies: developing marketing strategies- demand and supply oriented
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Merchandising

Category tactics related to assortments, pricing etc Implementation The buying organizers: purchasers/buyers Setting financial objectives: GMROI/ inventory turnover Advantages of rapid inventory t/o:
Increases sales volumes Reduces obsolescence / markdowns
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Merchandising

Improves salesmen morale Helps to buy more merchandise Reduces operating expenditure (lower carrying cost, lower interest) Increases asset turnover

Disadvantages: Loosing customers/ increasing cost of goods of sold due to purchase in smaller quantities Increases operating expenditure- meeting, order processing etc
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Merchandising

Category lifecycle- difference between fad / fashion Krrish

The assortment planning process Depth ( assortment) / breadth (variety) Determining buffer stocks: 1. Availability offered by retailer 2. Demand fluctuation 3. Lead time fluctuation 4. Product availability of the vendor
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Merchandising

Assortment plan: minimum for fashion related category

Product mix trends:


Shotgun merchandising Rifle merchandising

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Merchandising

Assortment plan: minimum for fashion related category

Product mix trends:


Shotgun merchandising Rifle merchandising

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Merchandising

Most common: OTB (open to buy) Helps retailers project and control future buying OTB refers to merchandise budgeted for purchase during a certain period of time for which the stocks have not yet been ordered. It also involves forecasting OTB amount: amount remaining to be ordered to meet the budget Retailers tend to overstock when sales increase and under stock when they are low
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Merchandising

Most common: OTB (open to buy)

Helps retailer fix the ideal amount of stock that should be on hand at the beginning of any given month and the quantum of new merchandise to be received during the month

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SCM & logistics

PPO: pre purchase order- instrument thru which the tentative plan of order placement to the vendor is done for the whole season as soon as the inventory planning is completed Integrated supply chain- Whirlpool Hit ratio: gap between delivery and purchase orders VMI: vendors manage inventory at the store/ take back slow selling items EDI: Warehouse management:
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SCM & logistics

EDI: Warehouse management: GRN ITN- inter transfer notes- when merchandise is supplied to the retail stores (ITN out) Material handling: forklifts/ Zara using hangers ECR Automatin and barcodes (EAN standards)115

SCM & logistics

RFID in retail: No need to unload goods at cash/ shrinkage No need to check loadings and unloading in the warehouse Results from WM: 16% reduction in OOS items AND items with RFID tags replenished 3 times faster SCM @ Tanishq SCM @ Shopper Stop SCM@ Reliance retail (article discussion)
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SCM & logistics

Logistics- military origin Critical in outsourcing an era of globalization and

Logistics is tactical and SCM strategic: walmart, dell and Zara No longer a cost Dangers of scm: the walmart effect, nike
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SCM & logistics

Some trends: Putting second factories in customer-dense markets Zara breaking conventions

Two issues: buying cheaper and cutting stocks


The bull-whip effect- source of major inefficiency

P&G and pampers More reliable information flow can smooth out fluctuations
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SCM & logistics

Some trends: In future supply chains/networks will compete with each other and NOT companies Manufacturing complexities CISCO Agile, adaptable and speedy Flexitronics: 30 countries- how transnational companies use SCM strategically- toyota
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SCM & logistics

Some trends: Criticality of information ( and inventory) Different product (supply chains) move at different speed- this creates assortment problem for retailers 2 moments of truth for retailing (P&G) A. is the product on the shelf? B. does it deliver what it promises?
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SCM & logistics

Some trends: Role of packaging in SCM Toyota in India

Role of containerization
Fedex, UPS and DHL- how they are growing? By giving value added services like?
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SCM & logistics

Some trends: Fedex Kinkosemergency backups e-mailing documents/

UPS and Toshiba laptops Whirlpool truck drivers Just-in-time lobsters

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SCM & logistics

Some trends: be careful of slim supply chains How sony ericsson came into being Toyota using video conferencing to discuss new rumours (6 lacs cars, 200 tier I suppliers in 400 factories) How all this relates to globalization (End of the Line, Barry Lynn)
Due to consolidation, globalization and outsourcing provide temporary relief- flexibility is lost

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SCM & logistics

Some trends: be careful of slim supply chains Continental strategies Product line strategies Limits of globalization defined by supply chain management! Come back home Risk management (internal impact on share price and external)-

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