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Executive Summary

Retail industries involve the sale of new or used goods to end consumers for personal or household consumption. Cut-throat competition is becoming tougher in retail space with growing supply and demand.
Hyper-markets and Super-stores are battling each other on every major corner while direct marketers (including catalogs and online sites) are stealing customers from stores. Online selling at deep discounts is even making immense inroads into consumer purchases of automobiles and travel. Direct selling through online retailers, catalog companies and home-shopping television channels continues to increase. Sales via the Internet rose dramatically in 2005 globally.

To continuously improve on the process and leverage on the core competencies, there is a need for a foundation that provides accurate information wherever and whenever required. This calls for a need for strategic management of supplies and inventory as far as retail industry in concerned. To change an in-store paper based environment of registering sales in retail shops to an online shopping environment, there needs an integration of the data to increase customer satisfaction, increase productivity and liberate sales people from registering chores and extend market beyond traditional bounds.

Enriching category, item planning, streamlining product introductions and other business strategies alone are not sufficient to sustain and over-grow in the market place. Real-time visibility to sales and order status, in-store kiosks, and service desk enhancements and strategic technologies to track inventory have become the call of the hour to improve the customer experience and further differentiate the brand. New efficiencies in managing stock and collaborative forecasting and replenishment help ensure that the products customers want are readily available on store shelves.

Strategic methods and tools like Vendor Managed Inventory, ERP and SCM are recognized very much these days. Several Indian companies have already come up with either a home-grown ERP or SCM model or they use packages from well-established firms. There is a need for a strategic collaboration of the internal process with the business process of the suppliers and customers. Hence, this paper would aim at answering the question, "How retailers need to organize their supply chain strategically to compete in consumer market?"

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* Contributed by -
Gautam Sukanya Krishnan & Amit Kumar,
PGDSM - MIT,
S. P. Jain Institute of Management & Research, Mumbai.