Spatial Convenience: Strategically locating the outlet with distribution networks and warehouses located proximally.

Supplier holds inventory.

2. Vendor Managed Inventory: In this case, the vendor himself is given the responsibility to handle the inventory. A space for the vendor is rented in the outlet, and he takes care of the shelves and the space. It is a 2-way agreement wherein the vendor gets the space to market his product by interacting one-to-one with the customers.

3. Point of Sale Information System: As soon as one stock keeping unit moves out of the store when purchased by a customer, the information readily flows to the supplier.

He is given access to the inventory database.

A re-order point can be imposed based on consumption pattern and the supplier is asked to fill the shelf upon inventory reaching the re-order point.

4. SRM - Supplier Relationship Management:

Relationship with supplier should not be a marriage of convenience. Supplier has to act in ways more than what is required.

By providing special offers, discounts and incentives, the supplier savors the relationship. This also serves as a promotion strategy for the outlet.

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