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As mentioned in exhibit above, the manufacturer forecasts demand and plan for it based on past records and plans for promotions from manufacturer's marketing team. As explained in previous section, an organization tries to increase demand for its SKUs
for various objectives. But if Modern Trade Outlet also plans its promotions at the same time, then the demand will suddenly shoot up as in period 6 to 8 in the exhibit and if they both withdraw promotions then demand in the market will suddenly reduce and its freshness level will reduce. In this way, it becomes a challenge for manufacturers to plan and satisfy their customers. Therefore, it is the requirement of the market to include channel partners in the planning process to reduce the deviations.

Challenge or Opportunity

Based on previous sections, we can say that Modern Trade is a challenge and this challenge is becoming bigger and challenging everyday with a very high growth rate. Today, every manufacturer is developing its organization and trying to convert Modern Trade from a challenge to an opportunity, and to grow with the retail industry. There are various methods, models and technology described subsequently to handle this challenge and convert it in an opportunity.

Supply Chain Innovation - "Changing Business Strategies"

Supply chain innovations combine developments in information and related technologies with new logistic and marketing procedures to improve operational efficiency and enhance service effectiveness. Innovations include ECR (Efficient Consumer Response), CR (Continuous Replenishment), automated ordering utilizing scanner data, and many other technology-enhanced processes and procedures in the out-bound supply chain. Importantly, these innovations consist of allocating new investments and activity sets to channel participants to maximize joint profit by reducing costs through greater operational efficiency and by increasing revenue through greater service effectiveness.

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* Contributed by: -
Devdatta Jain & Meenakshi Chhajer,
National Institute of Industrial Engineering (NITIE), Mumbai.