• PAGE ONE
• INDEX
• HOME

New retailing realities call for finetuning supply chain

Our Bureau

BANGALORE, Feb. 5

THE radical change in the structure of the Indian retail industry has resulted in the balance of power shifting from brand marketers towards retail stores. This, in turn, has increased the need to track tens of thousands of customers through computerisat ion and connectivity and also to ensure efficient consumer response.

In a panel discussion on the `challenges for supply chain' at the KSA Retail Summit 2000 here, Mr. Lalit Bhojwani, Vice-President, Satyam Infoway, in a presentation (delivered by a colleague in his absence), said connectivity through computers is importa nt for retailers as it ensured linkages with suppliers on a ``cross platform environment''. It also helps in complete asset management and allows remote users access to centralised resources. Also, `end of day' and `beginning of day' reports could be spe eded up with a computerised system.

Expanding on the market realities of the retail industry in India, the presentation pointed out that the business operates on low margins, high volumes and high investments and overheads. The retail system involved a high logistics complexity in the tax structures, the geographical reach, customer preferences and cultural diversities. Other stumbling blocks were the low IT maturity levels at the supply side, while computerisation at the point of sale end was harder to implement.

However, a connectivity model shown for FMCGs in the presentation, revealed that it could actually result in lower inventories and higher availability of products. Retail chains, too, could focus on their core competency and connectivity could be a compe titive differentiator.

IT could also lead to a tight integration of information flow, better customer response and allows better management of market dynamics.

Retail connectivity could be one-prong in the many different skills, required to make a retail business a success like shopper management, inventory control, design and display, footfall enhancement and location selection.

In the same panel discussion, Mr. Sarbajit Ghose, CEO, Nanz Food Products Ltd, Delhi, spoke on the challenges from a retailer's perspective. Mr. Ghose said dry groceries and perishables were the product categories in which supermarkets could truly differ entiate their offering vis-a-vis competition. The challenges for the retail business lay in building partnerships with the FMCG companies which would help retailers avoid working at cross purposes.

Mr. C.S. Suryanarayanan, Country Manager, Levi Strauss, India, spoke on the challenges facing an apparel retailer. The apparel business, he said, is characterised by short product life-cycles, high rates of obsolescence, and a large number of SKUs (stock keeping units). It is also confronted by an evolving consumer who is getting more brand conscious and who has a wide choice today. He said different retailing formats needed appropriate solutions.

For example, an exclusive store's supply chain priorities would be online information, model stock corrections with speed, targets for quick response time, visibility on stocks and inventories and analytical tools for improving ordering of stocks. The cr itical success factors for the apparel business would be high forecasting quality, effective and appropriate use of information technology, speed and flexibility, integrated product development, while benchmarking oneself against international standards.