Chennai-headquartered retail chain Vivek's, which sells consumer durables, electronics, IT and telecom products across the South, has tied up with Vector Consulting Group to revamp its supply chain.

Mr B. A. Srinivasa, Joint Managing Director and CEO of Vivek & Co, said it will be a long-term initiative. The idea is to bring about improvement in top and bottom line by leveraging the supply chain and inventory management. According to him, Vector Consulting has been specialising in employing the Theory of Constraints (TOC) in the retail sector and is already working with some major retailers including Westside and Landmark.

Propounded by Israeli business consultant Dr Eli Goldratt, TOC is based on the premise that every system has at least one constraint limiting it from getting more of what it strives for. If that weak link is strengthened, the system would produce infinite output.

This theory was initially applied in the manufacturing industry and is now being extended to other areas including retail and supply chain, said Mr Srinivasa.

According to Mr Srinivasa, Vector Consulting has already initiated the exercise at Vivek's.

“This will help us redesign our supply chain and store stock management and achieve better sales,” he said. This exercise is expected to improve quality of inventory – “We would not buy what does not sell” – and reduce inventory (from the current levels) while ensuring availability of almost 99 per cent of all fast-moving SKUs (stock keeping units) in every store at any point in time.

Mr Kiran Kothekar, Founding Director of Vector Consulting, said Vivek's, like any other retailer, is forced to compromise on availability of the required product, as it keeps some amount of not-so-well-moving SKUs and does not have capital enough to buy faster-moving products. “We are confident of helping them significantly improve on their sales and profitability through this initiative,” he said.

> rravikumar@thehindu.co.in

Related Topics
comment COMMENT NOW