End to End Supply Chain Planning for a Fashion Retailer in India

End to End Supply Chain Planning for a Fashion Retailer in India

Aravind D. (JDA, India)
DOI: 10.4018/978-1-4666-9894-9.ch017
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Abstract

This study initially explains all the Supply chain processes involved in fashion retail business and later discusses about the real time challenges faced by fashion retailer in India. It also throws a light on how IT can improve the supply chain aspects in fashion retail. Paper also talks about why fashion retailers in India are more resistant towards IT solutions. Paper also look at the obstacles faced by fashion retailers in India in to go Omni-channel. This study helps the IT providers to understand how to build their products solving the real time challenges faced by fashion retailers, and helps retailers to improve their supply chain planning by leveraging IT solutions. This paper also helps to understand the fashion retailing business in India.
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Introduction

Supply Chain Management

Let us initially understand what is supply chain management, it can be defined as ‘ the integrated network of all the people, organizations, resources, activities and technology involved to create and sell the product, from the delivery of raw materials from the supplier to the manufacturer, through to its final delivery to the end user’. It oversees flow of goods, information, labor and finance across the entire network.

Time taken from start point to end point of the value chain is called the Lead time. Lead time plays a very crucial role in entire supply chain planning. In short, Lead time means how quick are you able to deliver your products to the end customer. This lead time varies across the industries.

Supply Chain Management in Retail

Supply chain management in retail is an end to end process in merchandise planning and movement, from forecasting the demand to the point of reaching the merchandise to the customer. It is an integrated process where all the activities are interconnected with the system for information throughout the value chain.

Broadly retail supply chain is divided into four parts:

  • Manufacturer: Manufacturer is an entity that makes a good through a process involving raw materials, components, or assemblies, usually on a large scale with different operations divided among different workers. These entities take care of procurement of raw material and production of finished goods. Post manufacturing, the finished goods are routed to either distributor or wholesaler or a retailer.

  • Distributor: Distributors frequently have a business relationship with manufactures that they represent. Many distributors maintain exclusive buying agreements that limit the number of participants or enables distributors to cover a certain territory. The distributor becomes the manufacture’s direct point of contact for prospective buyers of certain products. However, distributors rarely sell a manufacture’s goods directly to consumers. Wholesale representatives and retailers generally find distributors to buy products for resale.

  • Wholesaler: Wholesalers generally buy a large quantity of products directly from distributors. High-volume purchase orders typically improve a wholesaler’s buying power. Many distributors provide discounts for a certain number of items purchased or the total amount spent on merchandise. The goods are frequently destined for retailers.

  • Retailer: Retailers consist of small and large for-profit businesses that sell products directly to consumers. To realize a profit, retailers search for products that coincide with their business objectives and find suppliers with the most competitive pricing. Generally, a retailer can buy small quantities of an item from a distributor or a wholesaler.

Key Terms in this Chapter

Planners: Often referred as Retail Planners or Merchandisers in the market. People who work on planning the merchandise across the stores, involved in procuring and pricing activities.

Shelf Life: Shelf life is the length of time that a commodity may be stored without becoming unfit for use, consumption, or sale. In fashion, it is referred as the time for particular style to sell from the stores.

Omni-Channel: Omni-Channel is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.

Procurement: The act of obtaining or buying goods and services. The process includes preparation and processing of a demand as well as the end receipt and approval of payment.

Under Stock: Under stocking is to have a lesser stock of something needed. Usually for an Indian fashion retailer, if the store is not carrying inventory which can cater to 3 to 4 months of demand is referred under stocking. This is very critical in fashion retail, as under stocking is a direct sales loss.

Merchandise: Merchandise is nothing but the inventory of finished goods. Merchandise is often referred as stocks in this paper.

Over Stock: Over stocking is to have a bigger stock of something than is needed. Usually for an Indian fashion retailer, if the store is carrying inventory which can cater to more than 3 to 4 months of demand is referred over stocking.

Sales per Square Foot: Sales per square foot is simply the average revenue a retail business creates for every square foot of sales space. This is a popular sales metric used in the retail industry.

In-House Production: Conducting an activity or operation within a company, instead of relying on outsourcing.

Point of Sale (POS): A point-of-sale (POS) terminal is a computerized replacement for a cash register. The POS system can include the ability to record and track customer orders, process credit and debit cards, connect to other systems in a network, and manage inventory.

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