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

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:

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  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.

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  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.

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  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.

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  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.