Supply Chain Management in Retail

Supply Chain Management in Retail

Supply Chain Management (SCM) is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. Previously, individual activities of the SCM process were warehousing, distribution, transportation etc. done separately. Later, the process moved on to logistics where every activity was carried out in a logical sequence following a specific timetable. Now, an information backbone supporting the SCM process has helped retailers in greatly reducing cycle times and attaining efficiency.

SCM MANAGEMENT DECISIONS

There are three levels of decisions-strategic, tactical and operational. The strategic level decisions are long-term decisions about location, production, inventory and transportation. Location decisions include size, number geographic location of supply chain entities. Production decisions determine what to produce, where to produce, which suppliers to use etc. Inventory decisions decide the way of managing inventories throughout. Transport decisions decide the mode of transport. Tactical level decisions are medium term decisions such as weekly demand forecasts, distribution planning production planning, material procurement planning. The operational level decisions are of short-term decisions concerned with day to day operations

Efficient Inventory Planning: Efficient inventory planning enables the retail organization to achieve its strategies and benchmarked standards of customer deliveries and thereby reducing supply chain expenses. Forward planning is done by forecasting sales and Beginning of Month (BOM) and End of Month (EOM) inventories for specific periods, and preparing the OTB (Open to Buy) plans. Efficient inventory planning optimizes purchasing controls through OTB so that the planned stock turns are achieved for the store with just-in-time inventories for freshness and achieving customer satisfaction through the seven ‘rights’ of merchandising –right product, right place, right quantity, right quality, right price, right mix and right time.

Pre-Purchase Order (PPO) and Purchase Order (PO): The PPO is an instrument through which the tentative plan of order placement to the vendor is done for the whole season as soon as the inventory planning is completed. The Purchase Order is the confirmed order for supply.

INTEGRATION OF SUPPLY CHAIN

The end-to-end integration of all supply chain elements and functions are achieved by applying interlinked packages. The integrated supply chain starts from the design stage at the vendor level to the time when there is consumer response at the retail stage. The benefits of having an integrated supply chain are best delivery performance, reduced inventory, faster cycle time, accurate forecasts, lower supply chain costs, improvement in overall productivity, improvement in capacity utilization, and so on.

Vendor Management: Efficient vendor management involves selecting the right vendors capable of giving the right quality of merchandise and to deliver the right quantities to get the right ‘hit ratio’. The right hit ratio measures the gap between delivery and purchase orders and helps eliminate backlog in deliveries. In a chain store scenario, vendors’ direct delivery to stores is an important element in attaining good supply chain efficiency.

The vendors directly manage inventories in a few retail organizations. Vendor Managed Inventory (VMI) is ideal for retail organizations as it totally eliminates inventory-carrying costs. The vendors manage the inventory at every store, monitoring the flow of information and ensuring just-in-time deliveries. The vendors are able to take back slow-selling and non-moving merchandise, thus reducing the scope for mark-down losses for the store.

Electronic Data Interchange (EDI) helps in establishing an efficient information flow on stock movement, and the vendors can know sales and inventories instantaneously. Reorder supplies are immediately planned and executed by the vendors. The time taken to exchange documents for placing orders is eliminated thus achieving just-in-time inventory management. EDI is done with the help of the organization’s ERP package that interacts with the vendors’ systems.

Warehouse Management The retail warehouse or the distribution centre receives the ordered stocks; checks for the right quality, quantity and price; stores and tags the merchandise with both the MRP and security tags; prepares the merchandise; transports the merchandise; receives goods returned from retail stores, if any; and sends returned merchandise ‘to vendors back as returns.

A Goods Received Note (GRN) is prepared when the merchandise received at the warehouse from suppliers is checked and matched with the relevant purchase order after certifying all the elements of quality, quantity, etc. The GRN is then automatically recognized by the system after authorization for payment to the vendor by the accounts department. The merchandise is then docked and tagged with bar codes and price tags if applicable.

Inter-Transfer Note (ITN) When the prepared and readied merchandise is supplied to the retail stores ITN is prepared. The reverse ITN (ITN out) is prepared when goods are sent back to the warehouse by the retail store. Goods that are returned to the warehouse are then sent back to the suppliers and vendors. The system recognizes the same and raises a debit note to the vendors.

Transportation is done according to timely delivery schedules so that replenishments are delivered as per the plan. Cost efficiency and reduction in delivery time are critical success factors in transportation.

Efficient docking with a plan ensures the best utilization of space. Docking ensures that the First in First out (FIFO) delivery plan is followed so that ageing of merchandise in the warehouse is kept to the minimum.

Material Handling Equipment in the warehouse should be tailored for specific varieties of merchandise. At a micro level of handling, most of the time garments are delivered by hangers and sometimes by the browser itself in a ready-to-sell state. Value Chain The entire SCM process is a value chain where bottlenecks, value-adding factors and liability factors are identified and addressed, thus enabling the retail organization to have an efficient supply chain. The entire process needs to be audited to meet timelines, and may be reengineered to achieve cost efficiencies and reduce cycle times.

Efficient Consumer Response (ECR) This is a replenishment system designed to link all parties in the logistics channel to create a massive flow-through distribution network. Replenishment depends upon consumer demand and point of sale information. In a retail organization, an integrated supply chain — with the right application of packages enabling the free flow of information and consequently merchandise and services elicits the greatest response from consumers since it addresses their needs appropriately.

PROBLEMS OF INVENTORY IN SCM

While oversized inventories are a costly inventory management strategy; low fill rates are also costly. Therefore the company’s interest to balance inventories holding cost and the cost of imperfect satisfaction. The main pitfalls in inventory management are:

•Inappropriate information system
•Incorrect delivery dates
•Organizational barrier
•Incomplete supply chain
•Failure to account uncertainties

RETAIL AUTOMATION AND SUPPLY CHAIN MANAGEMENT

The challenges that a retail organization include huge stock-keeping units (SKUs), seasonal variations of product lines necessitating the introduction of new SKUs, complex tax structures, the sheer geographic spread of the country, changing consumer demands, etc. A retail organization has to plan perfectly to satisfy the needs of every customer. Automation through the implementation of ERP systems has helped many organizations improve their efficiency and helped them grow.

3 Tips for Reducing Nervousness During an Interview

Preparing for a job interview is quite nerve-wracking as in fact, most job interviews are quite intimidating. You want to stay confident, but nervousness potentially arises from the pressure of impressing the interviewer and answering questions correctly, or presenting yourself in a professional. This can always happen even in the most seasoned of people. Fortunately, there are several things that you can control right before and during the interview to help in reducing your anxiety and make you look confident.

Dry mouth, sweaty palms and nervous twitching are just to name several situations that most people experience before and during a job interview. As long as these signs of anxiety do not interfere with your ability to look well during an interview, it is absolutely fine to feel this way. Otherwise, you need to do something to overcome your anxiety before it decreases your career success. Here are 3 tips that you can follow to calm your nerves before and during a job interview:

1. Be well prepared with your interview material.

It is important to research everything about the interview in advance. By doing this, you will know where you are going and can avoid getting lost on interview day. You can begin by researching the job and the company that you are interviewing for. Research them as much as you can and get all your past work experience notes straight. Even if you are quite familiar with the company and job in which you have applied, you still need to get some extra information, so that you can predict what kinds of questions you should ask at your interview.

You can note the questions that you will want to ask on a piece of paper prior to your interview. Familiarizing yourself with what you want to question will make you feel more relaxed and also will make you ready for the pending interview. Also, you can note why you could be the right candidate to fill the job you are applying for.
After listing some of the qualities that you believe makes you good person and employee, you can rehearse some of the possible answers that you can say either with another person or in front of a mirror. Knowing what you want to say will make you ready for your upcoming interview.

2. Be ready before your interview day.
If possible, you can go to the gym, or exercise before going to an interview. Exercise can help you clearing your mind and decrease your anxiety.

Select the outfit that you want to wear for your interview at least several days before the day of the interview. Get something that will make you feel comfortable physically and mentally while still looking professional and confident. It is not wise to try out a new style for an interview. Arrange your clothes for the interview to include brooches, tie clasps, cufflinks, and any jewelry. Be sure that every item is well cleaned, while your shoes are well polished.

Have a healthy breakfast. For example, you can have a bowl of oatmeal for breakfast, as it will give you enough energy and it has magnesium, a natural relaxer. You can add several slices of banana and a glass of orange juice. These foods can help in releasing serotonin, the “happy” hormone while giving you extra energy. Avoid the caffeine from coffee as it may make you extra jittery.
It is important to bring a cell phone. If something happens and delays your arrival, you can contact the company to explain it while you will be late.

3. Be well prepared during your interview.

On the day of your interview you should try to get an early start to avoid feeling rushed the day of your interview. You can wake up extra early or begin preparing several hours in advance. Remember that if you are in rush, you will tend to feel stressed. Worse, the nervousness from rushing around may make you forget important things such as the address of your destination or an extra copy of your CV.
Prepare for the interview process. Remember that most of your anxiety comes from not knowing what you expect. It is more productive to use that nervous energy to prepare for the interview. For example, you can visit several web sites offering practice interview questions, you can drive to the interview place ahead of time, you can have a copy of your CV, or you can make your outfit ready before interview.

Before your interview session, try to take deep breaths. This will help you releasing some of that nervous energy. The proper way to breathe in is through your nose and the right way to breathe out is of your mouth.

It is also important to set your expectation levels to a realistic level. If you hope too much from a job interview, you will tend to feel disappointed. It will be bad if you go in with a negative attitude but having no expectations could be harmful too.

Try to look confident and don’t forget to give smile during your interview. Do not worry if you still have sweaty palms. You only need something to wipe your hands as probably the interviewers will shake your hand before the interview. Get relaxed and remember that those interviewers are just humans. Probably they are just as anxious as you are!

In short, by doing the right research and rehearsing ahead of time, you will be ready for any job interviews that you are facing. Although entering into any interview is very stressful sometimes, you must remember to relax. By adopting the above practice steps, and practicing several relaxing techniques, you can always be fine on your way for your pending interview.

Basic Small Business Marketing Principles

35jxfggMarketing is defined in many different ways according to who you ask, but all responses usually are part of the same answer: marketing is a combination of all of the activities you implement or participate in which help promote, brand, and sell you product, service, or business. Why is marketing important?

Many small business owners feel sales is the most vital part of their business. Sales are very important, but your brand, image, and, ultimately, marketing determines your customer loyalty and growth of your business. Marketing establishes the basis for your sales strategy and how you will close sales. What does marketing cost?

Small business owners are confronted ever day with sales pitches for various costly marketing activities. Most small business owners see marketing as an expensive business component they just can’t afford. This is not true. In fact, small businesses can’t afford to overlook marketing, and it doesn’t have to drain the bank account either. One of the best forms of marketing that is very affordable is a consistent and professional image.

Elegant business cards, matching letterhead, and an informative and effective website are just a few pieces of a small business’ tool box that can do much more than a high-dollar advertising campaign. How do small business owners create a consistent and professional image? The first thing a company will create is a name. There are many steps before this point, but this is the first product. Next, comes a unique logo that conveys the right image. Once the marketing package has these two pieces, consistency becomes the primary focus.

Small business owners usually put off the rest of the basic building blocks until they can put it off no more. At that point, professionalism and consistency goes out the window in favour of a quick answer. The right way to approach this issue is to prepare on the front end. Following the name and logo stage, the small business owner must push on. Create the right business card, elegant letterhead, useful brochure, and quality website. By creating all of these things at the point in the start-up process, all of the basic components of your marketing become consistent, professional, and effective from the start.

Should You Cut Marketing Expenses During the Recession?

If you read marketing journals and blogs these days, you likely have come across the advice that you should spend more on marketing in a recession. The typical logic is that your competitors are spending less and so it’s a good time to pick up market share. Note that most of these recommendations come from people who have a vested interest in you spending more on marketing (e.g., advertising agencies).

I dislike basing marketing expenditures on what competitors are spending. It’s not relevant for budget decisions during “normal” economic conditions and it shouldn’t matter in a recession. You should increase or decrease your marketing budget solely on the basis of what maximizes operating income – based on your own measurement systems.

Certainly, if your competitors are dramatically reducing spending and therefore giving up sales opportunities that you can exploit, then you should go after those sales, provided you maintain your required level of profitability. However, it is more likely the case that your competitors are cutting back on their marketing right now because there is less total demand in the marketplace – not only for them but also for you.

The purpose of marketing is to maximize the long-term profitability of the enterprise. If you are managing marketing effectively, you have measurement systems in place both to determine the return of past marketing programs as well as to help you predict the return of future programs. Economic trends are inputs into your models and will help you determine how much to invest in marketing. Most of the time, an economy that is slowing rapidly will result in your analytical models advising you to spend less on demand generation. Besides, how much do you know about your competitors’ spending on marketing?

While some types of expenditures like advertising are highly visible, you have no way of knowing what competitors are spending on most types of communications, like database marketing, SEO, direct sales, etc. You could waste a lot of resources trying to figure out what your competitors are spending and still be way off.

To make your marketing efforts profitable, you need sophisticated analytical systems, and a comprehensive understanding of integrated marketing communications. You don’t need to know what your competitors are spending, regardless of the state of the economy. So don’t listen to the advice of experts who tell you when you should increase or decrease your marketing expenditures. Constantly improve your modeling capabilities, find the best data you can and spend marketing dollars in ways that maximize your bottom line. Any other approach is likely to waste your money – and will waste your time for sure.

Top 10 Marketing Concepts for Small Business

Top 10 Marketing Concepts for Small Business

Over the past decade more and more people are getting fired, getting downsized, or getting fed up with their corporate jobs and embark on the journey as a small business owner. Unfortunately, most of the new small business owners fail to consider their marketing plans or strategy. There are many marketing concepts for small business marketing to consider and plan for, but here is our list of Top 10 Marketing Concepts For Small Business Marketing.

Marketing Concept # 1: Consistency

Consistency is the number one marketing concept for small business marketing only because it is left out of marketing concepts for so many businesses. I have worked with a long list of clients, big and small, that are extremely inconsistent in all areas of their marketing. Consistency helps lower the cost of marketing and increase the effectiveness of branding.

Marketing Concept # 2: Planning

Once small business owners decide to be consistent with their marketing, planning is the next major concept to engage. Planning is the most vital part of small business marketing or any level of marketing, for that matter, and so many owners, marketing managers, and even CMOs plan poorly. Put the time into planning your marketing strategy, budget, and other concepts presented here to ensure success.

Marketing Concept # 3: Strategy

Strategy immediately follows planning because your strategy is the foundation for the rest of your marketing activities. In the process of planning, you must develop your strategy: who you will target, how you will target them, and how will you keep them as a customer.

Marketing Concept # 4: Target Market

Target market is also another key concept for small business marketing. Defining exactly who you are targeting allows small business owners to focus on specific customers and reduce marketing waste. A well-defined target market will make every other marketing concept so much easier to implement successfully.

Marketing Concept # 5: Budget

Although it is listed at number 5, budgeting is important throughout the entire process. Creating a marketing budget is usually the hardest and most inaccurate part of small business marketing. Most small businesses owners lack a great deal of experience in marketing, so their budgets usually end up skewed. The most important part of this marketing concept is to actually establish a marketing budget. From there, you can worry about how to distribute your available funds.

Marketing Concept # 6: Marketing Mix

The marketing mix is usually defined as product, pricing, place, and promotion. As a small business owner, you must specifically decide on your products (or services), the appropriate pricing, where and how you will distribute your products, and how will you let everyone know about you and your products.

Marketing Concept # 7: Website

In today’s market, a business of any size must have a website. I hate when I see businesses that have a one page website with out-dated information. Customers, be it businesses or consumers, will search the web over 60% of the time before making any purchasing decisions. This marketing concept contains a slew of additional components, but you must at least develop a small web presence of some kind and keep it updated.

Marketing Concept # 8: Branding

Many small businesses owners also neglect this concept. Small business marketing must focus on this marketing concept just as much as large corporations do. Branding consists of the pictures, logo, design scheme, layout, make up, and image of your products and even your company. Branding is how your customers perceive (please place a lot of emphasis on that word!) your products and company. Make sure to pay special attention to what kind of brand you are building through each step of your planning and implementation.

Marketing Concept # 9: Promotion and Advertising

Promotion and advertising is a very complex marketing concept, but must be considered for any type of business and its products and services. Once you engage the previous 8 marketing concepts, you must finally let your target market know about you and your products. Proper promotion and advertising will result in effective brand recognition, and, ultimately, increased sales.

Marketing Concept # 10: Customer Relationship Management (CRM)

The concept of customer relationship management has become a huge industry in the marketing world. There are many types of software and services offered to help businesses of any size handle their customer relationship management. Since there is so much available, usually for a large sum of money, small business owners usually look at this concept as something they are not big enough for or have enough money to implement.

Supply Chain Maturity

Supply Chain Maturity

Managing the supply chain and finances are the core factors that determine the success of any organization. For ages, executives keep on experimenting with different approaches to optimize their supply chain and cash flow.

Supply chain management is one of the most important strategic aspects of any business enterprise. Decisions must be made about how to coordinate the production of goods and services, how and where to store inventory, whom to buy materials from and how to distribute them in the most cost-effective, timely manner. What are those Critical Dimensions or Key Performance Indicators that drive the agility and maturity of a supply chain? Most of them are quite obvious and most of the organizations keep a religious watch on this but even then those companies make only the 10% of all those organizations that can benefit much more if they streamline their processes, capabilities and compliance related stuff connected with SCM. Let us look at some of the critical dimensions in this respect:

Supply Chain Visibility: End to end supply chain visibility is the first major need to make it more agile and mature. It is highly recommended to use a commercially available best of breed (or ERP) solution to monitor line level statuses in orders, on hand inventory and those assets that are not stationary and this includes field inventory, service equipment, containers etc. Certain visibility initiatives like financing triggers, warning alerts on events that drive inventory stocking, tracking actual total landed cost as sales order progresses etc. are the hot initiatives in this area

Automation Level: It is not just automation of order entry to picking to shipping and from forecasting to demand to plan to build/procure but also end to automation of all systems that complements your main system of reporting and transactions. It includes systems like PLM or B2C order capturing portals that are input systems as well as Business Intelligence tools that act as the output systems to your main transaction system. The more the automation, more mature and agile is supply chain

Logistics Agility: Processes such as using nearest warehouse to the customer, supplier drop ship, transit order re-direction or grouping shipments in same route play a major role in streamlining the supply chain. Organizations need to keep on thinking on new actions in this space and plan to execute them frequently.

Business to Business Collaboration: Customers and Suppliers are to businesses that one must collaborate with. This will not only keep the inventory to the minimum level but also will help in improving fill rates and reduce stock-outs. Identify the processes where collaboration will help the organization most and take actions accordingly.

Risk Management: Supply chain resiliency is one of the most critical factors in maintaining the agility of supply chain and it is seen that though most of the organizations are worried about this but do not take substantial actions in this area. It is important to manage supply chain resiliency to risk related events. Also, employ network design and inventory optimization tools to quantify supply chain risk and create short-term and long-term crisis response plans.

Compliance in Trade: The more manual hand-offs are present in the processes, more are the chances of inconsistency in compliance of trade laws. Also, not having a single source of truth and independent databases for import and export data per country will also contribute to non compliance ultimately impacting the supply chain processes. It is high time to have one single enterprise wide trade compliance platform that is automated and integrated with all the related processes.

Competitive Resourcing:The times of in-house resourcing are now ripe and the success of outsourcing story has proven that while the in-house resources in certain areas are more costly, they also are less efficient that their BPO counterparts. Need is to evaluate carefully, where exactly this initiative is required and what are the tangible or non tangible benefits expected and take an informed decision. The good part is that most BPO’s come with their own collaboration and visibility techniques and also share their best practices that they picked from their customer across the globe and this makes move a “check and mate” move to improve the supply chain maturity.