Smarter Supply Chain Utilization For The Retailer

By Microsoft Dynamics

This paper introduces various supply chain concepts and explains their importance. It describes initiatives being undertaken by the largest retailers and reviews what small and mid-size fi rms need to do to compete. Very few small and mid-size retailers can compete with companies like Wal-Mart on price. However, while some go to the wall, many smaller retailers prosper alongside Wal-Mart exploiting the traffi c that they generate and managing their own supply chains and customer propositions well.

There are many defi nitions of supply chain management. A good one is "The achievement of a pre-determined service level to the customer by the effective management of all of the relationships in the supply chain."

To develop any supply chain improvement program it is necessary to determine the level of service appropriate to give each customer or customer type. Different customer types or groups might get different service levels. It isn't necessary or economic to give all customer groups the same level of service. Also, different products might get different service levels depending on the role of each product in getting customers to purchase in your store.

Aggressive industry consolidation and expansion into new territories by many of the larger operations has reshaped the market for many smaller and midsize retailers. To grow, or even maintain market share, in this environment the focus must be on maximizing customer response, raising service levels and demonstrating value to the consumer, all while minimizing costs.