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Retail Management Chapter 8

The document discusses supply chain management and information flows within a supply chain. It describes how purchase data is collected at point of sale and transmitted throughout the supply chain network. It also discusses electronic data interchange, pull and push supply chains, logistics, merchandise flow, and the activities and advantages of using a distribution center.

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Rechelle P. Soriano
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185 views21 pages

Retail Management Chapter 8

The document discusses supply chain management and information flows within a supply chain. It describes how purchase data is collected at point of sale and transmitted throughout the supply chain network. It also discusses electronic data interchange, pull and push supply chains, logistics, merchandise flow, and the activities and advantages of using a distribution center.

Uploaded by

Rechelle P. Soriano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Information

System and
Supply Chain
Management
Chapter 8
“
Supply Chain Management
A network used to deliver products and services
from raw materials to end customers through an
engineered flow of information, physical
distribution, and cash.

”2
Supply Chain
Strategic Importance of
Supply Chain Management
● Opportunity to Reduce Costs
○ Transportation Costs
○ Inventory Holding Costs
● Provide value to customers by making the right merchandise is in the
right place at the right time
○ Fewer Stockouts - merchandise will be available when the customer
wants them
○ Greater Assortment with Less Inventory
4
Strategic Importance of
Supply Chain Management
● Improved ROI
Increases sales – customers are offered more attractive assortments
Net profit is improved by increasing gross margin and lowering expenses

5
INFORMATION FLOWS

6
When customer makes a

1
purchase, sales associate
scans UPC code or RFID
chip on merchandise to
customer credit card/loyalty
card
Information about purchase

2
is transmitted from POS
terminal to the
buyer/planner.
Information about

3
purchases are aggregated by
buyer/planner.
Buyer/planner
communicates with

4 vendor and places a


purchase order
to re-supply stores.
Buyer/planner
notifies distribution
center about

5 incoming orders and


how they are to be
distributed to stores.
Store managers
inform distribution

6
center about receipt
of merchandise and
coordinate deliveries.
Data Warehouse
Purchase data collected at the point of
sale goes into a huge database. The
information stored in the data
warehouse is accessible in various
dimensions and level.

13
Electronic Data Interchange
EDI is the computer-to-computer
exchange of business documents
between retailers and vendors
Merchandise sales
Inventory On Hand
Orders
Advanced shipping notices
Receipt of merchandise
Invoices for payment

14
Benefits of Electronic Data Interchange

o Reduces cycle time – inventory


turnover is higher

o Improves overall quality of


communications through better
record-keeping

o Information can be easily analyzed

15
Pull and Push Supply Chains

Pull Supply Chain Push Supply Chain


Merchandise is generated Merchandise is allocated to
at the store level based on stores based on forecasted
sales data captured by demand.
POS terminal.

16
LOGISTICS
The aspect of supply chain
management that refers to
the planning,
implementation and control
of the efficient flow and
storage of goods, services
and related information
from point of origin to the
point of consumption to
meet costumers’
requirement.

17
Merchandise Flow
within Supply
Chain
Retailers can have
merchandise shipped
directly to their stores
(path 3) or to their
distribution centers
(paths 1 and 2).

.
18
Activities Performed by Distribution Center
● Managing inbound transportation
● Receiving and checking merchandise
● Storing or cross docking merchandise
● Getting merchandise floor ready
○ Ticketing and marking
○ Putting on hangers
● Preparing to ship merchandise to a store
● Managing outbound transportation

19
Advantages of Using
a Distribution Center
● More accurate sales forecasts are
possible when retailers combine
forecasts for many stores serviced by
one distributor
● Enables retailers to carry less
merchandise in the store
● Easier to avoid running out of stock
● Retail store space is more expensive
than space at the distribution center

20
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