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Bringing Efficiencies in Retail Supply Chains

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Bringing Efficiencies in Retail Supply Chains
BRINGING EFFICIENCIES IN RETAIL SUPPLY CHAINS

Dr Jamshed A. Modi
Professor, Operations Management
S P Jain Institute Of Management & Research, Bombay
91-22-2623 7454 modi@spjimr.ernet.in Introduction –

Some will say that the retail sector in India is about to take off, what with the Ambanis planning huge investments in the sector in the near future. I would say it already has, or at least the nose-wheel is off the runway. The retail sector in India today is un-recognizable from what it was say even 10 years back.

But along with the big bucks will come the big botherations or challenges of introducing appropriate management processes and technologies to cope with the newer and bigger problems. In fact in the long run the big bucks will come only to those Indian retailers who successfully implement these newer technologies, and constantly track the developments in this sector in the western countries.

Operations Research (OR) is one of the fields that have been making important contributions to our understanding of the dynamics of the retail sector, and there have been numerous studies recently that have some interesting insights to offer for managers in this sector. Also, there have been several surveys recently of consumer preferences and needs, and how the retail sector is coping with these. This paper is intended to give a brief overview of some of these findings, and discuss how they might be applicable under Indian conditions.

Some OR Work In Retailing

The question of clearance pricing and left-over inventories is a crucial one in retailing, especially in seasonal and style goods. It is not that only the “truly” seasonal and style goods are involved. The flow of new products has reached such torrential proportions, that countless products that have nothing to do with “season” as such, or style, have a life-cycle akin to the truly seasonal or style products. The challenge of deciding how much to stock of these new products, when



References: 1. Smith and Achabal, “Clearance Pricing And Inventory Policy For Retail Chains”, Management Science, Vol 44 No 3, March 1998. 2. Srinivasan et al, “Do Promotions Benefit Manufacturers, Retailers, or Both?”, Management Science, Vol 50 No 5, May 2004. 3. Tan and Mookerjee, “Allocating Spending Between Advertising And IT In Electronic Retailing”, Management Science, Vol 51 No 8, August 2005. 4. Demand Today: Emerging Consumer Desires In the Retail Sector, Kanbay Research Institute, 2005 5. Russell and Taylor, Operations Management – Quality and Competitiveness In A Global Environment, John Wiley, 2006. 6. Modi, “RFID – The Next Frontier In Supply Chain Management”, ET Intelligence Group Research Paper, May 2006. **********

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