ENTERPRISE RESOURCE PLANNING (ERP) AND SUPPLY CHAIN MANAGEMENT (SCM) -APPLICATION IN RETAIL INDUSTRY SUPPLY CHAIN (MARKS AND SPENCER)
ABSTRACT: This report examines Supply Chain Management (SCM) and how it enhances the supply chains in the Retail Industry. Also the report examines how the supply chain is a link of suppliers and buyers and customers in turn becoming supplier. The report examines the problems associated with the supply chain a major one which is bullwhip effect. This study focuses on how ERP and SCM work together to help in solving supply chain problems and making the supply chain management of the retail industry efficient. The aim of this report is to explore various Information technology applications/solutions in the Retail Industry Supply chain.
We live in an ever changing world, with globalisation, liberalisation and increasing market competition, need for real time operations and the rapid change in information technology Retail businesses more than ever before now seek better ways of keeping up with the ever increasing market challenges. Retail industry is seeking solutions to its own industry problem which is majorly stock management to avoid pilferages and stock out, and spoilages etc. in the supply chain. The retail industry is now adopting ERP and SCM to proffer solution to its supply chain problems. This study focuses on solutions pertaining to the Retail industry and particularly examining how marks and Spencer (a leading food and clothing retail company) has improved its supply chain also, a recommendation is made to Marks and Spencer and other upcoming Retail firms on how to improve its supply chain.
Supply Chain Defined “Supply chain refers to the flow of materials, information, payment, services from raw materials, suppliers, through factories and warehouses to the customers”. Supply chain as explained by (Turban M.U, n.d., p.375) includes organisations and processes that create and deliver products, information and services to the final user. Supply chain also includes the many tasks that the organisation engages in such as purchasing, payment flow, materials handling, production planning and control, logistics and warehousing, inventory control and distribution and delivery.
Supply chain management coordinates all the activities of the supply chain by planning and organising them using supply chain software that improves decision making, optimisation and analysis. (Turban M.U, n.d) Supply chain involves 3 (three) major segments they are upstream which takes care of sourcing or procurement from suppliers, downstream whose activity involves packaging, assembling or manufacturing and downstream which ensures that the products are distributed to the end user. Porter’s value chain (1985) (cited in Turban M.U,n.d. p.359) emphasized that value is added when one moves along the supply chain. He explains that one of the goals of SCM is to see that value is maximised in the supply chain. (Turban M.U, n.d).
A customer as a supplier in the supply chain and vice versa: The supply chain below shows the different process of a supply chain in an apparel industry. Supply chain is essentially a series of linked supplier and customer and every customer is in turn a supplier this can be seen in the supply chain above. The yarn manufacturer is a customer of the fibre manufacturer and also a supplier to the fabric manufacturer, also the garment manufacturer is a supplier of finished products to the retailer and in turn a customer of the fabric manufacturer this process continues until it gets to the final customer. Following the market pressures, it is difficult to find a company taking responsibility for all he business operations.
Looking at the supply chain diagram below, the manufacturing of yarn for instance could be outsourced to another company. This helps the company to focus on its core competency which could be garment...
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