Logistics Challenges in the Retail Industry

Topics: Logistics, Supply chain management, Supply chain Pages: 11 (3855 words) Published: August 26, 2013
Introduction

in the retail industry it is often taken for granted that goods and services are available for purchase, when demand for them has been initiated. The cornucopia that good in a retail store or supermarket are available seldom means that consumers have forgotten how products have been initially supplied. With the emerging e-commerce consumers have come to demand complete availability and home delivery at time suiting their lifestyles, consumer tastes and preferences have also altered tremendously in recent times. Customer service and gratification expectations have increased and customer’s willingness to wait to be satisfied or served has decline which in turn has put excessive pressure on the Business Logistics Systems procedures in the retail industry.

With all these developments it is only obvious that the transformation of good from point of origin to point of consumption have to be improved, implemented and control with greater accuracy in order to meet the end user (consumers) needs. Retailing and Logistics are primarily concerned with availability of goods; many have described this as ‘getting the right product to the right place at the right time’. Along with this great pressure are numerous Logistics Challengers that hamper the effective and efficiency of many retail organizations in the Retail Industry.

Logistics Challengers in the Retail Industry
2.1 Demand Driven Distribution
Inventory being a major contributor to the market success of a company, it is essential to manage inventory well to meet company financial and business goals. Companies all over the world either in the manufacturing, distribution and retail industries are striving to become demand driven. Demand driven distribution is a strategic action that’s allows actual demand for good to pull inventory through the company and its supply chain. Unfortunately with outside factors, cooperate strategies and management practises that create challengers’ in achieving success. Demand Driven Distribution is a vision for leveraging management decision support systems and automation technology that improves the warehouse and distributors business. The idea is to redesign the distribution system activities such that based on the customer’s request and purchase information, activities within a distribution centre are reorganised to reduce the lead time needed to load trucks and balance the workload of the order picking operations. Accompanied by an intelligent support system that captures the information generated by purchase and sales and make use of the available order picking resources throughout a distribution centre Outbound Inventory

Since becoming demand driven and improving service levels, has strongly become challenging as demand is less predictable in recent years. Approximately every distribution intensive organisation is pursuing this trend as consumers have shifted away from normative purchase patterns. Variable demand being a focused challenge and the position of the companies supply chain will determine which issues are likely to cause volatile in outbound inventory. “• Closest to the customer, retailers suffer most from fulfilment execution problems. Fulfilment execution is a problem for fully 35% of retailers, but only 18% of distributors and 11% of manufacturers.

• Furthest from the customer, manufacturers fight order changes and poor production planning. Order changes rippling through the supply chain were identified by nearly 20% of manufacturers as the primary cause of outbound inventory volatility. This sinks to 13% of distributors and only” http://www.logility.com/files/library-section/whitepaper/demand-drivenwp?source=http://www.logility.com/library/white-papers/media/demand-driven-inventory-management-id

2.2 Product Proliferation.
Product proliferation is the variety and the range of different product offerings, sizes, usability in the same basic product. Product proliferation is used to...

References: ◆ Wessel J. Pienaar, John J. Vogt; (2012); Business Logisics Management: A Supply Chain Perspective; 4th Ed; South Africa: Oxford University Press; p 1, 3, 23, & 28
◆ John J
◆ Ajay Gupta; (2012); Managing Inventory Obsolesce for Improved Retail Performance; [WWW]; Dell; Available from: http://i.dell.com/sites/content/business/smb/sb360/en/Documents/wp-retail-r4-fa-uk.pdf; [Date accessed: 22-03-2013]
◆ J Ashayeri, R.P
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