Retailing contributes about 40 percent to the US economy, and it is a major part of every economy in the world. The competition in the retailing industry in the recent past had grown tremendously and the customers are demanding more services. The retailers are offering a wide range of products at lower prices and providing higher levels of services in their supply chain to gain competitive advantage.
- The efficient supply chain management process helps retailers in reducing the inventory carrying costs and it also increases the responsiveness to the orders of the customers.
- It also helps in the reduction in the lead time and it makes products available to the customers readily when they enter in to the shop.
- It is possible for retail companies to enhance service and increase supply chain velocity by improving upstream and downstream processes.
- Effective supply chain management can improve all business processes, such as data accuracy, operational complexity reduction, supplier selection, purchasing, and warehousing and distribution for the retailers.
- With the efficient supply chain retailers can offer a variety of product mix at affordable prices to the customers.
- With the use of different technologies in the supply chain a retailer can get benefits like maintaining good relation with manufacturers, with the use of RFID the inventory can be tracked, ERP helps in improving the performance of the supply chain, etc.
- Effectively managing the supply chain saves operational and transportation costs for the retailing industry.
- If the quality is maintained through out the supply chain it improves customers satisfaction.
Supply chain is very important for the retail industry as it provides its services directly to the customers and the effective supply chain provides competitive advantage for the retailers.