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Supply Chain Management in the Retail Industry


Notably, the exemplary companies in the world today consider supply chain management (SCM) is an essential aspect of gaining a competitive edge in the marketplace (Gold, Seuring, & Beske, 2010). SCM entails all the incorporated undertakings that deliver the product to the market in a way that satisfies the needs of the customers. Mainly, SCM integrates activities that include manufacturing processes, transportation, purchasing, and distribution in a seamless way to form a unified program (Plazibat & Brajevic, 2009).

Particularly, the retail industry considerably depends on the efficient SCM process to facilitate the delivery of goods and services to the consumers in a manner that satisfies their unique needs. For this reason, this paper will focus on the importance of SCM in retail operations before identifying its significance in the formulation of retail operations. Further, this paper will provide relevant examples based on personal experiences about retail operations and finally, describe how I would execute, train or mentor someone on the SCM topic.

Importance of SCM in Retail Operations

In the retail industry, SCM plays several pivotal roles that foster the efficiency of processes. By looking at its broader scope, SCM entails warehousing, inbound and outbound transport activities, inventory management, sourcing procurement, and handling the delivery of supplies. In this regard, SCM is important in the retail industry since it facilitates the efficient planning and management of the endeavors associated with sourcing and procurement besides the entire activities about logistics management (Sarac, Absi, & Dauzère-Pérès, 2010).

What is more, SCM bolsters the collaboration between retailers and channel partners that include third-party service providers, intermediaries, suppliers, and customers (Oke & Gopalakrishnan, 2009). In this case, SCM plays a significant role in underscoring the essence of collaboration, not only for competition but also for mutual benefits. In this context, when retailers use SCM to collaborate with suppliers, intermediaries, and consumers among other parties, they realize their personal and mutual interests and satisfaction cost-effectively and profitably. Therefore, the financial benefits that arise from SCM in the retail sector make the concept an important one in the industry since it bolsters performance improvement.

Importantly, SCM forms an integral aspect of the retail industry since it facilitates steady and quick delivery of services to the customers (Plazibat & Brajevic, 2009). In this regard, the area is important since it fulfills the demands of clients promptly. In this regard, the timely delivery of goods and services to the customers acts as an essential aspect of boosting sales, thus stimulating the increase in profit margins. Therefore, when a retailer stays longer in the marketplace as compared to the competitors, it is likely to gain a considerable profit advantage, which fulfills one of the objectives of venturing into the retail industry. As such, the importance of SCM in the retail industry is tied to the profitability aspect courtesy of the streamlined processes.

Importance of SCM in formulating retail operations

In the context of the retail operation, SCM mainly centers on the offering of economic value to the end-users or customers by managing the flow of merchandise and relevant information from the retailers to consumers (Sarac et al., 2010).

As such, SCM shapes up the retail operations in a way that fulfills the appropriate delivery of goods and information to the customers. Therefore, the strength of SCM demonstrates in the way it influences retailers to integrate consumers as crucial partners in delivering the products and services offered by the supply chain. In this case, thanks to the contemporary economic activities that include consolidation and the development of big and operational fit national retail sector players, retailers currently take an active role in the strategic planning and coordination of supply chain undertakings.

Notably, SCM purposes to bolster competitive performance by creating a close integration of the various internal functions within the retail industry by effectively bridging them with the external processes involving customers, suppliers, and additional channel partners. For this reason, retailers nowadays interact with all the stakeholders of a given supply chain for the sake of improving the flow of goods, services, and information (Oke & Gopalakrishnan, 2009).

Further, SCM shapes up the operations of retail players as they pursue varying competition capabilities by considering generic approaches about competitiveness in quality, cost, time, product differentiation, or flexibility (Sarac et al., 2010). In this light, retail operations focus on established supply chain metrics mainly geared towards internal logistical elements including fill rate, lead time, and on-time performance. Therefore, SCM prompts retail traders to develop criteria for evaluating the performance of its partnerships In so doing, retailers fulfill the customer satisfaction performance metric since the final consumer is the one that gets significantly affected by the processes of a given supply chain.

Additionally, SCM influences the strategic planning aspect of retail operations (Oke & Gopalakrishnan, 2009). In this concern, retailers continually seek to develop tailored assortments and reduce stakeouts to gain a strategic advantage. For these reasons, retailers engage in tailored assortments to ensure the availability of the right merchandise in a particular store as well as tailoring or customizing it to fulfill the expectations of the customer.

The reduction of stakeouts requires the retailer to uphold a collaborative relationship with the customers to improve customer satisfaction. As such the development of concepts like Quick Response (QR) and Efficient Customer Response (ECR). QR seeks the maximization of merchandise and information flow between SCM channel members and enhances customer satisfaction through the embracement of technologies including barcoding and electronic data interchange (EDI) (Tajima, 2007). On the other hand, ECR streamlines collaborative efforts between the retailers and suppliers to ensure that customers get goods and services in the quickest way that also considers the minimization of costs.

Examples of my SCM Experience Pertinent to Retail Operations

Customers need to know that the goods and services offered to them undergo various SCM processes. I have experienced a demonstration of SCM processes while seeking the acquisition of certain products. For example, I ordered a customized suit from a particular online retail store operator dealing in designer wear and complementary fashion. Firstly, I witnessed the aspect of tailored assortments since the retailer sought to understand my expectations and preferences regarding the suit.

The Quick Response element also manifested as the retailer engaged me in constant communication by joining me in point of sale interaction. Surprisingly, the order got delivered in time besides meeting my expectations. Another example is where I sent a package overseas through the services offered by DHL, who charged an affordable fee to deliver the merchandise in real-time thereby depicting the aspect of ECR in SCM.

Mentoring or Training Someone on SCM

Understanding the fundamental components of SCM is crucial for an interested party within a given organization to enhance the performance of its operations (Gold et al., 2010). As such, mentoring or training someone on how SCM works requires one to start with the basics associated with the system.

Therefore, the introductory part of the mentorship or training program would entail the definition of the SCM concept by underlining that it implies the realization of a unified framework that integrates processes associated with the manufacturing, transportation, operations, purchasing, and physical delivery of goods. Afterward, a description of the components of the system including information technology, warehousing, transportation, and inventory management would follow (Tajima, 2007).

The mentorship and training program would also focus on flows entailed in the SCM aspect of an organization’s operations. As such, I would mentor the individual on the efficient management of product, information, and finance flows. The product flow element would address the processes involved in goods and services delivery from suppliers to consumers as well as returning them to the supplier from the consumer. The flow of information features would underline the importance of delivering information and offering timely updates on the status of orders. Moreover, to attain the efficiency of SCM, I would introduce the individual to financial accounting basics as part of the financial flow element.


SCM plays an integral function in ensuring steady processes involving manufacturers, suppliers, retailers, and consumers in the production and delivery of merchandise and services. Notably, SCM is essential in the retail industry since in reinforces the management of processes encourages collaboration among the stakeholders, and fostering steady and quick delivery of goods and services. What is more, SCM influences retail operations considerably as it leads to the identification of performance metrics, trigger competitiveness, and the development of strategic planning. Moreover, training or mentoring an individual about SCM requires one to introduce them to the basics including the definition, components, and how to ensure the effective execution of the concept in a particular organization.


Gold, S., Seuring, S., & Beske, P. (2010). Sustainable supply chain management and inter‐organizational resources: a literature review. Corporate Social Responsibility and Environmental Management, 17(4), 230-245. Web.

Oke, A., & Gopalakrishnan, M. (2009). Managing disruptions in supply chains: a case study of a retail supply chain. International Journal of Production Economics, 118(1), 168-174. Web.

Plazibat, I., & Brajevic, S. (2009). Supply chain management in retail industry. Business Logistics in Modern Management, 9, 133-140. Web.

Sarac, A., Absi, N., & Dauzère-Pérès, S. (2010). A literature review on the impact of RFID technologies on supply chain management. International Journal of Production Economics, 128(1), 77-95. Web.

Tajima, M. (2007). Strategic value of RFID in supply chain management. Journal of Purchasing and Supply Management, 13(4), 261-273. Web.

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