Supply Chain Management Is Critical for Retail Success

Oct. 21, 2010
Retailers must establish best-in-class supply chain capabilities to remain competitive. Supply chain executives at leading retailers are pursuing agility, shelf-driven supply chain capabilities and private label manufacturing

Supply chain management (SCM) is one of the key drivers responsible for retailers surviving the recent recession, according to a study released by Auburn University in partnership with Retail Industry Leaders Association. The study includes major North American retailers and examines current trends, leading practices and the foremost issues affecting the strategy and planning of retail supply chains.

"Supply chain management has played, and continues to play, a strategic role in retail organizations throughout the recession and remains a key driver of business success and competitive advantage in today’s challenging market," says Dave Reiff, senior vice president of national distribution for Wal-Mart Stores.

"Thanks to cost reduction initiatives introduced by supply chain management executives, retailers were able to tap into existing opportunities to streamline their supply chains, lowering their bottom line costs and saving billions across the industry," explains Casey Chroust, RILA executive vice president of retail operations. "Moving forward these cost structure enhancements and efficiencies will enable retailers to thrive as the economy becomes healthy again."

"Retail supply chain management involves much more than DC to store inventory movement," says Brian Gibson, a professor at Auburn University. "Retailers must establish best-in-class supply chain capabilities to remain competitive. This year, leading edge supply chain executives are pursuing agility, shelf-driven supply chain capabilities and private label manufacturing."

The study revealed that efforts to reduce the bottom line costs while the recession held top line growth in check has also led to a growing importance of SCM throughout retail organizations and has gained C-suite recognition. CEOs understand SCM as critical to retailer success. The influence of SCM continues to expand up and downstream within the organization, to merchandising and store operations functions.

Looking ahead, the study also cites several key issues that should be on the radar of SCM executives moving forward, including sustainability, fluctuating fuel costs, new government regulations, streamlining multi-channel supply chain operations and utilizing the latest technological advancements.