Supply chains in the Indian retail sector
The primary objective of the retail supply chain is to source, store, transport and deliver the right merchandise to the store shelf at minimum costs, in the right condition and within acceptable timeframes. The impact of the recent economic downturn on the Indian retail sector, has underscored the importance of supply chain management in ensuring business sustainability and return on investment.
Globally, robust supply chain management is viewed as a competitive advantage in the retail industry. Major retail behemoths have developed their supply chains as strategic assets. In the Indian context, most retailers are in the early stages of developing their supply chains, although there are specific instances of higher levels of supply chain maturity. A quick analysis of sample supply chain performance indicators (provided in table below) suggests that retail supply chains in India are still under-developed.
Logistics cost as percent of price
Indian retailers Global retailers
Approximately 10 5
3 to 14 Average 18
Indian retail vs global retail
5 to 15 Below 5
3.1 Average 1
Source: PricewaterhouseCoopers estimates, Global Retail Theft Barometer Survey for 2009
Selected key features of globally competitive retail supply chains include:
Nimble and agile
Strategic partnerships with third-party logistics providers
Better availability of infrastructure in terms of cold chains, advance logistics systems, etc.
High levels of integration among various stakeholders in the supply chain
Heavy dependence on advance IT systems and tools for information visibility/ sharing