Supply Chain Management Practices of Garment Retailing

Prof. Rajwinder Singh (view profile)
Associate Professor
Operations Management and Quantitative Techniques

Supply Chain (SC) is the network of suppliers, processors, distributors, retailers and the customers. Supply Chain Practices (SCP) are the set of activities undertaken by an organization for efficient execution of the SC activities. The understanding of these practices shall help retail managers to better manage their business. The different garment retailing companies use different SCP for the growth of business. Maintaining good Product quality and Personality are one of the most important SCP to attract and retain customers. Here, the care should be taken to prevent the product spoilage during movement along various SC nodal points.  

The product quality and personality are directly associated with the process quality.  The use of efficient processing techniques shall help to mitigate wastage and to improve the product quality. The customers always expect better quality at lower prices. Hence, the practiced SC activities need to focus on waste SC cost components for elimination to produce the product at lower cost to survive in the low cost, high quality market competition. The organizations with these skills are the leaders in the market.

The inventory involves major cost component of the retail SC. Now-a-days, organized retailers use automated inventory management system with the help of advanced softwares and internet to lower lead time. These efforts shall be vitalized by using efficient fill rate which is the rate at which products are transferred to the rack for sale. Many organizations have focussed on the fill rate for better delivery to the customers.

There is also a need to minimize distribution cost. It shall be minimized by selecting flexible modes of transportation compatible with urgency and capacity. The operational flexibility helps to adjust the demand fluctuations without excessive costs, time and SC disruptions.

Exercising operational flexibility also helps to adjust resources for better customer satisfaction. The focus on quick customer response shall adjust returns immediately, resulting in better customer satisfaction. The quick response shall also handle customer queries efficiently, resulting  to minimum shipping errors. These efforts shall help to attract and retain customers. Also, the customer shall have better transaction satisfaction helping to translate a visit into the purchase.

Many times the customers bargain for more volume at lesser price. Here, the Volume flexibility shall help to attract and retain customers. Now-a-days, the discount offer has become a major trend to attract the customers. The companies shall harvest the profits by purchasing in bulk and selling at the discounted price. The delivery flexibility is concerned with the location choice of the delivery destination. It shall help to send the right product to the right place to the right customer and at the right time.

In this competitive environment, there is also a need to  innovate better SCP for better management of the SC to satisfy customers. The organizations have developed innovative practices with the use of internet enabled computer software to reduce time, cost and distance. These innovative practices shall help the managers to find better means to cope with the competition. The ultimate objective of these practices is to improve sale profits for better return on investment to satisfy stakeholder. However, these practices may vary from organization to organization as well as from place to place. Also, different organizations need different SCP in their life cycles. Hence, there is a need to match the supply chain practices with the life cycle of the products as well as the life cycle of the organization for the betterment of business.