It was Supply Chain's turn this year !

We have been doing an annual benchmarking exercise since last 3 years as part of a joint initiative between my employer and a Retail industry body. We have deep-dived into Store Operations and Multichannel in the previous years and generated enormous insights on the industry practices. The USP of this exercise has been it's execution at the Operational level. So most of the survey questions go few level deeper than just the strategy and vision of the leaders. Nonetheless it requires sweat and sweat to gather these insights and analyse the huge amount of data. And to double the fun, the analysis is done for 4-5 retail segments like Fashion, Consumer Durables, Food & Grocery, Department Stores and Other Retailers (including formats like Pharmacy, books, gifts).

This year we went ahead with benchmarking the Supply Chain function in Indian Retail with participation from top 50 Indian retail brands like Future Group, Reliance, More Supermarkets, Lifestyle, Shoppers Stop, etc. The results were a mixed bag- interesting, surprising and unexpected !
Let us look at a few:-

Interesting

• Warehouse management is the most mature function and Supplier management is the least. Hence, a lot of investment has been done in WMS (Warehouse management systems).
• Inventory reduction is one of the top challenges as 50% of retailers have inventory level of more than 60 days in warehouse
• More than 50% retailers are GST (Goods and services tax) ready (This tax may soon be levied by the Government replacing all central and state taxes)
• Around half of Consumer durables and Department stores retailers use inventory optimization tools (the adoption being very low in other segments)
• Transport management as a function performs decently attributed to the fact that it is outsourced to 3PLs

Surprising

• Sustainability in supply chain is not on the Indian retailers agenda for 2015-16, unlike their western counterparts.
• 25% of retailers have high warehouse costs (above 4% of sales)
• Only 3% of retailers use proper Supplier Relationship management systems for communication. Rest all rely on informal channels like phone, email.
• Even shipments are tracked informally through phone calls by 70% of retailers
• Buy online pick in-store (also called click and collect) - where you order online and then collect your order from the nearest retailer store does not entice Indian retailers too (Only 19% retailers offer this)

The Unexpected

• Multichannel readiness of supply chain does not have many takers- only 11% consider is as a priority in 2015-16
• Department stores have high level of automation in the warehouse (i.e. enabled by WMS with no manual processes; does not include automatic sortation systems or conveyor belts)
• None of the retailers use advance transport management features- like Route planning, network optimization, etc. (The adoption of RFID and GPS fleet is meagre too )

Grab the entire bundle of insights on the free download - http://www.tcs.com/consulting/related-insights/Pages/Retail-Operations-Benchmarking-Survey-Measuring-Supply-Chain-Performance.aspx

and the blog-
http://sites.tcs.com/blogs/agile-business/measuring-supply-chain