Advanced applications of Supply Chain Management (SCM) can be seen in the retail industry, especially in the apparel sector. It adds value to the business by reducing the total costs spread across the trading process by manipulating the speed and certainty of reply to the market. It enables the industry to remain competitive both at the domestic and global markets.
To capture good profits, the apparel industry must bring adequate change in its supply chain system. Managing the supply chain requires a balancing act, meeting multiple needs. Retailers must focus in delivering high service levels, and also keep low costs so as to remain competitive. Since the supply chain involves a hefty expenditure, remodeling, or modifying their existing networks will help the business to reduce their inventory costs, and increase operating efficiencies thereby ultimately gain more profits.
In today's world of business, the environment has undergone drastic changes, and has become more competitive than ever before. With the increasing reach of media, and globalization of business, one countrys products are available in other countries in a wink. SCM aids the organization to evaluate their entire operation, and restructure it in such a way, that, they can focus on its core competencies. It also aids the business in outsourcing those processes, which is out of bounds of their core competencies. Selecting the appropriate system of SCM will not only enhance the companys market position, but also provide them with strategic decisions in choosing the right partners, manpower and resources.
Cracking the 'Bull Whip' Effect:
Customer demands seldom remain stable, especially in case of apparels. The objective of SCM is to provide relevant information to suppliers to enable uninterrupted flow of materials to the customers. However, due to demand oscillations, distortions are created in the supply chain process, which can wreck the process itself. This situation is reminiscent to the cracking of a whip, and hence is known as 'Bull whip' effect. In worst cases, this will result in increased lead times and costs, deterioration in customer service, and lost sales. Hence it is vital for a management to understand the supply chain oscillations, and tackle it.
Fibre2fashion.com had an exclusive interview with Mr. Vineet Kanaujia, GM (Marketing), Safexpress , a pioneer in establishment of a Supply Chain management in India about the supply management system. He believes that the most important aspect of the apparel business is to provide time-specific deliveries.
- How does an effective SCM help apparel retailers in acquiring a share in the Global Market?
"Supply Chain & Logistics is the backbone of the apparel industry in India. Currently, Safexpress is providing its services to 10 different verticals including Retail & Apparel, Healthcare & Pharma, Auto, Publishing, IT, Telecom, FMCG, etc. Out of these verticals Retail & Apparel is our largest vertical with a contribution of around 20% to our total business revenues.
We have been very actively contributing to the growth of apparel industry in India over the last decade. Safexpress essentially provides three lines of specialized services to its apparel clients including Express Distribution, Third Party Logistics (3PL) services and Supply Chain Consulting. We specialize in providing "Value added supply chain services to our customers. This gives us a clear edge over other supply chain & logistics players, and helps strengthen our leadership position in the industry".
- How does Third Party Logistics benefit Apparel Retailers?
"We offer integrated supply chain solutions to our customers, by way of our Third Party Logistics (3PL) services. Specialized Value Added Supply Chain Services are provided by our company to our key apparel clients. These include services like Store-Ready Delivery, Packaging, Labeling and Reverse Logistics. Apparel companies can get numerous economic benefits by using 3PL services including elimination of infrastructure investment, risk hedging, better cash-flow, reduction of operating costs, exchange of fixed costs with variable costs, access to external resources along with world-class processes and technologies".
- Tell us something about the Stock2Shelf service.
"A recent apparel retail study conducted by us pointed towards the fact that the apparel retail stores inside malls were unable to make best use of the available resources owing to the lack of a professional Supply Chain service. Therefore, we recently introduced a unique and innovative service known as Stock2Shelf for the apparel retail stores inside malls across the country.
This is the first of its kind 'End-to-end professional mall supply chain service' in the country for the apparel retail stores inside the malls and is all set to redefine the mall-space. This innovative end-to-end service addresses the supply chain management requirements of major apparel retailers across the country in a professional and efficient manner. Stock2Shelf service provides comprehensive mall supply chain services, inclusive of movement of apparel goods, inspection and estimation, professional packaging, security clearance, storage and destination delivery, unpacking and setting of goods, and finally reverse logistics.
The Stock2Shelf service ensures 'time-definite' delivery through professionally trained crew that manages stocks along with the necessary paperwork required to enter the malls due to the increased security checks. This service enables the store owners in the malls to boost their brand image, along with a professional supply chain management of their apparel retail stores".
- Today the booming retail sector is being empowered by various business solutions, what has Safexpress been doing so far in this avenue?
"Pioneered and driven by 'Logistics Guru' and the CMD of Safexpress, Mr. Pawan Jain, the company has today given a new face to the Indian supply chain & logistics industry with the implementation of innovative and state-of-the-art services. Growing at a phenomenal rate, the company is the undisputed leader in the Indian logistics industry and plans to achieve a turnover of Rs. 1000 crores by 2010. Over the last one year, the company has launched several innovative services like Stock2shelf and Campus2home; a customized service for the students of the top B-schools in India".
- What are some of the other big supply chain challenges coming over in the next few years? How will this change your company, going forward?
"Safexpress has firmly entrenched itself as the Knowledge Leader and Market Leader of the supply chain & logistics industry. We have set up our offices in 562 locations, through which we cover every square inch of the country. We have more than 3,500 GPS-equipped all-weather-proof, containerized vehicles traversing over 6, 00,000 Kms every day. We have warehousing space of over 5 million square feet across the country and we deliver more than 60 million packages every year".
- What is the USP if your company?
"The USP of Safexpress is that we provide time-definite express deliveries to our customers. We have a capability to deliver in 1.8 days on an average to over 562 locations in India and our focus always remains in adding maximum value to our customers at every level".
Advanced SCM allows the business to not only enjoy productivity advantage, but also the value advantage. Productivity advantage enables lower costs, while value advantage adds to the value of the products amidst that of its competitors.