Retailers are largely capitalizing on 3Ds- digital, design and delivery which is shaping the way supply chain is functioning in the retail industry. These 3Ds are going to cut across the value chain including manufacturers, logistic service providers, customized warehouses and fret forwarders. Along with this the retailers are working towards inventory efficiency across multiple channels to maximizing sale and minimizing the inventory. Simultaneously they are focusing on digitizing the supply chain to bring every store under serviceability network area. Thus, talking about the changing trends in supply chain management at Bestseller with digitization happening across value chain Ranjan Sharma, Head of IT and SCM, Bestseller spoke to Indianretailer.com during ReTechCon 2017 in Mumbai.
At Bestsellers what is the role of 3Ds - Digital, Design, Delivery across value chain?
With 3Ds we are looking to bridge the gap between multiple technologies operating in the entire supply chain to create seamless experience. Supply chain is not just about procurement, warehousing and distribution it is a much larger picture. It actually impacts the way how we interact, engage and service our consumer.
Digital, design and delivery helps in offering seamless experience right from inception of the product to final sale to post sale service. All of this involves in supply chain and the real time information available across value chain is important to be able to take right decisions. Gone are the days when retailers would have to design their supply chain and take procurement decisions six months ahead of the curve and might have to readjust as and when sales are happening.
How 3Ds helping in collaboration challenges in supply chain?
Three Ds are not just about your ecosystem or enterprise it is going to cut across the value chain including your manufacturers, logistic service providers, customized warehouses, fret forwarders and everything. Hence, the value chain process has to be seamlessly integrated with not just your manufacturers even with their suppliers. The idea is to understand what availability of the raw material is with your manufacturer. Thus, getting that visibility of the raw material available in his supplier network is also very important and that’s where the whole digital is point of connects.
How you are working towards maximizing sale and minimizing the inventory?
There is a lot work happening in the space to bridge the gap between maximizing sale and minimizing the inventory. Our inventory efficiency across multiple channels would be 1: 1 now we have reached to a level of 1:1.9. The idea is to take it to 1:2.5 in the next year. It is going to give huge benefits because for one piece we are able to sell 2.5 times and that’s the beauty of it.
Do you think that the retailers are really losing money by going omni-channel way?
It’s a future investment. It is not just about retailers and the brands evolving around omni-channel it also about customer evolving around it. Today most of the retailers are going towards more for experience that they would want to provide to the consumer rather than just consumer driven sales. In terms of sales percentage omni-channel might not be a very viable model today but subsequently it is going to be more about experience and putting a cost to the experience at times becomes difficult.
How digital supply chain can connect all the dots inside the network?
The idea of digital supply chain is to connect all the dots it can’t have anything out of the dots. The moment that dot is connected it is in the serviceability area. Due to some challenges most of the retailers are not rolling out omni-channel across all stores. But the moment they start doing that the problem of a particular store is out of the serviceable area can be solved. With this the retailers have to keep up with the cost. There is also requirement of digital skill set to be able to serve the cause.
How do you think that GST will help with supply chain?
GST is creating more complexities. Though there is value attached to GST but nobody in the current form is taking decision about transformation of supply chain. GST is yet to be seen, because a lot of decisions are still being taken, a lot of amendments are still coming up and final picture may evolve in three to six months once we have a clear view of what GST means to us. One of the biggest benefits is being talked about GST is consolidation of warehouses and not creating more warehouses. Because at the end of the day the more number of warehouses you create the inventory holding cost increases and more inventories you are holding into the network it increases your working capital. So the benefit of GST is to consolidate your warehouse so that you should be able to reach to the demand anywhere at any point of time.