INTEGRATING THE SUPPLY CHAIN IN RETAILING INDUSTRY

Supply Chain Integration is coordinating and making an effort for each other in
all enterprises of supply chain, to enhance the overall competitive strength [5].
Current studies about supply chain integration in retailing industry are mostly
focused in production planning, marketing channels, inventory management and
cooperation. The main research achievements include: the analysis of prediction
about selling amount of European food grocer through case observation by
Johanna Smaros [6]; the application of design method called fuzzy object
program in s constructing the Synergetic production and selling planning by
Hasan Selim [7]; Jianxin (Roger) Jiao [8] introduces an associative classificationbased recommendation system for personalization in B2C e-commerce
applications; Bernhard [9] constructed the selling-distribution model of supply
chain integration, explained the method that changing the key factories and
capability indexes into the environment variables and analyzing how to use
decision making system to improve the supply chain; Charles S. Tapiero [10]
used NPQ model to analyze the risk and quality controlling of raw material
suppliers and manufacturers; Caroline Emberson [11] studied the collaboration
between the retailers and suppliers, expatiating on the competitive and
cooperative relationship; Piet van der V1ist [12] studied the collaboration
between retailers and suppliers in VMI. In retailing industry, in order to manage
more and more products and services effectively, retailers and companies in
supply chain should change traditional business model, rebuild supply chain
system and realize the integration of supply chain. The supply chain
management is not mature in our country, so supply chain management can be
solved not only by participators' self-adjusting, but by leaders' support and
coordination.

SUPPLY CHAIN INTEGRATION REQUIRES NEW

ABILITIES
A more complex approach to supply chain management requires a more
flexible and professional approach of managers and entrepreneurs to process
structuring, process management and operations. Each supply chain function
requires new abilities:
1.

Adapting stores to the local consumer strongly improves consumer value, but
requires systems that translate local data into local merchandising plans

2.

Demand generation requires new internal and external communication skills of all
employees that have contact with customers. Each complaint must be handled as a
free

advice of an emotionally involved customer to improve the service

levels. Complaints must also be considered prove of structural problems, not

of incidents.
3.

Demand generation also requires a feeling how to translate customer data into
valuable triggers for action. Questions and orders must be communicated internally
to the

4.

right person, who will deliver results.

Demand planning reduces bullwhip effects in supply chains, but needs a keen
alignment of sales and operations. This requires new planning systems and planning
personal that is able to operate these systems effectively

5.

Demand planning also requires shared information and systems to work with
shared information.

6.

Ordering in the stores is aided by the computer and point-of-sale data, but this
requires educated employees who act like stock controllers

7.

Order execution delivers improved lead times and fill rates, but requires the
development of responsive and reliable fulfilment processes

8.

Capacity planning in integrated supply chains lead to improved capacity usage,

but requires more flexible manufacturing and logistics

9.

Materials planning will have to align supply and demand by utilizing demand
information for materials planning

10.

Purchasing will no longer aim for lowest prices, but this function will have to be
able to reduce total transaction costs by cost/profit management. This is not easy,
but proves to be very rewarding

EVOLUTION:

Six major movements can be observed in the evolution of supply chain management studies:
creation, integration, and globalization (Movahedi et al., 2009), specialization phases one and
two, and SCM 2.0.

Creation era[edit]
The term "supply chain management" was first coined by Keith Oliver in 1982. However, the
concept of a supply chain in management was of great importance long before, in the early 20th
century, especially with the creation of the assembly line. The characteristics of this era of supply
chain management include the need for large-scale changes, re-engineering, downsizing driven
by cost reduction programs, and widespread attention to Japanese management practices.
However, the term became widely adopted after the publication of the seminal book Introduction
to Supply Chain Management in 1999 by Robert B. Handfield and Ernest L. Nichols, Jr.,[15] which
published over 25,000 copies and was translated into Japanese, Korean, Chinese, and Russian.
[16]

Integration era[edit]
This era of supply chain management studies was highlighted with the development of electronic
data interchange (EDI) systems in the 1960s, and developed through the 1990s by the
introduction of enterprise resource planning (ERP) systems. This era has continued to develop
into the 21st century with the expansion of Internet-based collaborative systems. This era of
supply chain evolution is characterized by both increasing value added and cost reductions
through integration.
A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1type supply chain,
systems such as production, storage, distribution, and material control are not linked and are
independent of each other. In a stage 2 supply chain, these are integrated under one plan and is
ERP enabled. A stage 3 supply chain is one that achieves vertical integration with upstream
suppliers and downstream customers. An example of this kind of supply chain is Tesco.

Globalization era[edit]
The third movement of supply chain management development, the globalization era, can be
characterized by the attention given to global systems of supplier relationships and the
expansion of supply chains beyond national boundaries and into other continents. Although the
use of global sources in organisations' supply chains can be traced back several decades (e.g.,
in the oil industry), it was not until the late 1980s that a considerable number of organizations
started to integrate global sources into their core business. This era is characterized by the
globalization of supply chain management in organizations with the goal of increasing their
competitive advantage, adding value, and reducing costs through global sourcing.