Supply Chain Management in Retail Industry

Companies attempt to change their ways of doing business to find out new approaches to customers. Internationalization and consolidation of retailing turned traditional retail industry upside down. Fast and efficient operational models and new technologies constantly challenge retailers. The term supply chain management (SCM) is relatively new in the literature, appearing first in 1982. Supply chain is a set of institutions that moves goods from the point of production to the point of consumption. Retailing is the last step in a supply chain. Successful managing of supply chain will achieve significant savings and increased customer satisfaction. Retailing is responsible for matching the individual demands of the consumer with quantities of supplies produced by huge range of manufacturers. Supply chain management is to consider only strategically important suppliers in the value chain. Retailers cannot perform their role in supply chain without close interaction with other functions of supply chain. Companies in the retail industry resort to supply chain management to counter the increasing uncertainty and complexity of the marketplace and competitive situation to reduce inventory in the entire value chain. Efficient managing of retailers supply chain should support the satisfaction of end-users requirements. Retailers operate at the point closest to customers therefore are in best position to answer the questions when, where and how customers want particular merchandise. SCM in retail industry is a challenge to implement and practice. The purpose of this work is to point out how retailers who understand the SCM functions and want to be successful should utilize abilities of all members of their supply chain and tend to be more efficient and profitable.