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Retail Logistics
04/12/11
Presented by : Group IV
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Presented by : Group IV 04/12/11

Contents
• Managing Retail Shrinkage
▫ Elements and Causes of shrinkage
▫ Approach for shrinkage reduction
• Managing Logistics Service Provider
▫ Services outsourced to 3PL/LSP
▫ Major drivers of logistics outsourcing
▫ Logistics service provider selection
▫ Evolution of 4PL
▫ Retail Logistics Service Provider
• Managing logistics visibility and exception
▫ Retail logistics exception handling process
▫ Role of information technology in managing logistics exception
• Green Retailing
▫ Green logistics
▫ Green Infrastructure and Green IT
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Presented by : Group IV 04/12/11

Managing Retail Shrinkage

• Retail Shrinkage
the percentage of loss of products between manufacture and point of sale
• Elements of Retail Shrinkage
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Presented by : Group IV 04/12/11

Managing Retail Shrinkage Contd..

• Causes of Shrinkage
▫ Lack of cooperation among departments/companies
▫ Making shop lifting synonyms with shrinkage
▫ Having same policy for all products
▫ Having the same policy for all stores/location
▫ Shrinkage is known only at the end of the year
• Affects of shrinkage
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Presented by : Group IV 04/12/11

Managing Retail Shrinkage Contd..

Approach for Shrinkage Reduction

Categorized the solution into four categories

 Process
 People
 Design & layout
 Equipment & technology
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Presented by : Group IV 04/12/11

Managing Retail Shrinkage Contd..

Approach for Shrinkage Reduction

▫ Process
 Focus effort on hot products, hot stores and hot spots in supply chain
 Fast tracking to secure area
 Check deliveries
 Secure delivery
 Appropriate replenishment
 Frequent replenishment
 Regular counting
 Ongoing control
▫ People
 Have in store champion
 Staff Awareness
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Presented by : Group IV 04/12/11

Managing Retail Shrinkage Contd..

Approach for Shrinkage Reduction

▫ Design & Layout

 Visible Location
 Anti Theft fixtures
▫ Equipment and Technology
 Using the in store CCTV system
 Source tagging
 Electronic Article Surveillance systems
 Advanced shrinkage applications
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Presented by : Group IV 04/12/11

Managing Logistics Service Provider

• 3PL/ LSP

“A firm that provides multiple logistics services for use by customers. Preferably,
these services are integrated, or "bundled" together, by the provider. Among the
services 3PLs provide are transportation, warehousing, cross-docking, inventory
management, packaging, and freight forwarding”
• 3PL – Industry Evolution
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Presented by : Group IV 04/12/11

Managing Logistics Service ProviderContd..

• 3PL- Services outsourced
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Presented by : Group IV 04/12/11

Managing Logistics Service ProviderContd..

• Major drivers of Logistics outsourcing

Disadvantages:
•Loss of control
•Impact on house workforce
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Presented by : Group IV 04/12/11

Managing Logistics Service ProviderContd..

• Benefits of using 3PL/LSP
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Presented by : Group IV 04/12/11

Managing Logistics Service ProviderContd..

• Evolution of 4PL(Lead logistics provider)
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Presented by : Group IV 04/12/11

Managing Logistics Service ProviderContd..

• Retail LSP- An Indian perspective
▫ Bad Side
 Poor road condition
 Lack of warehouse facility at competitive price
 Absence of cold chain
 Logistics management costs is as high as 7-10% against global average 4-5%
 Complex tax laws
 Insufficient technological cost
▫ Good side
 Huge growth in retail
 Organized market growth is 16%
 Ample of warehouse space available
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Presented by : Group IV 04/12/11

Managing Logistics Visibility & Exceptions

Visibility

“to have information about what your partners doing”

Exception

“crisis situation at the partner end that effects you”

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Presented by : Group IV 04/12/11

Managing Logistics Visibility & Exceptions

Contd..
Retail Logistics Exception Handling

▫ Deciding the elements that need to be monitored

▫ Deciding events
▫ Deciding the mechanism
▫ Deciding the mechanism of exception notification
▫ Deciding the nest set of action
▫ Measure performance

Role of IT in managing Logistics Exception

▫ Monitoring
▫ Notifying
▫ Simulation
▫ Control
▫ Measure
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Presented by : Group IV 04/12/11

Green Retailing
Structure
Green Green Green Green Green Infra Green CRM
Design Packaging Sourcing Logistics Structure Recycling

•Design for •Green •Supplier •Transport •Green store •Take back

environment Package compliance mode design waste/collecti
•Hazardous/to Design •Materials optimization •Reducing on center
xic substance •Use bio- selection •Use alternate energy •Invest in
reductions degradable •Organic fuel consumption recycle center
•Assessment packaging Framing •Consolidating •Avoid using •Special focus
of carbon material •Cleaner shipment certain for e-waste
emission •Reduce Fabric •Reducing materials in recycling
during life Packaging Production Food Mile equipment
cycle concepts making
•Increase use
of solar cell
etc
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Presented by : Group IV 04/12/11

Green Retailing Contd..

• Green logistics
▫ Efficient Transport Management
 Relooking at mode of transport
Using alternate fuel
Consolidating shipments
Reducing food miles
• Green Infrastructure
• Green IT
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Presented by : Group IV 04/12/11

THANK YOU