Issue of Increasing Lead Times in the Retail Industry - Annotated Bibliography Example

Research question and case study Research Question Supply chain management activities form an integral part to enhance the effectiveness of retail organizations. Thus the failure to effectively supply the right merchandise at the right time happens to affect the sales, revenue and productivity of the retail incorporations. The project in the above connection aims to probe two main questions: What is the impact of increase in lead times in supply chain activities on retail concerns? How do the retail organizations aim to counter such? The Issue of Increasing Lead Times in the Retail Industry The issue of increasing lead times in the global retail industry tends to significantly affect the operation styles of several branded and non-branded companies around the world. Owing to a rise in the lead times of products to reach the store from the manufacturing centers the retail companies tend to suffer from loss of demand of the consumers. This loss of demand for the products traded in by the retail company happens to render large amounts of impact on the productivity and revenue patterns of the concern. Thus the retail companies to sustain their enhanced market share and profitability in the global market must strongly work to reduce the amount of lead times involved. Retail companies that mainly focus on the trading of fashionable garments and merchandises along with toys and technological products generally tend to suffer from the pitfalls of an ineffective supply chain system. Increasing lead times in the supply chain systems of such retail concerns leads to the unavailability of the right merchandise at the right season or time thereby contributing to loss of sales. It is therefore required for the retail organizations to arrange for the merchandises specifically during the peak seasons to meet customer satisfaction and thereby gain in sale revenues. Again the increase in the lead times for such retail companies also amounts to piling up of unused or unsold merchandises in retail warehouses that in turn locks a considerable amount of working capital for the concern (Bakal and Geunes, 2010, p.2395-2396). The paper relating to the above fact tends to focus on cases where the retail business organizations have taken resort to technological and process innovations to help in reducing the amount of lead time involved. Process Innovation in Retail to Reduce Lead Times Fashion retail companies like Zara belonging to the Inditex group are found to take resort to process innovations in its retail operations to contribute in the reduction of lead times. The retail company is observed to suffer from the loss of sales owing to the emergence of assorted sizes pertaining to garments in their different stores. In that the fashion retail company required the store managers of different operating stores to render individual requests for unavailability of proper sizes relating to different garment categories. Along with the furnishing of the different orders the store managers are also required to render past records for the sale position of such product categories depending on item codes. This process would thereby help the company in making needed forecasts of the future sales relating to such and thereby can help in fetching the merchandises in time to meet consumer demands. Through the above model the retail company aimed at establishing a bridge between the manufacturer, warehouse and the stores to effectively contribute in shortening of lead times (Caro and Gallien, 2010, p.258-259). Other types of process innovation strategies incorporated by retail organizations like Zara involved the creation of local manufacturing and distribution zones along European and North African zones. Localized manufacturing and supply chain centers contribute to the enhancement of the parameters of accessibility and affordability relating to the merchandises on demand and also assists the concern in gaining an effective track on the performance of the supply chain systems. Further the company also focused on the production of short-term quantities of such products to help counter the problems related to the piling of unsold and unused stocks. Working on such ‘Quick Response’ models has helped fashion retail companies like Zara to maintain the spontaneity of demanded products thereby helping in reducing lead times and also in piling up of stocks in the warehouses (Cachon and Swinney, 2011, p.778-779). Technological Innovation to reduce Lead Times in Retail-RFID One of the significant technological innovations rendered in retail organizations to help in reducing the amount of lead time involved in procuring the right amount and category of merchandise to suffice the needs of the customers is through the introduction of Radio Frequency Identification systems. Incorporation of Radio Frequency Identification Systems (RFID) in retail is conducted through the designing of bar codes based on such technology which in turn when scanned through the Point-of-Sales system contributes to the gaining of real time information pertaining to market changes in demand. Gaining of such real time information helps the retail concerns to make effective decisions relating to procurement functions thereby satisfying consumer demands and also in reduction of stock piles. A case reflects how the incorporation of the RFID in textile incorporation based in Hong Kong contributed in assisting the company monitor the production and distribution systems of its different centers located along regions like Sri Lanka, China and the Indonesian Islands. Tracking of information pertaining to styles produced and dispatched contributes in enhancing the sales potential of the retail organization to gain due productivity in the competitive and changing market. The production and distribution centers along with the stores are interconnected based on Local Area Networks. This strategy helps in integrating the different components of the retail organization to reduce the chances of loss of demand and stock pile over (Ngai et al, 2010, p.2583-2584, 2591, 2597). Thus through the effective incorporation of RFID technology the retail organizations are found to gain on considerable reduction of the stock-out situation along with gaining on larger number of inventory turns. Tracking of high saleable products along with the low saleable and stagnant ones identified through the use of RFID technology assists the retail companies in properly planning orders for the same thereby contributing in reduction of the impact of lead times. Case Studies related to deployment of RFID Technology in companies reflect how the fashion merchandise retailer GAP used such in gaining accuracy relating to inventory planning functions at about 99.9 percent (Madhani, 2011, p.44). Similarly another case study relates to the automobile retail industry the situation of Renault demands observation due to the incorporation of RFID Technology in its supply chain and manufacturing parameters. The reduction in lead times pertaining to the parts or components of Renault’s manufacturing and production operations happens to gain success owing to the reduction of considerable amount of wastage along activities like forecasting, scheduling and planning functions with the supply chain units to thereby help in gaining financial effectiveness and also in the transmission of effective information between the company and the supply chain groups. Reduction of wastages along these fronts by around 9 to 36 percent finally helped the company in gaining competencies along the supply chain paradigm to reduce lead times and gain on operational productivity (Kach and Borzabad, 2011, p.370, 372-373). Integrating Electronic Commerce in Retail Organizations to Reduce Impacts of Lead Time The paper also focuses here on other cases where retail concerns like CompCo, a retailer of electronic merchandises based in United Kingdom through the incorporation of electronic commerce in its operational paradigm happened to reduce the impacts of long lead times. The company worked in integrating the manufacturing; distribution and store level components through the use of electronic commerce such that it would help in effective tracking of the flow of merchandises and in rendering potential feedbacks pertaining to emergence of stock-out situations. Further in that the company also works in gaining the assistance of outsourcing teams that contributed in rendering potential feedbacks to the customers relating to the availability of the merchandise and thereby helps in enhancement of customer relationships. In addition to effective tracking and feedback functions the electronic commerce interface closely integrates the activities of the marketing and operation department of the enterprises to thereby reduce the impacts of long lead times on sales and revenues. Integration of the functioning of the marketing and operational departments in the concern helps the organization in effectively tracking orders and also evaluating the parameters of availability of the right stock in fulfilling consumer demands. The company in addition to operating via the internet platform also worked in the creation of a local warehouse to effectively stock potential merchandises. Incorporation of electronic commerce activity on such a large scale through the integration of call centers along with marketing, operation and distribution departments along with the supply chain bodies contributes in augmenting the potential of the concern to reduce lead times of saleable produces. Thus electronic commerce incorporated enhances the level of integration of the company with external and internal stakeholders thereby augmenting the competitive advantage of the company in changing external market conditions (Piercy, 2009, p. 559-563). Conclusion The issue identified in the paper relates to the increase in lead times for organizations related to retailing activities pertaining to fashionable garments, toys, and also for automobile companies like Renault. These companies are evaluated in terms of innovations rendered in the supply chain activities both in terms of process and technology to thereby gain on productivity and market share. Reduction in lead times made possible through the innovations rendered also helped the company in effectively servicing consumer demands in situations of spontaneous volatility. References Bakal, I.S., and Geunes, J. (2010). Order timing strategies in a single-supplier, multi-retailer system. International Journal of Production Research, 48(15), 2395-2412. Retrieved from: UMUC Library Database. This article aims to identify the potential impacts of increasing lead times faced by the retail organizations involved in the trading for fashionable garments and merchandises. It reflects how the rise in lead times for such merchandises leads to loss of sales and revenues. Cachon, G.P., and Swinney, R. (2011). The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior. Management Science, 57(4), 778-795. Retrieved from: UMUC Library Database. This article reflects on a strategy taken by the retail organizations in the form of a process innovation that aims to act on Quick Response mode to counter the effects of increasing lead times and reduce such to help gain the right product at the right time. Caro, F., and Gallien, J. (2010). Inventory Management of a Fast-Fashion Retail Network. Operations Research, 58(2), 257-273. Retrieved from: UMUC Library Database. This article specifically focuses on the case study of Zara in showing how the fashion garments company tackled the problem of assorted merchandises through innovations rendered in its ordering and supply chain processes. This case shows how orders were effectively planned, scheduled and generated through the incorporation of store managers along with the central management to gain productivity. Kach, A., and Borzabad, A.F. (2011). Use of RFID Technology to Overcome Inefficiencies in the Supply Chain: An Analysis of Renault’s Operations in Iran. International Journal of Management, 28(4), 365-378. Retrieved from: UMUC Library Database. This article focuses on a technological innovation incorporated by the retail organizations using the RFID Technology to help in effectively integrating the different parts pertaining to manufacturing, distribution and marketing activities to effectively meet consumer demands. Herein it focuses on the case of Renault in Iran to enhance the understanding of the strategy taken by retail concerns to reduce the impacts of lead time. Madhani, P.J. (2011). RFID Deployment: Fast Fashion Retailing. SCMS Journal of Indian Management, 8(2), 40-51. Retrieved from: UMUC Library Database. This article reflects how the use of RFID Technology has enabled the retail concerns to effectively plan and schedule orders to thereby gain effectiveness of dealing with a stock out situation. The paper reflects on the case of GAP in showing how the technology helped in augmenting the accuracy level of its inventory planning activity. Ngai, E.W.T. et al. (2010). RFID systems implementation: a comprehensive framework and a case study. International Journal of Production Research, 48(9), 2583-2612. Retrieved from: UMUC Library Database. This article focuses on enhancing the understanding of how the RFID Technology system is effectively deployed by the retail concerns through the use of specific category of bar codes and enabling a scan conducted through a Point-of-Sales system to thereby contribute in generating real time information relating to changes in market demands. Piercy, N. (2009). Positive management of marketing-operations relationships: the case of an internet retail SME. Journal of Marketing Management, 25 (5-6), 551-570. Retrieved from: UMUC Library Database. This article reflects on how the retail organizations effectively employ electronic commerce interface to largely integrate the different departments related to production, dispatch and marketing activities along with supplier and dealer networks to enhance its operational and sales productivity. In that the article relates to a case study of CompCo, a retailer of electronic goods based in United Kingdom to help enhance the understanding of the strategy taken through the incorporation of an outsourcing team to address the distribution and marketing issues. Read More