Supply chain processes are low in maturity although they are considered the backbone of retail, says a RAI-TCS survey.
Retailers do not seem to have real-time inventory and order visibility on their radar for the coming year despite the phenomenal growth of online retail in India, the study titled ‘Retail Operations Benchmarking and Excellence Survey’ said.
Sustainability practices are low among the priorities of Indian retailers, while performance improvement and efficiency are higher priorities, finds the survey.
“The current supply chain maturity in the retail industry can be well compared to the diversity of the country demographics and the digital divide. This means the technologically advanced, financially rich are moving at a very fast pace; the followers are learning fast and taking measures to catch up to speed and maturity; while the laggards may run out of time to catch up and need support right from strategic to financial aspects,” opines Amit Gourwar, Head – Logistics, Infinity Retail.
Inventory norms and policies are still not mature. Nearly half of the respondents do not use systems to manage their inventory scientifically. Department stores show greater maturity than other retail segments.
“The organised retail sector in India is growing, so the role of the supply chain becomes more important as it needs to be more responsive and adaptive to customers’ demand. There is also a need for the supply chain to be more cost efficient and collaborative to win the immense competition in this sector,” Reeja Sujoy, Head – Supply Chain, The Mobile Store, said.
This is consistent with the fact that a majority of the fashion retailers reported undertaking strategic initiatives like WMS deployment and automation.
“When GST is implemented, the warehousing networks are going to be optimised and the number of smaller warehouses will be replaced by bigger ones at the regional level,” S Kumar Anavangot, Manager, Special Projects – CEOs Office – Supply Chain, Pantaloons, said.
Segments like fashion, CDIT, department stores, books, gifts and pharmacy retailers sell online, but the food and grocery segment is still experimenting with the online channel and features such as real-time inventory and ‘click and collect’.
Retail supply chains are not yet ready to handle multichannel. However, in comparison to 21 percent last year, 45 percent of retailers have started fulfilling the demand from any Distribution Centre this year.
The assortment challenge of online retail is driving up costs of multiple DCs. Retailers will need to unify stores (including backrooms) and DCs, and create incentives for stores to redirect traffic online, the survey underlines.