Integrating ICT with SCM: A Pakistan Retail Superstore Industry Perspective

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Violet Parrish
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1 Integrating ICT with SCM: A Pakistan Retail Superstore Industry Perspective Roshan Shaikh [ roshanshaikh@iqra.edu.pk] Fahad Mateen [ fahadmateen81@yahoo.com] Faisal Younus [ mfaisal4u@hotmail.com] Iqra University, Karachi The Problem Recognition of importance of ICT with SCM is widespread but acceptance depends upon expectations How best to use ICT with SCM to meet customer demands As the super retail business picks up protection for price, quality, and availability becomes harder to maintain (Bullwhip) loosing customer confidence: Woolworth, Kmart, Dollarrama

2 About this work Define the phenomenon of implementing ICT in super store in terms of empirical relationship between specific decision-making parameters: cost and productivity (availability) Alignment between expectations & efforts to implement ICT with SCM (λ=1.18) A pragmatic model proposal 3 rd t t i (ISCMSP) SCM Flow of Material, Money & Info

3 Contemporary Supply Chains Suppliers Logistics, Resources Operations Procurement, Manufacturing, Marketing Customers Distribution & Transportation Constraints Information, Competency, Capital, HR ICT as Managed Service Not just IT Real time, secure, transaction tracking control Across many globally dispersed stake holders Infrastructural, procedural and administrative innovation Substitute, Scale, Structure

4 10% 12% 14% 16% 18% 19% 21% 23% 26% 28% Fig-1 Total Mixed Retailers & Superstore volume out of Total Volume of Retail Sales ,000 3, ,000 Rs in (Bn) ,500 2,000 1,500 1, Rs in (Bn) Sales through Superstores & Mixed Retailers- Avg Growth Rate% = 30% Retail Sales Volume - Avg Growth Rate% = 9% Fig- 2 Sales volume through Superstores vs Total Mixed Retailers and SuperStore Volume 0 Source for all data: Ministry of commerce Pakistan, Financial Reports from Several years Rs in (Bn) Sales through Superstores & Mixed Retailers- Avg Growth Rate% = 30% Sales through Supestores - Avg Growth Rate = 50% Fig- 3 Sales volume contibution of Superstores of Total Mixed Retailers and Super stores 100% 80% 60% 40% 20% 0% Sales through Supestores - Avg Growth Rate = 50% Sales through Superstores & Mixed Retailers- Avg Growth Rate% = 30% Fig-4 Preceived vs Desired levels of ICT in Supply chain Management Source for all data: Ministry of commerce Pakistan, Financial Reports from Several years Survey results 14% 13% 12% 11% 10% 8% 8% Perceived 6% 5% Desired 4% 2% 0% Cost Reduction Increase productivity

5 Fig-5 Investment comparison of desired "cost" & "productivity" Rs in (000) Investment if only desired "productivity" is achieved Investment if only desired "cost reduction" is achieved Source for all data: Survey results Fig-6 Likelihood to be implemented at expected & desired "cost" & "productivity" At expected cost and productivity benefits At desired cost and productivity benefits Analysis From the survey cost reduction factor: a(max) ) = 13%, and productivity factor: b(max)=11% Define the phenomenon of implementing ICT in super store by:

6 4.50% 4.00% Cxa Cxb 4.08% 3.00% 3.50% Cxc 2.50% 3.14% 3.00% 2.00% 2.41% 2.50% 1.86% 1.50% 2.00% 1.43% 1.50% 0.82% 1.10% 1.00% 1.03% 0.63% 0.85% 1.00% 0.48% 0.65% 0.50% 0.37% 0.68% 0.29% 0.22% 0.50% 0.17% 0.50% 0.13% 0.10% 0.46% 0.30% 0.00% 0.20% 0.14% 0.00% 0.09% 0.06% 0.04%

7 Probable Effect of New Technology Proposed Model Delivery Receipt Fig- 7 Super Stores ICT Service provider company equipment Product Delivery ICT Service provider company equipment Sends Delivery receipt to ICT service provider from the super store Manufacturer Stock update sent, Required Stock PO Lead time (if urgency) to ICT Service provider Updating information to Manufacturer/Distr ibutor received from super store Live Information Sharing ICT Service Provider Updating Receives requests from the ICT delivery receipt Service Provider and delivering information in the actual product to the super Super Store store directly database Live Information Sharing Live Information Sharing Distributor/ Supplier Processing orders from super store for the desired Manufacturer/Distributor ICT Service provider connectivity equipment

8 The Solution Little or no upfront investment required by either stakeholder in the chain (retailer, manufacturer, distributor) Direct reduction of the transaction, coordination and multi-tier tier commission costs Accuracy of data, maintaining the exact data to enable the stakeholders to monitor various areas of the consumption Eliminating the hidden losses such as theft, breakage Efficient handling of uncertainties such as seasonal fluctuations etc. Management focus at a more strategic level, such as expansion and entering new markets Thank you Roshanshaikh@iqra.edu.pk

The Customer Relationship Management Process

The Customer Relationship Management Process E d u c a t i n g t h e W o r l d s B e s t A i r F o r c e Slide 1 The Supply Chain Management Processes Information Flow Supply Chain Management Processes