Supply Chain Management Key During Economic Slump: Study

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Supply Chain Management Key During Economic Slump: Study


Strong supply chain management (SCM) is one of the key drivers responsible for retailers surviving one of the worst recessions in history, according to a study released today by Auburn University in partnership with Arlington, Va.-based Retail Industry Leaders Association.

The “2010 State of the Retail Supply Chain” study brought together leading North American retailers to examine the year’s current trends, leading practices, and the foremost issues affecting the strategy and planning of retail supply chains.

"Supply chain management has played, and continues to play, a strategic role in retail organizations throughout the recession and remains a key driver of business success and competitive advantage in today’s challenging market," said Dave Reiff, SVP of national distribution for Wal-Mart Stores, who joined a panel of experts in a tele-press conference to discuss the study’s findings.

The panel also included Casey Chroust, RILA EVP of retail operations, and Brian J. Gibson, Ph.D., professor at Auburn University, and examined the critical value of careful supply chain management during both economic hard times and as retailers shift their focus toward recovery.

"Thanks to cost reduction initiatives introduced by supply chain management executives, retailers were able to tap into existing opportunities to streamline their supply chains, lowering their bottom line costs and saving billions across the industry," said Chroust. "Moving forward these cost structure enhancements and efficiencies will enable retailers to thrive as the economy becomes healthy again.”

The study revealed that efforts to reduce the bottom line costs while the recession held top line growth in check has also led to a growing importance of SCM throughout the retail organization and has gained C-suite recognition. CEOs understand SCM as critical to retailer success, and the influence of SCM continues to expand up and downstream within the organization, to merchandising, and store operations functions, the study found.

"Retail supply chain management involves much more than DC to store inventory movement," said Gibson. "Retailers must establish best-in-class supply chain capabilities to remain competitive. This year, leading edge supply chain executives are pursuing agility, shelf-driven supply chain capabilities, and private label manufacturing."

The study also cited several key issues that the panel feels should be on the radar of SCM executives moving forward, including sustainability, fluctuating fuel costs, new government regulations, streamlining multi-channel supply chain operations, and utilizing the latest technological advancements.

The detailed results of the study will be addressed at the 2011 RILA Logistics Conference, to be held February 20-23, 2011, in Orlando, Fla. For information on the conference, visit