Supply Chain Management Key for Retailers Battling the Recession

'State of the Retail Supply Chain Study' from RILA and Auburn University finds supply chain a key driver of business success and competitive advantage for retail sector during downturn

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Arlington, VA — October 27, 2010 — Retailers struggling to survive one of the deepest recessions in recent history have turned to their supply chains as a key driver for business success, according to a new industry reports released this week.

Released by Auburn University in partnership with Retail Industry Leaders Association, the 2010 "State of the Retail Supply Chain Study" brought together the leading retailers from North America to examine the year's current trends, leading practices and the foremost issues affecting the strategy and planning of retail supply chains. This year's study took a closer look into the results of 2009 and captured new insights from SCM executives in 2010.

During a teleconference to discuss the report, industry experts Dave Reiff, senior vice president of national distribution for Wal-Mart Stores; Casey Chroust, RILA executive vice president of retail operations; and Brian J. Gibson, a professor at Auburn University, examined the critical value of careful supply chain management during both economic hard times and as retailers shift their focus toward recovery.

"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 Reiff.

"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."

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

The study revealed that efforts to reduce bottom-line costs while the recession held top-line growth in check has also led to a growing importance of supply chain management throughout the retail organization and growing recognition in the C-suite of Supply Chains' critical role in the success of their organizations. In addition, the influence of SCM continues to expand up and downstream within the organization, to merchandising and store operations functions, according to the report.

Looking ahead, the study also cited several key issues that should be on the radar of Supply Chain 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 also be addressed at the 2011 RILA Logistics Conference, February 20-23, 2011, in Orlando, Fla. The conference brings together the retail industry's top logistics and supply chain executives for three days of collaborative dialogue and educational content.