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Agile supply chain: Experience for Vietnam’s retailers (part 2)

Walmart - the largest retail group in the world - has influences to its suppliers from prices to delivery schedules. Walmart’s success in building, managing and operating its supply chain is a helpful lessons to Vietnam’s retailers.

Walmart’s success in building, managing and operating its supply chain is a helpful lessons to Vietnam’s retailers

Building distribution centers

Distribution center is an important chain of a supply chain. Designing and locating them in proper manner will affect agility of a supply chain. In concepts of many Vietnam’s enterprises, a distribution center is merely a cargo storing place. However, a distribution center today has been considered as a multi-function warehouse, ensuring continuous cargo flows and increasing values to complete orders.

In a supply chain, a role of a distribution center is getting more important in ensuring smooth operation of a supply chain. In addition, it is considered a balance point between supply and demand in a supply chain. In term of supply, a distribution center has to ensure its efficiency, including effective inventory management, optimum transport and smooth operation of the center. In term of demand, a distribution center has to ensure its quick response ability.

Besides, distribution centers will create values as delaying orders or speeding up cross-docking. In the term of added value, when production activities are to maintain values, distributions will be a place to give customers more added values. Not only stopping at building normal distribution centers, Vietnam’s retailers should aim at centers to complete order as worldwide retailers are aiming at building a pulling model. That is, instead of pushing goods to distribution system for customers to choose, they will focus on customers’ requirements and satisfy them or it is customers who pull products as they required. Therefore, the concept of an order completion center is not that of a normal distribution center, but a pulling model. For uninterrupted operation, there should be large amount of cargo going through the center. Therefore, e-trade will be a factor that helps increase the amount of cargo going through the center thanks to its strong points as quick handling orders.

Inventory management

Good inventory management is an important factor that helps cut cost for the chain and increase income by limiting cargo shortage. Besides technological applications as retail connecting system or RFID, inventory management also requires the use of various methods.

» Identifying long-time inventory and remove them, which can be solved by using modern technology as ERP (Enterprise Resource Planning).

» Making good use of cross-docking technique to cut cost relating to inventory and improving delivery efficiency. In the technique, material and cargo will be unloaded from small trucks and uploaded to delivery trucks. Therefore, there will be no inventory or a little inventory between stages of unloaded and uploaded. Enterprises can employ the technique to cut costs related to inventory, improve local operation and accurate delivery abilities.

Creating relationship with customers and sppliers

Vietnam’s retailers should maintain tight relationship with customers and suppliers to have continuous and efficient goods flow in a supply chain. Enterprises should improve customer service quality and control good customer relationship and apply these processes in their management and operation. » Process of Customer Relationship Management is to ensure relationship to customers maintained and developed. The target of the activity is to find customers’ section based on values they bring to enterprises and solutions to improve their loyalty. The manager of the process will have a special team with members from various departments in the enterprise. The team will be responsible for designing agreements on products and service (PSA) that meet particular requirements from strategic customers. Then the CRM team will them to improve the processes and remove changes and activities that bring no values.

» Process of Customer Service Management is an enterprise’s face. The department is the main contact person in PSA management and provides customers information. The department also assists customers in operating product applications.

» Process of demand management requires a balance between customers’ requirements and supply abilities. With an accurate ability, an administrator can actively balance supply and demand and carry out the plan with the lowest cost. It is noted the process includes synchronous activities between supply and demand, increases flexibility and decreases changes. The process also assists cooperation with departments of marketing and production.

» Process of order completion: the process includes all necessary activities to identify customers’ needs and a network designed to allow enterprises to meet customers’ requirements with the lowest cost of delivery. Most activities are carried out by the logistics department. However, the logistics department should have good cooperation with other departments and with suppliers and customers as well.

Building an information exchange system

Reality showed Vietnam’s retailers’ supply chain management inefficiency was due to discontinuous flow of information in a whole supply chain. Therefore, enterprises should build for themselves a central data system connecting their supermarkets and distribution centers to distributors and build a connecting system among parts in a supply chain for information exchange. Information is a basis for decision related to elements that connects all activities and operations of a supply chain. Cooperation and information exchange to create prompt and accurate information flows for right decisions.

Today, with developments of sciencetechnology, enterprises have been able to use software applications or systems to assist information exchange among customers and related sides for better efficiency with important technology as EDI, RFID… Walmart’s supply chain management activities show RFID help increase inventory management efficiency. It is indeed am optimum choice for Vietnam’s retailers as well. The technology also helps to control product’s origin.

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