Active Supply Chain and Retail Responsiveness

Discuss about the Literature Review for Active Supply Chain Systems on Retail Responsiveness.

Active supply chain is one of the essential requirements in the present business environment. Effective supply chain helps an organisation to meet the needs and demands of the consumers and hence it is essential for every business to develop a smart supply chain so that the businesses are quick to react to the needs and wants of the consumers. As stated by Roh et al., (2014) Retail responsiveness has been one of the tools that have acted as the ladder of success for many companies in the contemporary business environment. Responsiveness is normally defined as the reaction or response given to a reply and responsiveness in retail means the response the companies give in regards to the needs and wants of the consumers which will help them to gain competitive advantage in the business. To critically analyse the role of supply chain it is extremely essential to mention that it is one tool that allows a company to provide the right kind of services to the consumers. In the present market almost all the companies are working to do responsive retail and active supply chain is one of the important aspects in allowing the companies to do that.

For responsive retail it is important to have responsive supply chain. Since consumers are becoming highly fickle nowadays it becomes tough for the companies to compete and gain customer loyalty. Hence it is important for these companies to have effective tools which would help them to be responsive to the consumers. According to Blanchard (2010) Active supply chain means the supply chain which is capable enough to respond to the needs and wants of the stores at regular intervals. With different concepts coming up supply chain has to be streamlined for the effective operation of the business. The implementation of active supply chain will help the stores to get supplies quickly which will help to address the needs and wants of the consumers effectively. On the other hand for manufacturers active supply chain system means getting access to large amount of raw materials and using the inputs to develop outputs within a very short period of time to meet the growing demands of stores and most importantly at lower prices. If a supply chain works like this then it is said to be retail responsive. Farahani et al., (2014) said traditional monolith of supply chain has been highly influenced by the changing consumer demand and hence supply chain had to be developed in order to keep up with the rapid pace of change.     

Impact of Active Supply Chain on Retail Responsiveness

Fig 1: Supply Chain Integration on retailers (Source: Farahani et al., 2014)

The customized needs and wants of the consumers have been fulfilled by the implementation of active supply chain where a company has been able to meet the needs and requirements of the consumers effectively and one of the best examples of this has been the growing need of fashion among the consumers and in response top companies have taken up the concept of fast fashion. As stated by Vermeulen & Seuring (2009) fast fashion consumers have developed customized needs and wants and for this top companies had to modify their supply chain which has helped them to quickly respond to needs and wants of the consumers effectively. Both form of business like offline and online businesses have taken up agile management system which has also helped to develop the supply chain management as per the market trend. Hence it could be said that active supply chain management impacts the retail responsiveness positively as it helps to address the needs and wants of the consumers quickly and effectively and allows gaining competitive advantage in the market.

Active supply chain mainly means having effective strategies and capabilities in place so that at the right time the supply chain could respond to the needs and demands of the consumers. The UK retail sector is more competitive than ever and hence it is important for the companies to focus on driving towards the business in order to sustain in the market which could be only done by offering better and smarter products at regular intervals. As per Kim (2009) An exceptional supply chain should be tailored to the customer experience a company wants to have which is extremely important not only drive the consumers but also to develop a strong platform based on which the company could survive for a long time in the market and hence it is extremely important to develop the supply chain as per the requirements of the organisation. An active supply chain is well equipped to provide growth, cost control, customer service enhancement and hence customer loyalty. When a supply chain is able to provide the above mentioned features a company is able to continuously develop and present consumers with their required products which automatically make the retail responsive. Critically examining the role of employment active supply chain it could be said that more active the supply chain there is a possibility of better result from the business. As per Van Weele (2009) Supply chain management is considered critical for the success of a retail organisation as active supply chain has positive influence over the companies.

Key Components of Active Supply Chain

Reaching to the consumers is what every company wants and the role of supply chain is to make the organisation capable enough to develop its position in the market so that it could come closer to its target audience through responsive retail. Vermeulen & Seuring (2009) said that an active supply chain means an agile supply chain that is capable of responding to the customers’ requirements readily and this clearly gives upper hand to the companies as they are able to do responsive retail. Strong distribution network, flexible capacity, people development and strategic alignment are some of the key components of the active supply chain. Blanchard (2010) stated that top multinationals in order to become responsive have focused on developing their supply chain based on these components which has helped them to respond to the market demand effectively. The role of supply chain has expanded in the last few years and continues to grow and has become integral to the success of retail businesses which clearly shows that active supply chain or a responsive supply chain is essential for the effective practice of responsive retail.            

Fig 2: Active Supply Chain (Retail) (Source: Christopher 2016)

The retail market environment in UK is highly competitive and it is essential for the retail companies to be responsive to their consumers but it is only possible with the support from the internal processes of the companies. The internal processes of the organisation include effective supply chain which will help the company to bring the right kinds of products to the consumers as per their taste and preferences. In this heavily congested retail market consumers have become highly unpredictable and their demands for unique kinds of products and low prices have created problems for the companies and the implementation of active supply chain have come to the rescue of the companies. As stated by Christopher (2016) Responsive supply chain has helped the retail companies to be responsive to the consumer needs and demands. An active supply chain is always responsive and prepared to compete with the unexpected pressure coming from the market. Vermeulen & Seuring (2009) said Supply chains in the retail sector will have to be prepared to face hiccups which would help the company to come out of pressure situations in terms of getting raw materials, development of output and distribution which will help to compete with the market environment. In the modern day market it is not always easier for the retailers to maneuver the daily hiccups like shortage of products, weak product mix and poor distribution and hence it is important to implement active supply chain which will help to get products within short span of time and will also help to strengthen the product mix.

Gunasekaran et al., (2008) said that performing fact based analysis will help to develop the supply chain effectively as customize it as per the needs and wants of the company and so for the consumers. Getting real time data from the internal and external sources about the needs and wants of the consumers and getting insights about the distribution channel and inventory management are extremely essential for effective working of an organisation. The implementation of active supply chain has clearly contributed to the development of retail business by helping them to get support in terms of products which has helped them to support the needs and wants of the consumers successfully and helped to make retail businesses responsive.

References

Blanchard, D. (2010). Supply chain management best practices. John Wiley & Sons.

Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.

Farahani, R. Z., Rezapour, S., Drezner, T., & Fallah, S. (2014). Competitive supply chain network design: An overview of classifications, models, solution techniques and applications. Omega, 45, 92-118.

Gunasekaran, A., Lai, K. H., & Cheng, T. E. (2008). Responsive supply chain: a competitive strategy in a networked economy. Omega, 36(4), 549-564.

Kim, S. W. (2009). An investigation on the direct and indirect effect of supply chain integration on firm performance. International Journal of Production Economics, 119(2), 328-346.

Roh, J., Hong, P., & Min, H. (2014). Implementation of a responsive supply chain strategy in global complexity: The case of manufacturing firms.International Journal of Production Economics, 147, 198-210.

Van Weele, A. J. (2009). Purchasing and supply chain management: Analysis, strategy, planning and practice. Cengage Learning EMEA.

Vermeulen, W. J., & Seuring, S. (2009). Sustainability through the market–the impacts of sustainable supply chain management: introduction.Sustainable Development, 17(5), 269-273.