We can learn a lot about supply chain management from successful retailers.
To be successful, generally they have identified their logistics chains as a key source of competitive advantage and they work on it.
Their business model depends on having the stock on shelf when a consumer wants it, but with a minimum in reserve stock, and none “left over” that requires discounting or dumping to clear.
Li & Fung, the extraordinary Chinese supply chain manager who have had a key role in the boom in Asian sources fashion wear, Woolworths, the dominant Australian supermarket chain, and Spanish retailer Zara have all based their success on supply chain innovation supporting their service offer to customers.
A usual metaphor when explaining the Japanese Kanban system of managing “flow” through a process is of a supermarket shelf, a consumer takes one off, a replacement is delivered to the hole from a JIT flow from the supply chain. The appearance of a hole on a supermarket shelf is a physical representation of “pull” or demand, the basic building block of a chain that maximises demand chain efficiency, and builds a competitive advantage
