Microsoft has launched Microsoft Dynamics AX for Retail R2 in Germany at the ongoing Euroshop 2011. The new version of Dynamics AX for Retail includes point-of-sale, store management, supply chain, merchandising and financials capabilities.

Microsoft Brings Retailers a Complete End-to-End Solution With Microsoft Dynamics AX for Retail R2 at EuroShop 2011

This solution, the next iteration of Microsoft Dynamics AX for Retail, offers midsize and enterprise specialty retailers point-of-sale, store management, supply chain, merchandising and financials capabilities to deliver business productivity, enterprise agility and customer service in a single, integrated end-to-end retail solution. It provides visibility from point-of-sale devices to the supply chain and the business insight needed to enable a real-time response to customer demand and build customer loyalty.

According to a report by Indian apex industry body, CII, and Amarthi Consulting titled “Global competitiveness of retail supply chain-Challenges, Strategies and Recommendations”, $65 billion is lost every year on account of the inefficient supply-chain system in India.

The industry is expected to touch $879 billion by 2018, but if the present challenges in its supply-chain system are not addressed, then the sector's growth could get hampered, it warned.

"Since Independence only 20 per cent capacity has been added to the railway network but the traffic has increased ten times. In a sector where margins are wafer-thin, the supply- chain management is a critical enabler to profitability and this has to be improved," said the report, which was released today.

It also said that supply-chain costs in India are about 12-13 per cent of the GDP as compared to 7-8 per cent in developed countries. Hence, the country loses out around $65 billion annually.

It further said the challenge also lies in the country's demography, geographical spread, distinct consumer preferences and differential taxation laws, which needs to be addressed.

The European supply chain specialist Wincanton will run the Supply Chain for food and grocery and hypermarket businesses of Reliance Retail. Reliance Retail which has scaled to 600 stores across India in the last two years have been feeling the heat managing the supply chain efficiently.

Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.

...

True to its form, Reliance built scale fairly rapidly, spreading from one city to another. The growth was achieved through a team of professionals poached from existing Indian retailers, but the pace of execution dwarfed rivals’ achievements.
Reliance, however, realised it needed to do a lot more on the back-end to continue the pace of expansion and return early profits, which its shareholders usually expect.
“It didn’t take Reliance long to realise that retail was a different ballgame altogether. It’s not just about some long-term government policy or certain business competency, which it’s known to manage well. The variables in retail business are far too many. There could be a number of factors such as general economic downturn, terror scare, shorter wedding season, cricket season like an IPL or a political protest, which can affect store sales. You need to be able to manage that,” said a source close to Reliance.

With Wincanton, Reliance wants to fix the problem.

Wincanton, the UK-based $4-billion supply chain solution provider, has been roped in precisely to tackle this problem. It is expected to completely take over the supply chain, find the right warehouses for goods and transport them in time and in the right quantity to Reliance Retail stores.
Supply chain solution providers, Wincanton, for example, have IT systems in place to update them with regular data on inventory level in stores.
So, even without a store manager calling up, the warehouse manager would know the stores’ requirements. Wincanton serves several companies across industries, from FMCG to retail, automotive and oil. Its client list includes retail giants Tesco and Woolworths, auto companies Ford and DaimlerChrysler, and consumer goods firms P&G, Nestle, SAB Miller and GSK.

More and more we are seeing that Indian retail companies are not hesitating to go for alliances to bring the best of retail technology and processes to manage the operations.

Internet Retailer is reporting on how web based information systems are enabling retailers, suppliers, carriers and freight forwarders to track the shipment status at multiple points between a supplier’s warehouse and a retailer’s distribution center, and from carriers in all modes of transport.

These retail supply chain systems—from technology and services vendors including GXS Inc., GT Nexus Inc. and E2open Inc.—are helping retailers move beyond the embattled advance ship notices and into a method of receiving updates on shipment status at multiple points between a supplier’s warehouse and a retailer’s distribution center, and from carriers in all modes of transport.

Using a web-based system enables suppliers, carriers and freight forwarders to enter shipment status reports into a single, centralized system, where companies like GXS and GT Nexus synchronize data, ensuring all parties are using common product and shipping definitions and letting all parties, including retailers, access a single version of the facts. Under more conventional systems, a retailer might re-enter information from a shipper’s advance ship notice into its own shipping management application, where the information may not be the same as that kept by a carrier.

...

A key metric derived from carrier collaboration systems, experts say, is the ability to shorten the lead time between ordering products and receiving them in a distribution center. This helps retailers increase sales by getting products on the shelves in time for planned customer demand, and it saves inventory costs by letting them hold less safety stock to compensate for late-arriving goods.

RFID Journal is reporting on Reliance Retail's RFID Plans.

Reliance Retail, one of India's largest retailers, has been testing RFID technology and is preparing applications for use at a large number of its hypermarkets and supermarkets, as well as its electronics and convenience stores. The company has already equipped these stores with data ports and wireless computer networks able to support RFID systems.

...

Reliance Retail has drawn up plans for using RFID to support its operations. The company has developed five RFID-deployment scenarios, including the tracking of reusable crates of fresh food; item- and case-level tracking of high-value goods; and pallet and case tagging of various goods.

Reliance has performed proof-of-concept tests using passive EPC Gen 2 UHF RFID tags to track crates of fresh foods and cases of high-value goods. The company managed to achieve above 90 percent read rates and found that RFID helped it reduce shipping and receiving errors while increasing productivity. For the test to track individual items and cases of high-value goods, Reliance Retail has recently conducted a pilot between one distribution center and one Reliance Digital store. This pilot is still under evaluation. Reliance is now working with various RFID hardware and tag suppliers to obtain improved read rates for the tracking of fresh-food crates, as well as planning a permanent rollout of other scenarios upon successful completion of the pilots.

With Reliance Retail's plans to have their own supply chains, Reliance could very well be the first retailer in India to implement RFID across stores and it's supply chain.

While the organised retail market in India will more than double in the next three years to touch 30 billion dollars from 14 billion dollars at present, the Indian Retailers are struggling with less than optimized Supply Chains. The supply chain in India is underdeveloped, so says the report titled, "Winning with Intelligent Supply Chains" by FICCI and Ernst & Young.

According to the report, which was released by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst & Young, “the most significant challenge that impedes the development of an efficient and modern retail sector is an underdeveloped supply chain”. Commenting on traditional supply chain networks, it says that the chain, a partially informed push/ pipeline model with a unidirectional flow, is expected to transform into a fully informed network model with bi-directional flow of information.

The report also points out to the huge shortage of experts in this area, coupled with the fact that only 64 per cent of organisations have a full fledged independent department to manage the supply chain.

...

The report calls for informational and technological intervention to tackle the current bottlenecks by using supply chain technologies like Radio Frequency Identification, barcode scanners, Point Of Sales terminals, handheld devices and software packages. It reveals that 85 per cent companies use IT to capture and analyse real-time information for effective decision making.

The other challenges that the Retail Industry in India faces include:

- Inadequacies in infrastructure such as lack of high quality road networks, power shortages and insufficient storage spaces

- With availability of retail space serving as a key enabler, the current rise in property prices and rentals may render a few retail business models unviable

- The retail industry loses to the tune of US$120 to US$130 million every year in frauds, thefts and employee pilferage, shop lifting, vendor frauds or inaccurate supervision despite using standard and modern security features

- Multiple taxes at the federal and state level

- Lack of clear policies (especially on the entry of foreign retailers)

- The industry also faces a huge shortage of experts in areas such as supply chain and store management

- The most significant challenge that impedes the development of an efficient and modern retail sector is an underdeveloped supply chain