Get ready for many new opportunities in SCM

By Ruchi Shrimali

At present, industry organized retail sector is only 5% of the total retail market in India. According to a study carried out by the Indian Council for Research on International Economic Relations (ICRIER), the organized retail sector will stretch to 16% by 2013. Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons, Trent, Subhiksha, Reliance Retail, More, and Spencer's are some of the bigger players in the organized retail industry right now and thrive on footfalls and conversions. 

Footfalls are the number of people who come to the malls while the conversions are people who actually buy things or spend money there.

Whether it is a diversified player like Pantaloon or apparels-only player like Koutons or lifestyle-product based players like Shoppers Stop's and Trent, all of them have to deal with chaotic supply chain in India. Whether it is Vishal Retail which is predominantly based in North India or Subhiksha and More that are more popular in South India, there are hurdles to be faced such as shoddy roads, umpteen taxes and state regulations, and barely available cold storage facility.

Global retailers who want a slice of the 450 billion dollar Indian retail market will also have to come up will need specialized skills to deal with such challenges that are related to supply chain management in India as well as other developing markets.

Supply chain in India has graduated from the days when it had to wait for 10 days for shipment to a 3-day wait. But still, the challenges like thousands of miles of distance between major cities in India, creaking railways with wagons in short supply, occasional political outbursts and public outrages that result in strikes and traffic jams are some of the things that might give logistical headaches to global giants like Wal-mart.

With the recent government announcement that allows 51% Foreign Direct Investment (FDI) in supermarkets, such global retailers will have to depend heavily on local expertise to gain traction with 1.2 billion Indians. The rule book says that they will have to source at least one third of their produce from local small-scale industries, invest 100 million dollars in India, and have to spend at least half of it on supply infrastructure to improve the back-end processes.

Of course, there is GPS tracking which means that firms can track their consignments every metre but that will not help in avoiding 30% waste of fruits and vegetables that occur in traditional supply of chain in India. To overcome highly regionalized distribution systems, they will need to hire local experts in supply chain management in India. This will add thousands of jobs every year to the retail sector. Supply chain management in India is the only way for all domestic and international retailers to ensure that they are able to fill their shelves, on time, every time.

Some of the institutes that offer training in supply chain management in India are:

• ACEAS Management Studies, Ahmedabad
• UTS, Pune
• Times Business School, Navi Mumbai
• ICRI (Institute of Clinical Research India), Hyderabad
• Winsoft Technologies, Delhi
• Sikkim Manipal University, Bangalore