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Fulfilment Factories and Modern Retail Methods - Article Example

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The paper “Fulfilment Factories and Modern Retail Methods” provides a deep insight into the new format of the retail chain’s cooperation, in which Fulfilment Factories provide a variety of products as well as timely and qualitative delivery of orders received by their contractors online…
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Fulfilment Factories and Modern Retail Methods
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Download file to see previous pages Increased sales demand increased support activities and deliveries that are met within time. This aspect has been discussed and two case studies of retail chains were examined to see how they handle this issue. It was found that technology played a vital role in the execution of deliveries and that the concept of Fulfilment Factories fit in very well with retail trade.
On evaluation of the FFs, it has been concluded that high achievement in retail is possible only with the help of efficient Fulfilment Factories.
Selling to the final consumer is what marketing is all about. Back until the early eighties, before the advent of the Internet, Mom & Pop stores were the ideal places for daily shopping and large retailers were few and far between, to be visited at leisure when the time was at hand. 
Globalization, outsourcing and increasing number of retail outlets started to change the scene. Mom & Pop stores still exist but are more a novelty than necessity. The big retailers cater to every need from under one roof. They have spread their reach and are available in your neighborhood.
With the introduction of broadband, a new kind of retailer or the e-Tailer was born. Mostly it was the same retailer you patronized who offered his services for home-delivery via the World Wide Web.
These events changed the whole supply chain cycle. Earlier there was a supplier who catered to many stores who in turn cater to many more customers. A movement was slow, people were content, availability was slow and delay in some items was inevitable and accepted. Order flow was cumbersome and involved a lot of guesswork. Inventories were either high or short and customers grumbled but kept on patronizing.
Manufacturing was forecast based and the forecast itself was based more on assumptions and customer satisfaction was at low ebb. A customer was king but reluctantly so.
In the late eighties and nineties, it dawned on retailers that to expand their business they needed Information Technology (IT) and the era of Enterprise software and Supply Chain Management was ushered in. IT had already taken manufacturing under its wings earlier and the retailers read benefits in it for themselves too. IT companies also came forward to understand their new clients’ needs and put forward many kinds of solutions. All were however based on supply chain management and the flow of orders and streamlining supply was the objective. A great improvement took place on the supply side and shelves were now found to be stocked with inventory and warehouses were overflowing with inventory.
This led to other kinds of problems. Higher inventory meant that the customer could finally be serviced and the retailer got loyal customers coming back for more supplies, but the downside was that the working capital requirements increased manifolds due to high inventories and their management became a sore point. Wastages ran high due to mismanagements and financial burdens hit the bottom line. Demand patterns also kept changing and new products flooding the market made inventory a headache. The customer got wiser and switched loyalty easily.
IT came to the rescue of the retailer again. The supply chain was tweaked further and the lean concepts of Just-in-time (JIT) that were in the production domain for a long time became standard practice in the retail scene as well. Now the inventory was planned on the JIT concepts and logistic planning became the mantra of the day. ...Download file to see next pagesRead More
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