In Traditional Retailing: SCM (An Optimized Hybrid Architecture)

Abstract

Brick and Mortar Retailing, generally known as Traditional Retailing is facing stiff competition from a variety of sources. Not only has it to be competitive in terms of on-shelf availability of products on a wide range of products but also has to balance many factors such as optimization of inventory and warehousing, profiling for distribution centre layout and process design, inventory segmentation and partnerships, network location and order sourcing, etc. which have a direct impact on the cost to the end consumer. While many techniques such as distribution centre (DC) bypass and cross docking are widely used to decrease the lead time of delivering orders to the retailers, but its impact on cost is high. The Click and Mortar Retailing, generally known as Internet Retailing, on the other hand is able to provide a wider range of product selection compared to traditional retailing using partner DC and third party logistics (3PL) in addition to wholesaler DC and Internet Retailer DC. Using cheap modes of transportation, it leverages the cost to end consumers well.
 In this paper, we present a hybrid approach to traditional retailing taking important optimization cues from Internet Retailing to leverage cost favourably to the end consumer.