THREE TIERS OF SUPPLY CHAIN IN RETAIL

Retail industry is a very complicated and sensitive network bound by people and machine. Any gap or lapse in process will lead to collapse of the complete supply chain. That's why its right said, "Retail is Detail". We need to plan, do, check and act (PDAC coined by William Edward Deming) in every segment of the supply chain. To implement PDCA process we also need to understand the classification or tiers in retail supply chain. We can define 3 tiers in any retail supply chain i.e. a supplier's supplier to a customer's customer.
1. Supplier Relationship Management (SRM)
2. Internal Supply Chain Management (ISCM)
3. Customer Relationship Management (CRM)


1. SUPPLIER RELATIONSHIP MANAGEMENT
SCM deals with the overall planning and assessment of the third part logistics or players involved in the sourcing and procuring of products by the organisation. This could involve manufacturers, suppliers, wholesalers, distributors and local vendors. SCM opens up the doors for closer ties with a few suppliers to uncover the potential of doing business together which will be mutually beneficial. Some of the health checks that can be done to review the relationship with the supplier in terms of SCM can be done through the below ratios and reports :
- Stock fulfilment ratio
- Payment report
- Supplier purchase report
- Supplier sales report
- Vendor Managed Inventory
- Vendor - Retailer performance report
- Demand Forecasting Report

2. INTERNAL SUPPLY CHAIN MANAGEMENT
ISCM covers all the internal movement of goods within the organisation over which the management has full control on. These involve the processes of internal distribution, replenishment and storage. The primary goal of Internal supply chain management is to satisfy the CRM's demands and manage reverse logistics.
Reports to monitor efficiency of internal supply chain management are :
- Distribution centre fulfilment report
- Distribution centre performance report
- Store Returns report
- Inventory ageing Report
- Replenishment Report
- Demand Forecasting Report

 3. CUSTOMER RELATIONSHIP MANAGEMENT
CRM deals with the processes involved in the interface between an organisation and its customers. In retail it covers Point of Sales/Service, Customer Loyalty Program, Website, Marketing activities and customer data analysis & analytics to forecast customer demand. It is CRM that defines the demand to be fulfilled by ISCM.
Reports to monitor efficiency of internal supply chain management are :
- Customer Churn Report
- Market Research Report
- Sales Reports
- E-commerce website analysis report
- Competitor Analysis report
- Market Basket Analysis

Overview of processes involved in the three tiers of supply chain management

SRM	ISCM	CRM
Sourcing	Strategy Planning	Marketing and market study
Negotiation	Demand Forecasting	Competitor Analysis
Supply Collaboration	Supply Planning	Sales analytics and analysis
Deals and Contracts	Reverse Logistics	Point of Service
Supplier Performance Review	Demand Fulfilment	Omni channel management