A whitepaper released by the Retail Industry Leaders Association (RILA) and the Auburn University Supply Chain Management Program reveals that, although revenues are stagnant in many retail organisations, costs are viewed as controllable.  Posted: Friday, October 09, 2009, 10:00AM

In particular, the expenses falling under the control of SCM (supply chain management) executives are receiving strong attention from the top of the organisation. SCM executives now find themselves in the spotlight and must perform their "brand of magic to save the show", the report stated.

Sponsored by Fortna, the report entitled "The State of the Retail Supply Chain," reveals that leading retailers are expanding the role of supply chain management within their organisations to better manage inventory, control costs and maintain first-rate customer service.

"In this challenging economic climate the critical role of supply chain management is underscored," said Casey Chroust, executive vice president of retail operations. "Retailers have responded with strategic investment and process improvements that focus squarely on delivering the products customers want and the value and service that they deserve."

According to the report 90 per cent of respondents have invested the same or more in supply chain process improvement; 70 per cent in management development; 60 per cent in technology and 60 per cent in workforce training. Additionally, to offset declined consumer spending, 80 per cent of supply chain management executives report focusing their efforts on reducing inventory with close to 70 per cent reporting that they are placing smaller initial orders.

According to the report, the tools required to successfully build superior supply chain management separate the best-in-class retailer from the laggard retailer.

"Supply chain management has proven to be a competitive differentiator for leading retailers," said report author Brian Gibson, Professor of SCM, Auburn University.

"Especially in these challenging economic times, supply chain executives are leveraging their internal capabilities to meet organizational cost reduction goals while maintaining excellent customer service."