{"id":1634,"date":"2018-03-22T22:41:37","date_gmt":"2018-03-22T22:41:37","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/?post_type=chapter&#038;p=1634"},"modified":"2024-04-25T01:59:35","modified_gmt":"2024-04-25T01:59:35","slug":"introduction-to-retail-entities-and-business-decisions","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/chapter\/introduction-to-retail-entities-and-business-decisions\/","title":{"raw":"Supply Chains","rendered":"Supply Chains"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcome<\/h3>\r\n<ul>\r\n \t<li>Describe the firms involved in a supply chain<\/li>\r\n<\/ul>\r\n<\/div>\r\n<img class=\"wp-image-2879 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2986\/2018\/03\/15193303\/Supply_chain_of_peanut_butter___Flickr_-_Photo_Sharing_1-300x248.jpg\" alt=\"Graphic showing the peanut butter supply chain. \" width=\"330\" height=\"273\" \/>\r\n\r\nRemember your favorite retailer we discussed at the beginning of this course.\u00a0 Have you wondered how the product is made and just how it makes it to the sales floor? The answer to that question is through exploring the supply chain.\r\n\r\nWhat exactly is the retail supply chain?\u00a0The supply chain is\u00a0a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.[footnote]Nagurney, Anna (2006). Supply Chain Network Economics: Dynamics of Prices, Flows, and Profits. Cheltenham, UK: Edward Elgar. ISBN 1-84542-916-8.[\/footnote]\r\n\r\nIt is important that every part of the supply chain is efficient, nimble, and seamless to allow retailers to deliver product to the customers in the most efficient and profitable way to achieve success and meet its overall goals.\u00a0 Some of the biggest issues in the retail supply chain are customer service, controlling costs, effective supplier\/partner relationships, qualified talent, and proper planning.\r\n\r\nWe can better understand how supply chain issues can affect a company by looking at Chipotle.\u00a0 In 2015 the company stopped serving pork due to the strict requirements they had regarding how animals were raised.\u00a0 It took them some time to find another supplier that met its shortage, and therefore had a shortage for approximately 10 months.\u00a0 They are now using a British supplier.\u00a0 As the company continues to expand think about how this will affect the business and how they can work through these issues.\r\n\r\nNow let\u2019s discuss some common supply chain firms within the supply chain structure.\r\n<h2>Supplier<\/h2>\r\nThink of the supplier as the person providing the good and\/or service.\u00a0 Suppliers can typically be domestic or international.\u00a0 However, one thing to keep in mind is that if you are dealing with international suppliers you will often have longer lead times.\u00a0 Lead times can vary but it is in the best interest of the supplier to deliver the product as quickly and efficiently as possible or else risk losing business to another supplier.\u00a0 Common types of suppliers include manufacturers, wholesalers, and vendors.\r\n<h2>Factory<\/h2>\r\nThe supplier has the raw materials made into products at the factory.\u00a0 Retailers can work with numerous factories all over the world in meeting demands.\u00a0 A great example of this is Adidas Group.\u00a0 They work with about 800 factories in approximately 55 countries.\u00a0 Most retailers are transparent regarding the factories they use for production of product to improve and promote compliance and safe working conditions.\r\n<h2>Distribution Center (DC)<\/h2>\r\nThe DC is also known as the Distribution Center and this can be small and\/or large depending on the retailer.\u00a0 This is where the finished product will go after leaving the factory.\u00a0 A great example of a distribution network is Wal-Mart.\u00a0 They have 152 distribution centers that service all Wal-Mart locations, Sam\u2019s Club, and delivery to the customer.\u00a0 Each distribution center for Wal-Mart is more then 1 million square feet and has over 600 employees.\u00a0 Remember we talked about the global reach of retail earlier!\u00a0 Think about how an expansive supply chain creates job opportunities!\r\n\r\nGoods can go to the retailer or directly to the consumer from the distribution center.\r\n<h3>Regional Distribution Center (RDC)<\/h3>\r\nAn RDC, Regional Distribution Center, is more local to the area and has several advantages.\u00a0 They allow retailers to save money and time.\u00a0 If you have multiple stores on the east and west coast a regional distribution center would allow you to quickly transport products to customers and process returns.\u00a0 Regional Distribution Centers are also smaller and less costly to build.\r\n\r\nOne disadvantage of a regional distribution center is that you must replicate processes, procedures, equipment, infrastructure, and labor which can be a challenge for any retailer.\u00a0 Managing inventory in multiple locations can also be costly for the retailer.\r\n\r\nIndustry Week, an online magazine of the industry, provides a list of the top 25 supply chains every year. You can find the <a href=\"https:\/\/www.industryweek.com\/supply-chain\/media-gallery\/22028091\/top-25-supply-chains-of-2019\" target=\"_blank\" rel=\"noopener\">Industry Week Top 25 Supply Chains 2019 list here<\/a> as well as previous years.\r\n<div class=\"textbox tryit\">\r\n<h3>practice question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/3ea2125c-c08c-40d4-acde-62ed7ad0c999\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcome<\/h3>\n<ul>\n<li>Describe the firms involved in a supply chain<\/li>\n<\/ul>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2879 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2986\/2018\/03\/15193303\/Supply_chain_of_peanut_butter___Flickr_-_Photo_Sharing_1-300x248.jpg\" alt=\"Graphic showing the peanut butter supply chain.\" width=\"330\" height=\"273\" \/><\/p>\n<p>Remember your favorite retailer we discussed at the beginning of this course.\u00a0 Have you wondered how the product is made and just how it makes it to the sales floor? The answer to that question is through exploring the supply chain.<\/p>\n<p>What exactly is the retail supply chain?\u00a0The supply chain is\u00a0a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.<a class=\"footnote\" title=\"Nagurney, Anna (2006). Supply Chain Network Economics: Dynamics of Prices, Flows, and Profits. Cheltenham, UK: Edward Elgar. ISBN 1-84542-916-8.\" id=\"return-footnote-1634-1\" href=\"#footnote-1634-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>It is important that every part of the supply chain is efficient, nimble, and seamless to allow retailers to deliver product to the customers in the most efficient and profitable way to achieve success and meet its overall goals.\u00a0 Some of the biggest issues in the retail supply chain are customer service, controlling costs, effective supplier\/partner relationships, qualified talent, and proper planning.<\/p>\n<p>We can better understand how supply chain issues can affect a company by looking at Chipotle.\u00a0 In 2015 the company stopped serving pork due to the strict requirements they had regarding how animals were raised.\u00a0 It took them some time to find another supplier that met its shortage, and therefore had a shortage for approximately 10 months.\u00a0 They are now using a British supplier.\u00a0 As the company continues to expand think about how this will affect the business and how they can work through these issues.<\/p>\n<p>Now let\u2019s discuss some common supply chain firms within the supply chain structure.<\/p>\n<h2>Supplier<\/h2>\n<p>Think of the supplier as the person providing the good and\/or service.\u00a0 Suppliers can typically be domestic or international.\u00a0 However, one thing to keep in mind is that if you are dealing with international suppliers you will often have longer lead times.\u00a0 Lead times can vary but it is in the best interest of the supplier to deliver the product as quickly and efficiently as possible or else risk losing business to another supplier.\u00a0 Common types of suppliers include manufacturers, wholesalers, and vendors.<\/p>\n<h2>Factory<\/h2>\n<p>The supplier has the raw materials made into products at the factory.\u00a0 Retailers can work with numerous factories all over the world in meeting demands.\u00a0 A great example of this is Adidas Group.\u00a0 They work with about 800 factories in approximately 55 countries.\u00a0 Most retailers are transparent regarding the factories they use for production of product to improve and promote compliance and safe working conditions.<\/p>\n<h2>Distribution Center (DC)<\/h2>\n<p>The DC is also known as the Distribution Center and this can be small and\/or large depending on the retailer.\u00a0 This is where the finished product will go after leaving the factory.\u00a0 A great example of a distribution network is Wal-Mart.\u00a0 They have 152 distribution centers that service all Wal-Mart locations, Sam\u2019s Club, and delivery to the customer.\u00a0 Each distribution center for Wal-Mart is more then 1 million square feet and has over 600 employees.\u00a0 Remember we talked about the global reach of retail earlier!\u00a0 Think about how an expansive supply chain creates job opportunities!<\/p>\n<p>Goods can go to the retailer or directly to the consumer from the distribution center.<\/p>\n<h3>Regional Distribution Center (RDC)<\/h3>\n<p>An RDC, Regional Distribution Center, is more local to the area and has several advantages.\u00a0 They allow retailers to save money and time.\u00a0 If you have multiple stores on the east and west coast a regional distribution center would allow you to quickly transport products to customers and process returns.\u00a0 Regional Distribution Centers are also smaller and less costly to build.<\/p>\n<p>One disadvantage of a regional distribution center is that you must replicate processes, procedures, equipment, infrastructure, and labor which can be a challenge for any retailer.\u00a0 Managing inventory in multiple locations can also be costly for the retailer.<\/p>\n<p>Industry Week, an online magazine of the industry, provides a list of the top 25 supply chains every year. You can find the <a href=\"https:\/\/www.industryweek.com\/supply-chain\/media-gallery\/22028091\/top-25-supply-chains-of-2019\" target=\"_blank\" rel=\"noopener\">Industry Week Top 25 Supply Chains 2019 list here<\/a> as well as previous years.<\/p>\n<div class=\"textbox tryit\">\n<h3>practice question<\/h3>\n<p>\t<iframe id=\"assessment_practice_3ea2125c-c08c-40d4-acde-62ed7ad0c999\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/3ea2125c-c08c-40d4-acde-62ed7ad0c999?iframe_resize_id=assessment_practice_id_3ea2125c-c08c-40d4-acde-62ed7ad0c999\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1634\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Supply Chain of Peanut Butter. <strong>Authored by<\/strong>: Elco van Staveren. <strong>Provided by<\/strong>: flickr. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/flic.kr\/p\/gcQi8S\">https:\/\/flic.kr\/p\/gcQi8S<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Marketing Channels vs. Supply Chains. <strong>Provided by<\/strong>: Lumen Learning. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/courses.lumenlearning.com\/marketing-spring2016\/chapter\/reading-marketing-channels-vs-supply-chains\/\">https:\/\/courses.lumenlearning.com\/marketing-spring2016\/chapter\/reading-marketing-channels-vs-supply-chains\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-1634-1\">Nagurney, Anna (2006). Supply Chain Network Economics: Dynamics of Prices, Flows, and Profits. Cheltenham, UK: Edward Elgar. ISBN 1-84542-916-8. <a href=\"#return-footnote-1634-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":82555,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Supply Chain of Peanut Butter\",\"author\":\"Elco van Staveren\",\"organization\":\"flickr\",\"url\":\"https:\/\/flic.kr\/p\/gcQi8S\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Marketing Channels vs. Supply Chains\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"https:\/\/courses.lumenlearning.com\/marketing-spring2016\/chapter\/reading-marketing-channels-vs-supply-chains\/\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"2c8620ef-fd8f-42d6-ad61-12671369f72e, 4bd3631d-af6d-438e-8e13-54b6ce86ad2a","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1634","chapter","type-chapter","status-publish","hentry"],"part":1631,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapters\/1634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/wp\/v2\/users\/82555"}],"version-history":[{"count":39,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapters\/1634\/revisions"}],"predecessor-version":[{"id":6337,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapters\/1634\/revisions\/6337"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/parts\/1631"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapters\/1634\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/wp\/v2\/media?parent=1634"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/pressbooks\/v2\/chapter-type?post=1634"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/wp\/v2\/contributor?post=1634"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/wp-json\/wp\/v2\/license?post=1634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}