Contractual design of Supply chain Inventory coordination mechanism in Indian retail industry using SAP-LAP analysis

Abstract

Purpose: Supply chain inventory coordination (SCIC) is concerned with managing in multi retail network of homogenous/ heterogeneous networks, often inventory management in uncertainty situation between various supply chain members (SCMs) and the joint collaborative effort of all SCMs to achieves mutually defined goals and targets. There are various supply chain Inventory coordination mechanisms (SCICM) reported in the literature that have been discussed to most evidences of uncertainty of supply and demand like asymmetric information sharing, information technology, inventory dependent price rate, controllable lead time, synchronization of inventory, long term partnerships and joint decision making which help to coordinate supply chain members (CSCMs). Various coordination models and mechanism have been proposed consider isolated activities of the supply chain (SC). There is need to consider the holistic perspective of coordinate in the entire multi retail supply chain network (SCNs). This paper set out to analyse a case study of India retail industry, through presence on the status of inventory coordination mechanism in the supply chain (SC).

Design/Methodology/Approach: A situation –actor –process (SAP)-learning –acting Performance (LAP) model has been implemented to analyse the case study of multi- retail supply chain network. In existing situation indicates that multi retail SCIC requirement of various coordination mechanism (CM) for effectively reduces stock-out situation, physical inventory inaccuracy, backorders, and successful coordination within SCMs, and appropriate alignment within supply and demand uncertainty to fil the gaps. Actors are the associated to participants, influencing situation to evolve different business processes. Based on SAP, various learning issues have been analysed which leads to suitable action followed by impact of SAP on the performance to effectively improve in multi retail industry of supply and demands uncertainties and efficient physical inventory alignment mechanisms.

Finding: The various relationships exists in multi echelons retailer networks such as types of relationship between single supplier and multi retails in homogenous/heterogeneous network. Inventory coordination mechanism within the SCMs, various mechanisms like asymmetric information sharing, information technology, information systems, joint decision making procedures and incentives mechanism required to successful inventory coordination within multi retails supply chain networks. Various collaborative business mechanisms initiatives such as VMI with stock-out cost sharing, VMI with fixed transfer incentives and stock –out cost sharing, continuous replenishment, and CPFR practices implications in multi retailers supply chain networks (SCNs).

Research Limitations/Implications: The Inventory coordination mechanism of SAP-LAP is used to explain effective inventory coordination mechanism in multi retails in homogenous/heterogeneous network considers. Effectively inventory alignment within the multi supply chain network (SCN) and only discussed SCICM in a managerial context with reference to a dynamic SAP- LAP model as applied to the Indian multi retail industry.

Practical Implications: The contractual design supply chain inventory coordination (CDSCIC) of SAP-LAP present the situation of coordination to participants who may initiate the processes needed to be coordinated. It also help in identifying CDSCIC gaps in adaptation of coordination mechanisms (CM). The synthesis of SAP leads to LAP, which brides the gaps of CDSCIC by suggesting actions on the gaps of flexibility or the learning from the present situation, actors and processes.

Originality/Value: The Novel approach to analyse the various issues of SCICM in a single supplier and multi retail network. And comparing of various aspects on inventory coordination mechanisms and CDSCIC and its impact on performance of supply chain process.

Paper Type: Empirical Research Paper.