Study: Supply chain management key to surviving recession
Washington, D.C. Supply chain management (SCM) is one of the key drivers responsible for retailers surviving one of the worst recessions in history, industry experts stated today.
Released by Auburn University in partnership with Retail Industry Leaders Association, the study brought together the leading retailers from North America to examine the year’s current trends, leading practices and the foremost issues affecting the strategy and planning of retail supply chains. This year’s study took a closer look into the results of 2009 and captured new insights from SCM executives in 2010.
During a tele-press conference to discuss the 2010 “State of the Retail Supply Chain Study, industry experts Dave Reiff, senior VP national distribution for Wal-Mart Stores, Casey Chroust, RILA executive VP retail operations, and Brian J. Gibson, Ph.D. and professor at Auburn University examined the critical value of careful supply chain management during both economic hard times and as retailers shift their focus toward recovery.
“Thanks to cost reduction initiatives introduced by supply chain management executives, retailers were able to tap into existing opportunities to streamline their supply chains, lowering their bottom line costs and saving billions across the industry,” said RILA’s Chroust. “Moving forward these cost structure enhancements and efficiencies will enable retailers to thrive as the economy becomes healthy again.”
The study revealed that efforts to reduce the bottom line costs while the recession held top-line growth in check has also led to a growing importance of SCM throughout the retail organization and has gained C-suite recognition. The influence of SCM continues to expand up and downstream within the organization, to merchandising and store operations functions.
Looking ahead, the study also cited several key issues that should be on the radar of SCM executives moving forward, including sustainability, fluctuating fuel costs, new government regulations, streamlining multichannel supply chain operations and utilizing the latest technological advancements.
Consumer Sentiment Index declined in October
Ann Arbor, Mich. — The Thomson Reuters/University of Michigan preliminary index of consumer sentiment, released Friday, showed that confidence among U.S. consumers unexpectedly declined in October, with Americans more pessimistic about current economic conditions.
The index decreased to 67.9, the lowest since July, from 68.2 in September.
Unemployment projected to remain above 9% through next year may keep weighing on sentiment and make Americans reluctant to ramp up their spending, which accounts for 70% of the economy.
The Thomson Reuters sentiment index averaged 89 in the five years leading up to the recession that began in December 2007 and has yet to reach that level since the recovery began in June 2009.
Separate figures from the Labor Department on Friday showed consumer prices rose 0.1% in September, less than forecast. The Commerce Department said Friday that retail sales climbed more than forecast in September; spending rose 0.6% following a 0.7% gain in August that was larger than previously estimated.
Consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 64.6 from 60.9, which was the lowest since March 2009, according to the Friday sentiment index.
The survey’s measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items such as cars, dropped to 73, the lowest since November, from 79.6 in the previous month.
Other index results showed that consumers expect an inflation rate of 2.6% over the next 12 months, compared with 2.2% projected in September.
Target renovates Chicago area stores to new layout
Minneapolis — Target announced that more than 55 of its stores in the Chicago area have been redesigned to further deliver one-stop shopping convenience for guests. The stores have been updated to feature the retailer’s open-market grocery layout, with an expanded selection of fresh produce, fresh meat and baked goods.
In addition to the expanded fresh food layout, the beauty department displays softer lighting and curved fixtures, as well as interactive screens to help guests select the right beauty products for their individual needs. The home department has added wider aisles and lower product fixtures offering easier navigation and enabling guests to see more of the department at a glance.
The shoe department provides better product visibility and has enhanced guest comfort by adding more seating and mirrors. Finally, the electronics department has added a fun, interactive environment with video games displayed on a unique tether system, allowing guests to browse and try games at their convenience.