Chapter 16 Buying and supply management in retail. Program. Definitions Role and importance of purchasing in trading and retail business. Structure and organization of the purchasing process Developments in trading and retail companies Trends in sourcing and supply chain strategies.
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Role and importance of purchasing in trading and retail business.
Structure and organization of the purchasing process
Developments in trading and retail companies
Trends in sourcing and supply chain strategies
Trade and retail companies:
Category management: because of a short time between purchase and sale, buying and selling are sometimes integrated into one function.
Human resources management
The value chain in trade companies (Adapted from Porter, 1985)
Wholesale and trade in the business chain
Purchasing in trade and retail companies
Trade companies fulfill the intermediary between
producer and end user. Their added value lies in
the following activities:
Regarding the retail trade, various types of stores can be
distinguished in the area of consumer products:
Stages in the buying-selling cycle:
Retail buyers pay more attention to marketing and salesaspects than industrial buyers. The function of retail buyer evolves from straight buying to commodity or category management.
Changing consumer behavior in European countries:
This means that the commodity manager/ retail-buyer must constantly tailor his product assortment to more specific
and often smaller groups.
VMI is a continuous replenishment program in which the retailer provides the supplier with detailed information to allow the supplier to manage and replenish product at the store or warehouse level
Kurnia et al, (2002)
CPFR allows cooperation across the supply chain, using a set of processes and technology models.
The buying function plays a very important role in trade companies.
In retail companies buying policy is much more integrated with sales and marketing policy,
Company policy is primarily focused on improving turnover and margin whilst reducing working capital.
Retail today is a truly international business.
Advanced information systems allow the application of new logistics concepts such as VMI, ECR, CPFR and electronic marketplaces.