Logistics and Retail Management: Emerging Issues and New Challenges in the Retail Supply Chain

281 Pages·2014·2.906 MB·English

by  John Fernie, Leigh Sparks

i
Logistics
and Retail
Management
ii
THIS PAGE IS INTENTIONALLY LEFT BLANK
iii
Fourth Edition
Logistics
and Retail
Management
Emerging issues
and new challenges
in the retail supply
chain
Edited by
John Fernie & Leigh Sparks
iv
Publisher’s note
Every possible effort has been made to ensure that the information contained in this book
is accurate at the time of going to press, and the publishers and authors cannot accept
responsibility for any errors or omissions, however caused. No responsibility for loss or
damage occasioned to any person acting, or refraining from action, as a result of the ma­
terial in this publication can be accepted by the editor, the publisher or any of the authors.
First published in Great Britain and the United States in 1999 by Kogan Page Limited
Second edition published in 2004
Third edition published in 2009
Fourth edition published in 2014
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as
permitted under the Copyright, Designs and Patents Act 1988, this publication may only be repro­
duced, stored or transmitted, in any form or by any means, with the prior permission in writing
of the publishers, or in the case of reprographic reproduction in accordance with the terms and
licences issued by the CLA. Enquiries concerning reproduction outside these terms should be
sent to the publishers at the undermentioned addresses:
2nd Floor, 45 Gee Street 1518 Walnut Street, Suite 1100 4737/23 Ansari Road
London EC1V 3RS Philadelphia PA 19102 Daryaganj
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www.koganpage.com India
© John Fernie, Leigh Sparks and individual contributors, 1999, 2004, 2009, 2014
The right of John Fernie, Leigh Sparks and individual contributors to be identified as the authors
of this work has been asserted by them in accordance with the Copyright, Designs and Patents
Act 1988.
ISBN 978 0 7494 6823 1
E­ISBN 978 0 7494 6824 8
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Logistics and retail management : emerging issues and new challenges in the retail supply chain /
[edited by] John Fernie and Leigh Sparks. – Fourth edition.
pages cm
ISBN 978­0­7494­6823­1 (pbk.) – ISBN 978­0­7494­6824­8 (ebook) 1. Business logistics.
2. Retail trade–Management. I. Fernie, John, 1948­ II. Sparks, Leigh.
HD38.5.L614 2014
658.5–dc23
2013047710
Typeset by Graphicraft Limited, Hong Kong
Printed and bound in India by Replika Press Pvt Ltd
Contents
Contents v
Contributors viii
Preface xii
01 1
Retail logistics: changes and challenges 1
The logistics task 3
Retail logistics and supply chain transformation 6
v Supply chain management (SCM) 8
The grocery retail supply chain in the United Kingdom 15
Supply chain challenges 21
Conclusions 28
References 30
Contents 02 35
Relationships in the supply chain 35
Introduction 35
Changing buyer–seller relationships 35
Quick Response (QR) 40
Efficient Consumer Response (ECR) 43
The role of logistics service providers 50
Conclusions 53
References 54
03 59
The internationalization of the retail supply chain 59
International sourcing 60
Contributors viii Differences in distribution ‘culture’ in international markets 66
The internationalization of logistics practices 70
Preface xii References 74
04 77
The international fashion supply chain and corporate social responsibility 77
Introduction 77
The internationalization of the fashion supply chain 78
01 Retail logistics: changes and challenges 1 CSR in international fashion supply chains 86
CSR in garment manufacturing in Sri Lanka 89
John Fernie and Leigh Sparks Conclusion 92
References 93
05 101
The logistics task 3 The footwear supply chain: the case of Schuh 101
Introduction 101
Retail logistics and supply chain transformation 6 Offshore sourcing and outsourcing 102
The complexity of the footwear supply chain 104
Supply chain management (SCM) 8 The case of Schuh 111
Conclusion 114
The grocery retail supply chain in the United Kingdom 15 References 115
06 117
Supply chain challenges 21 Supply chain strategy in the fashion and luxury industry 117
Introduction 117
Conclusions 28 The relevance of supply chain management in luxury and fashion 118
Typical structure of the inbound and outbound supply chain 122
Frameworks for company classification and supply chain strategy selection 123
Noteworthy examples of supply chain configurations 134
A portfolio approach for supply chain strategy in the fashion industry: the ‘segmentation tree’ 143
02 Relationships in the supply chain 35 Conclusion 144
References 145
07 149
John Fernie Tesco’s supply chain management 149
Introduction 149
The changing Tesco supply chain: establishing control and delivering efficiency 152
Introduction 35 Conclusion and lessons 174
References 176
Changing buyer–seller relationships 35 08 179
On-shelf availability in UK retailing 179
Quick Response (QR) 40 Introduction 179
Consumer reaction to stock-outs 180
Efficient Consumer Response (ECR) 43 The causes of retail OOS 182
Methods to improve OSA: grocery 184
The role of logistics service providers 50 Methods to improve OSA: clothing 193
Methods to improve OSA: other non-food 197
Conclusions 53 Conclusions 200
References 202
09 205
The development of e-tail logistics 205
Introduction 205
03 the internationalization of the retail supply chain 59 The growth and development of the e-commerce market 206
Web 2.0 210
John Fernie Exploiting the long tail 211
Online shopping formats 213
The e-commerce consumer 214
The grocery market 219
International sourcing 60 The logistical challenges 221
Definition of the home delivery channel 222
Differences in distribution ‘culture’ in international markets 66 Distribution of online purchases of non-food items 223
Distribution of online grocery sales 224
The internationalization of logistics practices 70 The last mile problem 226
Environmental impact of online retail logistics 231
Conclusions 231
References 232
04 the international fashion supply chain and corporate 10 237
The greening of retail logistics 237
social responsibility 77 IEnntvroirdouncmtieonnt al ef2f3ec7ts of retail logistics 238
Framework for analysing the environmental impact of retail deliveries 239
Patsy Perry, John Fernie and Steve Wood Managing waste within the retail supply chain 249
Topical issues 250
Conclusion 253
Introduction 77 References 253
index 257
The internationalization of the fashion supply chain 78
CSR in international fashion supply chains 86
CSR in garment manufacturing in Sri Lanka 89
Conclusion 92
vi Contents
05 the footwear supply chain: the case of schuh 101
John Fernie and Colin Temple
Introduction 101
Offshore sourcing and outsourcing 102
The complexity of the footwear supply chain 104
The case of Schuh 111
Conclusion 114
06 supply chain strategy in the fashion and
luxury industry 117
Alessandro Brun and Cecilia Castelli
Introduction 117
The relevance of supply chain management in luxury and
fashion 118
Typical structure of the inbound and outbound supply chain 122
Frameworks for company classification and supply chain strategy
selection 123
Noteworthy examples of supply chain configurations 134
A portfolio approach for supply chain strategy in the fashion
industry: the ‘segmentation tree’ 143
Conclusion 144
07 tesco’s supply chain management 149
Leigh Sparks
Introduction 149
The changing Tesco supply chain: establishing control and
delivering efficiency 152
Conclusion and lessons 174
08 on-shelf availability in UK retailing 179
John Fernie and David B Grant
Introduction 179
Consumer reaction to stock-outs 180
The causes of retail OOS 182
Methods to improve OSA: grocery 184
Methods to improve OSA: clothing 193
Methods to improve OSA: other non-food 197
Conclusions 200
Contents vii
09 the development of e-tail logistics 205
John Fernie, Suzanne Fernie and Alan McKinnon
Introduction 205
The growth and development of the e-commerce market 206
Web 2.0 210
Exploiting the long tail 211
Online shopping formats 213
The e-commerce consumer 214
The grocery market 219
The logistical challenges 221
Definition of the home delivery channel 222
Distribution of online purchases of non-food items 223
Distribution of online grocery sales 224
The last mile problem 226
Environmental impact of online retail logistics 231
Conclusions 231
10 the greening of retail logistics 237
Alan McKinnon and Julia Edwards
Introduction 237
Environmental effects of retail logistics 238
Framework for analysing the environmental impact of retail
deliveries 239
Managing waste within the retail supply chain 249
Topical issues 250
Conclusion 253
Index 257
viii
ContRibUtoRs
Alessandro Brun holds a Masters degree with honours in Production and
Management Engineering and a PhD on the same subject. He is Assistant
Professor of Quality Management at Politecnico di Milano and is Director
and Professor of training programmes in Six Sigma and in Luxury Manage-
ment at MIP-Politecnico di Milano. He has published more than 20 papers
in ISI/Scopus indexed journals, on the topics of supply chain management,
quality management and operations improvements in manufacturing and
service industries, with special attention to the luxury and fashion sectors.
Cecilia Maria Castelli studied the supply chain of Italian fashion/luxury
companies during her PhD at Politecnico di Milano (2006–08) and was
a visiting student at Heriot-Watt University, where she decided to focus on
retail strategy and operations. These research streams produced several pub-
lications in international journals and conferences, co-authored with other
researchers from Politecnico. Since 2008, she has lectured on supply chain
and retail in the fashion/luxury market at the MBA courses of MIP-
Politecnico di Milano. She belongs to the organizing committee of the
‘International Workshop on Luxury Retail, Operations and SCM’. Currently,
her main activity is business consulting on operations and supply chain
management.
Julia Edwards was a Research Associate at the Logistics Research Centre
in the School of Management and Languages at Heriot-Watt University,
Edinburgh, as part of the multi-university ‘Green Logistics’ project. Prior
to that, she was a Senior Lecturer of Environmental Management at the
University of Wales, Newport. Dr Edwards has been researching and teach-
ing in the areas of transport and environmental issues for the last 15
years. Currently, her research interests include carbon auditing of supply
chains, e-commerce and the environment and consumer travel and shop-
ping behaviour.
John Fernie is Emeritus Professor of Retail Marketing at Heriot-Watt
University, Scotland. He has written and contributed to numerous textbooks
and papers on retail management, especially in the field of retail logistics
and the internationalization of retail formats. In 2005 he created the George
Davies Centre for Retail Excellence with generous financial support from
the retail entrepreneur of the same name. Subsequently much of his research
has focused upon the fashion sector with work on offshore sourcing, on-shelf
availability and luxury branding. He was the editor of the International
Journal of Retail & Distribution Management from 1989 to 2009 and is on
the editorial board of numerous marketing and logistics journals. He is
Contributors ix
a Fellow of the Institute of Logistics and Transport and a member of the
Logistics Directors Forum. He holds an Honorary Professorship at St Andrews
University and several visiting positions at European universities.
Suzanne Fernie developed, led or taught retail programmes across all the
further and higher education levels from access to postgraduate. Suzanne
developed the first online HNC in Marketing in Scotland, and worked with
Sainsbury’s during their development in Scotland, leading a programme that
developed social, academic and vocational skills for long-term unemployed
people to help staff their new stores. Suzanne developed and examined
MBA modules in Retailing and Services Marketing for Edinburgh Business
School for many years, and taught retail classes at Heriot-Watt and
St Andrews Universities. Suzanne is a Member of the Chartered Institute
of Marketing and the General Teaching Council for Scotland.
David B Grant is Professor of Logistics and Associate Dean (Business
Engagement) at Hull University Business School, and an adjunct professor
at Mannheim Business School, Germany and Wirtschaftsuniversität (WU),
Vienna. David’s doctoral thesis investigated customer service, satisfaction
and service quality in UK food processing logistics and received the James
Cooper Memorial Cup PhD Award from the Chartered Institute of Logistics
and Transport (UK) in 2003. Research interests include customer service
and satisfaction; services marketing and service quality; retail logistics; and
reverse and sustainable logistics. Recent applied research has investigated
on-shelf availability and out-of-stocks, total loss and waste in food retailing,
forecasting and obsolete inventory, service quality of internet retailers, and
consumer logistics and shopping convenience in both grocery and non-
grocery contexts. David has published over 135 publications in various
refereed journals, books and conference proceedings and on the editorial
board of several academic journals. He is a member of the Council of Supply
Chain Management Professionals (CSCMP), the UK Logistics Research
Network (LRN), and the British Retail Consortium’s Storage and Distribu-
tion Technical Advisory Committee.
Alan McKinnon is Head of Logistics and Dean of Programs in the Kühne
Logistics University, Hamburg. He was formerly Director of the Logistics
Research Centre at Heriot-Watt University in Edinburgh. A graduate of
the universities of Aberdeen, British Columbia and London, he has been
researching and teaching in freight transport and logistics for 35 years
and has published extensively in journals and books. Alan has undertaken
research and consultancy studies for numerous public and private sector
organizations in the United Kingdom and overseas and been an adviser to
several UK government departments and parliamentary committees, the
European Commission, the International Transport Forum, the International
Energy Agency and OECD. Between 2010 and 2012 Professor McKinnon
was Chairman of the World Economic Forum’s Logistics and Supply
Chain Industry Council. In 2012 he was appointed to the EU High Level