Every business needs to have a set of logistics necessary for proper function, and retail is no exception. Without the support or services that logistics provides, retail would be unable to function in its current form. The essential functions of the retail logistics system are warehouse management, inventory control, distribution/delivery, product availability, price verification programs, and store layout design.
At the heart of every successful company, there is an effective supply chain management system that can be separated into 5 different areas:
- Warehousing and storage
- order processing and material handling
- production scheduling and control
- information flow and sharing;
- and customer service (supply chain management).
What is retail logistics
A logistics system in retail works much the same way as any other business, just on a smaller scale. At its most basic level, the need for every business to have an effective set of logistics management has not changed despite advancements in technology or methodologies within the industry. However, one would question how necessary warehousing still is considering many retailers are starting to move towards e-commerce sales (which does not require physical storage space).
Functions of Retail Logistics System
1 Smaller operation might collect enough money to keep up with demand through online sales, but for larger companies, this amount would not be enough to ensure steady turnover
2 It is also more expensive for retailers to maintain their own warehouses because they are liable for employer taxes and have additional storage fees
3 Retail logistics asks organizations to increase purchasing accuracy so it decreases the chances of being stuck with damaged goods.
Supply chain management can be broken down into 5 different functions: warehouse management, inventory control, distribution/delivery, product availability, and price verification programs. Without each of these components, retail would find it difficult to function as an industry.
While there are certainly other elements that provide support or services necessary for proper operation, below is a list of some of the most important functions that teams within the retail logistics system provide.
1 Inventory control: inventory control is essentially making sure that retailers have the right amount of product on hand at all times to meet customer demand, but more specifically it includes keeping track of what makes up those inventories and how much of each item or product a store has in stock
2 Availability programs: new industry concepts such as having stores restock by themselves instead of relying on people to physically go out and purchase products. This can be done with location technology and new inventory ideas like automatically moving items from one place to another without human intervention – e.g., Amazon's 'Just Walk Out' Technology
3 Distribution/Delivery: the process of making deliveries happen by putting together orders for customers and routing them to the right supplier
4 Warehouse management: a process used to store and distribute products. It is a critical area of the supply chain that needs to be managed properly because if it's not, then retailers will end up with too many or not enough products – neither of which are good for business.
5 Product Availability: In retail, product availability means anything from keeping track of how much inventory retailers have of a certain product at any given time, but also includes making sure that items are available when customers need them instead of being back-ordered or out-of-stock
6 Price verification programs: this function ensures accuracy in pricing across different locations. The prices retailers list on their websites should match what they charge in stores; all discounting practices must be followed accordingly.