Rsp Model in supply chain management.

Retailer Suppliers Partnership
RSP is a part of strategic alliance
TYPES OF RSP

1. RSP MODEL SOUMYA JASH (B.Tech & PGDM) SUBJECT:- SUPPLY CHAIN & LOGISTICS MANAGEMENT

2. ABOUT STRATEGIC ALLIANCE 2 Strategic Alliance is a type of partnership in supply chain management which refers A relationship formed by two or more organizations that share (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain.   This increases ability and dependability of various stages involved in the supply chain.

3. TYPES OF STRATEGIC ALLIANCES 3 Third Party Logistic Retailer-Supplier  Partnerships Distributor  Integration

4. ABOUT RSP RSP stand for Retailer Suppliers Partnership. RSP is a part of strategic alliance and it has multiple sides to it and is a big term in the supply chain world. It refer that In one scenario the supplier is linked to the Point of Sale of the vendor and is continuously aware of the sale that is happening in the retail store which basically helps the supplier plan its own forecasting and scheduling. 

5. Add a footer 5 TYPES OF RSP There are 3 types of RSP and those are: - Quick Response Inventory (QRI) Strategy . Continuous Replenishment Inventory (CRI) Strategy . Vendor-Managed Inventory (VMI) Strategy .

6. Add a footer 6 QRI   Strategy Suppliers receive  Point of Sale  ( POS) data  from the retailers and use this information to synchronize their production and inventory activities with actual sales at the retailer. But also the retailer still prepares individual orders, and the POS data are used by the supplier to  improve  forecasting and scheduling and  to reduce local time.

7. Add a footer 7 CRI STRATEGY Continuous Replenishment Inventory is a supply chain strategy in which frequent replenishment takes place from the supplier to the retailer or distributor in order to maintain better flow in supply chain and minimize bullwhip effect.

8. Continuous replenishment is a supply chain practice that's being pioneered by European companies such as Tesco in the United Kingdom. Instead of delivering weekly or even daily to restock store shelves, a retailer or manufacturer performs multiple daily runs. By doing so, the company makes sure that the consumer will always find what he or she wants at a store.   Add a footer 8 Example:

9. Add a footer 9 VMI  STRATEGY Vendor Managed Inventory (VMI) is an arrangement where the supplier, not the customer, decides when and how much of the customer's stock is replenished. It is a way to cut costs and keep inventory levels low throughout the supply chain

10. Add a footer 10 This type of relationship is being used in Wal-Mart and P&G, whose partnership began in 1985. It has dramatically improved P&G’s on time deliveries to Wal-Mart while increasing inventory turns less. Example :

11. Characteristics of Retailer-Supplier  Partnership 11

12. 12 THE TECHNOLOGY BACKBONE OF CRI & VMI The most widely used technology in CRI &VMI is still EDI. In the CRP-VMI process, these EDI messages can usually be seen: - Inventory report · Sales forecast · Order response · Dispatch advice · Sales report · Invoice.

13. Add a footer 13 BENEFITS OF RSP Supplier benefits: Visibility to the customer's point-of-sale data simplifies forecasting. · Promotions can be more easily incorporated into the inventory plan. · Customer ordering errors, which in the past would often lead to a return, are reduced. · Stock level visibility helps identify priorities (replenish stock versus a stockout ). · The supplier can see the potential need for an item before the item is ordered.   Customer benefits: Fill rates from the supplier, and to the end consumer, improve. · Stock outs and inventory levels often decrease. Planning and ordering costs decrease since the responsibility is shifted to the supplier. · The overall service level is improved by having the right product at the right time. · The supplier is more focused than ever on providing superior service.

14. Add a footer 14 DRAWBACKS Some possible drawbacks of VMI might include: · EDI Problems: - EDI sometimes creates a challenge due to the many different standards in use. This makes it difficult to communicate and translate information between companies. If manufacturers are to assume stock keeping responsibility, they must be able to communicate in real time with their (retail) partners in a uniform way.   Employee Acceptance: - All employees involved in the process must fully understand and accept this new way of doing business. It's not enough to simply sell the concept to senior management. All employees who are involved must be willing participants.   Trust among supply chain partners:- RPS can also fail when setting up rules for how the relationship should work. For example, the supplier and the customer must agree on how to deal with overstocks, ordering errors and obsolete stock. Finally, both parties must understand that this is a learning process that takes time. Equally important as time is trust. Many retailers and consumer goods firms are naturally reluctant to share information in advance, fearing that the information will somehow fall into the hands of competitors or they will lose control in some way.

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16. 16 In 2003, Maruti produced 359,960 vehicles, operating at a capacity utilization of 103%, against the industry average of 57.8 %. Vendor management became an important area as Maruti attempted to improve operational efficiency . Maruti procured components worth about Rs.5,000 crores every year . The company top 10 vendors accounted for about 34 % of its aggregate purchases of components from vendors in India . Maruti was working on a 3.5% per annum reduction in vendor prices by 2004-2005 . Maruti streamlined the sourcing and stocking of materials and components through its Delivery Instruction system, one of Suzuki's best practices . This system provided details of Maruti component requirements for every 15 days, across the different variants of the various models, to its vendors .