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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 United Kingdom USA New Delhi 110002 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 Supply chain management (SCM) 8 v The grocery retail supply chain in the United Kingdom 15 Supply chain challenges 21 Conclusions 28 References 30 02 35 Relationships in the supply chain 35 Introduction 35 CONTENTS 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 Differences in distribution ‘culture’ in international markets 66 viii Contributors The internationalization of logistics practices 70 References 74 xii Preface 04 77 The international fashion supply chain and corporate social responsibility 77 Introduction 77 The internationalization of the fashion supply chain 78 CSR in international fashion supply chains 86 1 01 Retail logistics: changes and challenges CSR in garment manufacturing in Sri Lanka 89 Conclusion 92 John Fernie and Leigh Sparks References 93 05 101 The footwear supply chain: the case of Schuh 101 The logistics task 3 Introduction 101 Offshore sourcing and outsourcing 102 Retail logistics and supply chain transformation 6 The complexity of the footwear supply chain 104 The case of Schuh 111 Supply chain management (SCM) 8 Conclusion 114 References 115 The grocery retail supply chain in the United Kingdom 15 06 117 Supply chain strategy in the fashion and luxury industry 117 Supply chain challenges 21 Introduction 117 The relevance of supply chain management in luxury and fashion 118 Conclusions 28 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 02 Relationships in the supply chain 35 References 145 07 149 Tesco’s supply chain management 149 John Fernie Introduction 149 The changing Tesco supply chain: establishing control and delivering efficiency 152 Conclusion and lessons 174 Introduction 35 References 176 08 179 Changing buyer–seller relationships 35 On-shelf availability in UK retailing 179 Introduction 179 Quick Response (QR) 40 Consumer reaction to stock-outs 180 The causes of retail OOS 182 Efficient Consumer Response (ECR) 43 Methods to improve OSA: grocery 184 Methods to improve OSA: clothing 193 The role of logistics service providers 50 Methods to improve OSA: other non-food 197 Conclusions 200 Conclusions 53 References 202 09 205 The development of e-tail logistics 205 Introduction 205 The growth and development of the e-commerce market 206 03 The internationalization of the retail supply chain 59 Web 2.0 210 Exploiting the long tail 211 John Fernie 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 10 237 04 The international fashion supply chain and corporate The greening of retail logistics 237 Introduction 237 social responsibility 77 Environmental effects of retail logistics 238 Framework for analysing the environmental impact of retail deliveries 239 Managing waste within the retail supply chain 249 Patsy Perry, John Fernie and Steve Wood Topical issues 250 Conclusion 253 References 253 Introduction 77 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 CONTB RI UTORS 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.

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