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SCM Reform for Retail Ahead of 2028

In anticipation of the 2028 implementation of the cost principle system, Funai Soken Supply Chain Consulting has released a detailed guide addressing vital changes for the retail and distribution sector. With this upcoming regulatory change, businesses in the industry must prepare for significant shifts in logistics operations, especially concerning freight cost determination rules. As traditional price negotiation practices may soon become obsolete, retailers face a pressing need to enhance their loading rates and operational efficiency to manage costs effectively.

The document outlines a transition to a demand forecasting-based push logistics model as a critical strategy for overcoming these challenges. This proactive shift in logistics methodology aims to not only streamline operations but also to fortify the supply chain in a rapidly changing economic environment.

Background

The impending cost principle system poses one of the most daunting challenges for retail management. Retailers can no longer rely solely on historical pricing negotiations but must adapt to a landscape where cost structures are expected to fluctuate dramatically. As such, companies need to rethink their approaches to logistics planning and procurement strategies.

Key Insights from the Guide

1. Changes to Freight Cost Determination Rules

The publication elaborates on the drastic changes associated with the new freight cost determination rules. Retailers must develop forward-thinking logistics strategies that align with these new regulations to maintain profitability and competitiveness.

2. Transition to Demand Forecasting-Based Push Logistics

One of the core focuses of the document is maximizing loading efficiency through a push logistics model. This approach emphasizes understanding demand forecasts to optimize deliveries and inventory management better. By shifting towards a push logistics system, retailers can enhance their supply chain responsiveness and reduce excess costs.

3. Building the Right Organizational Structure

Successful transformation requires designing the appropriate organizational structure that supports the new logistics model. The guide stresses the importance of integrating merchandising (MD) departments and retail stores into the logistics strategy to ensure everyone is aligned towards common goals.

This comprehensive manual provides actionable practical insights for retailers looking to build a sustainable SCM structure to uphold their business objectives amid changing external conditions.

How to Access the Guide

For those keen on preparing for these upcoming changes, the guide is available for free download. Retail professionals can click here to access the full document.

Company Overview

Funai Soken Supply Chain Consulting, established in May 2000, operates from its headquarters in Tokyo and Osaka. Led by CEO Naoyuki Hashimoto, the company specializes in delivering consultancy services focused on enhancing supply chain management for retail and distribution companies. For more information on their services and insights, visit their official website at Funai Soken SCM.