Technology gap among suppliers and Pop & Mom stores as a key distribution cost issue

Abstract

A Pop & Mom Store segment of around 450 000 business is an important market for large Multinational Corporations and medium size firms involved in the retail goods production business in Mexico. As large and medium size suppliers are fully integrated to technology based processes, and working under supply chain management practices, in the distribution side of the value chain are the Pop & Mom stores representing an important economic group of business with asymmetries in regard of the adoption of basic Information Technology to align with their business parties. Little is known about the challenges faced by Pop & Mom stores in developing countries to integrate Information Technology components to their business processes such as suppliers and inventory management. Results of a study conducted in a middle size city in the Northeast Region of Mexico suggest that due to the technology gap existing among them and their large suppliers, increasing distribution costs are threatening the survival of this business model while suppliers are focusing their attention on the convenience stores model operating upon technology based processes.