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Design Producti on Distribu tion

DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

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Design/ Production etc StoreCustomer 5 fingers on customer & 5 fingers on suppliers

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Page 1: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Design Production Distribution

Page 2: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Customer

StoreMgr

DesignerBuyer

Supplier

Store

Women

Men

Kids

• CONSTANT XCHANGE OF INFO • 3 independent Bu- implications?

Page 3: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Design/Production

etcStore Customer

5 fingers on customer & 5 fingers on suppliers

Page 4: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Close communic-ation loop

Stick to a rhythm

Leverage Your

Assets

Page 5: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

• Approach/ payoff

Philosophy

• You need to have 5 fingers touching the factory & 5 touching customer

Capability

• Zara can design, produce, deliver in 15 days flat.

Payoff

• Collects 85% of full price vs 65% competition

• 2001

Inditex

BenettonH&M Gap

0

2

4

6

8

10

12

% Net Margin

% Net Margin

Page 6: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

1991 20030

500100015002000250030003500400045005000

Sales E milProfit E mil

Page 7: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Simpler products outsourced(sweaters)

Complex Products in-house (Women’s suits)

Page 8: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?

Inventorydown

Profits up

Revenues up

Payoffs

Page 9: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?
Page 10: DesignProductionDistribution. Customer Store Mgr DesignerBuyerSupplier Store WomenMenKids CONSTANT XCHANGE OF INFO 3 independent Bu- implications?