SUPPLY CHAIN MANAGEMENT AT WORLD CO., LTD.
Presented By :
Hanif Bin Azizan @ Harun 814771
Azhar Bin Samsudin 814108
Tharshini Manalan 814789
Mharunmolly Tangayah 814112 Presented For : DR. MARTINO LUIS Date : 5 July 2014
Introduction
Vertically-integrated retailer of Japanese women’s apparel—designs; produces; and ships the product
Responds quickly to marketing signals
Gross margins high
Inventory Turns high
ROE/ROA low
WORLD CO., LTD - manufacturers design.
- develop their own products.
- SPARCS System
Functions as – Wholesalers, Retailers, Large Manufactures – Own Boutiques, Dept. Store Outlet Store
Japanese economy
Brand fragmentation
Chapter 10 Significance – Case Study Highlighted - Bullwhip effect and its impact on supply chain performance -
- Ability to increase the total supply chain surplus.
Effect on performance of lack of coordination- Manufacturing
Cost- Pricing obstacles- Behavioural
obstacles
Price Fluctuations.
Other batching
Forecasting updating
Shortage gaming
Long lead time
Inventory Cost
Transportation Cost
Relationship across the Supply
Chain
Level of product availability
Labour cost for sipping and
receiving
Causes of bullwhip effect
Supply Chain dependencies
Planning
Information system
Production Process
Empowerment
SPARCS
Empowered brand teams
Supply Chain Process at World Co., Ltd• Systematic• Disciplined• ABCD Rule
Forecasting
Manufacturing
• Make 50% of forecast• Balance 50% reserve• Capacity & raw material
Inventory & Production Planning
• Domestic manufacturing• Short lead time• Fast transportation• Close collaboration of design and
manufacturing• 2- 3 weeks replacement• Flexibility of factories• Small batch production
Case Background
3 Categorize
Product/Brand Facts
Company Facts
Industry Facts
Women apparel - short life-cycle and moving under an extremely uncertain demand.
3 - distribution alternatives
- company owned stand alone stores.
- company owned stand alone stores.
- shops within department stores.
Women’s apparel, handling men’s and children’s wear specializing in knitted garments.
Targeted female – 25 – 29 age.
Introduce new collections twice annually (spring-summer and fall-winter).
New product will introduce – every 2 weeks.
Women –apparel wholesale and retail distribution methods.
Business process system called SPARCS - customer relationship, order fulfillment, and supplier relationship processes.
Competitors are Gap Inc.
Company Stakeholders
Community
Government
Employee Competit
or
Designer
Retailer/warehou
se
Manufacturer
Distributor
Raw materi
al supplie
r
Customer
Stakeholders Surrounding World Co.,Ltd
Supply Chain at World Co. Ltd
Raw MaterialSupplier
Raw MaterialSupplier
DesignerDesigner
ManufacturerManufacturer
Distributor/ merchandiser
RetailerRetailerEnd UserEnd User
Problems Identification
High inventory turnKeen competitive Intelligence
Decentralized Merchandising operationsHigh Responsiveness
Versatile Line workersRecruit talented individuals
Weak pay for performance System (Management)
Low Brand AwarenessFragmentation of brands
Left over inventor is markdown 50%
Fewer Variations In Store AssortmentsFast Changing Fashion Trends (Social)
Low Inventory LevelsInternational Manufacturing
Lack of Channel Power Uncertain Demand
Seasonality Inventory Risk
SWOT
Strength
Weakness
Opportunity
Threat
Case Discussion
Features of fashion apparel in Japan and World Co., Ltd’s competitiveness?
World Co., Ltd salient aspect of manufacturing, demand forecasting and inventory planning
World Co., Ltd’s supply chain features strength for effective lead time and respond time (relative to U.S apparel supply chain)
Can World Co., Ltd’s supply chain processes replicated to other companies?
Case Discussion
Recommendation
◦High inventory issues – new product information sharing, update speed
◦ Advertising and promotional
◦ Lessen brand fragmentation
◦ Reduce the labor cost – lessen stores/ employees