Supply Chain Performance: The Case of World Co. Ltd.

Ali Yudhi Hartanto - 1206185053Azhar Harris - 1206185356

Dame Reiny E. Manalu - 1206185570Irawati Cipto - 1206186522

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1959 Established World Co., Ltd., wholesaler of women's knit sweaters, Kobe, with ¥2 million in capital. Mamoru Kiguchi assumed the position of President with Hirotoshi Hatasaki serving as Managing Director.

1968 Moved the Head Office to the company's new building, constructed in Sannomiya, Kobe.1980 Established a subsidiary that undertakes production management, development, and trade operation of textile

materials; expanded into a textile trading business.Established World Industry Co., Ltd., which undertakes manufacturing and planning, and expanded into the apparel manufacturing business.

1988 Established World Taiwan Fashion Co., Ltd., in Taipei, and started sales in Taiwan.1992 Announced the SPARCS Concept, our medium-term business plan.1995 Launched UNTITLED as our second SPA brand.

Damage from the Great Hanshin Awaji Earthquake led to the demolition of the company's building in Sannomiya, Kobe.Opened a select shop, AQUAGIRL, starting the Highly Fashion-Conscious Buying SPA business model.

1997 Appointed Hidezo Terai as President.1999 Introduced the executive officer system and WEL (World Entrepreneur Leader) to accelerate decision-making

and clarify business responsibility.Transferred listing to the First Sections of the Tokyo Stock Exchange and Osaka Securities Exchange.

2000 Opened HUSHUSH, a brand for young families, and started the FCOM Business Model based mainly in shopping centers located near major cities and suburban areas.Announced World Production Partners (WP2) concept as part of our production operation innovation and formed system synchronizing retail outlets, development and production, and factories.$1.8 billion in net sales and $32 million in net income for fiscal year ending March 31, 2000

2002 Started the mail order magazine, RUNA, in order to enter the Direct Marketing Business.Exceeded ¥200 billion in annual sales. (As of March 31, 2002)Established World Fashion (China) Co., Ltd. in Beijing to strengthen sales operations in China.

2010 Buyers Club specialist apparel purchasing site launched.Offered official suits for Nadeshiko Japan, the Japanese national women's football team.WSP Role Playing Contest held at sales subsidiary World Store Partners Co., Ltd. to improve customer service.Consolidated our office functions in Tokyo into WORLD Minami-Aoyama Bldg. and WORLD Kita-Aoyama Bldg.

2012 Transferred all the stocks of Le Monde Des Gourmet Inc., which developed the restaurant and cafe business.Launched WORLD BASIC, a new cross-functional brand, in order to strengthen the development of basic item products.Launched ANIMA, a sports brand featuring a fusion of sports and fashion, and opened its first flagship store in Harajuku

World has created many product and store brands with various values in the past. These brands are the result of our unique

creativity and have served to enhance the values of fashion in society. However, such values do not remain unchanged;

instead, they change as customer needs change over time. In order to continue evolving as a “Value-Creating Enterprise,” we

at World must keep creating new values in response to ever-changing customer needs.

Wholehearted Creation and Sharing of Values—Always Strive to Go Beyond

Our enduring aspiration in this statement reflects our strong determination to continue self-transformation and evolution—

now and into the future. We strive to attract customers and keep innovating ourselves toward new possibilities by building

a system that enables us to constantly offer values to customers and by putting that system into action.

Hidezo TeraiPresident

The Problem1. Although SPARCS has introduced since January 1992 and

has been a mainstay in managing the Supply Chain Management, however, Whether the system that has developed meet the challenges of the very dynamic fashion industry and wheter the system is able to answer the needs of World that will expand out of Japan.

2. Whether demand forecasting which has been implemented to achieve relevant monitoring sales trends and consumer demand to deliver right product to right store at right time to maximize profitability.

3. How to build World supply chain performance.

The Theory The use of resources, and flexibility desired output

has been identified as a critical component to the success of supply chain. Therefore, supply chain measurement system should emphasize on three separate types of performance measures, namely: measurement of resources (R), the measurement of the output (O) and measurement fleksibility (F), each of the three types of performance measures have different goals different. Supply chain system must perform measurements on each of the three types (R, O and F) measure of performance, because each type plays an important role for the success of the overall supply chain performance.

Analysis Problem 1 Although SPARCS has introduced since January 1992 and has been a mainstay in managing the Supply Chain

Management, however, Whether the system that has developed meet the challenges of the very dynamic fashion industry and wheter the system is able to answer the needs of World that will expand out of Japan.

Despite all the advantages of the scheme SPARCS system , the gross data errors are quite high, about 1 % ( an average 20 pieces out of 2000 pieces per store ) on the condition that describes the regular season sale inaccuracies SPARCS system is being developed by the World .On the other hand , the statement Hidezo Terai " Our lead time for replenishing fashion apparel is two weeks . We can also design , produced and ship new products to our store in six weeks " . Have not been able to demonstrate the superiority of the world co ltd SPARCS system is able to respond to the dynamic development of fashion industry forward that demands speed and responsiveness to meet consumer needs.World co ltd would face the risk of serious problem if the product they produce and presented in – stores are not in accordance with the demand of the market being targeted .The time is long enough, lead time of about 2 months ( lead time production and replenishing ) feared to have an impact on losing momentum to dig profit margins in a seasonally high demand at the time ( lost sales opportunity) .World co ltd can develop SPARCS system with a system of real-time information that is based on information demand and not only based on historical data alone. System developed by SPARCS expected to answer fundamental questions in the form of supply chain management How much to the make ; What to makeup ; When to make it and

SPARCS systemthrough world supply chain management

Analysis Problem 2 Whether demand forecasting which has been implemented to achieve

relevant monitoring sales trends and consumer demand to deliver right product to right store at right time to maximize profitability.

In order not to miss a sales opportunity, then the World should be able to provide 40% - 50% in-seasons product inventory commitments with not less than two (2) weeks.A variety of things that can be applied by the world include:1.Build distribution center near kobe Japan and build Distribution center overseas with the largest market share.2.Building a responsive logistics system by relying on the speed factor. Logistic fleet should be able to meet applicable to the entire network of stores within 72 hours to a maximum of asia.3.Increase the capacity of industry and vertical integrations in the fashion industry.

In pursuit of the chain responsiveness on its supply chain, the World co ltd forecasting demand to construct a series of stages1.Calculating the initial demand forecasts in two ways, namely the distribution side side forecasts and forecast category;2.Aggregate demand is obtained and the ranking of individual SKUs carried out by following the method obemeyer system; ranking then grouped with ABCD analysis;3.Updating forecast with regard during the product life cycle sales.4.Calculate inventory and production planning that aims to (1) the material preparations, (2) first-order quantity, (3) the replenishment quantity.

Current Futures

Analysis Problem 3 How to build World supply chain performance.

Nigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, © Nigel Slack and Michael Lewis 2012

Slide 7.27

Customer performance measures

To achieve strategic impact how should we be viewed by customers?

Financial performance measures

To achieve strategic impact how should we be viewed by shareholders?

Internal process performance measures

To achieve strategic impact what aspects of performance should business process excel at?

Learning and growth performance measures

To achieve strategic impact how will we build capabilities over time?

Overall strategic

objectives

The measures used in the balanced scorecardWorld can arrange supply chain performance with the help of a balanced scorecard, finance performance, customer performance, internal process and learning and growth performance in all aspects of corporate performance

One factor that is also important to the success of the supply chain, the world can establish a remuneration system by combining salary with bonuses of sales in each storenya and linking them with sales forecasts and sales growth in each store.

On Time Delivery

Customer Response

Manufactoring lead tme period

Customer Complain

supply chain performance

Measurement of OutputMeasurement of

Resources

Compare the total cost of the

current year with previous years.

ConclusionThe purpose of Supply Chain Management Hidezo Terai

emphasized monitoring sales trends and consumer demand to deliver right product to right store at right time to maximize

profitability.

SPARCS system integrates customer relationship, order fulfillment, manufacturing

processes and supplier relationships. The overall aspect is developed by

engaging groove services, materials, informations with

customer demand.

The time is long enough lead time of about 2 months (lead

time production and replenishing) feared to have an

impact on the World co ltd losing momentum to dig profit margins in a seasonally high

demand at the time (lost sales opportunity).

World defines a supply chain system that is built up over its performance by measuring the

resources (R) and the measurement of output (O).

Suggestion

In order not to miss a sales opportunity, then the World should be able to provide 40% - 50% in in-seasons product inventory commitments with not less than two (2) weeks.

Build distribution center near kobe Japan and build Distribution center overseas with the largest market share.

Building a responsive logistics system by relying on the speed factor. Logistic fleet should be able to meet applicable to the entire network of stores within 72 hours to a maximum of asia.

Increase the capacity of industry and vertical integrations build the fashion industry.

Establish a remuneration system by combining salary with bonuses of sales in each storenya and linking them with sales forecasts and sales growth in each store

Lessons Learned The purpose of Supply Chain Management to

deliver right product to right store at right time to maximize profitability.

The success of supply chain management is measured through the measurement of resources (R), the measurement of the output (O) and measurement fleksibility (F) and contrasting with periods that have past or compare it to measurements competitors.