15. Technology, Innovation and Supply Chain Management ...

15. Technology, Innovation and Supply Chain Management Competitive Sessions

Demand-supply Chain management for the Chinese fast fashion apparel industry

Abstract

This paper explores the applicability of the demand-supply chain management (DSCM) approach to help

improve the supply chain performance of the Chinese fast fashion industry. Based on a comprehensive

desktop research, the paper provides a thorough literature review on the paradigm evolvement from

demand chain management (DCM) to DSCM and investigates the current supply chain approaches used

by the apparel industry in China. The paper attempts to develop a theoretical DSCM framework that

incorporates the various underlying drivers and obstacles of DSCM application. The proposed DSCM

framework extends the conventional one-size-fits-all solution by advocating a dynamic outside-in thinking

that integrates marketing value stream with multiple supply chain network solutions under an aligned

organizational culture and leadership style.

Keywords

Supply chain Management (SCM); Demand chain management (DCM), Demand-supply chain

management (DSCM), Responsiveness, Efficiency and Innovativeness

1. INTRODUCTION

Fashion textile (FT) industry has raised the concern in the study of supply chain management

(SCM) for many years. There are many studies targeting the dynamic characteristics of it with many

different kinds of SC solutions (Bruce, Daly, & Towers, 2004; Castelli & Brun, 2010; Christopher,

Lowson, & Peck, 2004). It could be traced from the early traditional one-size-fit-all solutions of lean,

agile or leagile strategy to recently overarching approach that aligning market management with supply

capabilities. The contemporary study presents the exploratory idea of integrating all these strategic

solutions and packing them into flexible combinations for segmented value streams under demand-driven

supply chain (DSC) paradigm (Jüttner, Christopher, & Baker, 2007; Masson, Iosif, MacKerron, & Fernie,

2007). With the growing complexity of current global context, the success of a FT company is largely

determined by how the organization design its network package to achieve the optimal balance of SC

responsiveness and efficiency (Christopher et al., 2004). Retailers that can successfully manage the

complex supply network to achieve supply chain speed and flexibility will maximize profits when they do

of 26 ANZAM 2013


meet market needs, while at the same time minimizing the penalties associated with missing the market

(Masson et al., 2007).

Chinese market as one of the most influential market in the global FT trade (Candace, Ngai, &

Moon, 2011), undergoes dramatic challenges for recent years. From macro-environment perspective,

since the 2010 labor strike triggered huge labor-cost raising, Chinese economy is gradually losing the

advantage of world factory position (CN, 2011, 2012). The model of OEM and mass production is

confronted with phasing out (Chuang, 2008). From industrial development perspective, in line with many

fashion trends take-over, large invasion of international fast fashion retailers put a fierce competition in

the local market after 2010 with many famous brand launches, such as Gap, Zara, H&M, Uniqlo, C&A

(Li & Fung, 2011). Furthermore, consumers who are largely exposed to these fickle changes tend to shop

with more fashion consciousness and savvy buying behaviors (Dickson, Lennon, Montalto, Shen, &

Zhang, 2004; Flaven, 2013; Parker, Hermans, & Schaefer, 2004; Zhang, Li, Gong, & Wu, 2002). Figure 1

shows the various issues faced by the local fast fashion industry categorized into three general aspects.

In this context, these challenges add more supply chain complexities for the local FT industry.

Compared with global fashion brands, domestic brand retailers have less marketing experience result

from years of industrial focus on labor-intensive manufacturing(Chan, 2011). Some of them try to jump

on the ‘fast’ fashion bandwagon as a way-out with imitating classic successful model which ends up with

model dislocation and fatal lost (International Trade Centre, 2011; Lu, 2011). Which way should Chinese

FT industry go in this critical transitional trend? A more dynamic solution tailored for local FT

environment would be urgently needed.

Though there are many SCM studies focusing on the research of global FT industry, limited

research has been done upon the Chinese FT industry. According to the literature review, it lacks of

systematic studies in this field from the overarching perspective which could not only focus either on

supply capability strengthening or marketing behavior analysis but integrate both from macro- institution

and organization settings. Issues like new economy transition, specialized institutional environment,

diverse customer segmentations, and transforming consumer psychographics, all add complexity for

of 26ANZAM 2013


supply chain operation in local FT companies. It could be preliminary seen, A more dynamic outside-in

solution, which configures multiple supply chain networks based on separated value streams, would be

needed for the local FT industry.

In this study, demand-supply chain management (DSCM) is proposed as an overarching

collaborative solution for the current Chinese fast fashion industry. The term and concept was introduced

by Hilletofth (2011, p. 187) as “… the management of a supply chain network that links customers and

suppliers together through market segmentation, strategic alignment, and differentiation of supply

solutions with the objectives to improve efficiency through value creation and waste reduction and

enhance responsiveness by meeting diverse customer needs.” DSCM requires not only integration of

marketing strength and supply chain capabilities at the demand chain management level but also requires

the alignment of organizational culture and leadership style with the external market (Hilletofth, Ericsson,

& Christopher, 2009; Hilletofth & Hilmola, 2008; Hoover Jr, Eloranta, Holmström, & Huttunen, 2002;

Jacobs, 2006; Lau, 2012).

The purpose of this study is to explore the possibility of applying the DSCM approach to help

improve the demand-supply chain performance of the Chinese fast fashion apparel industry. The research

question is as follows:

How can Chinese FT supply chain network and operation be restructured and aligned with market

demand under DSCM approach for performance improvement?

This study reviews current literature research on DCM and DSCM across a broad spectrum and then

highlights existing fast fashion demand and supply network studies conducted in the context of China. A

framework specifically tailored for the Chinese fast fashion industry is proposed.

The paper is structured as follows: First, a thorough literature review is given on the DSCM definition,

paradigm evolution and the benefits that bring to the current supply chain network and fast fashion

industry. Based on historical literature and case studies review, the necessities and challenges when

DSCM is implemented in the real industry will also be elaborated. Then, a theoretical DSCM framework

based on alignment theory (Chorn, 1991) for Chinese fast fashion industry is proposed and presented.

of 26 ANZAM 2013


After that, the methodology of the study, which is primarily a desktop research with secondary data, is

discussed. Finally, limitations of the study are discussed and directions of future research are also

suggested.

2. LITERATURE REVIEW

2.1 Evolution of Demand Supply Chain Management

DSCM is a concept or approach that merged from Supply Chain Management (SCM) and demand

chain management (DCM). The Conventional SCM practices began in 1980s optimize internal production

efficiency with supply-focused process comprising inbound logistics, operations and outbound logistics

(Oliver & Webber, 1982; Priem & Swink, 2012). It aims at cutting cost and refining the intra-business

processes (Esper, Ellinger, Stank, Flint, & Moon, 2010).

SCM practices gradually became demand-drive due to the emphasis on consumers/customers and

the change in the way products are distributed and manufactured ((Langley, Gibson, & Novack, 2008)).

The change brought about the need to manage supply chain from a demand perspective that considers the

end-users of a company as the departure point and not its final destination (Wieland & Wallenburg,

2011). Porter (1985) first put forward the concept of disaggregation of two paradigms. In this regards, the

whole value chain is separated into supply activities and demand marketing service. According to Porter

(1985), Marketing, sales and service on the end half of the value-chain, and collectively driving and

sustaining demand, are the three main elements of the demand chain (Figure 2).

Christopher (2005, p. 5) also argues against the limitations of the uni-dimensional, cost-focused

supply chain and suggests the following:

“Supply chain management should be termed demand chain management to reflect the fact that the

chain should be driven by the market, not by suppliers. Equally the ‘chain’ should be replaced by

‘network’ since there will normally be multiple suppliers and, indeed, suppliers to suppliers as well as

multiple customers and customers’ customers to be included in the total system”

of 26ANZAM 2013


DCM preceded the SCM concept and evolved two stages from half-realization awareness stage to

real completion stage in the market place (see Table 1). The first stage is the so-called market-driven

supply chain management or demand-driven supply chain (DDSC) which started to concern demand

fulfillment with more agile supply chain strategy due to the bullwhip effect, inventory excesses or

shortage (Schelmetic, 2013). However, the focus is still on the question of “what customers want” instead

of “why and how” with demand treated as an exogenous condition (Schelmetic, 2013). For example,

Holmstrom et al. (2001, p. 24) compare the supply chain with customer’ demand chain with the linkage of

both for demand-supply chain proposition and conclude the following:

“Demand and supply management are linked in two places- the order penetration point and value-

offering point”

In the second stage, the demand chain is considered as an entity in its own right that involves the

coordination of marketing role with supply chain processes or capabilities. It is a broader scope

connecting marketing factors such as customer behaviour study, marketing planning, branding with

actionable strategies and plans for the whole groups of firms in the network (Langabeer & Rose, 2001).

Under this notion, the essence of DCM is the synergy between marketing management and SCM with

tight demand creation and fulfillment coordination (Hilletofth, 2007; Jüttner et al., 2007; Rainbird, 2004;

Walters, 2006). The objectives of DCM are to attract and retain desirable customers and improve its

product positioning (effectiveness) in profitable markets (efficiency). To achieve this, it may involve

managing unprecedented amount of complexity in a volatile marketplace, while coping with long

distances, trimmed budgets, and perhaps reduced manpower (Hugos, 2006). The growing need for DCM

reinforces the importance of processes in demand and supply network and also serve as the basis of

DSCM approaches (Hammer, 2003; Trinca, 2003).

2.2 Studies on DSCM

The focus from DCM to DSCM highlighted the evolving nature of supply chains that involve

multi-disciplines and broader business scopes. As the supply chain requirements change over time, the

of 26 ANZAM 2013


definitions of DSCM have also been updated to reflect the changes that now encompass process-driven

coordination among demand and supply chain network (see Table 2). The literature review reveals that

recent studies have taken a holistic approach to understanding DSCM and take into consideration or

macro and micro business processes. Since marketing function is identified as a key factor in DCM,

researchers have taken a step further advocating DSCM be a more practical-focused analysis

encompassing all cross-disciplinary processes without strict functional organization boundaries (Jüttner et

al., 2007; Rainbird, 2004; Van Goor, 2007). Hiletofth (2011, p. 187) defines DSCM as “an approach to

gain a superior competitive advantage by balancing cost efficiency, responsive effectiveness,

differentiation and innovativeness process across functional organizational and inter-organizational

boundaries”. The study embraces the overarching proposition of DSCM that incorporates organizational

capabilities within the value proposition from a management perspective.

Recent study by Baghai, Coley, and White (2000) suggests the organizational capabilities that

embedded in a company’s people, processes and institutional knowledge are basic value catalyst to

enhance the fusion between supply and demand drivers. Lau (2012) suggests of DSCM as a new field of

modern study relating to the holistic demand supply chain collaboration not only from combination of

marketing strength and supply chain capabilities but also corresponding adjustments in business strategy,

leadership style and organizational culture. Gattorna (2010) also stresses the important role of human

resource in the dynamic alignment framework by integrating marketing rules, internal supply chain

strategies with the internal culture and leadership style. To serve for better understanding DSCM under

diverse business settings, Table 3 summarizes the historical literatures via stages, disciplines, and

industries categories.

The literature review also highlight the research in DSCM is still limited and mostly are

exploratory studies within few industries. Only few research studies to date focus on studying the

contemporary DSCM from a broader multiple disciplinary perspective. The success of DSCM requires

heavy financial investment and structural changes in the long run (Hilletofth, 2012). It has also been

identified that Chinese companies have not yet to fully understand the implications of adopting DSCM

of 26ANZAM 2013


within their businesses e.g. supply chain collaboration (Ericsson, 2011; Hilletofth, 2011), IT support

(Walters, 2008), leadership (Jüttner, Christopher, & Godsell, 2010). A summary of the enablers and

barriers to DSCM implementation is summarised in Error! Reference source not found.. Although the

arguments (references) for DSCM is rich, not much research has been done on how the processes should

be integrated and how implementation issues may differ in varying contexts e.g. countries and industries.

This paper contends that DSCM can be a model stimulating new ways of operation to optimize the

fashion apparel supply chain in China with its complex economic and institutional background.

2.3 DSCM in the Fashion Industry and Chinese Fashion Apparel Market

A systematic literature review via computerized data retrieval via 64 business relating databases

including e-journals, industrial news, newspapers and reports, e-books and thesis is carried out at the first

stage. Journals and books which closely relate to the topic are initially focused and several closed-relating

SCM databases are followed by regular retrieval for updating information and articles. Despite the rich

literature on fashion industry’s SCM, only few studies have been conducted for DSCM and in particular

for the Chinese fashion industry (See Error! Reference source not found. & Table 6). Existing studies in

Chinese fashion industry supply chain field tend to be business reports that emphasises on marketing,

branding to support supply chain neglect the need to consider demand as the main driver of the supply

chain (See Error! Reference source not found.). Most of researcher mainly put focus on its specialized

Chinese GuanXi network and institutional model from one perspective of marketing side whereas the

integration between SCM and marketing management in a deeper level is hardly been explored. This also

demonstrates a lack of understanding of the enablers and barriers to DSCM in the context of the Chinese

Fast Fashion industry. The proposed research aims to investigate the readiness of the Chinese fast fashion

companies in the adoption of DSCM by proposing the use of the alignment theory (Chorn, 1991).

3. THEORETICAL UNDERPINNING AND PROPOSED FRAMEWORK

To provide a theoretical underpinning for the approach, alignment theory is used to account for the

need to match supply chain capabilities with marketing demand and align the internal competences with

of 26 ANZAM 2013


the external institutional environment and leadership style to develop corresponding supply chain

solutions. The alignment theory (Chorn, 1991) contends that the strategic fit of a firm is in essence the

matching of the organization with the external environment. The principle considers the degree of

alignment that exits between market environment, organization culture, leadership style and company

strategy (Chorn, 1991).

The alignment theory concludes that there are four types of ‘logics’ sectors in the market, which are

Production, Administration, Development and Integration. Each of them has its coordinating strategic

solution in terms of four elements, which are competitive situation, strategy, and organization culture and

leadership style. The optimal marketing alignment exists when the logic sets bear a close similarity with

each other in these four elements (Figure 3).

It provides a theoretical basis for DSCM (Hilletofth, 2011), which requires not only demand-supply

chain collaboration, internal infrastructural support, but organizational competences, firm-based

principles to enhance the demand and supply chain performance and competitiveness to the company.

Therefore, successful companies know how to align its supply chain solutions with the customer

requirement by using the methods of market segmentation, price discrimination or other combination of

supply management. Based on the underpinning theory and the review of the current situation of the

Chinese fashion apparel industry, this paper puts forward the following two propositions:

Proposition 1: From a marketing perspective, different market segments in the Chinese market

should be identified and supplied with relevant supply capabilities under the notion of DSCM to achieve

better performance.

Proposition 2: The supply chain operation in the Chinese fast fashion industry should be closely

aligned with the special leadership environment and culture background in China for better performance.

Based on the literature review and the two alignment theories discussed, a tentative framework to

investigate the feasibility of applying DSCM to the Chinese fast fashion industry is proposed (Figure 4).

The framework gives a direction with the purpose of testing the underlying drivers and obstacles for

DSCM application in China. The framework attempts to show that true DSCM requires end-to-end DSC

of 26ANZAM 2013


collaboration involving not only combination of marketing strength and supply chain capabilities but also

changes in organizational culture as well as leadership style to develop new strategy to respond to

changing customer demand. The highlighted part in the framework emphasizes the essence of DSCM

which incorporates organizational leadership into value chain/demand chain management.

Findings from this study identify the potential enablers and barriers of DSCM application in the

Chinese FT industry. With further refinement, the proposed framework can serve as a model to test the

various relationships between the enablers, barriers and actual DSC process for industrial supply chain

optimization.

4. PROPOSED RESEARCH METHOD

This study uses a desktop research to review the literature comprehensively on the paradigm evolvement

from DCM to DSCM. It also investigates the DSCM application, if any, in the fashion apparel industry of

China and the general awareness of DSCM in the fast fashion apparel sector. Desktop research, which is

similar to the case study method, is appropriately for preliminary exploration of a problem which is not

yet clearly defined or fully understood. It provides the required flexibility for investigation when a “how”

or “why “question is being asked about a phenomenon (Yin, 1994). The approach is also considered

suitable for studying areas where the experiences of individuals and the contexts of actions are critical or

where the theory and research at their early, formative stage (Williamson & Bow, 2002; Yin, 2008). The

approach has been widely used in exploratory study of DSCM research (see for example (Hilletofth,

2011, 2012; Hilletofth et al., 2009; Hilletofth, Ericsson, & Lumsden, 2010; Hilletofth & Hilmola, 2008;

Lau, 2012) and SC strategic design for the textile and the apparel industries (see for examples (Bruce &

Daly, 2006; Bruce et al., 2004; Cao, Zhang, To, & Ng, 2008; Jacobs, 2006; Kumar & Arbi, 2007).

A systematic information retrieval was undertook which include 64 databases on business relating

databases which includes 9 main peer-reviewed logistics and supply chain management journal databases

and 10 databases on latest fashion and textile industry news, marketing databases. e-book collections, e-

videos and news and newspapers. A two-stage literature review was performed. First, relevant articles

of 26 ANZAM 2013


published in reputed international journals, especially those reporting findings on fast fashion studies,

were reviewed and summarized. Then, information was also collected from industry news and reports as

well as recent conference and seminar papers and newspapers. Special focus was also placed on studies

on the application of DCM and DSCM in the current Chinese fashion textile development. The priority of

resources take the sequence from broad syntheses of the literature from around 500 articles to 50 specific

journal articles and books then followed by looking for recent conference papers on the keyword topics

by regular time.

5. CONCLUSION AND FUTURE RESEARCH

Through a comprehensive desktop research with analysis of secondary data, this study has

investigated the current studies of cutting-edge DSCM and its nascent understanding for Chinese fast

fashion apparel industry. DSCM as an overarching contemporary approach has not been fully investigated

in the real market. A comprehensive literature review on the Chinese apparel industry reveals that most of

the studies about Chinese FT market stand on the ground of either SCM or marketing management

perspective in a broad sense. This study contributes to knowledge by proposing the integration of both

from managerial outside-in manner under DSCM perspective. The value of applying the dynamic

approach of DSCM will be amplified when it is tested in a dynamic Chinese environment with multi-

purpose consideration. This paper fills the gap by proposing the framework and finding the potential

drivers and obstacles of DSCM to understand the appropriateness of applying DSCM to the Chinese FT

industry for network improvement. Supported by further studies in actual practice, the findings of this

research will contribute both to knowledge as well as actual supply chain management practices in the

industry.

The proposed framework gives a preliminary guidance for the industrial development and testing

based on the preliminary research of literature review and desktop research. Although, it has contributed

to knowledge by providing a snapshot of the current situation, the use of secondary data inferior to using

primary data to gather more in-depth information to explore how DSCM could be imbeded to optimize

of 26ANZAM 2013


the real local fast fashion industry in the case of China. Some practical drivers and obstacles to implement

in the identical Chinese industry needs more experimenting research to further validate the feasibility

result. Therefore, future research could focus on employing in-depth case study or questionnaire survey to

collect disaggregated data and business case-study from practitioner to further refine the framework and

facilitate the development of DSCM practice.

of 26 ANZAM 2013


Figure 1- Challenges faced by Local Fast Fashion Industry in China

Figure 2- Demand Chain Structure (Porter, 1985)

Table 1- Two Developing Stages of DCM

Stage Synopsis Studies

Phase ⅠⅠⅠⅠ:

Replacement of

SCM (Ontology)

� A more narrow definition of DCM based on

distinction between the efficient physical supply and

the market mediation roles, which defined the term

as market mediation supply chains

� Regarding demand as exogenous condition

� Addressing the issues in the frame of SCM definition

(Goldman, Nagel, & Preiss, 1995);

(Fisher, 1997);

(Cooper, Lambert, & Pagh, 1997);

(Vollmann & Cordon, 1998);

(Srivastava, Shervani, & Fahey, 1999);

(Lambert & Cooper, 2000);

(Childerhouse, Aitken, & Towill, 2002);

(Christopher & Payne, 2002);

(De Treville, Shapiro, & Hameri, 2004);

(Womack & Jones, 2010);

Value Chain

Supply Chain Demand Chain

Sourcing Manufacturing Distribution Marketing Sales Service

of 26ANZAM 2013


Phase ⅡⅡⅡⅡ:

Synergies

between

marketing and

SCM

(Epistemology)

� Integrating demand and supply orientated processes

� It is suggested to view DCM as a macro level process

which includes all activities that companies

undertake in their quest to create and deliver

needs-based customer value propositions

� By differentiating products and delivery, sourcing

processes to proactively satisfy different customer

needs with distinctive SC solutions

(Slater, 1997);

(Mentzer et al., 2001);

(Baker, 2004);

(Rainbird, 2004);

(Flint, 2004);

(Walters & Rainbird, 2004);

(Walters, 2006);

(Christopher, Peck, & Towill, 2006);

(Jüttner et al., 2007);

(Hammer, 2003)

Table 2- Definitions of DSCM

Definition Studies

“The management of supply production systems designed to promote higher customer

satisfaction levels through electronic commerce) that facilitates physical flow and

information transfer, both forwards and backwards between suppliers, manufacturers,

and customers” (p. 692).

Williams et al. (2002)

‘’A set of practices aimed at managing and coordinating the whole demand chain, starting

from the end customer and working backward to raw material supplier” (p. 667).

Selen and Soliman (2002)

It aims to provide superior customer value at lower cost by organizing the company

around understanding how customer value is created cost efficiently (from demand

management), how customer value is fulfilled cost efficiently (from supply management),

and how these processes and management directions can be aligned.

Hilletofth (2011)

An approach to gain a superior competitive advantage by balancing the cost efficiency,

responsive effectiveness, differentiation and innovativeness process across functional,

organizational and inter-organizational boundaries.

Hilletofth and Ericsson (2007);

Juttner et al. (2007);

Walters and Rainbird (2004)

Table 3- Historical Researches on DSCM from Different Research Perspectives

Study Industry related

Preliminary

theoretical

study

Macro business

strategic

overview

Micro

process-

driven

Functional

breakage Specific logistics perspective

(Gattorna, 2009) Overarching demand

chain network alignment √ √ √

Overarching business strategic

embracing Human Resource, supply

chain strategies

(Hilletofth, 2011, 2012;

Hilletofth et al., 2009;

Hilletofth & Hilmola, 2010)

Furniture industry

demand and supply

chain management

√ √

(Van Goor, 2007) FMCG DSCM/SC

collaboration √ √ √

(Esper et al., 2010)

Enterprise based

demand supply

integration based on

knowledge based theory

√ √ √

(Jüttner et al., 2007) Range of different

industries √ √ √

(Rainbird, 2004; Walters &

Rainbird, 2004)

Australia Fast food

industry: McDonalds √ √

(Lau, 2012) Downstream wholesale

and retail distribution √ √ Delivery/ distribution

(Canever, Van Trijp, &

Beers, 2008)

Beef industry from

DSCM perspective √ √

(Holmström et al., 2008) OEM Industry √ √

Segmenting service delivery and

asset management based on

industrial service operations

of 26 ANZAM 2013


Table 4- The enablers and Obstacles of Applying DSCM

Enablers References Obstacles References

Supply chain strategic designing

based on marketing/ demand

research

(Esper et al., 2010; Hilletofth,

2007; Jacobs, 2006; Jüttner et

al., 2007; Walters & Rainbird,

2004)

The revolutionary supply chain

reconstruction from physical and mental

perspective

(Hilletofth, 2007,

2011; Jacobs,

2006)

The proper balance between

demand creation and fulfillment,

between revenue growth and cost

reduction

(Ericsson, 2011; Esper et al.,

2010; Hilletofth, 2011; Jacobs,

2006; Jüttner et al., 2007)

Challenge to create acceptance for new

mindsets and new ways of behavior (many

approaches are still based on old business

paradigm with focus on intra company

effectiveness and efficiency

(Ericsson, 2011;

Jacobs, 2006; Van

Goor, 2007)

Advanced market segmentation

and intelligence

(Hilletofth et al., 2009; Juttner

et al., 2007; Walters and

Rainbird, 2004)

Highly control manpower along the

shareholders

(Hilletofth, 2007,

2011; Jacobs,

2006)

Information sharing/ relationship

management

(Charlebois, 2008; Frohlich &

Westbrook, 2002; Williams,

Maull, & Ellis, 2002)

Conflicts of interest along supply chain (Ericsson, 2011;

Jacobs, 2006; Van

Goor, 2007)

Trust and loyalty (Charlebois, 2008; Childerhouse

et al., 2002; De Treville et al.,

2004; Esper et al., 2010;

Frohlich & Westbrook, 2002;

Heikkilä, 2002)

Huge financial investment (Hilletofth, 2007,

2011; Jacobs,

2006; Van Goor,

2007)

Integrated IT support (Al-Mudimigh, Zairi, & Ahmed,

2004; Selen & Soliman, 2002;

Walters, 2008)

Commitment from senior

leadership style fit (culture

change/business strategy

alignment/functional process and

department fit)

(Esper et al., 2010; Hilletofth,

2011; Jüttner et al., 2007;

Langabeer & Rose, 2001)

of 26ANZAM 2013


Table 5- The DCM and DSCM Studies in Fashion Apparel Industry and Chinese Fashion Industry Research areas Literature reviews Main perspective

Marketing oriented SCM/

Lean agile leagile

coordination/ internal SCM

perspective

(Bhamra, Heeley, & Tyler, 1998; Bruce & Daly, 2006; Bruce et

al., 2004; Cao et al., 2008; Chandra & Kumar, 2000;

Christopher et al., 2004; Fernie & Sparks, 2004; Jones, 2002;

Lowson, 2002; Mason-Jones, Naylor, & Towill, 2000; Stratton

& Warburton, 2003)

It is proposed the effective buying behavior for

fast fashion focuses on the management of

portfolio of suppliers, relationship building as

well as interfacing effective with internal

activities

DCM perspective from

NPD, CRM and marketing

management

(Hoover Jr et al., 2002; Jacobs, 2006; Stockert, 2005); To assess the actual state of DCM compared

with its promises of a few years ago

Development of Chinese

fashion apparel industry

(Chan, 2011; Dickson et al., 2004; Hui & Jun, 2010;

International Trade Centre, 2011; Kwan, Yeung, & Au, 2003;

Lam & Postle, 2006; Li & Fung, 2011; Zhenxiang & Lijie, 2011)

Most of studies still focus on studying internal

supply chain integration and specifically looking

at some operational issues or technical

problems under SCM definition.

Table 6- Key demand supply chain research for Chinese Fashion Apparel and Textile Industry Literature Title Research focus Research methods Type

(Kwan et al.,

2003)

A statistical investigation

of the changing apparel

retailing environment in

China

Holistic industrial report— Examination of China’s

demographic and economic indicators over the past 20

years, and the changing pattern of other macro-factors

and micro-factors

Desktop Research Business

report

(Taylor, 2004) China textile trade Industrial trading report— Introducing the special issue

on the textile trade in China. Outlining its growth which

has reinforced its role as a preferred supplier to major

markets, and its alignment with other members of the

WTO.

× Editorial

(Chan, 2011) Fashion retailing in

China: an examination of

its development and

issues

Holistic industrial report— Examining the macro

development issues of fashion retailing in china

Desktop research

and exploratory

research techniques

Business

report

(International

Trade Centre,

2011)

The Chinese Market for

clothing

Holistic industrial report—Focusing on giving a

comprehensive business overview on local Chinese FT

market. The topic delivers through many perspectives,

such as macro economy, trading, marketing and logistics

perspectives.

Business case study

and desktop study

Business

report

(Yi, 2012) Fast fashion model

questioning to be ‘Fast’

in China

Industrial news report— Analyzing the issues in the local

FT companies for recent years.

× Editorial

(Zhang et al.,

2002)

Casual wear product

attributes--A Chinese

consumers’ perspective

Marketing/consumer behavior perspective—the

importance of product attributes of casual wear for

Chinese consumers was investigated. A total of 15

attributes were identified. It is found geographic and

demographic factors had great impact on these

attributes.

Quantitative survey

study

Research

paper

(Dickson et al.,

2004)

Chinese consumer

market segments for

foreign apparel products

Marketing/consumer behavior perspective-- Identifying

the product attributes salient to consumers’ apparel

purchase intentions

Quantitative cluster,

multiple regression

and other statistical

analysis.

Research

paper

(Chuang, 2008) A strategic study for

quickening brand

building of Chinese

textiles and garment

industry

Marketing/consumer behavior/branding—analyzing the

favorable and unfavorable factors for brand development

for local apparel industry and putting forward some main

measures and strategies for brand development

Desktop study Business

report

(Wang, 2009) The empirical study on

the ladder like

development trend of

Textile industry

Marketing/consumer behavior perspective—Analyzing

the regional development characteristics of China’s

textile industry. , namely regional ladder-like

development mode. Pointing out the big distinction

between strong and weak region.

Quantitative

clustering analysis

methods

Research

paper

(Li & Fung, China’s apparel market Marketing/branding perspective—statistic industrial Business case study Business

of 26 ANZAM 2013


2011) report for these five years. Introducing the latest

development on local FT industry and bringing the future

trend about this industry.

and desktop study report

(Eng-Meng,

2013)

Clothing brand

Metersbonwe takes cue

from Zara’s fast fashion

Branding—news report on famous local brand

Metersbonwe business model reconfiguration

× Editorial

(Flaven, 2013) In China, Hangzhou

Brands Face Identity

Crisis

Branding—In today’s large and highly competitive China

market, developing a real brand identity is crucial to

success.

× Editorial

(Lam & Postle,

2006)

Textile and apparel

supply chain

management in Hong

Kong

Internal supply chain perspective—the paper focuses on

reviewing the concept of supply chain management and

Fisher SC strategy. Analyzing how to use Fisher’ s SC

strategy to balance tradeoff between efficiency and

effectiveness for Hong Kong textile supply chain

Case study Research

Paper

(Candace et al.,

2011)

Supply chain flexibility in

an uncertain

environment:

exploratory findings from

5 case studies

Internal supply chain perspective-- To illustrate and

examine the different flexibility strategies adopted by

supply chain participants as a result of different

environmental uncertainties

An exploratory

multi-case study

involving 5 Chinese

FT companies

Research

paper

Figure 3 - Dimensions of Strategic Fit (Chorn, 1991)

of 26ANZAM 2013


Figure 4- Proposed Framework for Applying DSCM in the Chinese Fashion Apparel Industry

REFERENCES

Al-Mudimigh, A. S., Zairi, M., & Ahmed, A. M. M. (2004). Extending the concept of supply chain:: The

effective management of value chains. International Journal of Production Economics, 87(3),

309-320. doi: http://dx.doi.org/10.1016/j.ijpe.2003.08.004

Baghai, M., Coley, S., & White, D. (2000). The alchemy of growth: kickstarting and sustaining growth in

your company: Texere.

Baker, S. (2004). New Consumer Marketing: managing a living demand system: Wiley.

Bhamra, T., Heeley, J., & Tyler, D. (1998). A cross-sectional approach to new product development. The

Design Journal, 1(3), 2-15.

Bruce, M., & Daly, L. (2006). Buyer behaviour for fast fashion. Journal of Fashion Marketing and

Management, 10(3), 329-344.

Enablers to achieve the DSCM alignment

• SCMfactors:

o Strategic supply chain planning

o Integrated IT support

• Marketing factors:

o Marketing segmentation

o Marketing intelligence

o CRM

• Contextorganizationalmanagement(COM)factors:

o Trust and loyalty

o Commitment from senior leadership style fit (Culture

change/business strategy)

Barriers to achieve the DSCM

• Huge financial investment

• The revolutionary supply chain reconstruction

• Challenge to create acceptance for new mindsets and

new ways of behavior

• Conflicts of interest along the supply chain

• Highly control manpower among shareholders

…

Alignment Alignment

Coordination (Outside-in process)

The Achievement of DSCM approach under alignment theory

Enablers Barriers

Enterprise Institutional environment (Subculture fitting) Organizational structure design

Marketing Management (Identifying dominant buying behaviour)

Supply Chain Management (from product design to

corresponding supply chain operation)

of 26 ANZAM 2013


Bruce, M., Daly, L., & Towers, N. (2004). Lean or agile: a solution for supply chain management in the

textiles and clothing industry? International journal of operations & production management,

24(2), 151-170.

Candace, Y. Y., Ngai, E., & Moon, K. (2011). Supply chain flexibility in an uncertain environment:

exploratory findings from five case studies. Supply Chain Management: An International

Journal, 16(4), 271-283.

Canever, M. D., Van Trijp, H. C., & Beers, G. (2008). The emergent demand chain management: key

features and illustration from the beef business. Supply Chain Management: An International

Journal, 13(2), 104-115.

Cao, N., Zhang, Z., To, K. M., & Ng, K. P. (2008). How are supply chains coordinated?: An empirical

observation in textile-apparel businesses. Journal of Fashion Marketing and Management, 12(3),

384-397.

Castelli, C. M., & Brun, A. (2010). Alignment of retail channels in the fashion supply chain: an empirical

study of Italian fashion retailers. International Journal of Retail & Distribution Management,

38(1), 24-44.

Chan, P. Y. (2011). Fashion retailing in China: An examination of its development and issues. Advances

in International Marketing, 21, 75-110.

Chandra, C., & Kumar, S. (2000). Supply chain management in theory and practice: a passing fad or a

fundamental change? Industrial Management & Data Systems, 100(3), 100-114.

Charlebois, S. (2008). The gateway to a Canadian market-driven agricultural economy: a framework for

demand chain management in the food industry. British Food Journal, 110(9), 882-897.

Childerhouse, P., Aitken, J., & Towill, D. R. (2002). Analysis and design of focused demand chains.

Journal of Operations Management, 20(6), 675-689.

Chorn, N. H. (1991). The “alignment” theory: Creating strategic fit. Management Decision, 29(1).

Christopher, M. (2005). Logistics and supply chain management: creating value-adding networks:

Pearson education.

of 26ANZAM 2013


Christopher, M., Lowson, R., & Peck, H. (2004). Creating agile supply chains in the fashion industry.

International Journal of Retail & Distribution Management, 32(8), 367-376.

Christopher, M., & Payne, A. (2002). Integrating customer relationship management and supply chain

management. The Marketing Book, 5.

Christopher, M., Peck, H., & Towill, D. (2006). A taxonomy for selecting global supply chain strategies.

International Journal of Logistics Management, The, 17(2), 277-287.

Chuang, L. (2008). A Strategic Study for Quickening Brand Building of Chinese Textiles and Garment

Industry. Paper presented at the Business and Information Management, 2008. ISBIM'08.

International Seminar on.

CN, C. G. (2011). The way to the Post Chinese Manufacturing, Chinese Textile Industrial Union. Chinese

Textile Industrial Union(Chinese Textile IT Network Ltd. Company, Beijing).

CN, C. G. (2012). The end of production cost advantage for China. Chinese Textile Industrial

Union(Chinese Textile IT Network Ltd. Company, Beijing).

Cooper, M. C., Lambert, D. M., & Pagh, J. D. (1997). Supply chain management: more than a new name

for logistics. International Journal of Logistics Management, The, 8(1), 1-14.

De Treville, S., Shapiro, R. D., & Hameri, A.-P. (2004). From supply chain to demand chain: the role of

lead time reduction in improving demand chain performance. Journal of Operations

Management, 21(6), 613-627.

Dickson, M. A., Lennon, S. J., Montalto, C. P., Shen, D., & Zhang, L. (2004). Chinese consumer market

segments for foreign apparel products. Journal of Consumer Marketing, 21(5), 301-317.

Eng-Meng, T. (2013). Clothing brand Meters/bonwe takes cue from Zara's fast fashion. Economy

Retrieved 06/02, 2013, from http://www.wantchinatimes.com/news-subclass-

cnt.aspx?id=20130206000039&cid=1502

Ericsson, D. (2011). Demand chain management -- The evolution. [Article]. Orion, 27(1), 45-81.

of 26 ANZAM 2013


Esper, T. L., Ellinger, A. E., Stank, T. P., Flint, D. J., & Moon, M. (2010). Demand and supply

integration: a conceptual framework of value creation through knowledge management. Journal

of the Academy of marketing Science, 38(1), 5-18.

Fernie, J., & Sparks, L. (2004). Retail logistics: changes and challenges. Logistics and Retail

Management Insights into Current Practice and Trends from Leading Experts, 2nd Edition,

Kogan Page, London, 1.

Fisher, M. L. (1997). What is the right supply chain for your product? Harvard business review, 75, 105-

117.

Flaven, G. (2013, July, 2013). In China, Hangzhou brands face identity crisis, business report, The

business of Fashion. Retrieved from http://www.businessoffashion.com/

Flint, D. J. (2004). Strategic marketing in global supply chains: four challenges. Industrial marketing

management, 33(1), 45-50.

Frohlich, M. T., & Westbrook, R. (2002). Demand chain management in manufacturing and services:

web-based integration, drivers and performance. Journal of Operations Management, 20(6), 729-

745.

Gattorna, J. (2009). Dynamic supply chain alignment. Farnham, UK: Gower Publishing Ltd.

Gattorna, J. (2010). Dynamic supply chains: Prentice Hall.

Goldman, S. L., Nagel, R. N., & Preiss, K. (1995). Agile competitors and virtual organizations: strategies

for enriching the customer (Vol. 8): Van Nostrand Reinhold New York.

Hammer, M. (2003). The agenda: What every business must do to dominate the decade: Three Rivers

Press.

Heikkilä, J. (2002). From supply to demand chain management: efficiency and customer satisfaction.

Journal of Operations Management, 20(6), 747-767.

Hilletofth, P. (2007). Demand Chain Management: Next Generation of Logistics Management? Conradi

Research Review, 4(2), 1-17.

of 26ANZAM 2013


Hilletofth, P. (2011). Demand-supply chain management: industrial survival recipe for new decade.

Industrial Management & Data Systems, 111(2), 184-211.

Hilletofth, P. (2012). Differentiation focused supply chain design. Industrial Management & Data

Systems, 112(9), 1274-1291.

Hilletofth, P., Ericsson, D., & Christopher, M. (2009). Demand chain management: a Swedish industrial

case study. Industrial Management & Data Systems, 109(9), 1179-1196.

Hilletofth, P., Ericsson, D., & Lumsden, K. (2010). Coordinating new product development and supply

chain management. International Journal of Value Chain Management, 4(1), 170-192.

Hilletofth, P., & Hilmola, O.-P. (2008). Supply chain management in fashion and textile industry.

International Journal of Services Sciences, 1(2), 127-147.

Hilletofth, P., & Hilmola, O.-P. (2010). Role of Emerging Markets in Demand-Supply Chain

Management. Paper presented at the Proceedings of the 15th annual Cambridge International

Manufacturing Symposium.

Holmström, J., Ala-Risku, T., Auramo, J., Collin, J., Eloranta, E., & Salminen, A. (2008). Demand-

supply chain representation: a tool for segmenting service delivery and asset management.

Industrial Service Operations, Manufacturing Fundamentals: Necessity and Sufficiency.

Holmstrom, J., Louhiluoto, P., Vasara, A., & Hoover, W. E. (2001). The other end of the supply chain.

Paper presented at the Supply Chain Forum: an International Journal.

Hoover Jr, W. E., Eloranta, E., Holmström, J., & Huttunen, K. (2002). Managing the demand-supply

chain: Value innovations for customer satisfaction: Wiley.

Hugos, M. H. (2006). Essentials of Supply Chain Management: Wiley.

Hui, X., & Jun, Z. (2010). A Study on the Supply Chain Management and Integration of the Chinese

Textile Industry in the Post-quota Era.

International Trade Centre, I. (2011). The Chinese market for clothing. from Palais des Nations, 1211

Geneva 10, Switzerland.

of 26 ANZAM 2013


Jacobs, D. (2006). The promise of demand chain management in fashion. Journal of Fashion Marketing

and Management, 10(1), 84-96.

Jones, R. M. (2002). The apparel industry: Blackwell Science.

Jüttner, U., Christopher, M., & Baker, S. (2007). Demand chain management-integrating marketing and

supply chain management. Industrial marketing management, 36(3), 377-392.

Jüttner, U., Christopher, M., & Godsell, J. (2010). A strategic framework for integrating marketing and

supply chain strategies. International Journal of Logistics Management, The, 21(1), 104-126.

Kumar, S., & Arbi, A. S. (2007). Outsourcing strategies for apparel manufacture: a case study. Journal of

Manufacturing Technology Management, 19(1), 73-91.

Kwan, C., Yeung, K., & Au, K. (2003). A statistical investigation of the changing apparel retailing

environment in China. Journal of Fashion Marketing and Management, 7(1), 87-100.

Lam, J. K., & Postle, R. (2006). Textile and apparel supply chain management in Hong Kong.

International Journal of clothing science and technology, 18(4), 265-277.

Lambert, D. M., & Cooper, M. C. (2000). Issues in supply chain management. Industrial marketing

management, 29(1), 65-83.

Langabeer, J. R., & Rose, J. (2001). Creating demand driven supply chains: How to profit from demand

chain management: Chandos.

Langley, C. J., Gibson, B. J., & Novack, R. A. (2008). Supply chain management: a logistics perspective:

Cengage Learning.

Lau, K. H. (2012). Demand management in downstream wholesale and retail distribution: a case study.

Supply Chain Management: An International Journal, 17(6), 638-654.

Li, & Fung. (2011). China’s apparel market 2011. Retrieved from http://www.lifunggroup.com/

Lowson, R. H. (2002). Strategic operations management: The new competitive advantage: Psychology

Press.

Lu, A. (2011). The marketing influence of international fast fashion brand Zara for Chinese local apparel

market [Marketing]. Chinse Academic Jounral Electronic Publishing House, F272(A).

of 26ANZAM 2013


Mason-Jones, R., Naylor, B., & Towill, D. R. (2000). Engineering the leagile supply chain. International

Journal of Agile Management Systems, 2(1), 54-61.

Masson, R., Iosif, L., MacKerron, G., & Fernie, J. (2007). Managing complexity in agile global fashion

industry supply chains. International Journal of Logistics Management, The, 18(2), 238-254.

Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001).

Defining supply chain management. Journal of Business logistics, 22(2), 1-25.

Oliver, R. K., & Webber, M. D. (1982). Supply-chain management: logistics catches up with strategy.

Outlook, 5(1), 42-47.

Parker, R. S., Hermans, C. M., & Schaefer, A. D. (2004). Fashion consciousness of Chinese, Japanese and

American teenagers. Journal of Fashion Marketing and Management, 8(2), 176-186.

Porter, M. E. (1985). Competitive advantage. Diamond.

Priem, R. L., & Swink, M. (2012). A Demand‐side Perspective on Supply Chain Management. Journal of

Supply Chain Management, 48(2), 7-13.

Rainbird, M. (2004). Demand and supply chains: the value catalyst. International Journal of Physical

Distribution & Logistics Management, 34(3/4), 230-250.

Schelmetic, T. (2013, March 26th, 2013). Is the Demand-Driven Supply Chain right for your company? ,

Industry News, My ThomasNet News. Retrieved from

http://news.thomasnet.com/IMT/2013/03/26/is-the-demand-driven-supply-chain-right-for-your-

company/

Selen, W., & Soliman, F. (2002). Operations in today’s demand chain management framework. Journal

of Operations Management, 20(6), 667-673.

Slater, S. F. (1997). Developing a customer value-based theory of the firm. Journal of the Academy of

marketing Science, 25(2), 162-167.

Srivastava, R. K., Shervani, T. A., & Fahey, L. (1999). Marketing, business processes, and shareholder

value: an organizationally embedded view of marketing activities and the discipline of marketing.

The Journal of Marketing, 168-179.

of 26 ANZAM 2013


Stockert, A. (2005). Trends in the European Fashion Chain. the promise of demand chain managment

conference, Amsterdam.

Stratton, R., & Warburton, R. (2003). The strategic integration of agile and lean supply. International

Journal of Production Economics, 85(2), 183-198.

Taylor, G. (2004). China textile trade. Journal of Fashion Marketing and Management, 8(2), 136-140.

Trinca, H. (2003). Reconstructing work. Australian Financial Review: Boss, 11.

Van Goor, A. R. (2007). Demand & Supply chain management: A logistical challenge.

Vollmann, T. E., & Cordon, C. (1998). Building successful customer--Supplier alliances. Long Range

Planning, 31(5), 684-694.

Walters, D. (2006). Effectiveness and efficiency: the role of demand chain management. International

Journal of Logistics Management, The, 17(1), 75-94.

Walters, D. (2008). Demand chain management+ response management= increased customer satisfaction.

International Journal of Physical Distribution & Logistics Management, 38(9), 699-725.

Walters, D., & Rainbird, M. (2004). The demand chain as an integral component of the value chain.

Journal of Consumer Marketing, 21(7), 465-475.

Wang, L. (2009). The empirical study on the ladderlike development trend of textile industry. Paper

presented at the Computing, Communication, Control, and Management, 2009. CCCM 2009.

ISECS International Colloquium on.

Wieland, A., & Wallenburg, C. M. (2011). Supply-Chain-Management in stürmischen Zeiten:

Universitätsverlag der TU.

Williams, T., Maull, R., & Ellis, B. (2002). Demand chain management theory: constraints and

development from global aerospace supply webs. Journal of Operations Management, 20(6),

691-706.

Williamson, K., & Bow, A. (2002). Research methods for students, academics and professionals:

Information management and systems: Centre for Information Studies, Charles Sturt University.

of 26ANZAM 2013


Womack, J. P., & Jones, D. T. (2010). Lean thinking: banish waste and create wealth in your

corporation: Free Press.

Yi, C. (2012). Fast fashion model questioning to be 'Fast' in China. Economy Daily Retrieved 11/04,

2012, from http://finance.ce.cn/rolling/201204/11/t20120411_16857554.shtml

Yin, R. K. (2008). Case study research: Design and methods (Vol. 5): SAGE Publications, Incorporated.

Zhang, Z., Li, Y., Gong, C., & Wu, H. (2002). Casual wear product attributes: a Chinese consumers’

perspective. Journal of Fashion Marketing and Management, 6(1), 53-62.

Zhenxiang, W., & Lijie, Z. (2011). Case Study of Online Retailing Fast Fashion Industry. International

Journal of e-Education, e-Business, e-Management and e-Learning, 1(3).

of 26 ANZAM 2013

15. Technology, Innovation and Supply Chain Management Competitive Session

Demand-supply Chain Management for the Chinese Fast Fashion Apparel

Industry

Ying Ye

School of Business IT and Logistics, RMIT University, Australia

Email: [email protected]

Dr Kwok Hung Lau



Leon Kok Yang Teo



of 26ANZAM 2013

15. Technology, Innovation and Supply Chain Management ...

Documents

Transcript of 15. Technology, Innovation and Supply Chain Management ...