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

Pics for slides after editing

INTELLECTION