World Co.docx

7/29/2019 World Co.docx

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Supply Chain

Management at

World Co.Wesley Riley,BSAD 173 Section

BProblemIdentification:

World Co., Ltd. isa leading apparel


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retailer inJapan. Thecompany

hasexperiencedgreat success,

especially in itsability to

effectively utilizeits supplychain. By


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implementing break throughmanufacturing,

demandforecasting, and

inventorymanagement

techniques the firmis abletoexperience far


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better lead timesthan those seen inthe United

States. The firmalso has been able

toeffectivelyrespond to the

characteristics ofthe Japanese retailenvironment. Worl


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dsrevolutionarysupply chain structure

has helped itbecome a true

presence in thefashion

apparel industry.

Analysis:


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There are manydistinctcharacteristics of

Japanese retailingand World Co. has

adjusted itssupplychain around

them. NumerousJapanese firmsreach their


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customers throughdepartmentstores,due to many

high trafficareas. Also, fashion

trends changerapidly and there is

little variance insizechoice forclothing. World


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Co. employees aseparatemerchandising

group to manageeach of their

40 brand names,allowing for

adaptation tomarketsignals. This helps


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keep brands freshand exciting(theycan meet the

current trend), andalso strengthens

bargaining power(inventory risk,

decision making)withthe departmentstores. World Co.


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effectivelymaximizes theirsales per square

foot (about $2500),animportant factor

in cities withlimited store front

space. They alsominimize discountperiods that


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cause price cutsand disorganization.World Co.s

manufacturingprocess

demonstrates theireffective use of the

supplychain. Thecorporate office


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(merchandisers) arein direct contactwith the

factories. Merchandisers inform

factoryworkers ofpotential

productionproblems andpattern


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specifications. Also, if the factoryencountersmajor

issues they canrelay

this informationback to

merchandisersquickly. Minorproblems do


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notrequirecorporate approval,avoiding

unnecessarydelay. Employees

are given a varietyof tasks to

do,avoidingboredom andkeeping moral


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high. Workers atthe factories areinformed when a

new fabric isgoingto be arriving. This

allows managers toallocate scheduled

tasks 48 hoursahead oftime. Domesticfact


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ories are used tomost effectivelyrespond to demand

and productchanges. The

higherproductioncosts

(global) outweighscosts of slow leadtimes to


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customers.The firmforecasts demandin a variety of

ways. At the SKUlevel, a voting

system is used torank products. Thi

s is effectivebecause the votersare similar to


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potential customers(woman, ages 25-29) andquantity

recommendationsare

ignored. Demandforecasting is

dynamic andchanges as salescome in for the


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season allowing forproper adjustmentsto be made

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