Supply Chain Management at World Co.

, Ltd

Question 1: Examine the features of fashion apparel retailing in Japan. How can a company
use its supply chain to compete in this environment?

Answer:

Apparel retailing in Japan, as in the United States, was characterized by products with short
lifecycles and extremely uncertain demand. Moreover, the international competition had risen
during the last few years with the entry of large American retailers such as The GAP that now
had a substantial presence in Japan. However, there were some salient differences, especially
regarding the cost of real estate and the level of product variety, between apparel retailing in the
United States and Japan.
Size range and fit were different for Japanese and American women. Historically a closed society
with a homogeneous general population, Japan required less size variety than the United States.
Climate also varied much less over Japan’s smaller geographic area than in the United States,
necessitating fewer variations in-store assortments.
Supply chain management is a vital portion of management for companies to compete in this
competitive environment. It is very important to have the right product at the right store at the
right time, as a way to maximizing profitability. Further, supply chain forms the basis for demand
forecasting, inventory planning, manufacturing processes and supplier relations. 

Question 2: Identify the salient aspects of World’s supply chain focusing on the process for
manufacturing, demand forecasting and inventory planning.

Answer:

The salient features of World’s supply chain are as follows:

•Domestic manufacturing

•Short lead time

•Fast transportation
•Close collaboration of design & mfg
•2-3 wk replacement
•Flexibility of factories
•Small batch production
•Maintain relationships with manufacturers through network of business affiliations
•Domestic factories were considered over overseas factories as they could respond quickly
•Factory was informed in advance of fabric and about inspection
•CAD was used to cut the fabric
•Maintained an inventory of undyed fabric for faster response times
•Line workers were versatile
•Measurements & patterns were sent electronically from headquarters to factories
•Factory maintained small batch sizes to undertake several different operations
•Major new collections were introduced twice annually
•To preserve brand focus, designers identified with the target customer
•Appropriate mechanisms to link dyeing facilities, suppliers, manufacturers and World in an
integrated supply chain

Question 3: How do the features of supply chain explains company’s remarkably short lead
time (relative to U.S. apparel supply chains)? Examine the features of supply chain, and
identify why the company is able to respond so effectively.

answer:

Supply chain management was an essential part of management at Untitled and other World
brands. The company uses product sales as a predictor of overall sales. World’s strategy team
reviewed each of the company’s brands, competitors’ brands, and other offerings in the
marketplace every six months. World Co’s retailers estimate future demand for various products.
These analyses are conducted at predetermined periods in the sales cycle. This helps World Co.
reduce errors from its forecasting analyses. Armed with constant input and perspective on the
changing fashion environment, the merchandising teams were able to keep their brands fresh
and exciting. They’ve consequently managed to substantially reduce the lead time relative to US
apparel supply chains. 
The factories worked very closely with the merchandisers located at the corporate offices.
Merchandisers maintained open lines of communication with the factories about their
production needs so the factories could adjust their production accordingly. In addition, World
reserved capacity with its factories further into each season without having actual purchase
orders or even actual styles in mind. It has been able to increase the accuracy of its forecasts
even further by using different source data for forecasting and by using aggregate forecasts. If
they wanted more than the previously agreed upon quantities, the merchandisers had to re-
negotiate production availability with their factories. Lineworkers were very versatile and able
to perform many different operations. In fact, they were compensated for their ability to perform
more operations. In addition, the factory maintained small batch sizes to allow production
workers to undertake several different operations and relieve boredom. If they encountered
operations in the patterns that would be difficult or impossible for the line workers to reproduce,
the technical designers in the factory communicated with pattern-makers in headquarters about
changes.
Question 4: Can the World’s supply chain processes be replicated at other apparel companies?
What about non apparel supply chains? Identify potential barriers.

answer:

The processes can be replicated to other apparel and non-apparel companies having short
product life cycles. The management of other companies needs to develop an attitude of
efficiency. Others usually focus on inventory optimization by not keeping inventory rather than
focusing on quick response time. For non-apparel firms, they can do a cost-benefit analysis to
see whether it’s beneficial or not.
The retailers are reluctant to share data due to lack of incentive and relevant technology. The
diversified workforce may not be available to other companies, and even the top management is
unwilling to change the traditional approach to function. The main reason is that companies can’t
quantify cost-saving from shorter lead times. Moreover, the companies don’t focus on customer
satisfaction and employee morale instead focus on short term goals. As a result, they face
frequent stock-outs and employ markdown techniques to match supply with demand.