ketse Revised Meh 1,200 Wills Lifestyle in India “We ae much more Neible than thie pares, but it isnt clear that his fey i worth ‘te pric,” Chirajan Dar, CEO ofthe Wil Lifes apparel brand said ata senie manage ‘ea He ponte eu that despite the company effort fo nee eb, cing 2003 Inti that broaght manfaturing in-house, rodueuon conte raid about Rs. SO per wit Iigher than those of rdparymanufactrrs Forseverl minis the management ta Sbsted the outcomes and ments te iniatve [Wills Little was premium Indin apparel brand, part of TTC Limited's fst-moving sonsumerenods (FMCG) porfolo. ITC sas one of Inda's larger private-sector ms, With &| Sone marker caplaeaion of about $15 lon and anal trover of about 835 balan TTC id a vers presence tha included cguctes, hotel, paperboards and speclly popes, packaging, aghbusiness packaged foods snd confctonsry, information tehoalay, banded ppc, geting card, an salty matches tn the 195, to exploit the liberalization of o's canomy, which forthe Fist ie lowe Indian fim to gro walt goversment approval, TTC invested beuy In upgrading manufacturing fetes These invesiment wore ied a elevating capacity, quali ad abo proditviy fo oteraional level TTC alo ivered in resting the be technical and nage lent wel extensive tninng sn developmen By the end of the cade, hee Invests had jd of interns ofboth pot and market share, The profs bafore tax for ITC increased from shout Re. ilon i 1992 to wore than Rs. 16 blo in 200. Return ome ists employed increased fro les than 25 pectin 192 ome than 4 prec 2001 During thi period India's apparel nur had few lags, sophisticated players Businesses tended to have Tow volumes ands enreprener ve, with minimal investment cela, processes, and prope. ifersaonlly, tbe market way dhven by quots allocated to various oonimer Thus the primary objective of Indian entrepreneur was to secure sate athe quls Shi fil ht production capacity wih export orders whl Keeping wages and svesenen as Toe {posable In his eovironment, FTC recognized so opportu inthe appre sror to ete {ve the Indian eusomers with digomable come, who were Becoming incteasngly avare af ‘heiechoices {TC lunch he Wills Lifestyle brand in an fort capa this marks Indian 2000. By 2003, however the busines faced mp challenges. The buldup of unsld iver equled ‘Shout 6D pest ofthe anual sles trmoer ofthat period and ek of popular sk Keeping iooaek ro ep mtasencr germ aymeramn maWaustires exe une (SKUs) increased the froqueney of lost sles. Onsime in-ll deivey (OTIF), an Unimptssve 40 percent, cen dsliye the seeons lunch. Caso eur wae also hgh at ‘how? percent, In edition, low sles vores cat the Wills Lifestyle manapenent a Was fing dial to eu grat vendors, orig 0 sesk now’ ones cach sean In 2003 the tam reensrcted he saply chain tobe more responsive to customer demand and dts bse inventory ar ot sae, While he effort soceeeded fn mating spp and ‘mand inter cote of prodactoneaainued to be hgher than Tose of third pais ving Imunagemant ach to dba st the rest and spon hi rts, Organized Retailing in India India’s ong history of retaiing was dominated by small busgestes,o dkardar. By some ou inthe ely 2000 lod had ore than 12 mon ds of whch only 4 perce were inge tan 300 square foe. Unt the cay 1990 the ret sector was lpely bernie, with ‘diets ypialy in short supply and wholsslesexploing the absence of le reals 10 vtact a ingnificat magia win the supply ein. Nonstces, retain had teen one of he ‘tongs contr to India’s etonamy, wich by 2006 was the fur nest in the woe in ‘Suns of puchusing power parity (PPP). Retaing estimated st USS322billon oer in 2008 SS espedtd to grow a 8 poosnt pr annum, necoted for If perent ofthe gross domestic prodt In the 19905, with the site of customer expectations and daposble ince, ognized sealer began to cergs Shopper's Sop extabithed in 1991 in Mumbai, was ane ofthe first Aepurment stores Others seen followed sult neluing. the Panaloon deserinent sire ‘Sublisbed by Panaoon Retail India 1997. Vet organized ectaing in India was ony USS Billion in 2005, rereseng re percent ofthe ttl retailing market. Moving Forward, the ‘remized retaling market was projec to giow at ame of 25 430 perc por anna, ‘stebng an estat USS23 lon by 2010s conbuto o total etaling sas was Hk 10 ‘each 9 percent by end ofthe deca Apparel Retailing pore claimed the Hon’ share of India's organized retailing market, sccuntng for 40 perce af ttl oraz realing in 2005, followed by 11 poet for fod and proce and 9 cen exch for consumer dre td footwear. While domestic apparel brand tres Sch a5 Raymond bad existed for some tims he i: 1 late 1990s global brands ssh s Benton, [ikea Adie ative nd fliowed inthe ea to mid. 2000 by Tony lle, Maks [Spence Mango. and prt. Raysnons, lke many cry nian been tery succes Sratnore than S30 stores trom Indi ae of 2006. Silay, Beneon grew by 60 pee Sons and 2005 and was planning to double He numberof sores, fram 80 to 10, ove he nex tive yeurs By 2008, the apparel rand sto ioeuding” Wills Lifesyle—had beeome an stabbed eoneep i indian retain,‘Yot India’s organized rsalling market presented significant challenges to citing and anirng pstepans, especial i he nial phase f expansion, Preferences vied sigan by rion making i ult to develop single retain mode hat was Seals css te hunt. For example, the fint Shopper's Stop sore was very sucessful in Mumbo (one of India's gest and moet croatian ets, on the cous wes eos, but the company could ‘ot dupiste these tse witht slr shop in Tsipor(vssond-er ty the sob). Ts ‘configuring product mix based on eon ei, and even conumunit-bused ats and BuyNg ower Was eal othe suces of any etal han India, Another major callnge wa the high cost ofl state i lage Indian metpoitan areas, ‘ne regions tht drove mot ofthe county's growth in organized retail. As of Marsh 200, m0 retilr had silent mb of outs e expt dstibuon economies: For example, Wis [este had only five stores in Delhi. Expensive realest and the revlon lack of sigs ‘connie of cle in dation made dificult for eal canst be potable, rey 200%, ‘herent for rime rel ett n Delhi ws 1,146 po gure mtr er Yor, cearng to Jens {Eng LaSalle. Tp June 2008, the Fnanclal Times quoted Kishore Biya, chief executive of Pango, India’s leading war, "At cument property pecs, you cant exist inthe mode ‘ei busines Ether productivity has to Ines sipniianty or ont bas to come Jove” However, wth the development of quality ell space in newly consrcied malin ist and feeondter Indian cies that cold daw large suber of customers, teal ext cass wee txpeted to desing, making retail operations more profitable Infact the coset i nda’ Proper aretha tre bythe mide af 2008 with some, including Biya predicting tnt fone shopping malls unde construction wuld al becase of overcapacity. The Indian Consumer “The changing demographics of Indian consumers helped fucl the country’s growth in ‘organized retaing. One of the moet important drivers as Indians dinsnshg ag: ole In 2h India had one ofthe Youngest populations in the woHd, with 88 peecot under te ng of23 “nda median age of only 24 This youth poulaon, combined wit sing pucsing power ‘Rte cn phenomenal growth a employment opportnts (in 2006 India record some te ‘Asn Pate region's hiphet slaty row), faced demand for fashion bras, techooogy ‘gadgets ond fst fod chains In ation, he mindset ofthe young nian ha shied sigan After 200, the upp snd middleclass Indian consuncr bad evolved fom "teiédena” exssnee to one of “indulgence Blevated exporre to the media and Wester estes (hough be Inter!) slong mith increased globl tel, whet the tian consumers appt or Western fashion Thee factory contributed fo sigaicantpos-200) prow inthe target conrumer prea oe Will tise Specify, Wis focsed on all subgeoups within the Indian afMuest segment, which comprised 30 0 35 milion people ttl in 2008 {4 to TS milion uppe-midle-css, 9 0 10 ‘llon midaMaet 6 elon ery flea an milion oxy esting.wuss Liresre Kate ITC’s Lifestyle Retail Business Division By the at 190 ITC ha developed Sever! competencies in is disparate businesses and sought growth avenucs through synergis among These spac. Thus the Lele Retail ‘Dusnes Divisio {LRDD) evolved tncugh the ineraion of savic ect bills (a led {ohotl), band management sil of he obacco a PMICG business, manuacurng- poss ‘mamgenent expertise sociated with reer! basins Salud paper ad paging ad 2 ascent tity m gament soaring Because ITC's business divisions were buon lgesale ‘anulctrng of produce wit ow vara, adessng te appre business reed fo arly tnd pi changes was 2 ajc challenge forthe company TC was mot complete stanger tothe pament buses, having gained some produ sowing experiens for varour divisions” sposoships and evens. A team of fur people ‘nanaped the design and sureing of pris, petal alte weat fr golf an cxcket. When the LRED was conceived, there was no clea fashion lar ip premium Wester ready-to-wear "long he dan marke. The fain Beacnarks were European and Atsnian baa, to ‘ahich nian consumer ther than those who taveled abraudhad Ime exposure ‘An ITC tein comprising mangers fom the FMCG division assed by team from amor onnting firm, sonvened sn 1099 fo examine busines opportuni nthe rtaling arena. To suze equality of ambience and catomer Service ie tn deeded 1 retail tough excsive tyand outs with stall ecruted by FTC. The LRBD started sn 2000 with oe store in South Extensions premivn high sets New Delhi, og espa. nial the brad ocosed only fn leaurwen for mea and women inde he nam of Wis Spor. Good eustone reception of ‘hoster and the band mia an aggressive expansion. One yar later, the dvsion opened 2 ‘feond sre, thine in ine South Ina metopole Chennai Over the aoa mown, 35 tule ee added aoe the cvaty, wth 12 more ate Sx mons ae Ba Chast ¥.C. Deveshwars vision was to czate “a word clas supply eh om ber to fashion” and to make the vison India's lading fashion brand for ready-to-wear West Clone To this pds u master ait Grgann (near Delhi) was exublsbd Yo provide 2 Platfonm forexetch and development activites reltd to faves und washes ad fui the Prototyping of designs. Necemary prodocorused capable included sig, garment onstucton, speifistions, sourg/nenutung, nd eting of limps Four brands wet nroduced beswees 2000 apd 2003. The Sn sed 1 mae Wil Spor ‘he inaugural rand “an intrational suit, prema fllzange wardrobe bard for men and ‘Nome, constituting tlaxed wear fora oceans” In November 2002 LRBD added Wills ‘Cussc work weur targeted at bsinss professionals, an in December 2002 launched the Join Players band fo ester ecusomer bate beyond those who vised Wills Lifes srs, The buses objective behind ohn Payers was otap the sss markt 1 aeueve high volume, which ‘roul belp te LRBD explant competes snd scale up operation. John Plyes represented a amples sot of casual work, sed ary clothes frpted 10 a young’ aise who mph nt fave Lc buying power of cuioners purchasing the oer Wills brands Wl pics pes stared AM bout Rs, 1000 and went up to Re A0DD for pel samen, while Joh Payers pies an {fom about Rs 300 around, 1000, Te ohn Piyer fin eas wo valle at Wil rei tra ol through are than 1800 mol-brand outs and aout 100 exclusive and outs by Joos tn May 2003 the company launched Wills Cab, targeting he growing evennawear Saint Along wih sppach, each tor so accessories sich tis, cal inks, handbags es, tnd soos (ee Exhibit)A ypiea eater cue to @ Will Lifestyle store every mom and a half expting see new mechane. To say is cistomers the LRBD itoduced an extensive varie of produ ‘rey season. The stategy wast wer sigan vrety fo crete» highahion image aod Provide cstomers with greater number of choices One ofthe key elmons ofthe Satey Was Providing more size options than the Indian markt bd previo ofeed n 2006 Wills ors Sifered tne bands (Wilk Spo, Wills Casi, Wills Calif n $00 styles—resuhing in mere than 8:00 SKUs pe season, 1 2005, LRBD expansion plans ncaded ‘+ Teping ola store spac within tre years 1 Supplementing the band with new categories such a suit sare products ‘+ nereasing the numberof ses avaliable by about 15 percent xheie wear, end person No other single brand in India offered the ttl wardrabe solution that Wills 8m men's formalwear, the min competion Was Lous Philze and Van Heusen both owned by age Indian bsinss house. In kisureea, the chet competion was from fd brand Colour Ps su ternational bands ch 8 Lev, Docker, Lee, Tomy Hilige, and Esp (or Wome) ‘hich were sol through oes! fanehiaces Judging th semational brand is chit competion, ‘Wil used these produt s benchmark for fasion an vale. Atypical Wits Lifestyle tor, t 1,800 squire fs, could ply sot 360 garaentoptons a ‘time. The two largest tres were 3,00 Square fc each and the smallest sas B00 eae feat. Sales averaged about Re 4 por aqure foot per day, wl apa sae ling evens af Re_8,000 to Re. 130}00 per ds Sores were located on high trets dm pope Shopng reas, bot the plan was lel to expand through shopping mall. The investment fo pen a sore twas bout Rs 75 milion, excluding real estate cos ‘The LRBD Supply Chain in 2002 “The proseses inthe LRBD sly chin sare with a forecast of overall ashioe wend. The ‘esgn tam and merchants visit Iterations tae fire and eters 10 deny popu themes snd deve design sospwaons. Tey algo Used iteratonal desig Toecas aval ‘rough te Intemet and fbon pablistons. Simultaneously, the etal eam comstuced the ‘oduct pono bao on the tuner of aptons and projet sles volume a each price pol Seo known as range architec (RA) Ten, eh the eed as inputs, designers developed ets fore product ge: The proposed range wa resented ax compoier aided design (CAD) psu ‘ith rpresenative sare fra fe sls om the product ange ropesed by designe, he enor management team sleted styles for firter development. Ath sae, a gaps lave tothe RA were dni, and sys were rework or redesigned (Once the range was approve sles quanites were forecast for each produ by consensus of ‘he management eam andthe sas head Whatever posse the foeeast quali was based 90 Scualsamples. These quaies and selected syle shots wire handed 10 mechan fr ‘evelopment and Sourcing ris and insbed garments. Garment quaniics were consained‘bythe requirement to over fbr in nina lot sizes—numbers determine by bic ils— ‘ough euomers oul py a surcharge for lower quae. Subsequently, manufacturing vendors (manuficures) were identified and charged with ‘oduton far eich product Those vendors pial specialized by product. for example, ‘Shing vendors generally didnot make wowses, and denim manure would ot proces ik ‘or othr farce. Thos, given the LRBD's alm of povidg a complete warrote slant ‘Shnpany had to employ s lage numer of venders Yo make all ealegoris of produ. Fo 8 Inajonty of the products, fare war soured bythe merchants, an the vendors were pai fr ‘roduton bad on ims and conversion cost. ‘The chief erierion for vendor slction was experience with intratonal wand f igh quay. Because the full ange wast come wo market smeltaneusly, he cate vue ho 0 be Sfanutactred together ina sal tine window This eqrement fre nzesee the mur oF ‘eos despite ow overall production volome All finished goods were deliver oan ITC warehouse, fom whic they wer shipped 0 real stores The Ted me for doivery of garment fo the warebouse was abot cgi moths ter the alization ofthe syle and gual The main constituents ofthe lea tine were + Far finalization and placement of the fabric order 30 days + etvry fame or fae 6 10 90 days + rotting snd manufacturing lead tes: 60 0 90 days + Delvry lad ime: 15 1025 dy (fom vendors to stores via the warehous) Exhibit 2 splays the sequence ofthese presses anda ough imei. “The Indian calendar year foe apps ealing was divided ito two sles seasons: winter (Seplember tough February) aod smmer (Mare tough August) Because ofthe tof thyeemonh lea ie for fibro and te thee to fourm led ie for macactring sd {sivery, a single manifctring order was placod forthe whole season's reqaement Most ‘ede produced lge volumes tlw cost, wily miau Bach Sizes ranging Ho 2000 fo ‘foo pisrs prs Te large monn bic sis of most arent vendors, const the lowe volue routed by Wil, rested in the ete season's requirement Beng oduced atthe Seasons st a vendor wete reluctant to vp key sll vlumes Ture AS shown in [Exhibit 3; manufacorng osured ote tee moths pressing sean. ITC fad a singe warchouse in Dei tat recive all gumens and replenid all sores ‘Tertatonl sales hed. digvsson wit repoaal sles Dads abd store manages, determined lection of sock to ioe, Th allocation Fook ina secoun The sales turover age ofeach ore androgion and slaed aval stock, “The LRBD found thatthe apd expansion of tors ding 2001 and 2002 crested signet problems wth supply cain performance. Large ements of inventory became obsolete ut the End of scuson sod sles were let beste poplar prods and szs were out of tock, Especially inthe content of is ambitious gow plans, the division was coneeed ha hese ‘issues would daopen inane perfomance and fre growth sigan Addons, hense ‘wuustiresru: ‘sion of achieving international qualiyBeachmasks was not being alized, For example the "no ‘gesons asked” retums policy was resulting in 2 peers. In anazing the factors unerying these problems, the LRBD uncovered seve issues. The fist war the difely of making agcrte fresst piven the iret unpreciablty of seman for specific tls, forecast crore averaged SO percent. With a widening bis of rs, forecasting and sock aloeston teeame more complex die Wo viraions Ja He aud sc prefrenes acess markets and gegsapies. Ths foreasing dial reste bth overstock ‘nd Tost ales, Mean, he abit fo relocate stock srs liven! parts of the eu Was ‘onstraind by poor sock visiiiy, ae well ts By government replaions, which made the ‘process cumbersome The second major problem was tit the LRED had grodietion volumes flower than industry stndars for garpent manicturng, Athough vena were wiling to wok with hese Hed volumes baud on snteated fire growth end a dee o.work with a epuabe ‘company, most pment manfatrers were geared for expos, fr which the fdr Sie per se Star roughly tat owen times tat ypiel of Wills, Adetonaly, many export ores ila ‘Spulicatpenales for manufacturing ely. Based on these factors, manufactures often pave TERBD orders Tow poorty or push them back in the face of capacity shortages, resulta i delayed delivencs ‘The fin issue was that 9 diferent LRBD fneton was responsible fr each tage of the planning and freating process, abd between fueion hand i nt occu nial esos Stn gven fonction od Been made ‘The between function handolls andaosorted sus vere flows 1, Sis prepared he rngeaeitctur nd anded it oer to design, 2. The design deprment made designs for the entie range before sending ‘hem 10 the Innagement group for Sletion, with le or mo input fom merchant er the ele paren 4. Sclvted designs were banded of to merchants for sourcing. Vendors made potoypes fr ‘pprovel by tbe design depanment, afer ‘hich merchants took over manufctring and every othe central warcouse 4. Sales ew of the acu delivery guanity and date only when the product avd at he ‘warehouse ast bore the season's auch 5. Failures or delay at any stage ofthe process wete nat visible otber stages, Modifying the LRBD Supply Chain By the end of 2002 Anup Singh the drstor in charge of the LRA, resopniet that twat eral 0 manage these probleme to ensue the sucoas ofthe Vente ito ese ling To Stwestiae ie proseses ef Bumeat conversion more slorey, be vised & number of Imanufatring units, Afr these vis he concved the Mea of smpletening juste 7) ‘manulaturing with the gal of “shifing the risk fom fished poods fvestoy to TacWoastiresre eae inventry and minufcttng capacity.” He relied tht it would be necessary to bring in ‘users to tke this concopt fornad by desighing e new manufacturing anf supely chip ‘Satay that would dramatically reduce lot sles and the degree of obsolescence. Priosh Wal Sd Vivek Kama, FMCG exces wih experince; menufctsing abd suply chin Systeme, were aediged fo examine thee. In aden, M. Vishwoathsn, an expend {Brent manuficunng exceed the tear 0 give assis pespecte of he indy, Sn Amandecp Singh Hy young engiacer fom te FMCG busines wih net n operations Ianagement fod TT, was brought onto the cre team. THe goncal manager of operations i he MCE business Bs Suna served the sounding board forthe eas an als eed sees fo FMCG resoures. ‘The projet tam studied the weaknesses in existing processes snd concluded that -esponsive and flexible supply chs soe be deslgnad to cmable several specific ues: 4+ Rapid esponse to winning ses is ssid with "oss" 4+ Redon of finaei + Development and production of styles wing fabric et ver fom ery Tasers “The team set an LRBD goal of increasing ser semons fm two (with fe delves stores i (oth ore fequen divers to stores). This increase equed fhe etucuring of ‘unuficring and a reorganization of the entze supply chan for greater Mexliy and ‘Rapumnivenes, While thee changes meant oceneod unt production ons, they Wee expected to vedo obsolescene and lost se signin. Other expected beoehitsinluda + improved service levels at sores, especially for size availabiliy, leg w enhanced ‘sles * more npr sn wa op on he ead ine on ‘concept delivery + improvement product quality Based on the prot team's ways and recommendations, management decile o esl manufactring eopacty deacated to Will, using ITT pil 1o produce high vnc at ow ‘olunes, Bangalore was chosen af the miaulictring nts Teeaon because of Hs favorable Intsta-entons cima and he evaaiity of space in a ld tbaceoTctory owned by ITC: THC convacted with a vendor for 2 dedsated prodoton icity, fesng mvesinens on ‘chino and ke manager sal who understood and could inplement 7. ‘The eam recommended the following majr changes within LRBD to improwe eit an responsvencs 1+ Crston of eoeep-to-produt ells + SKU reduction and he ue of design plaorms ‘+ Creation of manutaeturing els + Dama driven replenishmentKeLse Wusstiresne Concept-to-Product Cells ‘To beter iterate the varios fneions within he soply chin the LRBD creed once to-proac ells (CPCa}, which were response for all supply cai activites fom conept product release to manufacturing, Organized by eaepory, cach CPC competed designer, Fmerchant, ganment engineer, pate mast, nance rescue, and fetal operations resoee (Chce ser ntograted tthe brand level (Wil Sport had two CPCs—ope each for men and ‘women integra unde a extgory head for Wills Spot) At the next level he ets Mee Integrated under the Walls CPC head (e merchant who fepored tothe head of useing td Imerehanding), Merchant were fly allgeted to the CPC, ah ether members reporting 0 ‘et functional heads, All CPC tame were lost in the head offic in Gargnn and were focused on prot (is and woven separately, brand and gender. EXMIbI 4 presen the reproducion activites performed by each CPC. ‘SKU Reduction and the Use of Design Platforms ‘To reduce product variety while costinuig 1 save customers’ needs, management csublshed design platforms tat encouraged commorality and redveed produtt development imc AS part of hs effort the numberof wouse aes valle was decreased fom fo inser Jn ech wat size to two insems, nd finally to ony ope length for business wear and ingle {nscam for Iesure- and eveolgear. Ate Same ine, the [tal numberof waist sis aval sve edsced rom eleven to eight Ths, he ol sube of SKUs per Uouserepion sas edd Fem forfour ight Siar actions were ake fr ether prods ‘To decreas the lengh of he pric development cyele given the large vay of tems, “ody tose” ware deve based on the dimensions of garments andthe rape an fll ht oud be guikly finalized. Tis reduc the tne requed to achieve a prope Tt nd velop pater. Trims were sandardze, anda ash development Mary was created, largely becuse {previous seasons every sl ended tobe designed fom scratch, Almost no styles tte card formard--not even those tht had done wells tbe rewous season —bscese CY comsune ‘mand for innovation, “The use of eee, or ra, dy fbi, had not been condor as cost-saving method Iecase the brand relied on large numberof yar dyes and on new and innovate fbr However, because the brand was ooking at expending the ange f basic ils, grip frie was ‘con avab tort lamest inthe supply chal of fe fe, Manufacturing Cells, ‘The go! associated with manufctring wa increase Dexiility and reduce batch sizes so tat production could closely mateh acta sles at rail sores. The ft step was 1 ele inufstrng cls co ExMDI 5) fOcusod on estes of product faalies with Sila Now ‘The cel ayou was designed to Taine single piece Now. Sples were clustered in cells based on thei commonality of operation and te sogucnce, witha pol of seduing soup timer during syle changes. Beause of thi process of cling the ting of operator, the une of mobile layouts, and the Hncease in workover Nexltytrough muted employees, style changeover imes were reduced fom the inustry nom of ‘outs to 30 munuts oleae. Call operation involved seve ntl hues bacase the factory was alvays under pressure to pode styles immediatly upon the release of ste speceatons bythe prod development team This presse nite he Cpiesbon of te syle sequen or production cod the aning ‘stoperstor egarding the spe Forte, the sl qantes were so fw that inaead of daly production response ong planed, he response as wekly. Tere wes ao ely imal derstanding ofthe spare capac requed for quck response Because ther wat no anal of | ‘tio tm forecatt. Dele i design developmen! abd pesurs to cove unpanned demand Fike indre mpemention othe concept ns pure fo Retaining the operators, production superiors and manages who were uso working in the conventional ways of the indy (batch abd progsssive bundle movemerd) was tote ‘Sallnge. Tn the Vata pas, manageried taining was efective AS capacity expanded and nore new recite arved, taining. wae not systemically and. uniformly adminiseed ‘Adio, a Inds economy grew, reteton of waned employees became aeajr challenge, ‘Spetlly Bien Bangalore's high economic pow To overcame these ass, the LRBD ‘Shablsed taining school to educate employees and motivate the oy with be oman. “The LRBD estimated tht unufcuing cost was shoot RS 30 10 SO higer ppc inthe Sim's manufacturing eels rlative to, benchmark conversion sons To beg With, woke productviy wat lower tha the Indian Benchmark heeauseof Te high variety an low vosnes Ur paments made Second th flue to we mich of weable capac fo Tong srtces ding the yar futher afleted cons egatsy. The use of ranufactring eels, however, improved Prodict vaabilty and reduced. profit obyoleicence The LRBD. esirated tht the Raposiveness of he JT replenish contbuted about 6 percent 9 sls and saved RS. 110 $brnllion by dininshing te umber of obelete produc Domand-Driven Replenishment “The LRBD sourcing ele was funanenally changed fom primal forcastiven to seman even, a6 own ib EXMIH 6 Given a specific demand fora, sles decided on the base fot order for each store be vee athe begining of the season Thon» pol stock quantity was aed fo the Base sock {rr forte mit prodicon guantiy. The poo stock cna a even days estimated sles {o bute the production queuing. manag, nd delivery Ted ne. Aller Ue Inch of he prodct to make, now ede, which wee based sta sles figures from sore managers, Efove the replant prdcon plan forthe week. The goal of peedution was fo erable ‘eplenimanton a weekly basis by geperating replenishment orders foreach se based on 5 ‘ht sales once the enters sbure planing implementation was complete Challenges and Opportunities Going Forward (ne challenge fr LRAD aot in Janvary 2006, when the Indian government gun allowing foreign cet ivestnent of ap wo 51 perce in singer rel businesses. According fo the Depurint of Indust! Pohey and Promotion, sigle-brand products were subject To tekee wnastaresnue folowing conditions: “Products o be sali shoul be ofa singe ran” only; prods shouldbe {old nde the sume bran interotionaly and “ingle band produc tall woul ever ony ‘oducts which ate branded during manufatuing” This ation was vcwed a an intial opening ‘tthe rei sector ip Inia frean det investment. Over tine, the goverment was el Farther open the sector: The new rl allowed retailers achat The Osp, Zar, and eat eer ‘he Indian market wath majonty ownership. After this amouncement, Giotdan, « Hong Kong sppaa lr forget India a major mnt ene. Anaher major suc for LRBD was ap analysis of is cos stryture and decisions repading how bert ote nla! manufatiring capacity. While wa mich moe Hebe ant esporsve than ttdpary manufacturing, iteral capacity was more expensive than third pais. Tis fee could bosome a big challenge ak competion nese ‘A Gol ase elated othe managerial mindset and mee sed to judge perfomance ofthe intemal facily, Historically, the LRBD had foensed on the cot of sourcing 1 tbe mast imponant metic when evaluating supplier. The company was stogeing to seni suitable Iris to jue sourcing decson ht could ep align deision making actos he Supply ain @Kellogg OmeExhibit 4: A Sample of Products Sold by Wils Lifestyle wt, nl “Vendors” Stores BE E— 090 6000 1525 nye days ays Foti alzaton and placement fhe fabri oer 80 days Deliver les ume fo fare 6090 cays Protolypng and manufacturing ad mos 60 to 90 days Belvor lee ina 15 to 25 day rom vender to tres via the warehous)‘wuss Lresrvue rise Exhibit : Consumption and Manufacturing Cycle, 2002 Exhibit 4: Activites Performed by a Concept-to-Product Cell Input ‘Activity Output ‘Sigralia produce Fovton ad mc recs] [tering re opens Picepa ronda source yorsge eat mat? Trim fgg tote at Quantity requirement FEB} Integraton with brand presentation = ene how Material optons ‘Senraton wih teal CABS cua ender capo oo ne etaoroval| | Ot@anking met for ‘Soper xpabity Pepe eT es production Proto shoot samgles Pater making er making Prociying activity Aoprova of eae sample ‘Vendor sstcton Placing oder table and CHT esue of PO—supplr ard vendor uying olan Billo Materials (20%) abe! ordonng| ‘Shlewisona eost Shleswise quantiy~size assortment Nanufactuing Rasource Panning (MRP) ‘razon etal product updato—bar code Barcode ping Produc copy anhand tag pining Siva petormanco feedbackExhibit 5: Manufacturing Cell for Wide-Leg Stretch PantsExhibit 6: Demand-Driven Sourcing Cycle