Supply Chain Management

Case : Polo Ralph Lauren & Luen Thai Using Collaborative Supply Chain Integration in the Apparel Chain
Serena | Jason | Sam

Agenda
Introduction Relationship Among the 3 Partners Framework for SCM Collaboration Traditional SCM Vs. Collaborative SCM Use of Technology The Supply Chain City
Dr. Benjamin Yen SCM Case

Benjamin Yen SCM Case 4 . Benjamin Yen SCM Case Discussion Examine how Polo’s relationship with Luen-Thai has evolved and examine the impact of collaboration on Polo’s business model? Dr.Introduction Dr.

Relationship Dr. Benjamin Yen SCM Case Relationship Three players within the strategic collaboration • Polo. the transferring information between designers and manufacturers was still difficult • mismanagement of inventory. Dr. Benjamin Yen SCM Case . Ruentex A few important concerns: • • • • Sharing information would be critical fulfill the market gap for shorter lead times post-quota environment… Using the old IT tool such as CAD. Luen Thai. production and delivery.

Relationship Their relationship gradually development since the mid-1990s Initial involvement (1996) • upstream and downstream activities • five major processes • three major problems Second involvement (1998) • “partner relationship” with tier-one partners • critical three major industry factors • still not enough… SCM Case Dr. Dr. Benjamin Yen SCM Case . Benjamin Yen Relationship Third involvement • implemented a number of initiatives • ASNx/FGA • However. fragmented… Fourth involvement • strengthen their supply chain collaboration across each dyad as well as the whole triad • D2S supply chain model • a “collective” view of relationship… Conclusion: collaboration is essential in the future development for all the parties.

Benjamin Yen SCM Case 9 Framework for SCM Collaboration D2S –Polo would outsource the key areas design and logistics processes to Luen Thai and would involve horizontal integration among the 3 partners Dr. Dr. Benjamin Yen SCM Case 10 .Discussion Develop a framework to understand the collaborative supply chain issues between the three partners.

Framework for SCM Collaboration Three Dimensions to Supply Chain Collaborations Issues Strategic Processual Organisational Dr. Benjamin Yen SCM Case 11 Framework for SCM Collaboration Strategic – Need to align their strategic philosophies Is it a platform that can allow all 3 partners to take advantage of future market opportunities Intra-organisation to inter-organisation perspectives – require real time information exchange across all business processes of the 3 partners Reconsider the value they add to the supply chain Revenue Sharing Model Dr. Benjamin Yen SCM Case 12 .

Oshkosh. Benjamin Yen SCM Case 14 . VF.Need to consolidate different business collaboration infrastructure Organisational – Need to decide how to build the e. Benjamin Yen SCM Case 13 Discussion Highlight supply chain conceptual underpinnings and differentiate between traditional supply chain management and supply-chain collaboration in the context of Luen Thai and Polo.g. Dr. Supply Chain City Current use of technology & integration is fragmented Current supply chain is asset based and designed for mass manufacturing and collaboration would involve a serious resource & financial commitment Dr.Framework for SCM Collaboration processes as compared to business functions What Integrative Mechanisms should they use What Performance measures should they adopt Processual .

SC Collaboration Traditional SCM Dr. Benjamin Yen SCM Case 15 Traditional SCM vs SC Collaboration SC Collaboration Dr.Traditional SCM vs. Benjamin Yen SCM Case 16 .

Traditional SCM vs SC Collaboration Summary • • • Traditional Supply Chains usually operate through temporary cooperation. better manage inventory. Benjamin Yen SCM Case 18 . rather than act as organized & integrated clusters Limited & fragmented technology result in inefficient information exchange The “D2S” Strategy allows partners to share information. and thus significantly reduce costs Dr. Benjamin Yen SCM Case 17 Discussion Examine how technology will enable collaboration amongst Luen Thai and its partners. and the effect of such collaboration? Dr.

. D2S provider Luen Tai: The interdependency between Polo is driving Luen Dr. 3D display.Current Use of Technology Ruentex: supporting collaborative SC • • Adopted the SAP system to restructure corporate resources Built a database for information query and knowledge accumulation • • Instant order checking.. Benjamin Yen SCM Case 19 Current Use of Technology Tai to transform from an OEM to a service-oriented. won international quality certification. Quickly response to customer needs Dr. Benjamin Yen SCM Case 20 .

sourcing. Benjamin Yen SCM Case 22 .Current Use of Technology • Ralph Lauren: building collaboration Introduced Internet-based Electronic Data Interchange (EDI) helped partners to design common interfaces and build a common platform Vendor Managed Inventory(VMI): will help Polo automatically create purchase orders based on warehouse or store demand levels in real time. manufacturing The Internet acts as a platform for information management and address the “Bullwhip” Effect The collaboration leads to growing interdependency: decreases mutual audits & inspection of incoming materials reducing cost Create visibility of Luen Thai’s logistics process Dr. Benjamin Yen SCM Case 21 Technology Effects of Technology One key element in SC collaboration is realtime/near real-time information exchange. • Dr. including design.

manufacturing and logistics.Discussion How does Supply Chain City initiative complement the D2S initiative? What are the synergies? Dr. Benjamin Yen SCM Case 24 . • Supply Chain City is “One location” solution – all supply operations from design to development to sample making Dr. material management. Benjamin Yen SCM Case 23 The Supply Chain City D2S is Luen Thai's business model that will provide customers with a one-stop shop of supply chain services ranging from design and development.

Benjamin Yen SCM Case 25 The Supply Chain City Through D2S.The Supply Chain City D2S customers are looking for suppliers that can provide more products and services. to the right place and right time. Benjamin Yen SCM Case 26 . • • • • Supply Chain City provides instant communication and information exchange helping to achieve speed to market & flexibility Fast product turnaround Substitutes information for inventory Reduced lead time Dr. achieve speed-to-market solutions that will help our clients bring the right apparel with the right volume. • • • • Supply Chain City provides access to all technical support enabling Luen Thai to take up additional processes Close to major hubs like HK and Guangzhou to help Luen Thai provide logistical services 30 upstream partners on site (Vendors & Customers) Standardises work procedures across partners Dr. perform faster but still offer a competitive cost.

30 minutes away from the Hong Kong border. Benjamin Yen SCM Case 27 . Dr. 30 minutes away from Guangzhou.The Supply Chain City The first Supply Chain City in China is located in Dongguan. Another one is currently being developed in Qing Yuan.

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