Collaborative Product

Development
Partnership as strategies options
Collaboration in apparel supply chain
JIT, ECR, QR, CPFR, VICS
 JIT
 Just-in-time (JIT) is an inventory strategy companies employ to increase efficiency
and decrease waste by receiving goods only as they are needed in the production
process, thereby reducing inventory costs. This method requires producers to
forecast demand accurately.
 A good example would be a car manufacturer that operates with very 
low inventory levels, relying on its supply chain to deliver the parts it needs to build
cars. The parts needed to manufacture the cars do arrive just as they are needed.
 Advantages
 Production runs remain short, which means manufacturers can move from one type
of product to another very easily. This method reduces costs by eliminating
warehouse storage needs. Companies also spend less money on raw materials
 because they buy just enough to make the products and no more.
 Disadvantages
 If a supplier of raw materials has a breakdown and cannot deliver the goods on time,
one supplier can shut down the entire production process. A sudden order for goods
that surpasses expectations may delay delivery of finished products.
 ECR
 ECR (Efficient Consumer Response)" is a strategy to
increase the level of services to consumers through
close cooperation among retailers, wholesalers, and
manufacturers. By aiming to improve the efficiency
of a supply chain as a whole beyond the wall of
retailers, wholesalers, and manufacturers, they can
consequently gain larger profits than each of them
pursuing their own business goals. Companies who
compose the supply chain can reduce the opportunity
loss, inventory level, and entire cost, as well as
increase monetary profitability by sharing the
purpose of "customer satisfaction".
 QR
The QR (Quick Response) system, a
production and distribution system for
quick response to the market, was
developed for the U.S. textile industry to
survive the global competition with low-
cost foreign companies. VICS (Voluntary
Interindustry Commerce Standards
Association) is the organization that is
promoting QR.
 CPFR Model
CPFR Model: Collaborative Planning,
Forecasting and Replenishment (CPFR)
As defined by Voluntary Inter-Industry
Commerce Standards (VICS)
Association
CPFR is being implemented at thousands
of companies across the globe.
The Voluntary Inter-industry Commerce
Standards Association (VICS) has defined
CPFR as "a business practice that combines the
intelligence of multiple partners in the
planning and fulfillment of customer demand”.
It is important to understand that successful
CPFR can only be built on a foundation in
which the two parties have synchronized their
data and established standards for exchanging
information.
 1. Strategy and planning. The partners determine the scope of the
collaboration and assign roles, responsibilities, and clear checkpoints. In
a joint business plan they then identify significant events such as
promotions, new product introductions, store openings/closings, and
changes in inventory policy that affect demand and supply.
 2. Demand and supply management. A collaborative sales forecast
projects the partners’ best estimate of consumer demand at the point of
sale. This is then converted to a collaborative order plan that determines
future orders and delivery requirements based on sales forecasts,
inventory positions, and replenishment lead times.
 3. Execution. As forecasts become firm, they are converted to actual
orders. The fulfillment of these orders then involves production,
shipping, receiving, and stocking of products.
 4. Analysis. The key analysis tasks focus on identifying exceptions and
evaluating metrics that are used to assess performance or identify trends.
 Benchmarking the supply chain

New emphasis on measuring performance.

Competitive benchmarking might simply be
defined as the continuous measurement of the
company’s products, services, processes and
practices against the standards of best competitors
and other companies who are recognized as
leaders.
 The first key point to make is that the ultimate
measuring rod is the customer, hence it is customers’
perceptions of performance that must be paramount.
 Secondly, it is not sufficient just to compare
performance to that of immediate competitors. We
must also compare ourselves to the ‘best in the class’.
 Thirdly, it is not just outputs that should be measured
and compared but also the processes that produce that
output. These three ideas lie at the heart of what today
is termed competitive benchmarking.
EXAMPLE: Xerox have successfully used
this broader perspective on benchmarking
as a major element in increasing both
quality and productivity
 Benefits from benchmarking
 It enables the best practices from any industry to be creatively
incorporated into the processes of the benchmarked function.
● It can provide stimulation and motivation to the professionals
whose creativity is required to perform and implement benchmark
findings.
● Benchmarking breaks down ingrained reluctance of operations to
change. It has been found that people are more receptive to new
ideas and their creative adoption when those ideas did not
necessarily originate in their own industry.
● Benchmarking may also identify a technological breakthrough that
would not have been recognized, and thus not applied, in one’s
own industry for some time to come.