Professional Documents
Culture Documents
ON
SUPPLY CHAIN MANAGEMENT
OF BIG BAZAAR
SUBMITTED BY
ARCHITAGGARWAL
BBA 3B(EVENING)
11121401712
SESSION:2012-2015
Jagannath International Management school
VASANT KUNJ , NEW DELHI-110070
CERTIFICATE
This is to certify that Archit aggarwal, 11121401712 of Jagannath
International Management school has successfully completed his major
research project on SUPPLY\CHAIN MANAGEMENT OF BIG BAZAAR
under my guidance and as per requirements of Guru Gobind Singh
Indraprastha University.
Date:
Signature of Guide
Place:
Vipul Singh
(Assistant Professor)
ACKNOWLEDGMENT
I have taken efforts in this project. However, it would not have been possible without the
kind support and help of many individuals and organizations. I would like to extend my
sincere thanks to all of them.
I am highly indebted to Mr.Vipul singh (ASSISTANT PROFESSOR) for their guidance
and constant supervision as well as for providing necessary information regarding the
project & also for their support in completing the project.
I would like to express my gratitude towards my parents & member of Jagannath
International Management school for their kind co-operation and encouragement
which help me in completion of this project.
I would like to express my special gratitude and thanks to industry persons for giving me
such attention and time.
My thanks and appreciations also go to my colleague in developing the project and people
who have willingly helped me out with their abilities.
Archit aggarwal
BBA 3-B EVENING
11121401712
TABLE OF CONTENTS
TOPIC
PAGE NO.
2. INTRODUCTION
38
46
60
INTERPRETATION
7. CONCLUSION
64
8. RECOMMENDATION
66
9.
68
REFERENCES
INTRODUCTION
The history of textiles in India dates back to nearly five thousand years to the days of the
Harappan civilization. Evidences that India has been trading silk in return for spices from
the 2nd century have been found. This shows that textiles are an industry which has existed
for centuries in our country. Recently there has been a sizeable increase in the demand for
Indian textiles in the market. India is fast emerging as a competitor to China in textile
exports. The Government of India has also realized this fact and lowered the customs duty
and reduced the restrictions on the imported textile machinery. The intention of the
governments move is to enable the Indian producers to compete in the world market with
high quality products. The results of the governments move can be visible as Indian
companies like Arvind Mills, Mafatlal, Grasim; Reliance Industries have become
prominent players in the world. The Indian textile industry is the second largest in the
world-second only to China. The other competing countries are Korea and Taiwan. Indian
Textile constitutes 35% of the total exports of our country.
The history of apparel and textiles in India dates back to the use of mordant dyes and
printing blocks around 3000 BC. The foundations of the India's textile trade with other
countries started as early as the second century BC. A hoard of block printed and resist
dyed fabrics, primarily of Gujarati origin, discovered in the tombs of Fostat, Egypt, are the
proof of large scale Indian export of cotton textiles to the Egypt in medieval periods.
During the 13th century, Indian silk was used as barter for spices from the western
countries. Towards the end of the 17th century, the British East India Company had begun
exports of Indian silks and several other cotton fabrics to other economies. These included
the famous fine Muslin cloth of Bengal, Orissa and Bihar. Painted and printed cottons or
chintz was widely practiced between India, Java, China and the Philippines, long before
the arrival of the Europeans.
India Textile Industry is one of the largest textile industries in the world. Today, Indian
economy is largely dependent on textile manufacturing and exports.
Being an agro-based industry the production of raw material varies from year to year
depending on weather and rainfall conditions. Accordingly the price fluctuates too.
POSITION OF INDIAN TEXTILE INDUSTRY
The Indian textile industry contributes about 14 per cent to industrial production, 4 per cent
to the country's gross domestic product (GDP) and 17 per cent to the countrys export
earnings, according to the Annual Report 2009-10 of the Ministry of Textiles. It provides
direct employment to over 35 million workers directly and it accounts for 21% of the total
employment generated in the economy and is the second largest provider of employment
after agriculture. Some of the textile clusters in which productions happens are very huge
and significant for the overall industry, for example
Panipat produces 75% of all blankets produced in India
Tirupur contributes 80% of the countrys cotton hosiery exports
Ludhiana makes 95% of total woolen knitwear produced
According to the Ministry of Textiles, Export target in textiles in 2010 at USD is 50 billion.
the cumulative production of cloth during April09- March10 has increased by 8.3 per
cent as compared to the corresponding period of the previous year. Moreover, total textile
exports have increased to US$ 18.6 billion during April09- January10, from US$ 17.7
billion during the corresponding period of the previous year, registering an increase of 4.95
per cent in rupee terms. Further, the share of textile exports in total exports has increased to
12.36 per cent during April09-January10, according to the Ministry of Textiles.
As per the Index of Industrial Production (IIP) data released by the Central Statistical
Organisation (CSO), cotton textiles has registered a growth of 5.5 per cent during April
March 2009-10, while wool, silk and man-made fibre textiles have registered a growth of
8.2 per cent while textile products including wearing apparel have registered a growth of
8.5 per cent.
The textile sector has increased their investment in projects to upgrade their equipment
amid fierce market competition and to meet the growing demand for more textile products.
Total investment in the textile industry between 2004 and 2008 was around Rs.65,478
crore in India, which is expected to reach Rs.1,50,600 crore by 2012. This enhanced
investment would generate 17.37 million jobs-- 12.02 million direct and 5.35 million
indirectby 2012.
10
11
12
13
Key positives
China
Efficient,
Key negatives
low
vertically integrated
India, Pakistan
Vertically
low cost
Mexico (NAFTA), Turkey
ASEAN
degree of competitiveness
Cambodia, Indonesia)
AGOA
countries, Bangladesh
Hong
advantage
Kong,
cheap labour
of
integration
Korea, Trading
Taiwan
proximity to China
USA and EU
Non-quota
currently by quotas
and
Target
24.18
21.16
19.73
15.565
Achievement
24.16
21.14
19.62
17.80
14
2004-05
2003-04
2002-03
2001-02
15.16
16.31
15.05
13.72
13.04
13.16
12.41
10.76
15
16
17
the world for re-export. It has over 48,000 employees who work in around 48 fully
equipped, modern, manufacturing factories.
ARVIND BRANDS
Arvind Mills Ltd. was incorporated in 1931 with share capital Rs.2525000 ($55000) in
Ahmedabad by the Lalbhai group. The Company's operations are divided into the Textile
Division, telecom division and garments division. We will be majorly concentrating on the
garments division. Products manufactured are dhotis, sarees, mulls, dorias, crepes,
shirtings, coatings, printed lawns & voiles cambrics, twills gabardine etc. Arvind Brands is
part of the Lalbhai Group, which holds licenses for leading international brands such as
Arrow, Lee, Wrangler, Gant and Tommy Hilfiger for retail and wholesale sales in the local
market. Its mainstream brands are Excalibur and Flying Machine. In addition, it owns an
array of casual sportswear and denim brands marketed in India, including Flying Machine,
Newport and Ruf & Tuf jeans and Excalibur shirts along with licensed relationship with
various international brands like Nautica, Jansport, Kipling, Hero by Wrangler, Lee Riders
and Tommy Hilfiger, and joint ventures with VF Corporation and Diesel. but the company
is facing severe competition from major brands like Louis Philippe, Park Avenue and small
brands like Trigger and Blackberry. It produces about 110 million meters of denim every
year and the garment section is doing extremely well because of the customer loyalty it
enjoys. The demand for jeans, in particular, is expected to rise, as manufacturing
companies in the US have shut operations.
20
KOUTONS
The winner of best retailer leadership award 2008 organized by retail congress,
Mumbai, Koutons Retail India Limited engages in the design, manufacture, and retail of
mens wear and integrated apparel in India. It currently sells its apparel using the
Koutons and Charlie Outlaw brands. Mr. Kohli along with his brother in law Mr.
Sawheny partnered to set up Charlie's Creation. In 1997 the Company diversified its
business by introducing non-denim trousers in the existing product range of denim apparel.
The company has inaugurated its 89th family Store in Hyderabad, which it claims to be its
largest store in the country. Koutons India has an annual finishing and manufacturing
capacity of 22.92 million pieces and 12.36 million pieces of apparel, respectively. The
capacity utilization for the same was 41.21% and 21.99% respectively at the end of
FY2007.Koutons has 18 manufacturing/finishing units and 14 warehouses spread across
various locations in and around Gurgaon. The company's strategy is to have small, but
more stores. This helps to save costs and at the same increase reach of the company. The
company has a phenomenal growth record.
ZODIAC
Zodiac Clothing Company Ltd manufactures, exports and imports garments, textiles
accessories etc. Zodiac has been in the apparel business for a period of 50 years by now
and is known for its quality shirts. Zodiac, is today, the largest selling shirts & tie brand at
Shopper's Stop according to Brand Equity (The Economic Times) The Company started
business in 1954 and export of readymade garments to Europe started in early '60s, which
included mainly ties and shirts. For many decades, Zodiac has been synonymous with ties.
21
The business of ties is a high fashion business and Zodiac has taken this to new highs in
India and across the globe. In fact, one can say that in India Zodiac is generically
associated with ties. Following Zodiac's huge success with ties, the company entered the
arena of men's accessories with Cuff links, Belts, Wallets and Handkerchiefs. In 1973,
Zodiac had a stand-alone exclusive shirt shop in Hotel Taj in Mumbai. The company then
entered the domestic shirt segment in late '80s.It employs around 3500 people in 7
manufacturing units in 16 offices located in UK, US, Germany, UAE etc. Each
manufacturing unit is spread over 35000 sq.ft and has modern equipment to spread 60
yards of cloth at a time. All the manufacturing units are same in design and layout. Quality
is maintained throughout the 40 stages of assembly line. All the units have their own power
generating units in order to be efficient. It has its own 80 exclusive outlets and around 2000
multiband outlets. Its continuously showing profit and has a consistently growing export
business.
HOUSE OF PEARL
House of Pearl Fashions Limited is a multinational ready to wear apparel manufacturing
company. The company also provides supply chain solutions for the fashion industry
globally along with warehousing & distribution networks in the UK & US. It operates in
11 strategic locations in six continents. It has two brands Kool hearts, DCC in the United
States of America. The brand Kool hearts focuses on the young fashion, where as the focus
of DCC is more towards the Missy segment It basically deals with 3 streams which are
manufacturing to Retailers, souring solutions for retailers, Marketing, Distribution &
Branding for Retailers. It takes care of the whole process from design & development,
manufacturing or sourcing till offering a range of pre retailing services, warehousing to
delivering at the door step on a call off basis. It manufactures a broad range of products
comprising of knits, woven, sweaters and bottoms in basic as well as complex designs. It
has a good manufacturing capacity; the present in-house manufacturing capacity of the
company is twenty million pieces. Per annum spread over more than 725,000 sq feet of
built up area with efficiently designed layouts to ensure smooth flow of materials. The
company is planning to double the capacity by expanding the operations in Chennai,
Bangladesh & Indonesia. It intends to have a capacity of 30million pieces by the end of
2009. The company adopts integrated marketing techniques and has merchandising teams
in Canada, Europe, HK, UK, and US, closely interacting with existing and potential
22
customers at their doorstep. The Company shares were listed on the stock exchanges first
time in Feb, 07. It recently went for a joint venture with LERROS, a premium apparel
brand from Germany.
HARIA EXPORTERS
Haria Exports Ltd. is a leading garment exporter in the country for the last twenty four
years. It is a Star Trading Company and has won the golden status certificate in the year
1999. This company occupies a unique place in the industry of the by its contribution to
Industrial output, employment generation and Foreign exchange earnings. Even though the
textile industry has the distinctive advantage in respect of raw material and skilled labor,
the industry is suffering from technology obsolescence which in turn affects the quality,
productivity and cost effectiveness. The high capital cost is impeding the process of HiTech up gradation. Therefore, the Government of India, Ministry of Textile has launched
Technology Up gradation Fund Scheme for Textiles & Jute Industries of Rs.25000.00
crores at a concessional rate of interest of appx.5%. In order to compete with the outside
world, the company is paying attention to the application of technology, closely following
up the fashion trends and improved product quality. In order to be more cost efficient the
company has acquired latest machinery which ascertained exact material consumption
depending upon the style and pattern. The Government policies, interest rates, export
incentives etc may also affect the overall performance of the company, but even then the
company is optimistic about its revenue and growth.
EVINIX
The company started in 1996 with the manufacture of headgears, baseball caps and high
altitude jackets, using cotton textile and leather, mainly for exports. The company was
incorporated on 1st May 1996 as Evinix Fashion Accessories Private Limited under the
Companies Act, 1956. Mr. Sanjay Taneja, brother of Mr. Raujeev Taneja (the original
promoter of the company) joined the Company as a Promoter replacing Mrs.Anuradha
Taneja, who disassociated herself from the company. The name of the company was
changed to Evinix Accessories Private Limited from Evinix Xsesryz and a fresh Certificate
of Incorporation dated 20th March 2003 was taken. In March 2005, M/s Ambros Exports
Private Limited took equity stake in the company.
23
The apparel category constitutes men and womens shirts, trousers, skirts and tops,
kidswear and nightwear. Organic cotton wear for expecting mothers and infants is an
additional strength. They use Organic cotton and its products through its brand name
Othentix- Authentic Sustainable Textiles, lends a unique personality to each garment
manufactured and supplied by Evinix. The company came out with a principle of Rapid
Retail suggesting that every merchandise has a limited shelf life at CUT stores; CUT is an
acronym for Comfortable, Urban and Trendy. Evinix is setting up CUT stores (averaging
4000-5000 sq feet) in fast urbanizing young Indian towns. It recently launched the CUT
youth style store in Rajkot. The Rapid Retail business concept embraces the e.t.o.a.d
concept i.e. the exact time of awaited departure when the product will move out to the next
best price bracket.
PEARL GLOBAL
Pearl Global Limited was incorporated on 23rd October, 1979 under the name Pearl
Agencies Private Limited. The Company became a Deemed Public Company with effect
from 1st July, 1991 The name of the Company was change to PEARL GLOBAL LIMITED
(PGL) on 2nd September, 1993 in terms of Section 21 of the Companies Act, 1956 as per
fresh Certificate of Incorporation issued by the Registrar of Companies, Delhi & Haryana.
PGL manufactures, sells, and exports ready to wear apparel in India. The company
primarily produces garments in woven and knitted fabrics. Its products include casual wear
dresses, ladies blouses, and bottoms. The company is based in Gurgaon, India. PGL is a
subsidiary of House of Pearl Fashions Limited.
BANG OVERSEAS LTD
Bang Overseas limiteds principal activity is to manufacture and market textiles and
apparels. The Group's textile includes readymade garments, under garments and hosiery. It
markets with a brand name of Thomas Scott. The Group operates only in India. It was
incorporated in the year 1992 and is presently providing fashion fabrics and meeting ready
to wear requirements of the customers in apparel, textile and Retail segment. The company
started the business from trading in textile and since 1998, they are conceptualizing and
designing fashion fabrics and outsourcing the manufacturing process of the same from
countries like Turkey, Portugal, Mauritius and other European Countries. In the same year,
they launched our seasonal fabric collections in textile under the name "Body waves",
marketed through their own distribution channel to different brands and retailers. They
24
The companies that have high growth rate and lower market share are the question mark as
they could be new ventures started or they are companies that do not have liquidity enough
to increase their share in the market. But these companies have potential to be the star in
the market due to good growth rate and thus they could invest more into their business to
expand as the star and then becoming the cash cows.
Dogs
The dogs are more charitable pets that exist in the market and have the low market share
and low growth rate so these companies are better to get out of the market or much cash is
required to set them up. These companies have the cash traps which ties up the money in a
business with the lower potential.
26
27
This is not just a labour intensive industry but even the cost involved in plant setup is very
high along with that with the invent of many new technologies many companies have
adapted to modern techniques to remain competitive in industry as well as to produce
better products for their customers in lesser time and with lesser cost.
Therefore because of high involvement and emotional attachment with the business as it
has been a traditional business for generations for many companies they still prefer to stick
and continue with the business. But in the current scenario many textile mills have closed
down because of deep cut in demand and high operational cost due to severe global crisis.
III. The bargaining power of buyers
Indian textile companies are facing a tough competition from Chinese,
Brazilian and South Korean companies as they are able to produce at a lower
cost compared to Indian companies
This industry is fragmented and there are large number of players in the
industry, therefore buyer get the option of choosing from many suppliers
Indian textile industry is no more just a mass producer of textile rather it has
moved into niece segment and has developed capability to produce finest
quality of fabric which provides them distinctive competencies against other
countries as well as small players who could cater to mass consumers only.
Therefore overall buying power of buyer will defer from company to company. Companies
like Arvind mill, Raymond, aditya birla group have achieved certain degree of distinctive
competencies therefore with them buying power of buyer is negated to large extent against
their competencies.
But many small companies who are mass producer of textile face a strong buying power of
buyer.
IV. The bargaining power of supplier
Here again bargaining power of supplier dictated by the segment that they are targeting to,
for a niece players and companies who have achieved operational excellence can dictate
terms to buyers but for small players who just produce for mass consumption do not have
much say in the business deal and the prices are mostly dictated by the buyer.
32
Segment Analysis
Indias textile industry comprises mostly small-scale, non-integrated spinning, weaving,
finishing, and apparel-making enterprises. The figure below depicts the overall value chain
and the number and type of units within the industry.
Textile Sector High Level Value Chain
Spinning mills
With an installed capacity of 40 million spindles, India accounts for about 22 per cent of
the worlds spindle capacity. In 2005, Indias spinning sector consisted of about 1,161
small-scale independent firms and 1,566 larger scale independent units. Independent
spinning mills account for about 75 per cent of capacity and 92 per cent of production.
33
Knit/Weaving/Knitting Units
Indias weaving and knitting sector is highly fragmented, small-scale, and labour-intensive.
The woven fabric production industry can be divided into three sectors: power loom,
handloom and mill sector. In 2005 it consisted of about 3.9 million handlooms, 1.8 million
power looms, and 0.1 million looms in the organised sector. The decentralised power loom
sector accounts for 95 per cent of the total cloth production. The knitted fabric forms 18
per cent of the total fabric production.
Processing Units
The processing industry is largely decentralised and marked by hand processing units and
independent processing units. Composite mill sectors are very few falling into the
organized category. Overall, about 2,300 processors are operating in India, including about
2,100 independent units and 200 units that are integrated with spinning, weaving or
knitting units.
Garment Manufacturing Units
Small-scale fabricators dominate garment manufacturing. Most garment manufacturing
units fare reasonably well on the technology count. The bulk of apparel is produced by
about 77,000 small-scale units classified as domestic manufacturers, manufacturer
exporters, and fabricators (subcontractors). The fragmented structure of the industry
provides the advantage of a large pool of skilled workers in different areas of textile
manufacturing, and also gives scope for entry of organized integrated textile
manufacturers. Small scale units in different sectors can also be leveraged as a supply base
for sourcing materials at low cost. Apart from these advantages, the industry has also been
experiencing consistent growth across different sectors, making it one of the key potential
sectors in India.
34
The most serious problem of the industry is the lack of adequate processing
facilities; there is over-dependence on hand processors and traditional items.
The Indian textile industry is fragmented. Most of the SMEs are tiny and cottage
type units without sufficient capital back-up.
The government policies in India for the textile industries are traditional as they are
not upgraded like the up gradation of the policies for the IT industries.
The quality of wider-width fabrics for meeting the export demand is lacking in
many respects, which is acting as a disadvantage to the growth of the industry.
The technology used in the most of the textile mills is old enough that they cant be
modified, but there have to be new machineries imported to give the edge in
technological advancements in this sector.
Opportunities
As per available information, the market for processed cotton fabric will increase in
the European and other markets and, therefore, the power loom industry may
benefit and expand substantially. Further the growth in the export segment will be
mainly from cotton made-ups and garments along with processed fabrics.
Grey fabric export is continuing to grow and will show increasing trends.
Value added products will have greater demand and, therefore, processing will play
an important role.
India with traditional designs and craftsmanship can command a greater market
share for niche products in made-ups and garments.
Indian companies need to focus on the product development and this could easily
be possible as there is the greater scope in the Indian Market.
As the new generation is keen towards the western culture the training for specially
textiles could be provided to them and they could be encouraged to develop the
efficient sector of India.
Increased use of computer aided designing to develop the designing capabilities of
the textile. Using new technologies and software ease the use of virtual design on
the computer and then choosing from various alternatives.
Threats
36
Increased competition in the domestic market yield to the development of the more
SMEs which invest more to survive in the market.
The working area of most of the industries in the textile industries is not hygienic
enough to give the workers more comfortable area to work in. so this condition has
to be improved.
Need to revamp consumer consciousness
Chinese goods are cheap as well as the machinery provided by them is also cheap.
So the threat for the export and designing is the Chinese Aggression over the
International market.
Continuously quality improvement is needed to make sure that people would rely
on Indian goods not on the foreign goods.
Traditional items like terry towels are manufactured in EOUs all over the country
with superior quality. This has been eroding the traditional markets for power loom
and handloom products forcing them to go for product diversification.
37
the complexity of coordinating the product definition and managing the associated
miscommunications across multiple companies slows the process to a crawl. So, brands
routinely begin working on their product lines well over a year before the selling season.
specification has been slow to keep up with the increased complexity of the supply chain.
Ensuring that everyone in the supply chain has an accurate and up-to-date description of
the
product is one of the biggest challenges. Like all products, once designed, garments are
subject to many design changes in the preproduction phases. Typical products see more
than 50 changes or enhancements before production is complete. And often changes made
by brand designers are slow to reach the production floor of a contract manufacturer. In
many companies, the change process is conducted through faxes, phone, and emails all
poor means of managing a distributed, complex supply chain. An executive at Burlington
lamented that the change process looks like a childs whispering game. Starting at one end
of the chain, a designer may call a manufacturing coordinator requesting a change to the
left rear pocket of the pants. But, by the time the request makes its way to the
manufacturing floor in Mexico, the request becomes a change to the right front pocket.
Getting the right information to the right people at the right time is the biggest challenge.
Equally important is visibility to the entire product and sourcing team with a documented
history of product changes. All too often, a change made by one member of the design
team would be unseen by others creating confusion and finger pointing. Off-spec products
arriving at a brand distribution centre would be turned back by inspectors only to find out
later that a single manager in the chain verbally approved the changes. At Liz Claiborne,
the first step toward information integration was bringing designers online using a
consistent set of tools.
Designers, long focused on hand sketching, were hesitant to move to computer-aided
design. The organizational change of bringing hundreds of users online with digital design
tools was painful, but after a five-year effort they have cut design time by 50 percent. Yet
firms like Liz found out that automating the design process, while improving internal
efficiencies, did not help solve the supply chain problems. Vendors, who were less
technically sophisticated or used different proprietary design systems, couldnt profit from
the digital product designs. Often artwork created in a CAD system by a brand would be
printed and shipped by overnight mail to a manufacturing partner where the document
would be scanned (re-digitized) to drive the manufacturing system that actually created the
material. Even for those who could use the digital artwork, moving very large files over the
Web required more than
40
simply attaching the CAD file to an email message. It required a content management
system that provided centralized product information, where changes could be tracked and
everyone was sure to have the most recent information.
41
happened over the phone or via email with others in the design team left out of the loop,
causing confusion and mistakes.
Web-Centric Product Content Management
Tormented by the rising cost of complexity, many apparel designers began adopting digital
design systems 10 years ago, but like Liz, found that transferring the information within
the rapidly disintegrating supply chain was tedious. Large firms like Gap and The Limited
invested in their own systems only to be paralyzed by the integration issues. With the
opportunities of moving design processes onto the Web, third party apparel product
management software companies like Applied Intranet (now Free borders) and later Gerber
began developing Web-based solutions. Levis was one of the first large apparel companies
to begin implementing a collaborative product management system from Freeborders to
facilitate fabric development, linking textile mills to Levis product development, sourcing,
pattern-making, and quality. For Dillards, even the simplest features of these tools
dramatically changed their product content management. Using a publishing and content
management tool called Free borders CPM Design, Dillards eliminated the faxing and
emailing of product documents to their vendors. Each style is now managed with a virtual
folder where designers and manufacturing partners can access documents over the Web.
With important product content stored in a single place, everyone is assured to be working
from the most recent version. More importantly, changes cannot occur without being
visible to all parties. Email is limited to reminders to check changes in the folder and no
changes can be made outside of the system. Besides saving weeks in communication time,
the system helped eliminate costly mistakes and confusion. Liz implemented a similar
system, cutting weeks out of the cycle time. At Liz, the time saved using a Web-based
system ensured more on-time deliveries and helped avoid costly markdowns due to late
shipments. In some cases, with extra time in the design cycle, products could be further
improved or shipments could leverage less-cost ocean transport rather then air freight. The
advantages of even a simple
Web-based system are enormous including: Reduced cycle time Reduced faxing and
express mail costs
42
management sill reside in the off-line world. In some cases, the barriers are technology
adoption and cost. For example, spectrophotometers can precisely measure color of sample
items, but some designers are not comfortable abandoning personal, eye-witnessed
samples. Information transfer speed in many third-world countries where most apparel is
produced is also a limitation of true, two-way collaboration. While plants may be able to
successfully download specifications and sketches, the concept of real-time interaction
around the product design is limited by long intervals between communications.
Additionally, complex CAD specifications of fabrics with detailed colour pictures create
data movement problems even within the United States and Europe, let alone rural China
or Thailand. For a vendor in Sri Lanka to download a specification over a phone
line could take hours. In those cases, physical samples of materials and drawings still must
be moved by express mail. As with many other industries, trust and technology adoption
are still the largest barriers to collaboration. Technology itself is rarely the limiting factor.
Decades of cost-focused procurement has created an environment of distrust in the industry
that hinders firms from working together. Resistance to change itself also leaves many
companies squabbling internally rather than moving forward. Nevertheless, given the
current financial
state in the industry, few firms have the luxury to do nothing. With cost and efficiency
improvements available in the current generation of Web-based tools, the benefits of
content management systems are easily justified. Adopting these tools is the first step in
the move towards product collaboration. Possibly some of the most exciting initiatives to
enhance collaboration have been focused on helping the designers and manufacturers early
in the textile and garment development process. For example, DuPont has vast experience
working with textile mills to help them better use DuPont fibres in manufacturing. When
fashions move towards more stretch garments, DuPont is there to help fabric producers
better use Lycra to produce a wide variety of stretchy material. This service offered to mills
has given DuPont a working knowledge of worldwide textile producers to help designers
find plants that can produce the high-quality fabrics required by the brands. Building on
this service has opened an exciting opportunity for DuPont to collaborate and add value in
the apparel supply chain. By developing a Web-based system that can be integrated into a
product content management system, DuPont could help designers both design fabric and
find manufacturing
44
partners to produce it. Recently, DuPont introduced the Lycra Assured Network, a
collection of textile and apparel industry partners that collaborate to bring innovative
stretch garments to market faster and at reduced costs. A cornerstone of the Network is the
development of a suite of online collaborative tools that will increase the efficiencies and
the marketing reach of the partners. The first generation of this tool, the Lycra.com
Online Fabric Library, allows users to develop libraries of fabrics and reduce the need for
physical samples. Additionally, it speeds up the search process for high-quality fabric
vendors. Integrating those libraries into product content management systems is the next
step in creating a valuable tool for the apparel industry and bringing DuPont into a
collaborative relationship with designers.
For the apparel industry, making the leap to true collaboration will be the key to survival
for many firms. Building trust and an organization that embraces Web-centric technology
are vital to move forward
45
46
Reducing costs and speeding the design process are important benefits of webcentric product management systems. However, the biggest prize is leveraging the
intelligence of all partners to enhance the product. The study will show that the
majority of the final product cost (80 percent or more in some cases) is locked in
the early design process when concepts are considered and materials selected.
The study will probe how cost-management and time management can be
effectively done through web-centric product management process.
The study would through light on how the supply chain complexity can be reduced
through real-time communication. Companies that are technology enabled would
find real-time inventory solution,and thereby capture lost supply chain value in the
process.
RESEARCH METHODOLOGY
PURPOSE OF THE RESEARCH
The purpose of the project is to carry out an in-depth analysis of the driving forces
in the complex supply chain process of the apparel industry.
To study how web-centric co-ordination in the supply chain process would help in
capturing lost supply chain value.
The research has been conducted based on according data and it is a discipline study
This project would incorporate and entail all the aspects about the complexities in the
supply chain process arising out of outsourcing and globalization. This information can be
gathered from primary as well as secondary sources of data. Keeping in mind the above
mentioned hypothesis and the better comprehension of the area of study it becomes
mandatory to have an access to both the sources. Thus I have adopted a comprehensive
research methodology which depicts a judicious blend of both primary as well as
secondary sources.
SECONDARY RESEARCH
The study would be starting with secondary research to understand the existing scenario in
the apparel industry. The study would use the following as source for Secondary Data
collection:
Internet
Journals
Articles
Newspapers
48
2.
3.
49
This paper illustrates three case studies from the companies involved in the study. The
study was carried out with 10 companies, both in the UK and the US, but due to
limitations of space only a small sample will be discussed.
Results
Case 1
Company 1 is a US based global producer of womens clothing. They produce 5
different and have just acquired licensing rights to DKNY Active and Jeans.
Company 1 has recently established a new department, concerned with design
technologies, such as the use of CAD for surface design. The company has had to
restructure to integrate different departments. CAD was first introduced into the
company in 1995, but it took the company 2 years to fully convert from doing hand
painted textiles to using the CAD system. The company has over 40 users of CAD and
50 workstations. Through the use of Style Manager the company has moved from
doing specification packages by hand to on-line and now all the designs are now
transmitted through the company electronically. This was a huge initiative for the
company, and was a complex process. One of the main challenges was teaching people
who could hand-paint to paint on the computer. 75-100% of all textiles in the company
are designed on the CAD system.
The company uses the Internet for B2B transactions, Specnet being one of the
applications. They have Lizlink, which is available for vendors to access, and small
companies are able to order online via EDI systems. They are currently in the process
of considering using the Internet for B2C activities. In consumer markets their products
are available on line through department stores that sell their products and also sell
online. Company 1 does not have input into their section on any of the customers
websites. They see one of the greatest challenges of the Internet as being inventory.
The company has an Intranet site, which is not accessible to manufacturers, and is just
used as a corporate communication tool. It has been in operation since November 1999
and is used to communicate trends and colour information throughout the company to
designers. Designers are able to access inspiration for designs through this, and there
50
are different inspirations for each month. Offshore offices are able to access the
information, as they help the company to source. These offices are in Hong Kong and
Taiwan. They also have agents, Egypt, Israel, Sri Lanka, Japan, and Korea. The Intranet
is also used to publish all of the company newsletters, and is used as a corporate
communication tool. The system has been operating since November 1999.
The company finds that one of the major benefits of using the Intranet for such
purposes is reduced cost. They have found that there is less copying of resources such
as mood boards, a better sell through, improved communication and reduction in the
time needed to do certain activities. They are now able to move the conceptual design
phase much closer to the end of the process.
Case 2
The Company 2 is the worlds largest manufacturer of apparel, with revenues in 1999
approximately $5.6 billion. They have a number of global brands. They are also the
largest supplier of work wear in heavy industry, special products such as space suits
and fire fighters uniforms, and uniforms for the postal service and Federal Express. The
philosophy of the company is growth by acquisition on a global basis, and then to
implement common strategies and processes.
Company 2 sees e-commerce, as a major step forward for them B2B is a major
priority, whereas going directly to the consumer is not, and includes customer/retailer
affiliations as part of B2B. They feel that retailers need some solutions and services
from them as a company there is a role for them to play. Their business model
concerning e-commerce has not yet emerged, but could possibly include inventory
holders, fulfilment and ownership of customer care.
In April 1998 Company 2 had their first e-commerce venture. They had a lot of
individual brands with informational sites. They then carried out some research into
what competitors did, and then moved forward to decide what the role of Company 2
should be. They identified one of their Brands, which had numerous small accounts,
and so less dependence on one major company therefore reducing channel conflict, and
decided to offer the brand to the end consumer over the Internet. The site offers full
retail opportunities for visitors. This is contracted through Yahoo and AOL. This has
51
seen some success, although it has not yet reached the purchase goals that were initially
predicted.
Presently Company 2 does not use e-commerce in their supply chain at all with
suppliers. They are starting to use e-commerce supply purchase in the next few months,
and then move into direct purchasing. The company found that they could not convince
themselves that there were true gains for them in the B2C area of e-commerce. The
company feels that they are past driving on the edge, and feel that they are ahead by
not spend large amounts on money producing websites for all of their brands. They
have seen a huge move towards B2B, and can see a lot of change.
Company 2 feels that they rely less on the first mover advantage and more on doing
something correctly when it is done. To Company 2, correctly will bring a lot of
change to the company. They feel that they need to fully understand the company, what
makes them successful, and then to capitalise on these strengths. This might include
brands, technical expertise. They want e-commerce to enhance what they are currently
offering, not to replace. They also feel that there is no point in rushing the process, but
prefer to take a considered look at the whole of the business. They feel that they have
learnt from their experiences of AOL and that the main lesson from this is to take the
process much slower.
Company 2 feels that the business model and e-commerce are closely linked and that ecommerce is intrinsic to the business model. Company 2 does not regard e-business as
something separate, but as something that is intrinsic to the business model.
The company would like to take part in a partnering venture with a retailer, rather than
attempt this alone, so that they do not miss out on the e-commerce market. Research
has projected that overall, apparel sales via the Internet will still be less than 10% of
the apparel market in the US the project is around 8%. Company 2 is trying to keep
this in perspective.
52
53
54
55
56
57
58
1. As per your understanding to this industry what are the critical success factor for
Supply chain does have for Apparel industry i.e pantaloon, big bazaar, etc.?
A. Rail container service
B. JIT approach
C. Cost effective logistics system
D. Customer service
Critical
Success
Factor
34
27
21
18
4. How does different Channel would utilize the cost optimization technique for the supply
chain management for the Appeal industry?
A. Through cost Audit
59
5. What kind of technological support that required for Apparel Industry Supply chain
taking for the targeting more market share.
A. Material Management system
B. Warehouse Management system
C. Transportation management system
60
61
Excellent
Very good
Good
Fair
Poor
Dont Know
Refused
Details Easy
to Providing Availability
of
Understand accurate
of
all
MDS
of MDS
statement products &
MDS
pack
size
(SKU)
54
23
66
71
16
22
17
9
5
19
6
2
7
11
6
8
7
12
3
1
5
6
1
3
6
7
1
6
Ability to
handle
urgent
requirement
Care taken to
minimize
dumping of
stocks
43
32
1
9
6
7
2
67
12
9
4
3
2
3
As per the graph and data table suggested that the quality of the Ordering process of the
Grasim would be very good in terms of the Retailers view. the Grasim providing details in
the monthly dispatch statement (MDS) which 70 retailers out of 100 are agree on that
while details of the MDS also taking care of the easy to understandable process which 45
people are agree on that which is very good satisfaction level that the Grasim stockiest and
retailers has. Almost 80 of the Retailers are saying that the Grasim gives an accurate MDS
which is clear transparency maintained by the firms.
CONCLUSION
Rose (2001) suggests creating personalised experiences for different customer segments in
order to build loyalty. This was an issue for the UK companies involved in the study, three
of which had separate websites for different target markets, in order to minimise factors
such as confusion and channel conflict. However, Rose (2001) argues that this will build
62
loyalty amongst customers, but this study has indicated that loyalty is built upon trust of
the brand and the company, and also by the company addressing issues such as fulfilment.
One of the companies in this study felt that trust and confidence in the company is built by
providing the customer with contact details and the opportunity to speak with the company,
rather than just a faceless website.
OKeefe et al (1998) suggest that IT provides small companies with the opportunity to gain
competitive advantage, but that such companies are likely to be forward thinking and less
likely to find the demands of the web inhibiting. Research carried out as part of this study
would suggest that this might not always be the case. One company only went online
during the course of this study, not as a result of not being forward thinking, or finding the
demand inhibiting, but merely because the owner-manager was too involved with other
aspects of the business to find the time to devote to online activities. Small companies face
many constraints, including skills, time, resources and finance, and the companies in this
study indicated that these were inhibiting factors to building and online presence.
E-commerce literature suggests that through e-commerce sellers are able to take advantage
of additional channels with little disruption to existing distribution, and achieve a way of
disposing of surplus inventory. Although physically this may be possible, research carried
out with companies in the US has indicated that in reality this is not possible due to the
risks of channel conflict between existing customers and new profile customers. Company
2 cited the example of a traditional manufacturer selling to retailers and using e-commerce
to also sell directly to retailers to illustrate this point, indicating that a major issue would be
becoming a competitor to your customers.
Globalisation has been cited as an issue in both supply chain and textile and apparel
industry literature, with the move to sourcing overseas. E-commerce enables the small
company to become involved in this, and opens the global market up to companies other
than large international corporations. All of the companies involved in this study cited one
of the major outcomes of having an internet presences as being the increased interest from
potential overseas customers something that many of them they had not experienced
before building their site.
63
RECOMMENDATION
1. For a vendor in India to download a specification over a phone line could take
hours. In those cases, physical samples of materials and drawings still must be
moved by express mail.
64
2. As with many other industries, trust and technology adoption are still the largest
barriers to collaboration. Technology itself is rarely the limiting factor. Decades of
cost-focused procurement has created an environment of distrust in the industry
that hinders firms from working together.
3. Resistance to change itself also leaves many companies squabbling internally rather
than moving forward. Nevertheless, given the current financialstate in the industry,
few firms have the luxury to do nothing. With cost and efficiency improvements
available in the current generation of Web-based tools, the benefits of content
management systems are easily justified.
4. Adopting these tools is the first step in the move towards product collaboration.
Possibly some of the most exciting initiatives to enhance collaboration have been
focused on helping the designers and manufacturers early in the textile and garment
development process.
5. For example, DuPont has vast experience working with textile mills to help them
better use DuPont fibres in manufacturing. When fashions move towards more
stretch garments, DuPont is there to help fabric producers better use Lycra to
produce a wide variety of stretchy material. This service offered to mills has given
DuPont a working knowledge of worldwide textile producers to help designers find
plants that can produce the high-quality fabrics required by the brands.
6. Building on this service has opened an exciting opportunity for DuPont to
collaborate and add value in the apparel supply chain. By developing a Web-based
system that can be integrated into a product content management system, DuPont
could help designers both design fabric and find manufacturing partners to produce
it. Recently, DuPont introduced the Lycra Assured Network, a collection of textile
and apparel industry partners that collaborate to bring innovative stretch garments
to market faster and at reduced costs.
7. A cornerstone of the Network is the development of a suite of online collaborative
tools that will increase the efficiencies and the marketing reach of the partners.
8. The first generation of this tool, the Lycra.com Online Fabric Library, allows
users to develop libraries of fabrics and reduce the need for physical samples.
Additionally, it speeds up the search process for high-quality fabric vendors.
Integrating those libraries into product content management systems is the next step
65
in creating a valuable tool for the apparel industry and bringing DuPont into a
collaborative relationship with designers.
9. For the apparel industry, making the leap to true collaboration will be the key to
survival for many firms. Building trust and an organization that embraces Webcentric technology are vital to move forward
REFERENCES
66
Number 1
/2, pp 68-77
7. Desbarats, G (1999) The innovation supply chain, Supply Chain Management, Vol
4, No 1,
8. Falcioni (1999) The Business to Business Internet (Editorial) Mechanical
Engineering CIME
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