You are on page 1of 18

Supply Chain

The process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

Apparel Supply Chain: Network of Fibers/ Textiles/Findings/ Suppliers& Auxiliary businesses

Apparel Supply Chain as Linear model Agriculture Fiber Production Textile Production Apparel Manufacturing Retailers Final Consumer

In the 1980s , The distinctions among the various levels began to blur.e.g The Limited ventured in to Product Development The need was to bypass the profit centers of Branded apparel manufacturer and produce exclusive product at a more competitive price. Other members of the Supply Chain explored processes previously not in their domain in order to remain competitive.

Virtual Supply Chain


Members of the supply chain now function as integrated units rather that as independent businesses The days of producing standardized products and services based on limited information and store based transactions are gone Companies must compete globally with products that are geared to niche markets defined by customer prefrences and delivered through multiple distribution channels. Broader Product ranges, produced in smaller lot sizes, and available for shorter periods of time are the norm. Agile Manufacturing Environment

It is comprehensive response to the business challenges of profiting from rapidly changing environment , continually fragmenting, global markets for high quality , high performance, customer configured goods and services. Cos are restructuring to create, produce and distribute goods and services that appeal to micro markets of customers. Agility demands that companies identify their core competencies- and partner with other specialists to establish processes that are customer centered

In order to compete at all levels like cost, speed to market, manufacturing expertise and access to technology and resources- business capabilities must be synthesized by businesses forming alliances with other companies that already posses the required resources. A Virtual Supply Chain is an interactive network of manufacturing specialists that integrate complementary resources to support a particular product effort for as long as it is economically justifiable to do so. It relies on the synergy of computer networking and telecommunications technologies to deliver products at internet speed

Virtual supply chain concentric circles

The evolution from a linear to a virtual supply chain involves the method of growth Growth industries; They produce products that are introduced, the emerging technology they utilize commands a relatively high price, placing them out of reach for some consumers. Mature industries produce products that are characterized by relatively stable sales from year to year and by a high level of competition.

The Domestic Apparel Market is saturated with suppliers who must compete by maintaining a differential advantage. In mature industry, internal growth is generally accomplished by gaining market share previously controlled by a competitor. The purchase of another company is an effective means of increasing market share or competitive advantage.

The ability of a business in mature industry to turn a profit is not only measured by volume alone but also market share, profit margins, capital investment , capacity utilization, and inventory levels.

Vertical Integration It is a strategy that seeks to consolidate a supply chain by acquiring a company at another stage in the supply chain. Vertical integration rarely affects market penetration, but it can have an impact on a firms competitive advantage. COs are examining their core competencies and integrating other activities in the supply chain that complement their core competencies but were previously handled by other segments. examples: Kohls , Target corporation, and Nordstrom develop private label products apart from Donna Karan/ Nike and Levis

Vertical integration has the potential to shorten cycle times and reduce costs. Horizontal Integration: This strategy prioritizes the acquisition of companies that make similar products. Diversification; Its growth strategy in which a firm expands its product mix in order to capitalize on brand recognition, increase sales, and thus enhance efficiencies for grater profit . Ralph Lauren/Calvin Klein. Globalization: Geographical boundaries create less of a barrier as technology enables companies to conduct business globally

Product Development in an Agile Manufacturing Environment A large conglomerate may manage and develop multiple product brands but outsource all production, advertising, warehousing, distribution, and accounts payable. Production has a better scope than Manufacturing Product development function is charged with creating apparel that has value for customers. The circular model help achieve this agility. When a company determines that a particular processes is not a match to its core competencies, it contracts out. Very large product developer frequently prefer the control of owning critical links with their Production Chain. Others prefer Seasonal Contracts.

Regardless of ownership within the chain, all links work together as interconnected partners rather than as independent businesses. Product development and Supply Chain management are the keys to survivals. Product development is a result of the virtual apparel supply pipeline. The development of Standards and Specifications is now the responsibility of teams of creative and technical designers

Product Development variations


Branded Products: are created under a proprietary label and sold at wholesale for distribution to retailers that also carry other branded products. Co- Branded Products: result of a partnership between a branded product developer and a retailer BCBG and Nordstrom Private label Products: are developed and merchandised with labels that are owned by a retailer, for exclusive distribution by that retailer to compete with branded products also carried by the retailer .

Store brand products: Product developers of store brands offer a complete assortment of privately developed products under their own label for exclusive distribution in their own stores or catalogs. E.g GAP Licensed products: - licenses ,may be granted to expand a brands product e.g Anne Klein - Licensing agreements may be granted to expand distribution into a foreign market. Rather than deal with complexities of foreign sizes, labeling and business practices , Co. might partner abroad - Character licensing is another form of licensing.

Customized products: Mass customization utilizes mass production technology and applies it to the creation of products and services for a market of one.e.g usage of Body Scanners by Levis Scanners

Supply Chain Management Tools


JIT Inventory: elimination of non value cost of warehousing Specification Ordering: Involves defining quality by setting product standards and specifications Bar Coding: technology allows all products to be pre ticketed before they are shipped EDI: refers to the electronic transmission of transactional information CAD Today these tools are well integrated into product development and supply chain management systems for both domestic and offshore production.

Reverse Supply Chain


The process of planning, implementing and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal."

You might also like