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Indian Institute of Management, Rohtak

The document summarizes World Co. Ltd's supply chain management practices for apparel retailing in Japan. It discusses how World Co. is able to respond quickly to demand changes through features like manufacturing in the US, forecasting demand at the SKU level based on early sales data, maintaining fabric inventories, and facilitating close communication between all parts of the supply chain. While other apparel companies could replicate some practices, non-apparel supply chains may face barriers due to differences in fundamentals between manufacturing and services industries. Barriers could include inflexible organizational structures and the ability to maintain advanced IT systems across locations involved in the supply chain.

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0% found this document useful (0 votes)
62 views5 pages

Indian Institute of Management, Rohtak

The document summarizes World Co. Ltd's supply chain management practices for apparel retailing in Japan. It discusses how World Co. is able to respond quickly to demand changes through features like manufacturing in the US, forecasting demand at the SKU level based on early sales data, maintaining fabric inventories, and facilitating close communication between all parts of the supply chain. While other apparel companies could replicate some practices, non-apparel supply chains may face barriers due to differences in fundamentals between manufacturing and services industries. Barriers could include inflexible organizational structures and the ability to maintain advanced IT systems across locations involved in the supply chain.

Uploaded by

VINI JAISWAL
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Indian Institute of Management, Rohtak

Operations Management

Supply Chain Management at World


Co. Ltd.

Made By-
Group 1

Anu Bharti PGP12074


Chanchal Priya PGP12099
D.N. Chandhini PGP12070
Deeksha Gabra PGP12108
Kajal Meena PGP12096
Parth Gupta PGP12118
Riya Nagpal PGP12089
Question 1: Examine the features of fashion apparel retailing in Japan. How can a
company use its supply chain to compete in this environment?

● Apparel retailing was typified by-products with short lifecycles and extremely
volatile demand, and companies needed to be quick and responsive to stay
afloat in this highly competitive industry.
● SPARCS system- To increase the effectiveness of its store support operations,
the company focuses on client demand. Product planning, development,
manufacturing, and marketing all worked together to make better judgments
about production volumes and lead times. Actual sales data prompted
merchandisers in the corporate office to place extra orders or change existing
orders.
● After every two weekends, the supply chain of WORLD enabled it to adjust
product assortment often depending on recent sales data.
● Facilitate communication between all business stakeholders while also
empowering each party's decision-making authority so that market changes can
be responded to rapidly.

Question 2: identify salient aspects of the World’s supply chain focusing on the
processes for manufacturing, demand forecasting, and inventory planning.

Manufacturing

They were able to adapt to changes very quickly as compared to others

● Manufacturing in the United States, where manufacturers could adapt to the


inevitable little changes that were required more swiftly than manufacturing
facilities in other countries.
● Due to their exceptionally fast fashion cycles, lower inventory rotations would be
tremendously harmful to the company's financial position in the long run.
● The merchandisers at the corporate offices worked closely with the factories,
ensuring open lines of communication.
● The pattern makers produced precise instructions for the line workers during the
construction of the sample garments in order to avoid manufacturing problems
when the garments were actually run on the production lines.
● Line employees were highly adaptable and capable of performing a wide range
of tasks; they were compensated for their capacity to accomplish additional
tasks.
● Due to the considerable lead time, fabrics are acquired in advance.
Demand forecasting

● Initial demand forecasting and updating based on early sales data


● Forecast of aggregate demand
❖ Distribution side forecast (Market management system )
➢ Historical sales figures, growth rates, seasonality, competitor
actions, and changes in macroeconomic conditions are all
factors to consider.
❖ Forecast by category
➢ Projected chain-wide sales plans for the brand, as well as
product characteristics for a specific product category
➢ Based on historical data, market trends, and projected
advertising expenditures.
● Forecasting at the SKU level
❖ Based on the views of World Co. shop managers and helpers
❖ Participants in Obermeyer's Method are comparable to the intended
consumer population.
❖ The votes of the participants were used to do an ABCD analysis.

Inventory Planning

● Based on the Accurate Response method


❖ Preparation of materials
➢ Based on aggregated demand for multiple SKUs must be
accurate and capable of negotiating bulk discounts
❖ First Order Quantity
➢ Forecasted demand for 50% of SKUs
❖ Quantity of Replenishment
➢ Weekly forecast updates throughout the season to allow for
the placement of extra orders as needed.

Question 3: How do the features of the supply chain explain the company’s
remarkably short lead time (relative to U.S. apparel supply chains)? Examine the
features of the supply chain, and identify why the company is able to respond so
effectively.

The financial benefits of quick response and short lead time are as follows:
Inventory turned 8.5 times with a gross margin of 47.8 percent, but US apparel only
accomplished 2.6 turns and a gross margin of 41 percent.
Markdowns accounted for only 11 percent of overall sales, compared to 31.8 percent for
American women's clothes.

Examine the following aspects of the supply chain:

Plan of Action
"Test" the product ahead of time to identify sales tendencies.
Real-time sales data were used to update demand projections on a regular basis.

Maintenance of Inventory
Prepare the fabric ahead of time,
Maintain an inventory of undyed fabric to enable speedier reaction time.
Inventory control IT system that is competent (availability and accuracy).

Assembling and Manufacturing


It is easier for firms to make small changes quickly which produce domestically
The merchandise at the corporate offices and the factories worked closely together.
Designers worked side by side with labourers to create clear instructions.
Line workers were adaptable and capable of performing a wide range of tasks.

Deliver
Delivery of products depends upon the type of apparel firm such as:
Delivery can be directly to the customers where big brands are involved
Delivery can be segmented where mass production is involved

Question 4: Can the World’s supply chain processes be replicated at other


apparel companies? What about non-apparel supply chains? Identify potential
barriers.

Ans. Replicating World’s supply chain is not an impossible task but the company would
have to invest sufficient resources as a prerequisite, beyond that to replicate the effects
of the World’s tactics like advanced online inventory management system they would
require highly competent IT personnel with investment in the capital too.
This would prove costly especially for companies working out of Japan because they
would have a hard time synchronizing their systems.

For non-apparel supply chains - The services sector won’t be able to replicate it at all as
the difference in fundamentals between manufacturing and services is too large
Barriers they may encounter are -
● Inflexible organisational structure
● Ability to maintain effective and efficient IT functions
● Location of involved parties
● Not being able to reach economies of scale

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