Term Paper on "Supply Chain Management at World Co, Ltd"

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[EXCERPT] . . . .

Supply Chain Management at World Co Ltd.

Supply Chain Management at World Co, Ltd. -- Surviving and thriving in the Japanese fashion industry

Features of fashion apparel retailing in Japan: Use of the supply chain 'Innovate or die' was the title of a recent conference on the subject of Japanese fashion industry (May 2010). In technology, fashion, and other aspects of modern life, the Japanese consumer has long been fascinated with what is 'new,' making it difficult for clothing retailers to survive and establish brand loyalty. Until recently retailers had little bargaining power in terms of the venues through which they could sell their products. In 2000, securing heavily-trafficked areas in department stores was essential for clothing companies to sell their products to trend-conscious Japanese consumers. Risk for decisions about inventory, purchasing, and trying out new ideas laid with vendors, while stores had a tremendous amount of control in dictating their terms to sellers, given that most consumers bought their clothing at department stores.

The significant of department stores in reaching the public was essential to establishing a foothold in Japan as a retailer. Keeping costs down to buy the best department store spaces, reducing risk and inventory build-up, while still holding the attention span of buyers with the next 'new thing' in clothing was the challenge of all Japanese fashion merchandisers, including the highly successful company World Co, Ltd. In most instances, a lack of brand strength and desirability of location put Japanese clothing companies at a disadvantage, but World Co. was able to flourish.

Salient aspects of World Co's supply chain design and management: Short lead times

One of the reasons the fashion retailer World Co, Ltd. has succeeded in Japan is because of its embrace of constant innovation. World Co believes: "value is never static when it comes to fashion, and instead changes with the needs of the customers. To continue evolving as a value-creation company, World must keep creating new value in response to the constantly-changing needs of our customers" (Company information, 2010, World Co). World Co was an early adapter to new communication methods, using information technology to enable sellers to monitor sales figures and inventory tabulations with a click of a mouse. Data accuracy, with the exception of high-traffic 'sales' periods was close to 100% for the company.

Links in company's supply chain: Responding to market trends quickly

Manufacturing

World Co established a close relationship with a small group of Japanese manufactures that handles its orders. This enabled the company to respond to small, but significant shifts in consumer demand that affected inventory totals. The company reduced delays in responding to demand because of factory responsiveness. There was a bond of trust between World Co and the factories, which meant that small, necessary changes in production plans did not necessarily have to be pre-approved, also reducing delays. On-site inspection also reduced lead times. World Co additionally had some natural advantages regarding product composition, in comparison to U.S. firms -- for example, in terms of product offerings, clothing sizes in Japan are far less varied (Raman & Fisher, 2001, p.3).

World Co has emphasized integration of the manufacturing process to build a more effective brand image and minimize production costs. "Flexible and varied" production is necessary to stay on top of the fashion industry, as is minimizing waste (Releases, 2010, World Co). World Co achieved this through establishing tight control over manufacturing and day-by-day operations. Space in factories was reserved even before the product lines were established, and the measurements and information about the… READ MORE

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