c
 
 









c
 
 



|


This report shows the Supply Chain Management of 





 
which is a manufacture in global fashion. This group is present in
around 120 countries and produces over 150 million garments every year. Its
Headquarters is located in Villa Minelli near Venice, Italy. This company was
founded in the year 1965 by the three Benetton brothers. Benetton fallows the
global strategy by selling the same garments throughout the world . The
companys logistics are managed in Italy and the finished good are sent
directly to the retailer groups around the world.

Benettons deals with highly competitive and time sensitive market with a
rapid change over in products to meet the immediate demand of consumer.
This report firstly discusses about the supply chain management and it is
explained in figure1: supply chain management of Benettons, then shows the
five major performance objectives which includes Quality, speed,
dependability, flexibility and cost. At the end of the report it shows the
alignment of performance objective of different members of the supply chain.

| |





  



The companys core business is fashion with a style, quality and passion as
its Italian character which is seen in the brand. It has contemporary stores of
around 6000 around the world. Benetton offers a high quality customer
service and its total turnover are generated over 2 billion euro.



 
!  "#!#

According to Lysons et al. (2006) A supply chain is that network of
organisations that are involved, through upstream and downstream linkage, in
the different process and activities that prod uce value in the form of products
and service in the hands of ultimate customer or consumer.

Supply chain management is the process which establishes a good relation

between all the members of the organisation during the process of converting
the raw materials into final products so that the end customers can be
consumed in the market. In this report explains the supply chain management
of Benettons who take part from manufacturing of raw materials to distribution
like sub contractors, agents and transportation until the finished goods are
delivered to the stores. This process is illustrated in Figure 2.1:



 c
 
 



Figure
 |
$$
%

!% %&' 

  (

(Adapted by Joseph et al, 1993)












%& 
 
 
$$
 
 



 c
c

" 


 '$

() * 
 
   
+


  
!" ,
 
  

 
 

-

+ 
 


 Return Finished

Undyed Garments  

Finished  Retail

Dye
Products  Stores

Ship to design
 & cutting 

 

!"#!$
" 

Information Flow

Physical Flow



c
 
 


! )*
#*+*! #
)#,#



They are five major performance objectives

Quality

Speed

Dependability

Flexibility

Cost

|
-%
.



Slack et al. (2010) found that quality is a major objective in all operations. It
has an important influence on customer satisfaction or dissatisfaction. Quality
is the most visible part of what an operation does. It is something that makes
a customer easy to judge about the operation. Quality is to do things right.
Quality in an operation means not only producing services and products to
satisfy the external customer but also inside the operation as well.

According to the company the most important characteristic of Benettons

production process is from the raw materials to the finished garments with
high quality. The company manufactures and maintains an international style
in quality and fashion. To maintain this standardizat ion of the products they
produce good quality of raw materials according to the everyday season. It
offers a wide range in selection of accessories and quality. By using the
advance high technology facilities it is capable of producing a turnover of 150
garments every year. (United colours of Benetton [online], 2009)

.

c
 
 




$ .





According to slack et al. (2010), speed means the time elapsed between
products requested by the customer or services and receiving them. Inside
the operation speed is very important. The main benefit to external customers
in operations is the speedy delivery of goods and services. The faster they
provide product or service, the more likely they buy it. If the response to the
external customers is speedy the movement of materials is fast.

In the present days speed is the important scenario, which helps in reducing
wastage of time and money. Benetton uses new technologies for production
cycles and also for packing and delivery like automated sorting system which
is fully innovated to handle individual orders of around 6000 shops worldwide.
The methods of folding and handling the garments are also automatically
sorted and packed into boxes and send to the distribution. Once the order is
placed the products are directly delivered from the distribution center for
shipping. The company use advanced technologies like (EDI) Electronic Data
Interchange to connect the agents and factories.

$ %/

.





Slack et al. (2010), highlights that dependability is delivery of goods and
services to the customers exactly when they are needed in time, or at least
when they are promised. Dependability of operation can only be judged by
the customer after the product and service has been delivered. Dependability
inside an operation gives stability and saves money and time .

Benetton starts working for the production once the subcontractors places the
order for the finished goods. The company uses automated distribution which
covers a large area with a capacity of 800,000 boxes of finished garments
which makes the process of manufacturing quickly and frequently. Benetton
mainly focuses on the customer priority which raises the overall turnover of
sales. This distribution can handle 120,000 i ncoming/outgoing boxes daily
with a very less work force of only 28 members. The company allows the
physical distribution operation it has an ability to replenish the stock quickly to
the orders places by the retailers. (United colours of Benetton [online] , 2009)



c
 
 


0
+1
/


.






Slack et al. (2010), concludes that flexibility is the ability to change the
operations according to the situation. It may mean changing what the
operation does, how it is doing it, or when it is doing it. To provide some of
the requirements customers need the operations to change. There are four
types in requirements of flexibility.

1. Product/service flexibility it is the ability of the operation to introduce

new products and services.

2. Mix flexibility it is the ability of the operation to produce a wide range or
mix of products and services.

3. Volume flexibility it is the ability of the operation to change its levels of
activity and output to produce different volumes or quantities of products
and service overtime.

4. Delivery flexibility it is the ability of the operation to change the timing of
the delivery of its service or products.

Benetton has a constant commitment for the factor of development. There is

a special attention for the research of new materials and production to
integrate logistics. It has a staff of around 300 designers around the world,
which creates different collection according to seasons and demand. The
company is engaged in creating new lines and new materials with rich outpu t
and latest design according to the trend. The flexibility in company depends
on which the dyeing of grey process allows the operation to respond quickly
to the orders placed by the retail operation. (United colours of Benetton
[online], 2009)

2

.



According to slack et al. (2007), cost is the last objective but no t the least
performance objective of supply chain management. The lower cost in the
production of the goods and services, the lower can be priced to the
customers. Cost can influence in operation management largely when the
operation cost are incurred. Bot h cost and quality are important in the
manufacture house. Cost means different things in different operations,
Low cost is a universally attractive objective.

In the company cost depends on the quality of the product and its services.
Benetton uses the contractors and sub contractors in the supply chain which
reduces the cost because they have the lower wage rates in their own
factories. By using the advance technologies like automated sorting system
and automated distribution center also reduces the cost of labour.



c
 
 


0
'% 
/3
4

$$
%

'% %&' 



Supply chain can be defined as (Ganeshan and Harrison, 1995): A supply
chain is a network of facilities and distribution options that performs the
functions of procurements of materials, transformation of these materials into
intermediate and finished pro ducts to customers. Supply chain in an
organisation refers to the networks of the companies whic h coordinate and
work together and encompasses the activities needed to design, make,
deliver and use a product and service.

According to (Mentzer et al) Th e systemic, strategic coordination of the

traditional business functions and the tactics across these business functions
within a particular company and across business within the supply chain, for
the purpose of improving the long - term performance of the individual
companies and the supply chain as a whole. Supply chain management is
important in an organisation because it is linked to the logistics which helps in
maintaining a supply chain for the coordination of the participants during
inventory, location, production and transportation among all the participants to
achieve a responsive and efficient market.

Benetton has a direct control over the logistics phase for both own
manufactured and sources products. It has invested for developing new
technologies in the organisation for production as well as distribution of the
products during operation which reduces the cost of labour and can provide
quality goods for low rates. Benetton invested in modelling and in the
organisation for the automation of logistics process to complete the entire
production cycle from client orders, to packing and delivery which is an
objective of speed.

The company has made big changes in its core business, casual wear in term
of production design, supply, and retailing with production networks as a
result it created a trend of fas hion and demand for the products in different
seasons which show that the company is flexible for changing its operation
according to seasons. Dependability of good depends up to the contractors
and sub contractors they had a wide range of delivery options as per
customer needs. Deliveries of the stock to the retailers in time also add up to
the retailers to maintain a relation with the customers with a wide range of
collections in the stores. Which increase the demand and brand image of the
brand without keeping the store out of st ock.

/

c
 
 


*#+#*##

1. Benetton groups (2009) [online]. Available from: www.benettongroup.com

(Accessed14 may 2010).

2. Dupuis, M. and Dawson, J. (1999, p 162) D
 



 . 1st ed.
USA: Blackwell Publishers Limited.

3. Govil, M. and Marie Porth, J. (2002, P 9)   



t. USA: Academic Press.

4. Hugos, M. (2006, P 3) D 
   
. 2nd ed. USA:
John Wiley and sons, Inc.

5. Lambert, Douglas M. Stock, James R. and Ellram, Lisa M. (1998, P 568)

   

  . International edition. Singapore:
McGraw-Hill Education.

6. Lysons, K. and Farrington, B. (2006) 


  

. 7th ed. London: Pearson Education L imited.

7. Mentaer, John, T. De witt, W. James, S. Keebler, Min, S. Nancy W. Nix, Carlo

D. Smith, and Zach, G. Zacharia, 2001, 

  
 
, Journal of business logistics,Vol.22,NO.2,P.18

8. Slack, N. Chambers, S. and Johnston, R. (2007 , P 49) 


 
 5th ed. London: Pearson Education Limited.

9. Slack, N. Chambers, S. and Johnston, R. (2010 , P 39) 


 
. 6th ed. London: Pearson Education Limited.

0