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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 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.
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
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
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