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Assignment Week 10

The document provides information about a case study on the supply chain management practices of World Co., a Japanese clothing wholesaler. It discusses World Co.'s operations, including its headquarters location, founding, and employee numbers. It also outlines three questions examining World Co.'s supply chain processes for manufacturing, demand forecasting, and inventory planning. Key aspects of these processes discussed include domestic manufacturing, open communications, accurate demand forecasting methods, and inventory planning approaches based on sales data. Potential barriers to replicating World Co.'s supply chain at other companies are also identified.

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Junaid Ahmed
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66 views5 pages

Assignment Week 10

The document provides information about a case study on the supply chain management practices of World Co., a Japanese clothing wholesaler. It discusses World Co.'s operations, including its headquarters location, founding, and employee numbers. It also outlines three questions examining World Co.'s supply chain processes for manufacturing, demand forecasting, and inventory planning. Key aspects of these processes discussed include domestic manufacturing, open communications, accurate demand forecasting methods, and inventory planning approaches based on sales data. Potential barriers to replicating World Co.'s supply chain at other companies are also identified.

Uploaded by

Junaid Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ASSIGNMENT

SUBBMITTED BY:
MOIN AHMAD

ROLL NO: 1250-FMS/BBAIT/S17

SUBMITTED TO:
SIR TAZEEM ALI SHAH

SUBJECT:
OPERATIONAL MANAGEMENT

WEEK # 10

INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD


Supply Chain Management at World Co:
Company Background

World Co., Ltd.

World was headquartered in Kobe, a port city termed the “fashion


capital” in Japan; many leading fashion companies, including World,
were located on Port Island. Established on January 13, 1959 as a
clothing wholesaler specializing in knit garments, World was selling over
40 different brands in approximately 7,000 shops and stores by the late
1990s. Terai noted that World had been founded by a group of
managers from a company called “Empire;” wanting their new venture
to be bigger than “Empire,” they chose to name their new company
“World.” Employees in 1998 numbered 2,394.

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 characterized by products with short lifecycles and

extremely uncertain demand, where speed and responsiveness were vital


for company to survive under this highly competitive environment.

- SPARCS system – focus on consumer demand to maximize the efficiency

of its store support operations. Coordination between product planning,


product development, production, and marketing allowed each area to make
better decisions about production volumes and lead-times. Merchandisers
in the corporate office quickly reacted to actual sales data by placing
additional orders or modifying existing orders.

- World’s supply chain also enabled it to change product assortment

frequently based on recent sales data after every two-week period


- Facilitate communications between all parties of business; empowering

each parties’ decision making authority in order to respond quickly to market


changes

2. Identify salient aspects of World’s supply chain focusing on the


processes for manufacturing, demand forecasting, and inventory
planning.
Manufacturing

- Domestic manufacturing where factories could respond to the inevitable

small changes that were necessary more quickly than overseas


manufacturing facilities

- Lower inventory turns would be highly detrimental to the company’s financial

position in the long run due to their extremely fast fashion cycles

- Factories worked very closely with the merchandisers located at the

corporate offices which maintained open lines of communications

- In the process of constructing the sample garments, the pattern-makers

developed detailed instructions for the line workers to circumvent


manufacturing problems when the garments actually ran on the production
lines

- Line workers were very versatile and able to perform many different

operations, they were compensated for their ability to perform more


operations

- Fabrics are purchased in advanced due to long lead time.

Demand forecasting

- Initial demand forecast and updating this forecast based on early sales data

- Aggregate demand forecast

➢ Distribution side forecast (Market management system (MMS))


- Historical sales data, growth rates, seasonality, competitor actions,

changes in macro-economic conditions


➢ Category-side forecast

- Projected chain-wide sales plans for the brand, and product

features for the products in a particular category

- Based on historical data, market trends and advertising expense

planned

- SKU-level forecast

➢ Based on the opinions of managers and assistants of World Co. stores


➢ Participants of Obermeyer Method are similar to target customer base
➢ Took the votes of participants to perform an ABCD analysis

Inventory planning

- Based on Accurate Response approach

➢ Materials Preparation

- Based on aggregated demand for various SKUs in order to be

accurate and able to negotiate volume discounts


➢ First Order Quantity

- 50% of SKU demand forecast

➢ Replenishment Quantity

- Updated forecasts every week during the season in order to place

additional orders as necessary.


3. Can the World’s supply chain processes be replicated at the other
apparel companies? What about non-apparel supply chains? Identify
potential barriers.
World Co.’s system can be replicated at other firms given sufficient resources.
However, given the secret to succeed from the case, certain apparel companies
would still have difficulties replicating the process.
For example, World Co. uses advanced online inventory management. These
information systems require highly competent IT personnel and sufficient
capital. A start up may have difficulty meeting these requirements.For
companies located outside of Japan would not be able to use the exact same
system, at least not cost effectively.

Not for service industries, as the supply chain functions for service are very
different from manufacturing. Also with industries facing the following barriers,
will not be able to replicate the process effectively

Potential barriers:

- Unreducible lead times

- Involve perish goods (unable to prepare material in advance)

- Location of different parties

- Inflexible Organizational structure - ie, strict hierarchy

- Ability to maintain effective and efficient IT functions

- Unable to reach economic of scales

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