The Crocs Supply Chain

The objective of these establishments, apart from achieving labor cost savings, was to spread risk. Initially, the various production sites were capable of producing the same types of shoes, indicating an insignificant degree of specialization in the production units. However, in recent years ECCO had strived to narrow each unit and capitalize on its core competencies.

Unlike its competitors, Crocs had a highly responsive and flexible supply chain. Owing to the Crocs executives’ experience in electronics industry, they were accustomed to producing what the customer needed and when it was needed. Thus the business model was focussed on customer needs and responded promptly to changes in demand and trends. The retailers of shoes, therefore, had neither the pressure to forecast exact demand nor the obligation to order bulk orders several months before the selling season.

flexible, retailer focused supply chain system enabling Crocs to support a boarder retail base than competitors;

Changes within the supply chain can disrupt the normal flow of goods and services because each change hasn’t been fully scrutinized. A firm can plan and speculate that a change with have a certain effect on the supply chain, but until those processes have been measured it is impossible to know the true cause and effect of any disruption.

Established and maintained more suppliers that would provide more options and huge discounts in large orders

All these advancements by the IT team of M&S are aimed at encouraging customers to use technology to spend more money at M&S.

A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.

Traditionally, the shoe industry was seasonal and based on projections of future trends. Retail stores would need to place orders several months before the shoes would even hit the shelves. As orders were made early in the year, manufacturers would begin production for shipment later in the year. Since inventory supply depended on expected sales, stock could not be quickly replenished as it ran out. The executives at Crocs decided to branch out from the traditional production schedules and develop a lean production model. As sales increased or decreased, Crocs managed to speed up and slow down production throughout the year to quickly replenish depleted inventory. Since the shoes were easily made with the foam mold design, rapid production and order fulfillment came easily for Crocs. This approach attracted the attention of many footwear retailers. With Crocs shoes being made to order, stores could more easily control inventory without worrying about a

The customers, wholesalers and retailers may order in large quantities with the expectation that they will receive a greater allocation of products that are in short supply. The impact on the supply chain is significant as the forecasted demand is greatly, and unrealistically, increased with these inflated orders. Eventually orders disappear and cancellations pour in, making it impossible for the manufacturer to determine the real demand for its products

1. Which of the comparable companies appears to be a good match to Crocs at the time of

Customer demand and product preference should be focused on to produce more of what the customer wants and to allow for stock reduction.

Costs were lowered by the elimination of standard box packaging for individual pairs of shoes. They were also decreased by the reduction of stock-keeping units (fewer styles, sizes, etc) and by the use of inexpensive plastic resin material (Croslite) compared to other fabrics which allowed Crocs to lower manufacturing costs because product could be made faster and cheaper using injection molding machines compared to traditional labor intensive methods.

To achieving greater revenue in sales crocs company minimizes their cost of production and expand their market to export their products to other countries. In this case we conclude the best alternatives are Vertical Integration and growth by acquisition to solve the problems : increase market sensitiveness and quickly shared the information to the other supply chain partners and found varied costumer expectation.

3. ECCO has a fully integrated vertical value chain. What are the pros and cons of this strategy? What economic and strategic factors should be analyzed to answer this question?

This requires a good understanding of the business model of a company by their suppliers in order not to frustrate their service delivery process. Cashbuild strives to improve their value chain by having long-term contracts with key suppliers and contracting in providers of transport to facilitate their on-time delivery. They have concern, though, of having limited suppliers of some products.