INTRODUCTION
Chris Fraser, President, Supply Chain International, VF Brands is faced with a challenge to create a competitive advantage for the company by making its supply chain more efficient and robust in terms of speed to market, material utilisation, lower inventories, less work in process and lower cost to quality. VF’s coalitions were pleased with the quality and reliability of service they received from sourcing. VF had driven down cost by continually expanding their supplier base to ever lower cost locations enabling VF to hit corporate margin targets of 10-15%. At his juncture, Fraser and Green began exploring the next possible actions to take for making the supply chain more efficient.
ISSUES
Immediate:
To exploit the
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IMPORTANCE/URGENCY
Immediate issue: On a Importance/Urgency matrix the immediate issue can be assessed as low on urgency since in the current situation VF is doing pretty well with its current sourcing strategies and methods. However it can be assessed as high on importance better sourcing strategies can free up capitol locked in huge inventories and also increase market responsiveness enabling the company to exploit the lost opportunities due to long and inflexible sourcing time lines.
Basic issue: If we discuss the basic issue again is high on urgency since it was critical to get a buy from different stakeholders in the company to set the future strategic sourcing direction of the company since scaling up needed time and the roadmap to change needed active cooperation. It can also be assessed high on importance since it was evident from the industry trends that the future competitive advantage would no longer come from finding low cost locations but from managing the whole supply chain in a more efficient manner. It was also importance to make the supply chain robust to wither the effects of 2008 like economic crisis situations.
CASE DATA ANALYSIS
We can start by making a note of a few industry trends which are relevant to the case:-
Trends in the Apparel Industry
A major trend in the apparel industry was growing power of large mass retailing chains in the
- Retailing industry change, Large chains were expanding their market penetration by offering a more diverse array of product.
The value delivery option is another component that supports the supply chain. Providing attention to the changes within consumer demands that will aid in rapid production of consumer products. In order to gain a larger view of the said component it is vital that the value-based method must be clearly understood. Based on the findings of (Feller, A., Shunk 2006).the ability to realign the structure of the supply chain, this process will allows the supply chain to sustain its effectiveness by adopting to changes in consumer necessities with merchandises of larger value. A diversified supply chain is constructed to match the overall components of the chain with customers need in mind. But if this construction of the supply chain doesn’t match the needs it will make nearly impossible for the organization to provide said products and services to the consumer.
2. Richard M. Johns (2006). The Apparel Industry. 2nd ed. UK, London: Blackwell Publishing Ltd.. 1-124.
Westminster’s domestic operations comprise three separate companies that are wholly owned. Each company manufactures and distributes its own unique product lines. Distribution centers are a spread out across the US but not shared between the companies. Management is decentralized and each company maintains a unique and independent product development and ownership. The companies will have come under the light of new SCM techniques to advance and stay competitive in the mew market. Pressure form global consumers, domestic customers and competitors have made it difficult for Westminster to stay competitive and maintain current profit margins. Westminster’s current CEO, is aware of the situation and asked to take the company in new directions. Westminster’s own plan will take the company into stronger relationships with customers and foster better partnerships. It will also improve timeliness and attentiveness it fills its orders. Is short, our actions coincide with Westminster’s; we seek to consolidate warehousing, thereby reducing warehouse transfers, ship fuller truckloads, implement RFIDs and also add the use SCM technology and KPI’s to enhance their supply chain flow and implement key performance incentives to foster better overall management of their supply chain and allow more flexibility to improve and enhance their growing supply chain. Implementing these
Westminster Company has a long, rich tradition of being one of the biggest healthcare supply businesses in the world. They developed from a simple pharmacy supplier into an expanded, diverse variety of healthcare products to satisfy customer requirements. Westminster has operated in the United States (US) as three separate entities under one company that differ in location, size, and products produced. These three entities are individually operated and have no centralized management. In recent years, Westminster has observed the changing market and competition related to supply chains. In response, Westminster has conducted surveys and research over the past couple months that found some of the major issues that need to be addressed, to better serve their customers. As a result, they have sought solutions to adapt to these necessities in order to remain a solvent, competitive organization. The customers that make up the largest portion of sales (80/20 rule) are the mass merchants. These mass merchants are expected to continue growing during the upcoming decades. Therefore, it is imperative for Westminster Co. to ensure that they are able to properly serve the mass merchants’ requirements, while still being able to maintain customer requirements of non-mass merchants. The purpose of this paper is to evaluate Westminster’s current traditional supply chain practices and integrate solutions that will target efficient use of company resources while building stronger
PROBLEM STATEMENT - Supply chains have become a lot more complex, nuanced and sophisticated. With remarkable technological innovations, seamless borders and global trade policies, role of being a foreign intermediary for multinational manufacturers, is in great threat. It is becoming increasingly easier for companies to source a product on their own by going factory-direct thus eroding the value proposition for intermediaries. There is a paradigm shift from Build-to-Stock to Build-to-Order and building as close to the delivery point as possible. The challenge then is how embedded can an intermediary be in a customer’s journey from value creation to value capture. LF’s 2015 revenue has been $18.8B and has been steadily declining for past several years without any significant growth in operating profit at the level of 2009{Ref: Figure}. It is therefore important for
The problem VF Corporation is experiencing is an inefficient supply chain. Supplier relationship management seems to be the cause of the supply chain inefficiencies as indicated by occurrences VF management has experience. The objective of supplier management is to maintain a mutually beneficial relationship with suppliers. Suppliers do not trust VF and focus on their own goals that, in some cases, create more expenses for VF. Another cause VF’s supply chain problem is the difficulty of renegotiating contracts or negotiating new contracts that are mutually beneficial. These negations take long periods and hardly result in what can be described as a win-win situation for both parties. The capabilities or lack thereof, of VF’s suppliers is also a cause of the supply chain problem. Many of VF’s suppliers are in third world countries, therefore, lack both the skills and the technology to increase their own efficiency and product quality. While VF is considering the idea of supplier development, when a buyer invests human and capital resources to improve the seller’s ability to meet the buyer’s needs, suppliers have been resistant to VF’s attempts to get involved in their operations. VF’s supply chain worked in previous years, but as the apparel industry is changing the pressure to drive down cost has forced manufacturers to implement more creative solutions.
The Purpose of GSCMP requirements Management Plan is to establish how requirements will be identified, analyzed, documented and managed.
Numerous organisations have effectively executed supply chain ideas with terrific results. Proficient supply chains have empowered these firms to contend better. What were the purposes behind their triumphs? What were the obstacles these firms confronted in their excursions to accomplish joining in their systems? How were they ready to beat
The purpose of this report is to analyze the current market situation of the company and to recommend courses of action to address the question raised above.
Through internal and external analysis, we have discovered three strategic issues which merit front burner attention.
|the industry and its challenges it is important to understand its various phases of growth so far. |
The information in the case gave the overall conclusion that the apparel industry is a very competitive field to get into and in order to prosper companies must find their own personal niche within the industry. A company cannot survive in the apparel industry by providing what is already available in other stores. It is important to define a target market and appeal to their needs and wants. For instance, Wal-Mart appeals to low income individuals, Target and Old Navy appeal to more fashion sensitive customers, and so on. Ultimately, stores must relate and direct efforts towards specific apparel shoppers demographics and
On the micro level the clothing store industry is influenced by discount supercenters, and online retail stores with discounts (Imbruglia, 2015). The potential threat to the industry is the demand for alternative stores. With the rising income inequality consumers are searching for cost-saving techniques for items that are no name brands or generic.
Current Jim’s re-engineering team on processing an “as-is” analysis that point to understanding the current status of supply chain such as strengths, weaknesses, opportunities and it found 10 inefficiency which are discussed hereafter.