Supply Chain Management at World Co. LTD Case Solution

Another important feature of the supply chain was the ranking of individual SKUs. SKU level forecasts were arrived at through the Obermeyer method. Voting was conducted for various SKU’s and rankings were given based on the votes. Store managers and assistants were invited to look at the new collection and vote. Based on the voting process a mean and standard deviation score was obtained for each SKU. Sorting was done based on the mean scores and then standard deviation scores. The ABCD analysis enabled them to predict demand and supply SKU’s in accordance with that. Moreover, the demand forecasts were updated through the life cycle of the products. Sales forecasts were revised as soon as sales data started pouring in. This streamlined the forecasts, and the updated forecasts were far more accurate.

Inventory and production planning also played an equally important role in the supply chain at World Co. This department was based on the Accurate Response approach that took into account the costs of overstocking and understocking. This Accurate Response Approach entailed three steps i.e. materials preparation, first order quantity, and replenishment quantity. These were carried out through the help of spreadsheets and merchandisers updated the forecasts at regular intervals. Based on the SKU demand forecasts, merchandisers approximated the amount of material that needed to be ordered. Moreover, standard length zippers and buttons were also stocked in ensure no time is lost due to lack of material availability. A portion of the SKU demand was ordered initially as part of the first order quantity. Lastly, once the product was launched the merchandisers kept an eye on sales. Merchandisers then re-ordered based on actual sales figures and availability of material. The supply chain at World depended heavily upon details and accuracy and was well integrated which enabled it to reduce lead times drastically.

Can World’s supply chain processes be replicated at other apparel companies? What about non-apparel supply chains? Identify potential barriers.

The world’s supply chain processes can be replicated at other apparel companies. The president of the company HidezoTerai has focused on monitoring the sales trends and consumer demand prevalent in the company and in the Japanese market and ensuring that the right products are available at the right stores and at the right time. This is in line with the dynamic fashion industry that requires short lead times and swift performance. World Co. has been able to shorten its lead times due to its supply chain management system called SPARCS (Super, Production, Apparel, Retail, Customer Satisfaction). The system has been able to coordinate product planning, production, and development, etc. Information Technology has been utilized efficiently and effectively to provide real-time information to all relevant stakeholders in the company. The simplicity of the process makes it easier for other apparel companies to replicate it with ease and implement it with ease as well. The benefits also add as an encouragement for other companies to adopt the process. The system provides improved forecasting and planning of the supply chain starting from demand forecasting to material planning, etc. Moreover, the visibility aspect is also important since it enables employees to view sales data and inventories. Moreover, given the information, it helps the company gain market share and strategizes accordingly along with being able to respond quickly to changes in the market conditions.

It is also easier to replicate the supply chain at other apparel companies due to the similar environment in which they operate. The industry is fragmented, and the structures are also similar for most firms. Similar supply chain challenges and problems are faced by other apparel companies as well. The costs associated with overstocking or understocking are serious sources of concern for all such companies. These companies are constantly working towards adopting and implementing processes that eliminate or curtail these costs.