Supply Chain Management at World Term Paper

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Communication was kept constant, so any problems were dealt with before they resulted in delays.

Demand forecasting

Demand forecasting is a critical aspect of World Co's success. It is essential that new product lines are responsive to the consumer's needs and desires. Both aggregate demand for the products sold by the company, as well as category-specific demand for specific types of clothing was closely monitored (Raman & Fisher, 2001, pp.6-7). Responsiveness was also required to minimize wasteful production of unpopular lines of clothing and reduce the build-up of unsold inventory. Monitoring of past inventory and current sales, as well as speedy transmission of information between headquarters and the factory floor enabled demand forecasting to have a significant impact upon inventory waste reduction.

Inventory

Department store's significant impact upon sales of product lines such as Untitled meant that brands were constantly struggling for better placement within expensive retail spaces. But cost savings were achievable through Accurate Response monitoring, which enabled World Co to balance overstocking and under-stocking cost risks and achieve a happy medium between these two extremes.

Quick inventory turnovers are useful in the fashion industry because inventories that build up frequently are usually sold at a loss, once the trends have become stale. Yet small inventories may mean that some customers may leave stores dissatisfied and there may be insufficient capitalization upon new trends. Accurate Response was thus an effective risk management technique.

Production planning

Through materials preparation, such as standardizing zipper lengths and other relatively inconsequential details, production time was reduced.

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This also reduced waste, as inventory for obsolete products was less apt to become stockpiled. Also, this enabled the company be more responsive to demand, as existing input materials could be used in new clothing.

Financial impact: Supply chain design, short lead times and quick inventory turnovers

By increasing its ability to respond to subtle changes in demand in an immediate fashion, World Co managed to achieve high levels of consumer responsiveness and innovation. Its lean, tightly-controlled supply chain proved effective in reducing costs for the company but kept quality high. Short lead times for product releases and making use of adaptable raw materials increased inventory turnover, as this allows the company to be a 'first mover' in meeting demand without building up an inventory that had to be sold at a loss.

What can other companies learn from World in terms of managing their own supply chains?

Minimizing waste through close monitoring of the production process and consumer demand enabled World Co. To create value for the consumer and succeed as a brand even when brand names were in a relatively powerless position in the Japanese market, relative to the dominance of department stores. Perhaps the most striking feature of the company's success, however, is its reliance upon domestic production sources. This is a notable deviation from the current trend towards outsourcing to cut costs. However, for World Co., domestic production facilitated responsiveness, reduced production costs and delays, as well as improved quality......

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