Logistics:
Luen Thai can meet the requirements of Polo by designing templates and by sharing VMI programs. In addition, by delivering the raw materials to Polo through accurate and complete co-ordination will also improve chances for the company. Luen Thai can improve competitive capabilities through process efficiencies by delivering shipment to Polo’s distribution centre and sharing all information captured from the floor of the factory along with exchanging the logistics to all relevant prices.
Design:
Luen Thai must also have the capacity or the capability for developing design template that can be stored through the application and product database. Moreover, these can be XML-enabled to allow each partner to look at them and update accordingly.
Major drivers for supply chain in the apparel industry
With the change in apparel quotas expiring in 2005, the apparel industry gas undergone sweeping changes in the current supply chain practices within the industry. The quota removal has further pressurized and squeezed the already razor-thin margins of manufacturers. For instance, A.T. Kearney projected that manufacturers and retailers have to produce bigger volumes with unique and different styles while maintaining the quality to remain competitive and all this needs to be done with low profits after the elimination of quotas. The quota system created inefficiency and allowed incompetent manufacturers to exist; in a competitive market however, companies would only choose suppliers who provided competitive apparel products and enhanced customer value. Apparel business has made huge progress that has a\driven towards effective collaboration among various companies to increase value-added processes within them. Supply chain in apparel industry has been asset-based and production was designed to manufacture in large numbers. Previously used methods of manufacturing in apparel industry have changed or transformed into better and new innovative technology. The old fragmented technology has become obsolete. Along with this supply chains in the apparel industry has been operated through loose alliances to gain competitive advantage. All this is done through co-operation, instead of acting as integrated and organized clusters. Therefore, a combined effort that can address collaborations, procession and organization dimensions in supply chain integration is a necessity. Following are major drivers of change for supply chain in the apparel industry that can bring the necessary change in it and make it a better opportunity for industry players if they compete on the following basis.
Product Design:
Texture, strength, fabric and fibers are technically very important as a driving force in the apparel industry. With an increase in new requirements and technologies, apparel product design has transformed into a main force of the industry. To improve quality CAD has been used by industry players to reduce the overall manufacturing time.
Sourcing:
Traditionally, the labor cost, shipping cost and the material cost are sourcing decisions in apparel industry. With increasing competition among companies in the apparel industry, they have shifted their supply chain systems to Asian countries that prepare the same quality product at cheaper rates. Wal-Mart, Marks and Spencer have transformed the production and shifted to cheaper regions to increase profit margins and to stay competitive at the same time. Outsourcing is a common practice among companies in the apparel industry, which obviously increases the complexity in selecting the supplier.
Manufacturing:
With increasing prices in Western countries to manufacture apparel, industry players have shifted complete manufacturing to Asian countries that have produced high-quality products at much cheaper rates.
Logistics:
A logistic flow chart includes manufacturing of goods in the Asian market, which are then transferred or shipped to the homeland where retailer stocks garments to sell across the country. The process includes typical logistics flow that starts with manufacturing goods, where goods were delivered to the distribution facility for labeling, re-packaging and making it ready for retail outlets. The important aspect was however, that logistics management was reducing time-in-inventory and transit by increasing efficiency along the logistics process.
Retail:
All retailers in the apparel industry continued to combine their supplier/manufacturer strategic partnerships to reduce overall prices of the final product. Retailers in fact, got the privilege to understand the buying decision and behavior of each customer and its demands. By sharing their information, retailers and manufacturers could significantly reduce economic costs which plagued the apparel industry......................................
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