AMDT 430 Exam I

-mechanization of spinning, weaving, and sewing. Early spinning mills included carding, drawing, roving, and spinning. -ready to wear *slops and size standards

1794

development of dry goods stores in cities, which later became department stores.

-growth of the ready-to-wear industry -womens RTW didn't expand until late 19th century -"Gibson Girl" -intro of rayon -fashion mags beginning with vogue (1892) -wartime manufacturing streamlined production -stock market crash (1929) devastated the economy -1930s- manufacturers began using contractors and subcontractors

Ready-to-wear children's apparel

brand names of manufacturers gained strong consumer recognition (branding)

production of RTW clothing located primarily in modern factories

-after WWII, Christian Dior's New Look got consumer attention's returned to Paris -increase in large, publicly owned apparel companies in the late 50s/60s. -emergence of mega malls -60s/70s= increased prominence of American designer names (gained recognition in Europe). -discounters

-growth in consumer demand for apparel and a shift in the product mix demanded.

-youth explosion and mass fashion- freedom & choices. -synthetics overtake natural fibers in popularity- innovation and cool.

vertical integration (supply chain theory emerged) -in need of more effective business mgmt skils -at larger scale

-consumer demands for lower prices, quality merchandise, and better service reflected in business strategies -major mergers and acquisitions: extended control of product agenda & expand ownership from upstream to downstream -quick response introduced: predecessor of fast fashion & shorten lead time (bring desired products to the market asap)

-increase in vertical integration among manufacturing and retailers (levis/nike/etc.)

-pull system -increased speed of design and production -increased efficiency with which companies communicate and conduct business -reduced amount of time goods are in warehouses or in transit -decreased amount of time needed to replenish stock on the retail floor

-QR strategies are adopted almost universally -goals of supply chain mgmt= bring right textiles/apparel to right mkts/consumers with right places at right time. (4Rs) -coordinate forecasting, design, procurement, production, inventory, location, transportation, and sales/returns to achieve the best mix of responsiveness and efficiency for the market being served. -maximize the profitability while minimize the cost at a system-wide level.

mid-1990s

-b2b (web-based technologies emerged) -consumers expect true multi-channel retailing that seamlessly integrates bricks-and-mortar and online operations. -radio frequency identification *identify authentic products from counterfeit products *seamless monitoring of product movement

up to 11 months for apparel products sourced from Asia, but some- World and Zara- achieved 2 week lead times.

50%-100% errors for a season forecast at chain level is typical

stock outs caused by inventory record errors (book inventory v. physical inventory)

creation of an ultra-fast supply chain that focuses on consumer demand is known as this.

-each supply chain has its own unique set of market demands and operating challenges. 1. serve different customers 2. own different resources & capabilities -some issues remain essentially the same in every case. -companies in any supply chain must make decisions individually and collectively regarding their actions in five areas.

1. Production 2. Inventory 3. Location 4. Transportation 5. Information

what, how much, when. Create master production schedules (considering plant capacity, workload balancing, quality control, and equipment maintenance)

decide optimal inventory levels and reorder points. A buffer against uncertainty in the supply chain.

where. Facilities for production and inventory storage. Determine possible paths for products to flow through for delivery to final consumers.

mode of transportation. (cost, transit time, and reliability).

-how much data should be collected, how much should be shared, and use it to support effective decision-making in other four areas.

True

-low inventory

-high inventory

1. Cycle inventory= amount of inventory needed to satisfy demand for the product in the period between purchases of the product. 2. Safety inventory= held as a buffer against uncertainty of demand. 3. Seasonal inventory= built up in anticipation of predictable increase in demand that occur at certain times of the year.

1. cost of facilities 2. cost of labor 3. skills available in workforce 4. infrastructure conditions 5. taxes and tariffs 6. proximity to suppliers and customers

True

accurate, timely, and complete.

1. coordinating daily activities 2. forecasting and planning

do everything by myself

do what I am good at

1. understand the markets 2. define core competencies 3. develop needed supply chain capabilities

-attributes for different types of customers -quantity of product needed -the response time consumers are willing to tolerate -variety of products needed -service level required -price -the desired update/innovation of products (fast fashion)

-define the role that your company plays (or wants to) in the supply chain -any company can serve multiple markets and participate in multiple supply chains

responsiveness -demands excess capacities and requires flexible manufacturing techniques.

efficiency is the priority. Results in little excess capacities and usually makes companies produce limited items.

-give and take relationship -deals are made to buy/sell products, including sales, negotiation, and ordering between companies or departments within companies.

-"physical work"- to get supplies moved through the entire chain -design, manufacturing, transporting, storing, facilitating sales, etc.

apparel manufacturers, apparel contractors, retailers, wholesalers, agents, and brokers.

make garments, own factories, do storage, and do delivery.

make garments, find quality manufacturers, watch production schedule, do storage, and do delivery.

-four types of criteria 1. ownership 2. pricing philosophy= discounters/full price 3. product assortment= walmart v. ann taylor 4. service level= specialized or convenient

intermediaries/middlemen who buy products from manufacturers (domestic or foreign) and resell them to retailers.

-intermediaries work between suppliers and retailers *usually don't take ownership *independent sales representatives working on commission based on sales volume *can sell to wholesalers and retailers *buying offices

-lack of expertise (focus on core competencies), cost-efficiency, shared responsibilities, risk mgmt, and better performance against uncertainty in customer demands.

1. direct 2. retailer 3. wholesaler 4. agent/broker 5. electronic commerce/mobile commerce 6. dual/multiple channel

-in apparel, usually retailers own dominating power and drive distribution channels. -however, in many instances, apparel manufacturers make the decisions on choosing one channel over the other. *ownership of products, capacity, and competencies.

the products, types of customers, market size, producer's level of control, size of the apparel producers, and the size of retailers.

1. exclusive distribution 2. selective distribution 3. intensive distribution

-high end fashion, has legal right to sell the product line in a geographic area, sometimes required by retailers rather than apparel producers, product quality and services are much more important than quantities of sold products.

retailers are carefully screened, and only a few are selected to sell the product lines, similar as exclusive, part of the goal is to enhance the image of the product by making it harder to obtain, allows retailers to charge full price, and apparel production usually uses different brands to serve different retailer distribution channels, such as designer brand for dept stores and secondary brands for discounters.

products can be found everywhere, some apparel brands take advantage of any accessible retail channels, increasing sales volume is the priority, and usually it is the most complex distribution form.

partnership arrangement between companies with products or skills to share. -more than 2 companies holding shares of each others' stock, or ordering merchandise jointly for added buying power (economies of scale) -alliance must have 3 characteristics 1. must be collaborative 2. horizontal 3. must be beneficial to all members in the alliance

-customers want to interact in different ways -electronic channel gives opportunity to overcome -limitations of traditional channels -retailers can reach out to new markets -enables retailers to gain valuable insights into customers' shopping behavior -providing multichannel offerings builds "share of wallet"

True

-convenient -offers greater selection of products due to not having to take physical space to store inventory -more personalized information about products in relatively short time -unique opportunity to collect info about how consumers shop -vast # of alternatives -consumers can easily visit

1. can provide as much info as each customer wants 2. info can be frequently updated and always available.

-networks of ppl who seek info, products, services, and communicate with one another about specific issues. -Purpose= added ability for customers to post reviews, provide valuable feedback to buyers about what is liked or not liked, and retailers ideally suited to offer problem-solving sites for customers.

-lack of touch and feel information, so they experience higher return rates. -to cope with this people use brands for a consistent experience. Consumers trust familiar brands and they sell successfully.

-use 3D image and/or zoom technology -virtual models *see selected merchandise looks on an image with similar proportions (memory mirror)

1. Security of credit card transactions on the internet (encrypt communications) 2. Potential privacy violations -this concerns consumers about retailers collecting info on purchase history, personal info, and search behavior.

retailers need to have the skills to... -develop assortments/manage inventory, manage ppl in remote locations, efficiently distribute merchandise to stores, present merchandise effectively in a printed format and distribute catalogs, present merchandise effectively on a web site, process orders from individual customers electronically, efficiently distribute merchandise to homes, accept returns, and integrate information systems to provide a seamless customer experience across channels.

easy to use website, management information system (order processing, customer database, and personalization software), and retailing skills (managing inventory and editing assortment), efficient fulfillment systems, strong brand name/image, complementary merchandise, and availability customer information.

significant costs, picking/packing individual orders, and handling returns.

build traffic and reduce customer perceived risk

one stop shopping and lower shipping costs

tailored presentations- personalized

lack of skills to succeed in internet retailing and consumers prefer multi-channel retailers.

plan, source, make (produce), deliver (transport), and return

refers to all the functions that are necessary to plan and organize the operations in the other four categories. (demand forecasting, product pricing, and inventory mgmt).

operations in this category include activities necessary to acquire the raw materials or skills to create products or services, or end products or services. 1. procurement of materials/products or services 2. credits and collections/acquisitions of cash -clean up of contract payment is a big issue and cash discount

operations to develop and build the products and services 1. product design/development 2. production mgmt 3. facilities mgmt

receiving customer orders and delivering the products to customers. -delivery is about time, the mode, and the place. 1. order entry and fulfillment (receive order) 2. product delivery (ship order) 3. shipping cost including insurance

refers to service-related functions, they are critical functions making a difference in customer loyalty. (a very serious issue in the US apparel retail business). 1. credit policies 2. returns, repairs, and exchanges

-reductions in sales, reduced gross margin percentage, reductions in customer traffic, increased markdowns, reductions in inventory productivity, and increases in aged inventory.

1. Which product lines will be required? 2. In what amounts? 3. When they will be needed?

1. demand 2. supply 3. product characteristics 4. competitive business environment

refers to the overall market's perceived need for a group of related products or services.

determined by the number of producers of a product and by the lead times that associated with a product.

refers to the actions of a company and its competitors -company's market share and trend -competitors' market share and trend -product promotions and price wars

1. qualitative= intuition/opinions 2. causal= demand is strongly related to certain factors (correlation) 3. time series= based on historical demand patterns 4. simulation= combines causal and time series methods (statistical modeling)

inherently more accurate than long-term.

more accurate than forecasts for individual products or for small market segments.

True

know degree of error to prepare contingency plans to cover these uncertainties

create a plan that maps out exactly how the company will meet the expected demand for what it makes or sells