Supply Chain Management at World Co. Wesley Riley, BSAD 173 Section B Problem Identification: World Co., Ltd.

is a leading apparel

retailer in Japan. The company hasexperienced great success, especially in its ability to effectively utilize its supply chain. By

implementing brea k through manufacturing, demand forecasting, and inventory management techniques the firm is ableto experience far

better lead times than those seen in the United States. The firm also has been able toeffectively respond to the characteristics of the Japanese retail environment. Worl

ds revolutionarysuppl y chain structure has helped it become a true presence in the fashion apparel industry. Analysis:

There are many distinct characteristics of Japanese retailing and World Co. has adjusted itssupply chain around them. Numerous Japanese firms reach their

customers through department stores,due to many high traffic areas. Also, fashion trends change rapidly and there is little variance in sizechoice for clothing. World

Co. employees a separate merchandising group to manage each of their 40 brand names, allowing for adaptation to market signals. This helps

keep brands fresh and exciting (theycan meet the current trend), and also strengthens bargaining power (inventory risk, decision making) withthe department stores. World Co.

effectively maximizes their sales per square foot (about $2500), animportant factor in cities with limited store front space. They also minimize discount periods that

cause price cuts and disorganization .World Co.s manufacturing process demonstrates their effective use of the supply chain. Thecorporat e office

(merchandisers) are in direct contact with the factories. Merchan disers inform factoryworkers of potential production problems and pattern

specifications. Also , if the factory encountersmajor issues they can relay this information back to merchandisers quickly. Minor problems do

notrequire corporate approval, avoiding unnecessary delay. Employees are given a variety of tasks to do,avoiding boredom and keeping moral

high. Workers at the factories are informed when a new fabric isgoing to be arriving. This allows managers to allocate scheduled tasks 48 hours ahead of time. Domesticfact

ories are used to most effectively respond to demand and product changes. The higher productioncosts (global) outweighs costs of slow lead times to

customers.The firm forecasts demand in a variety of ways. At the SKU level, a voting system is used to rank products. Thi s is effective because the voters are similar to

potential customers (woman, ages 2529) andquantity recommendations are ignored. Demand forecasting is dynamic and changes as sales come in for the

season allowing for proper adjustments to be made