Page 249 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes advantage for it. A customer could leave his office for a short while, either for measurements or
fitment, without much problem.
The supply chain in this industry consists of suppliers of branded products, some of whom are
established in the market. The established players normally provide 30 to 60 days credit for
stock delivered to the retailer. Suppliers of branded products that are not established may
provide their goods on a ‘consignment’ basis, i.e. the goods are paid for when they are sold and
unsold goods are taken back by the manufacturer.
For the tailor-made products, such shops normally employ a few master tailors who take the
customers measurements and oversee the fitting. The stitching is normally carried out by
independent tailors, who are attached to the organization.

When you analyze the product range of Style and Grace, it is clear that there are two distinct
supply chains, one for the branded readymade, and the other for the tailor-made custom products.
For the branded products, the demand uncertainty is high. You do not know what product the
customer will buy. If the customer is unable to find his size, style, brand or colour, the sale will
be lost. For the branded products, we need to have a supply chain that is responsive so as to
avoid stock-out situations.
In the case of the tailor-made products, as the customer would come and order for the product
and then its manufacturing would start, the demand is certain. For these products, we need to
have an efficient supply chain so that we can supply the product to the customer with the right
quality and with speed i.e. at the right time.
The overall strategy calls for coordination of two different supply chains. The functional spectrum
aspect depicts two supply chains that move in opposite directions.

A good strategy would be to use the certain demand of tailor-made products complement the
demand for branded shirts and accessories whose demand is uncertain.

Example: If a customer comes in for a suit, we could cross-sell him the matching shirt,
tie, belt etc.

They could have catalogues which would be promoted by the tailors, while they are measuring
or fitting the customer. Also, it must be remembered that men are generally less price conscious
than women. The supply chain for the branded items should be responsive enough to supply the
items on the date the suit is to be delivered. This means the concept of cross-functional teams
would help Style and Grace.
The design requires a strategic fit between the two supply chains. Each functional strategy must
support the other functional strategy so that acting in harmony, Style and Grace can attain
competitive advantage. For successful execution of the supply chain strategy, we first need to
understand the supply chain capabilities and demand uncertainty. Secondly, we need to streamline
the three flows such that they are efficient enough to reduce the time required to complete the
cycle.

For the readymade products, Style and Grace needs to have a cooperative relationship with its
suppliers. These relationships should be based on cost focus. There must be highly personalized
and responsive customer service. Proper customer relationship management becomes important.
If Style and Grace are able to create high customer loyalty, they will be in a position to take
advantage of the more lucrative deals offered by the less established brands, and also get better
credit facilities from the established brands.
All customer information has to be captured and regularly upgraded. This is especially important
as the pattern of demand of its customers may be unique.

244 LOVELY PROFESSIONAL UNIVERSITY