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Quick response and supply chain structure with strategic consumers. This work explores the impact of quick response on supply chain performance for various supply chain structures with strategic customer behavior. By investigating pricing and inventory decisions in decentralized supply chains under revenue-sharing contracts and in centralized supply chains, we study the performance of four various systems and compare the value of quick response in different supply chain structures.
The results show that if the extra cost of quick response is relatively low, the value of quick response would be greater in centralized systems than in decentralized systems. On the other hand, if the extra cost is high, decentralized supply chains reap more incremental profits from adopting quick response. We also find that revenue-sharing contracts enable a decentralized supply chain to outperform a centralized supply chain, but only allow limited flexibility of allocating total profits between a manufacturer and a retailer.
More about this item Keywords Supply chain structure ; Strategic customer behavior ; Value of quick response ; Revenue-sharing contracts ; Newsvendor model ; Statistics Access and download statistics. It is information based as compare to conventional supply chain which are lengthy and includes long lead times hence are forecast driven M Christopher et al. Fig 1: Apparel Supply chain Source: M. Christopher, D. Since the product cycle is short enough hence agile supply chain is required in order to deliver the product in time.
Although outsourcing to regions further away results in broad and complex supply chain thereby causing longer lead times. There may be unseen costs related with global suppliers like inconsistent exchange rates that affects the performance of supply chain in fashion industry Martin Christopher et al. Jin, reports that in agile and lean related world, it becomes critically important to quickly respond to changing needs of customer in order to sustain competitive advantage in the market.
The shelf life of basic products increases and the physical costs represents major portion of total potential costs. In labour intensive industry, the production choice is developing and undeveloped countries where low income is there Sen, In high fashion product category, that has short life cycle and high market mediation costs, retailers follow responsiveness while deciding the source Sen, Network complexity in fashion industry results in various problems which impacts the performance of supply chain globally. These contractors act like a bridge among wholesalers in developed countries and manufacturers in developing countries.
Globally the search costs is usually high and also the arbitrary costs due to cultural and language barriers. There are two opposing views in the literature on intermediate contractors exchange relationships.
The QR (Quick Response) system, a production and distribution system for QR was created from a project to improve the supply chain management of the. Quick Response (QR) is both a management paradigm and a methodology that of a supply pipeline as opposed to the generalized theories of Supply Chain.
As such there are no studies to link intermediate contractors with supply chain. This research paper focuses on filling gaps. Methodology The characteristics of an organisation that implements agile strategies reflects flexibility M. Agile supply chain management in fashion industry focuses on responsiveness. As the fast fashion industry demands quick response in delivery of the products to the stores, hence these agile and quick response thinking is beneficial for the industry thereby meeting the demands of the consumers which are less predictable.
The characteristics of agile supply chain are mentioned in below table. Characteristic Interpretation Market conscious SCM has the capacity to read and respond to actual demand.
Process integration Shared information is fully leveraged through process integration among supply chain partners. Network-based The partners in supply chain provides great network which act as fourth ingredient of agile SCM. Retailers do not prefer inventory stock, instead they closely work with manufacturers that can swiftly provide them new commodities. Therefore more suppliers are required in the supply chain that can feed larger diversity of style demanded by customers.
Phases like commodity development and quality control are removed from SMC processes in order to swiftly response to customer needs. M Christopher et al.
The trends change at a rapid rate and retailers who showcase long production runs have low demand. Therefore supply chain source has shifted from China which prefer long run production towards more adjustable and small run production. As there is more pressure now suppliers, hence there is innovation in shipping technology and if the production orders are urgent air freighting is used in order to avoid delay in market. Quick Response has emerged as a strong operation strategy Lowson, which fascinates for two reasons.
Firstly, the capability to confront complexity involved in fashion logistics and second as a procedure to confront shift towards global outsourcing from low wage countries that helps in cost minimisation and resulting into effective supply chain. The new technology implemented results in optimal performance in agile supply chain networks of fast fashion industry. The main principle of QR is aligning industry processes to demand. All the processes in the organisation should be paced to customer demands and changing trends.
Hence it becomes crucial to understand the strategic understanding of demand drivers and appropriate connection with supply. The strategies needs to be implemented at supply chain networks which leads to effective distribution of product. Time plays a strategic role in QR operation. Demand based on time needs special assessments as to where the consumers can be served.
Quick and correct adaption to market change is the most important factor of QR. Information is constructing factor for effective QR.
Hence accurate information flows and timely flows ensures fast and correct results minimising waste and costs. Findings The complications related to global manufacturing and constant demand to reorganize the supply chain structure can be overcome through intermediate contractors.
Fig: 4 SCM networks before and after utilising intermediate contractors source: Purvis et al. The fabric and information flow is represented below in fig: 5. Therefore the retailers have to be excessively agile in grabbing new trends, designing new commodities and delivering in the market. Sometimes the retailers prefer global outsourcing as compared to local producers due to lack of experienced manufacturers. In order to reduce risk, less capacity is delivered frequently.
Discussions and conclusions 5. Therefore higher flexibility will provide intensive capacity usage.
The QRM process looks at how lead times across the company can be reduced to increase productivity. Inventory is carefully managed based on demand and overall throughput, governed by the constraint process, which itself is governed by the job routing. They expected and received quality workstations. The company also started purchasing instead of making some components, including those articulating arms. If QRM is right for you and your company, using QRM as an adjunct to your lean manufacturing program, will help reduce costs across multiple functions, eliminate waste from your production processes, drive customer service levels higher and result in a higher level of financial goal achievement.
The greater level of responsiveness is possible through intermediate contractors who helped the retailers by providing required information in global situation. These contractors have detailed information about finance, management and technical capacities of individual manufacturers in the local area along with extra capacity if required at short notice.
Their information helps in speeding up the production by integrating production structure that is hugely segmented. Also, the intermediate contractors provide the retailers, the capability to coordinate among different firms and thereby enhancing the economies. Due to the contractors order consolidation from consumers before initiating request with manufacturer along with orders consolidation with various manufacturers before shipping items to UK, a large amount of cost was saved.
Hence advanced intermediate contractors are required that can subcontract the orders to other local industry. These contractors offer assistance to the retailers by bringing experts from clothing manufacturer, dyer, fabric manufacturer etc.
This results in shorter lead time, high delivery speed, increased confidence and other crucial factors to gain a competitive advantage in the market. According to the findings various issues related to supply chain have been resolved after employing intermediate contractors. These contractors helps in filling gaps between potential buyers and suppliers Nayyar, Hence it can be concluded that global, agile and quick response supply change is becoming the requirement of time as the consumers are now more demanding in terms of cost, quality and service.
It has been observed by retailers that overseas contractors have the ability to manage different forms of sourcing, manufacturing, production, delivery that require high agility and quick response while retailers prefer direct sourcing with steady demand. In future, there is a necessity to examine the complex communications that occur among various stages of supply chain and among contractors that are involved in particular market sector. Further researches that addresses the scope to which intermediate contractor relationships could facilitate greater flexibility in SC would be beneficial.
Factors governing the development of marketing channels. Barnes, L. Fast fashioning the supply chain: shaping the research agenda of Fashion Marketing and Management. Fast fashioning the supply chain: shaping the research agenda. Journal of Fashion Marketing and Management.
Christopher, M. Creating agile supply chains in the fashion industry. International Journal of Retail and Distribution Management. Marrying the lean and agile paradigms. Dornier, P. Global operations and logistics: Text and case. Doyle, S. Supplier management in fast moving fashion retailing. Forza, C. Time compression in production and distribution within the textile- apparel chain. Integrated Manufacturing Systems. Fung, P. Relationships and performance of trade intermediaries.
Relationships and performance of trade intermediaries: An exploratory study.