supply chain innovations

Onearth

BEST PRACTICES :- LOAD BUILDING

Comprises constructing a pallet, loading it and building transportation routesEver changing customer requirements

Automate the Process•Installing an inline print-and-supply operation right before palletizing•Not feasible for some manufacturing processes which require label is required at the time of manufacturing.Use robotic palletizer there.•Limit the number of SKUs loaded into an import container

OPTIMIZE THE CARTONSDownloading an orderPutting pieces into cartonLoading cartons onto palletsLoading pallets into trailer in sequence

BUILD STORE-READY PALLETSSmaller European storesCustomization of pallet with specific department or Aisle location of store

CONSEQUENCES OF CUSTOMIZATION AND CHOICES AVAILABLEIntegrate store’s layout with WMS to direct pick according to location and what item to pick3D image of the load he is building available on RF device to know the exact location of placing productUS following trend with barcodes for store operations and human readable information including store number ,department and specific aisle location

OPTIMIZING THE TRAILEROptimize loading based on cube of trailer, whether pallets are stackable or how load is distributed over truck axles

Load sequencing based on the temperature zones and compartments i.e. frozen foods in the nose and refrigerated in the mid-section of a trailer

Customizing w.r.t. Driver-WMS maintains profiles of individual drivers and use rules for product-placement precision.

Best practices: Load building

•Mandatory now with smaller and more frequent deliveries •To reduce shipping costs, control of inbound logistics and combine less-than-truckload (LTL) shipment into full-truckload(F/T) •Accomplished by getting details about quantities and delivery dates from vendors and then use TMS functionality to arrange for multi-stop pickups at vendors located near one another•Retailers have added 20 percent profits by implementing this and is best suited for firms with more than $150 million a year in sales as they are going to have the kind of shipping volume that make this strategy feasible.

CONVERT LTL TO F/T

United Colors of Benetton : Supply Chain Innovation

Benetton ……..

•Benetton Group S.p.A. is a global clothing brand based in Treviso, Italy. •The name comes from the Benetton family who founded the company in 1965.•The company's core business remains their clothing lines. •Casual clothing is marketed as the "United Colors of Benetton"; there are also a fashion-oriented "Sisley" division, "Playlife" and "Killer Loop" streetwear brands. •To protect franchisees, the company does not sell online, using its websites solely for marketing purposes without listing prices. •By the year 2000, the group was selling 160 million garments worldwide, annually in 5,500 stores.

The Operations : The Three tier model

Designing

Designing responsibility were with Benetton headquarter

Designers worked in three groups

First group takes care of commercial aspects

Second group carry’s out research

Third group responsible for graphics.

Manufacturing Process - Vertically integrated Model

Purchasing function

Largest buyer of wool in world

180 suppliers of raw material

Over years it had gone vertical integration

Reduce lead time ?

By directly sending to production facilities from suppliers

Olympia's functioned as source of woven fabric and dye house

Dec 2006 Benetton Operated through 18 factories 12 in Italy and remaining in Europe and India

• Plants in other countries– Smaller in scale– Subsidiaries fully partially owned – Allocated tasks to contractors– Specialized in one type of product– Established WIDE, Benlog, Benair

Italy Final Customers

Final Customers

Plants in other

countries

Plants in other

countries

Retailing

High Lead Time to Produce

Postponement strategy

Problems

• Benetton Other sweater and garment

producers(H&M, Zara, Gap)

2 collections in a year 12 collections in a year

Many internal designers Many consulting designers

Manufacturers not Retailers Manufacturers and Retailers

Feedback from customers was low

Feedback from customers was high

High lead time to produce and ship garments to shop (6-8 months)

Low lead time

High priced Affordable price + colorful clothes+ trendy designs

Ways to deal with problems

The DUAL SUPPLY CHAIN

Benetton’s Supply chain

Benetton’s Production SystemSub contractors Italy , Tunisia & Eastern Europe

Sub contractors India , Hongkong

Benetton factories (local)

Benetton factories (International)

Direct delivery to client

Logistic Hub Europe Logistic hub Asia

Retailers / Outlets/ Franchisees

Benetton’s Collections

Benefits of Dual Supply chain

• Offer new products to its customers on a continuous basis

• Able to maintain sales and profitability even after season

• Balancing the time to market and cost

• Better inventory management• Faster deliveries

Interplanetary SCM

Haughton-Mars Project:•Inventory•Network Modelling•RFID•Extra Vehicular Activities Logistics

Push to Mars : Pull the Moon

Risk Pooling

Functional based Classes of Supply