This shows the emphasis that Abercrombie & Fitch placed on improving communication between all these different elements in the supply chain.
This solution was integrated with the Oracle Retail Merchandising System, a complex solution that allows merchants "merchants to monitor the delivery status of key orders and for the logistics team to proactively manage inbound shipments by milestones"
. There are several elements worth analyzing here. First of all, accurate shipment information, as implied by the delivery status of key orders, means that the company and the management is able to completely track when each batch of products is delivered and is sold throughout the supply chain.
This is very important, because of several key issues. First of all, it allows the company a proper inventory management. This means that it is able to estimate the potential demand in a certain store and determine exactly when the orders that have been sent will arrive, which means that the respective store will be able to determine whether or not it can sell the merchandise in the inventory and how much of it. Second, it will also create a rational approach to the way products and goods move in the supply chain, with the company able to track the products as they move in the chain at certain milestones. This also means a more strategic approach and a better understanding of its own supply chain.
Another technological solution that Abercrombie & Fitch has implemented in order to increase transparency and visibility is the Xpress Commerce. This tools is also primarily used for tracking and reporting, and ensures a cohesive transparency and visibility within the different elements that are part of the supply chain.
It is safe to emphasize that, as most supply chains, the supply chain at Abercrombie & Fitch is a combination of a push and pull systems. On one hand, Abercrombie & Fitch sets certain volumes of products that the manufacturers with which it is working have to complete. With that in mind, it is also a pull-based supply chain because the orders are linked with the actual customer orders rather than on the forecasts that the company sets.
Considering both these aspects and because of the technological additions and improvements that have been previously mentioned, it is more likely that the supply chain at Abercrombie & Fitch is more push than pull. Agreeably, the company does set certain standards of sale, as they are determined by the strategic objectives over the year, by the investments that have been made in marketing and promotion campaigns and, overall, on the sales expectations that the company has over the year
In terms of logistics, there are several key issues in the operations and supply chain at Abercrombie & Fitch. The logistics system that the company sustains is based on key elements, included the existence of a central location that tracks shipment from multiple sources. This is important because of coordination issues: making sure that all information is, at any given time, at a certain place in the supply chain means that that particular element in the chain will have knowledge of the entire chain and will be able to properly coordinate the way that the products move.
As shown in this paper, Abercrombie & Fitch use a complex portfolio of technological solutions to improve its supply chain management and to ensure that products and services move more efficiently across the supply chain.
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Abercrombie & Fitch Case Study. On the Internet at http://www.managementdynamics.com/html/case/mdi_case_af.shtml. Last retrieved on November 28, 2010
Abercrombie & Fitch Enhances Vendor Collaboration and in-Transit Delivery. April 2010. On the Internet at http://logisticstoday.com/operations_strategy/abercrombie-fitch-vendor-transit-delivery-0419/. Last retrieved on November 28, 2010
On the Internet at http://loughran425.wordpress.com/. Last retrieved on November 28, 2010