rapid technological advancement and high competition it has become a challenge for businesses to manage their operations effectively and efficiently. It has become mandatory for businesses to find ways and methods which are not only cost effective for them but also deliver the required and needed value to the customers (Beamon, 2008).
Apart from this ongoing changes and technological advancements the element of globalization and internationalization has also resulted in imposing serious and worth considering impacts and influences on the decisions of the organizations and companies related to their day-to-day operations and also to their long-term strategies and plans. Organizations now also have to consider international and global environment and factors which have direct or indirect impact on the business and operations of the company (Fisher, 1997).
The overall business industry and environment has turned into a highly competitive landscape and companies are facing increasing pressure of creating competitive edge and difference in order to survive and grow in this competitive landscape. The trade liberalization policies and removal of international quotas and tariffs have on one hand provided companies with increased opportunities and whole new markets but on the other hand it has also raised serious challenges and threats for many businesses around the world.
Many manufacturing and other related companies are outsourcing some of their operations to the suppliers and contractors in countries where the cost of production and cost of operations is considerably low. This has allowed businesses to create a competitive edge on the basis of the low cost involved in the production and operations and companies can provide the same product and goods at relatively low prices than the competitors (Maloni & Benton, 1997).
But on the other hand this outsourcing in different regions and areas has resulted in creating challenges and problems for the companies while managing their supply chains. Businesses are looking for new methods and ways to manage their global supply chains in a better manner in order to increase the efficiency of the global supply chain and also the responsiveness of the global supply chain (Min & Zhou, 2002).
The most difficult decision being faced by different organizations in this challenging environment is the effective and efficient design of the supply chain. The companies are facing dilemma between deciding to outsource the operations or to perform them in house. The overall performance, responsiveness, and efficiency of the supply chain of any company are directly dependent on the decisions of outsourcing or in house performing of the operations. There are several factors which have to be considered before making this decision. This decision is also dependent on the nature of the product and needs and demands of the market and consumers. For example if the consumers want quick service and high responsiveness it will be beneficial to keep the control of operations with the company and focus more on in house and internal production. On the other hand if the consumers are price conscious it will be better to outsource the operations to the suppliers and contractors who can perform those operations at considerably lower cost than the main company (Min & Zhou, 2002).
CHALLENGES IN SUPPLY CHAIN Management:
It is becoming difficult and challenging for the organizations and companies to manage their supply chain effectively and efficiently. The decisions about the design of the supply chain are one of the most vital and critical decisions that have to be taken by the companies (Ballou, Gilbert, & Mukherjee, 2000). It is essential for the companies to understand the basic concept of supply chain. Supply chain is just not a new name for logistics; it is more than that (Cooper, Lambert, & Pagh, 1997). The network of supply chain consists of the main organization along with the suppliers and customers of the business. Due to the involvement of many different parties and levels the supply chain management is just not the management of the logistics but is the combination of the management of the human resources, internal processes, and of the process of product transformation. Apart from this supply chain management also includes the sharing and management of the information among the main organization and suppliers and customers of the organization (Harrison, Lee, & Neale, 2003).
The most important question which has to be answered by the organizations while designing supply chain is about the objective of the supply chain. There is a tradeoff between the responsiveness and cost efficiency. The supply chain can be either highly responsive or can be cost efficient. This decision is made according to the needs and demands of the market and customers. The supply chain should be designed in such a manner that it facilitates and helps the organization in the fulfillment of the needs and requirements of the end consumers (Kouvelis, Chambers, & Wang, 2006).
The decisions related to the supply chain strategies, operations, and designing are difficult and challenging. The companies are creating competitive edge over one another with the help of effective and efficient supply chain network. The fact that the supply chain network involves several other parties and levels makes the management of the supply chain more challenging. The companies and organizations have to come up with the right strategies and plans for profitable integration and long lasting partnerships with the other members of the supply chain like suppliers and distributors (Lavassani, Movahedi, & Kumar, 2009).
Supply chain management is important and critical for the organizations because it enables the organizations to create maximum value and customer service, which will help and facilitates the organizations in the process of creating high profits and revenues for the business (Lancioni, 2000).
OVERVIEW OF THE COMPANY AND THE APPAREL INDUSTRY:
VF is one of the renowned and famous names in the apparel industry. The company is being operated since the year 1899 when it started its operation under the name of Reading Glove and Mitten Company. With the passage of time company has been expanding and finally in 1917 it changed its name to Vanity Fair. The company further expanded and entered into new markets by using the strategy of acquisition. The company is known for its wide set of acquisitions in order to expand the existing product lines and diversify into new markets and areas. For many years the main strategy of Vanity Fair was of vertically integrated manufacturing in jeans and most of the factories of the company were located in the United States. In the following years Vanity Fair also entered in the market of global lifestyle apparel (Pisano & Adams, 2009).
The strategic growth plan of the company revolved around two key points. The first goal or aim of the company was the expansion of sales and business outside the United Stated to other countries particularly to the countries with rapidly developing and growing economies like Russia, India, and China. The company worked to increase its international sales. The second element or goal of the strategy of the company was the expansion of the direct to consumer business. The company increased the retail outlets and company operated stores in different areas and regions. The company strived hard and keeps on coming with new and innovative ideas and strategies in order to compete and survive in the industry.
The overall apparel industry constitutes of design, manufacturing, and marketing of the clothes, accessories, and the personal luxury items and goods. The apparel industry is highly fragmented and competitive. There are broad and wide range of products and items along with the range of prices in the industry. Different companies operating in the industry are always looking for new methods and techniques to create competitive edge over other competing companies. The growing trend and increasing power of the mass retailing chains has also resulted in causing serious challenges and issues for the companies in the industry. The recent economic downturn has imposed huge pressure on businesses in order to reduce the cost associated with the operations.
Apart from this the globalization and other advancements have also changed the overall outlook of the industry. The consumers are asking for quicker service and the retailers and wholesalers are seeking more flexibility. In order to fulfill these changing needs and requirements businesses in the apparel industry are looking for ways and methods to make their supply chain more responsive and flexible (Pisano & Adams, 2009).
OPERATIONS AND SUPPLY CHAIN OF THE COMPANY:
The supply chain of the company consists of several steps and intermediaries. The supply chain process starts from the design and end when the final product is at the shelf of the store ready for consumer to purchase. The traditional supply chain processes of the company starts long time before the availability of the final product for the consumers. The design department of the company starts working on the design of the product according to the needs and requirements of the market and consumers, once the designing of the product is done a prototype is formed of the product which is used for taking any…