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Purpose of the paper:
Getting products to market in a shorter time enables a fashion brand to savor the trend in vogue and can start preparing new products later than its competitors. Shorter time-to- market could help reduce product inventory risk because not only might the design fit the market better, product replenishment can be fulfilled in a shorter time. ZARA is one of the apparel fashion brands best able to reduce finished product inventory and respond quickly to market demand; adidas CORE is a reasonably-priced fashion sports shoes targeting at younger consumers and seeking to capture market share through a responsive market strategy. Because apparel and shoes have different product structures and production processes, the supply chain design and management engaged are different. This study employed a case study method to investigate the bullwhip effect and responsiveness of ZARA and adidas CORE, and also examine the use of postponement strategies and concurrent engineering to achieve quick response.
Design/methodology/approach:
We studied fashion industry supply chain and manufacturing strategies, especially those related to design, purchasing, postponement, inventory control, production, logistics etc. that could lead to lead time reduction. ZARA and adidas CORE were used as two cases to verify the theoretical findings through direct observation, interviews and document review.
Findings:
In order to reduce out of season unsold inventory while also responding to market demand quickly, under this premise, ZARA and adidas CORE both adopted postponement strategies in their supply chains and manufacturing systems. They also adjusted production to ensure that customized processes are delayed at the postponement point until the demand is confirmed. However, due to different production structures of apparel and shoes, their postponement points are also differentiated. In addition, the two brands both use anticipatory business models in conjunction with their postponement strategies to prepare for rapid production. Because shoes require many different types of materials, to shorten development time, adidas embraced the concurrent engineering concept by inviting vendors to participate in the development process. After products have reached the market, in accordance with their sales situation, ZARA may adopt a responsiveness business model for quick response, while adidas CORE maintains a brisk production and shipment pace in order to supply the market without interruption.
Value:
The case study rationalizes from supply chain perspectives regarding how those fashion brands could make their products to market in a short time. The effectiveness of short lead time can also be confirmed from the metrics in inventory level and profits.