Dynamics of Supply Chains for Perishable and Non-Perishable Items

This chapter analyzes the dynamics of supply chains for perishable and non-perishable items and compares them. It starts with a single echelon supply chain with widely used inventory management and ordering policies; and then generalizes it to multi-echelon supply chain. Simulation experiments are conducted to match the results with literature and real-world scenario. It shows how spoilage information can be incorporated in the ordering decision to create highly responsive supply chain, which may not always be desirable. Amplification is lesser and stabilization is faster for supply chains of perishable items. ANOVA shows significant difference for the identified performance metrics under varying demand patterns and to a certain extent varies with the item type.

Super Responsive Supply Chain: The Case of Spanish Fast Fashion Retailer Inditex-Zara

The successful implementation of an integrated supply chain strategy enhances total control over the operations and thus enhances speed and flexibility. The objective of this study is two-fold: first to identify the constituents that mold the fast fashion retailing business model, and second to discuss how global leader of fast fashion retailing Inditex-Zara’s product offering is strongly supported by integration of various supply chain operations. The findings suggest that vertical integration through ownership of various operational stages including product design and development, production operation, logistics and distribution channel; appropriate sourcing strategy to meet product needs; application of process/product modularity practices in product design, material procurement and manufacturing to ensure manufacturing flexibility; flexible logistics capability; and all of these seamlessly integrated and coordinated by a centralized IT infrastructure can significantly raise overall supply chain flexibility and responsiveness. Inditex-Zara’s super-responsive supply chain reduces ‘bullwhip effect’, order-to-delivery lead time to stores, ensures lean inventory and high level of responsiveness to adapt and deliver products to stores with latest fashion trends and customer feedbacks at a rapid speed. Thus Inditex-Zara is able to successfully counter the negative effects of short product life cycles, high product variety, demand uncertainty and thus able to closely match product supply to the stores with market demand. This contributes to lower inventory backlogs; avoid mark-down losses and/or inventory stock out.

Continuous Cost Reduction Resilience in Adaptive Responsive Supply Chain

Fashionable products industries are facing greater pressures from market saturation with shorter interval of new add-ons product introductions make easy by open-technology platform proliferation. Consequently responsive supply chain needs to be more adaptive and agile in sustaining continuous cost reduction to be resilience. The study looks at the repercussions of rapid product and technology mutations; higher market volatilities, and the criticality of appropriate systems and methodologies in deliver continuous cost reduction resilience and sustainability. The focus is on fundamental nature of continuous cost reduction (CCR) system and processes; its centrality in adaptive responsive supply chain (A-RSC) amidst market uncertainty which persists to be more vulnerable. In A-RSC with soaring dynamics, it is imperative to fully grasp the structural comprehensiveness, responsiveness and agility to avoid structural incoherency and non consistency. Specifically, the study takes CCR architecture as a whole with its key functional components – core strategic vision, cost management, product portfolio Management, product design and development and product lifecycle management in skilful materializing sustainable CCR. Main objectives of this study are to find the answers to: is CCR process mainly a result of deliberate, carefully planned and managed deterministic competitive strategy in adaptive responsive supply chain? Or it is just evolves through an incremental experiential process going through a sequent of stages towards more resilient and reliable cost reduction? Or cost reduction is just another utility in A-RSC with little strategic value?