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The Evolution of UNIQLO's Supply Chain (WS I)

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Grecia Muskus

on 26 July 2013

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Transcript of The Evolution of UNIQLO's Supply Chain (WS I)

Planning
Production
Sales
SPA
Competitive Advantage
Basic clothes
Revolutionary functionality
Reasonable prices
Attractive fashion features
essential yet universal
Value
Quality
Price
Specialty Store retailer of private label apparel
*According to statistics from Japan’s Ministry of Economy, Trade and Industry, sales at Japan’s department stores, supermarkets and apparel retailers


Japanese Apparel Market (10 trillion ¥)
5%
Competitors
Performance
Market Share
Strategy
Flagship store in Tokyo
5000 m2
Grecia
Muskus

2013 (1Q-3Q)
(+)
SG&A ratio
Stronger advertising

(-)
Gross profit margin

Price sensitive consumers
(+)
SG&A ratio
Stronger advertising

(-)
Gross profit margin

Price sensitive consumers
Rising costs of materials
(+) Offloading of surplus summer inventory
Competitors
International
Performance
Strategy
Asia (80% of sales)
U.S.
Explosion of market
Highly profitable
Expanding into new markets
Sluggish performance
Fast Retailing CO., Ltd
84%
Reduction of demand uncertainty through aggregation
China
Asia
Other Markets
Capturing market growth
WS II
Cooperative framework is evolving

Efficiency
- reduce waste
Responsiveness
- faster decision making
Quality
Assurance
Production Department
R&D
Pros
Research a different business model in India
Supply chain strategy
&
Conclusions
1. Scale economy accomplished by UNIQLO
2. Japanese market
3. International market
4. R&D function
NEXT TO
production facilities
Operating income versus competitors
Sept 2012
Responsiveness by reducing demand - supply mismatch
Conclusions
Challenges
1. Reduction of sales discounts
1.2 Price sensitive consumers
Driver: Cost of raw materials
1.1
Reduction of inventory levels
Driver:
Reduction of demand uncertainty (aggregation)
2. Increase number of customer visits
2.1 BIC Camera & Uniqlo
1. Expanding number of stores

2. China (store - production facilities)
Pros
Reduction of lead time
higher inventory turnover - less cycle inventory - reduction of total inventory.
decrease demand uncertainty
Opportunities
Decrease
UNIQLO: SUPPLY CHAIN STRATEGY AND APPRAISAL
Full transcript