BUS606: Operations and Supply Chain Management

Since the introduction of first jeans in 1873, Levi's is one of the world's largest brand-name apparel marketers with an unparalleled global presence of more than 100 countries which are sold under the brand names Levi's and Dockers. The changing and demanding trend in fashion business had an extensive impact on them. They explain that it was under pressure to lower the prices of its clothes which has put pressure to reduce workforce and cease operation of some of its own facilities. The global outsourcing trend in the early nineties pushed them to outsource from less expensive resources to keep them competitive. Levi's forced to reorganize its strategy which resulted affordable Signature brand. Although they were offering more affordable priced product to the customers, they were putting effort on providing more options to the consumers. Levi's have been trying to customize jeans for several years, offering consumers choices within a range of style, colour, and fit, which was not a successful campaign at the end. But recently they have re-launched the mass customization concept offering "Made To Order" jeans for individual customers. In addition, Levi's emphasized on sustainability through green campaign, better cotton initiative, waterless products etc. So, they are not following the footsteps of fast fashion, but yet try to offer versatility in their product range.

Nevertheless, Levi's was struggling with the flourishing aptitude of less expensive and trendy products as ecological campaign is also not uncommon by those brands. It is not only the low price, ecological product, fit, brand image that is offered by the brands which makes the difference, but the consumer behaviour and market need is one of the chief moderators. Barnes and Lea-Greenwood argue that there has been a decline in the length of fashion product life cycles which has put pressure on retailers to replenish more frequently as they simply need more product ranges to keep up to date. Fashion from the catwalks that might have been exclusive in the past is now often widely available on the high street in weeks. The prime user of fast fashion concepts like Zara, H and M, Gap organized their operations to refurbish products many times in a year. Firms like Inditex (Zara) and H and M are able to produce apparel from design to distribution in three to eight weeks, which allows them to renew the stores frequently.

Zara is one of the pioneers to use the fast fashion concept to manufacture and retail clothing successfully. Zara introduces approximately 11,000 new products each year, resulting in a much shorter product shelf life. From the drawing board to store racks, new fashions can be brought into the markets in 2 weeks. The traditional product development and product offering which was based on two main seasons is extended. According to Runfola and Guercini it is increased up to four or even six seasonal collections. From the design point of view, it is continuous product development round the year where seasons have an impact to develop products rather than the collection based on season. It is clear that the target is to offer a wide option for the customer according to the current trend and also at an affordable price.

Runfola and Guercini highlight the international expansion of some successful fast fashion companies (namely the two leading examples, Inditex-Zara and H&M towards foreign markets, especially towards European countries. Zara has over 2,000 stores strategically located in leading cities across 88 countries. Their international market positioning places it in direct competition with some of the most skilled operations in the business, including Italian fashion giant Benetton and U.S.-based Gap and The Limited and also H&M. The whole process of supplying goods to the stores begins with cross-functional teams–comprising fashion, commercial, and retail specialists–working within Zara's design department. They have their own tightly linked and vertically integrated SC that is attributed by many as key to its success. Almost uniquely they have developed SC processes that enable them to capture ideas and trends in the apparel market and to translate them into products in amazingly short lead times, through closely connected, highly synchronized arrangements with internal and out-sourced suppliers.

Zara's specialist design team constantly collects the customers' feedback. A creative team consists of over 200 professionals forward those to product development. Besides efficient design process, they have organized material sourcing and product manufacturing which are strategically located in different places. Raw materials are procured through the company's buying offices in the United Kingdom, China, and The Netherlands, with most of the materials themselves coming from Mauritius, New Zealand, Australia, Morocco, China, India, Turkey, Korea, Italy, and Germany. The product range is strategically divided in order to produce the fastest among fast from the adjacent facilities and the least amongst to take competitive advantage of relatively inexpensive resources. It also uses a postponement trick in its SC by keeping the utmost raw material in unprocessed form. The material or fabric is also held in "Greige" (i.e., undyed and unprinted) and, if demand for a particular garment turns out to be higher than expected, local manufacturers can then quickly manufacture additional products.