Analysis of the Impact of Agility in Supply Chains

Question: Analyse the Impact of Agility in Supply Chains on Performance of Fast Fashion Industry. Answer: Introduction As the globalization has occurred in the world, the fashion industry has taken a new height with the turnover reaching to multibillions in amount. Fashion industry stood as one of the leaders in the global growth. The fashion market has fastest changing trend, because of which there is an increased demand for information to be circulated at a very fast pace. With the rapid change in a digital world now, all information is communicated at a very rapid rate from one corner to another corner of the globe, which is actually responsible for the increase in demand. (Smith, 2014) In todays world fashion market has become cutthroat; it is getting difficult for the retailers to beat the regular need of the customers for the latest trends which is changing at such a faster pace. Also, the price of the product doesnt matter much in the highly competitive market. The expectations of the customers have become more crucial in todays world with such expectations fashion apparels have to be made available at persistent basis. Because of rapid change, the fashion industry demands the suppliers who realize the relevance of changes and have the competence to fill the store with the recent trends and make the newest fashion available to the customer at the earliest, so that he can lead the market (Joy, Sherry, Venkatesh, 2012). The customer demand has definitely led to large collection annually, as of when compared to the traditional four seasons collection. Even though it has created a challenge along with this it has also established, the opportunities for fashion companies which has brought turnover to greater success by attracting the customers with continually bringing new products. The crucial component of the present day fashion industry is the supply chain which competes among themselves rather than companies. The market area where the customers are the actual buyer decides the success or failure of the supply chain. The type of product has its, specific, market, according to its consumer, meeting the customer need at the right time and on the right price is the actual key to the success of competitive market of supply chain of fashion. If one wants to step into the supply chain market should thoroughly study the market place and customer satisfaction. (ANZSIC, 2016) At times, few products create ambiguity in the supply chain. For example, if the product is extraordinarily modern or popular, the supply chain is unable to predict the demand because of its peculiarity. With all these above factors, fashion industry has come up with the new approach of fast fashion, which has now become the important part of international companies. Fast fashion- It is the approach followed by the retailers, which they have adopted in their business strategies. It is the strategy of making available the latest trends in the shortest time to the customer. Fast fashion is based upon providing the maximum variety to the customer by reducing the time in the supply chain (Bruce, Towers, Daly, 2004). Tom Ford, one of the known classic designer, who has earlier worked for many years for Gucci came up with the concept of fast fashion, which is all together a democratic change in the fashion industry as it is the concept of providing the product at very reasonable price and not just for the elite group dominating and flaunting the fashion. Because of this, the complete scenario of the fashion industry has changed, now the production is done in mass, because of which its price is reasonable and everybody can afford it. Now, everyone can afford the stylish look at very low cost. (Schmidt, 2015) Problem Statement Fast fashion is the change made in the existing business strategy in order to provide the latest trends at the earliest to the customer. Key factors of Fast fashion Reducing the time in stock group Providing the maximum variety to the customer Low labor cost Improved technology The trend in the fashion industry is changing at such a fast pace like day and night. Keeping up with such high competition has really become tough as customers are ready to invest in something new and trendy. So now companies have to buckle up their belts in order to provide the latest trends at a faster rate. Because of this globalization definitely everyone is benefitted in the fashion industry-the company, the designer, the supplier everyone. The company has attained a new turnover, which has shown a dramatic change. (Euromonitor, 2016) The demand for the new product and life cycle of each product, both of these are inversely proportional. For the companies in the fast fashion, time plays the crucial role in deciding their success. It has started becoming really tuft and difficult to remain up-to-date in fashion industry, also it is very costly to provide new trends so frequently (Tang, 2006). Till date, no qualitative study has been researched to understand the model as how to manage the brunt of the supply chain on complexity of fast fashion products (Caro Martnez-de-Albeniz, 2014). Cost of intricacy has to be understood in detail in order to effectively reduce the future complexity related to the cost. This has to be understood in detail in order to prevent unmanageable disruption in Inventory demolition Piling up of the stock Irresponsible deliveries Economic crunch Fast Fashion Product Complexity- The problems related to fashion commodity are relatively more complex as compared to basic merchandise. As it requires refined analysis about the fashion and type of color in latest trend, so with the fast fashion, complexity of the business is further increased. (Baker, 2012) Even though if we talk about the product of fast fashion, it has been more simple and trendy, but in order to make it available in various sizes, colors, different styles in order to make the product unique and fashionable, its complexity is increased. Justification of the research project We have discussed two big brands i.e. Zara and HM in order to make it generalized. The conclusion derived from it will be true and will give a broad picture of the fast fashion industry. Research Aims and Objectives Key factors of fast fashion Reducing the time in stock group Providing the maximum variety to the customer Low labor cost Improved technology Agility is defined as application of market knowledge and basic business strategy to accomplish maximum profit in the erratic marketplace. The supply chain in fast fashion is expected to be agile, flexible, quick and fast driven supply. The approach adopted by suppliers of fast fashion industry is that they are directed by information; here the market data is considered as the source this information between the companies in the field of supply chain. The main focus of fast fashion is a quick reaction to the demand of the customers. The demands of the fast fashion customer are responding quickly by the use of agile network of suppliers (Hansson, 2010). The information about the marketplace plays the key role and how fast the information is responded in the form of supply is the goal achieved. In conventional period, supply chains used to be like customers were practically at distant from manufacturer, now in agile chains the information is shared quickly and is made applicable and then it is made available through agile supply chains the product is ordered immediately and their product is replaced. With this change in the supply chain, the so called agility has created a line of profit for everyone related to the fast fashion industry. Even the designers are being updated on the regular basis, so that they can respond exceptionally fast and with the help of technology, they can demonstrate new designs desired by the market. Conceptual framework and research hypotheses This research subject is chosen to study as in the past five decades, fashion industry has taken altogether a new turn. Interest of fashion has also raised profoundly among the people in the last ten years. As the digital media is growing very fast, because every bit of information is transferred at rapid speed, so the peoples demand for new fashion keeps on increasing. Because of which, fast fashion industry was evolved which has also grown perilously. With this change, few international companies introduced special strategies to meet the need of fast fashion, and they worked following those strategies for quite a long time and now those companies are named as fast fashion companies. With the advancement in the fashion industry, now the latest fashion products are available everywhere (DEU Edu., 2012). The two companies who always remain in discussion whenever the fast fashion is discussed are HM and Zara. These two companies have their concept of fast fashion with the type of behavior they have adopted in the market and the unique strategy they follow in the management of the supply chain. Both HM and Zara have been following the fast fashion approach even though supply chain management was quite similar to each other, still they exhibit a lot of differences because of which it was interesting to study these fashion companies (Mihm, 2010). Fast Fashion Approach: Retailers dealing with the fast fashion adopt the different kind of strategy in order to make current and trending product as soon as possible available in the store. Fast fashion is based on the quick response to rapidly changing fashion (Dissanayake, 2013). Methodology Decrease in the lead time Meeting the consumer demand in right time In the fast fashion industry, the new ranges of fashion products are consistently updated. The life cycle of product in the fast fashion is very small for some products its months and to some, only a few days. Retailers in the fast fashion follow the business strategy which marks the reducing the time involved in the supply chain which includes the steps from buying cycle to the lead time of making the new fashion product available to customers. Keeping the newness of apparel by continuously updating the product is the factor which plays the lead role in the fast fashion industry. The product life span is very span from the time the product is introduced in the market to the point, where it demands stands no-where the product gets completely declined. This is a main cause creating the vicious cycle pressure on the retailer to renew the product (Stratton Warburton, 2010). With the increase in availability of the fashion product at very low cost have increased its number of customers , in order to create more pressure by increasing the demand from more customers for renewal of the product. The digital media have played the major role in increasing awareness about the latest fashion trends, with these consumers are becoming more confident about the fashion which increase the demand. Earlier, the catwalks, reality show latest magazines were the main source of influence, but now the TV shows have also joined the digital media, the advertisements by various brands encourage the customer for the latest trend (Bhardwaj, 2010). As a result, this has led to increase in frequency of shopping. This particular research work is done on the basis of secondary data. The data which already exists is collected by various means and studied thoroughly to understand the market of fast fashion. With a growing of the digital media, now the study conducted and analyzed is more resourceful. Even, the questionnaires are sent through emails and results are also reverted via email. Research Quality In order to have an exemplary report, its results should be positive and reliable. The study conducted should be of great quality and has the great impact. In order to quantify the credibility of qualitative study, the main precedents are its reliability and how strong it holds its validity. Validity It is the concept of proving the research authenticity. It is shown that conducted research is accurate, ethically right and acceptable. In order to prove its authenticity, the result obtained should have references for its explanation. To talk about the external validity whether its results can be used as a reference of support for other research, case studies are normally criticized for its validity as they have limited probability. But as our study, we have discussed two companies Zara and HM, so it excludes from generalization and conclusions derived will give the true and a broader picture of the scenario. Reliability Reliability of the research depicts the consistency in the results whenever the research is conducted with the similar situation. This maintains the research to be considered classic. Method critic As the main source of collecting the data in our study is the internet which is regularly updated, even though the point of conflict can be raised as different researches are due to various authors opinion and their biasness, which is always persuaded by the authors knowledge and experience. In such thesis, there is always a risk of doubt even though the source of empirical data is normally the home page of the website and the newspaper which are always updated in the fashion industry (S Sardar, 2016). For the research based on the secondary data, one should make sure to have recent and updated data. Managing the supply chain of fast fashion industry Factors which brunt effect on supply chain are The cycle of the product is decreased The customer is highly passionate about buying the latest trends Now the customer has got adapted to such fashion industry, which is ready to provide latest trend at a very fast pace so they have become highly volatile in nature. Now, the customer always looks for something, latest in trend which as a result reduces the product life. Also, with the growing media, fashion has further created a great impact on product life. The supply chain is the key factor, because of which the fast fashion has been successful (Nagurney Yu, 2010). The Approach, which, was adopted to revamp the supply chain Exact in time Frisky, energetic, lively supply chains Agile response Lean As the commitment of the supply chain has been increasing with significant growing demand now, the management is looking forward by putting more emphasis on production, and looking for the distributors (Christopher Towill, 2001). Earlier, the industry used to follow the concept of having good number of suppliers. (Wang, 2014)Now, they have changed the strategy by limiting the suppliers and increasing the entrepreneurs who are looking forward to work in partnership with leading companies. Timing and Supply In the fast fashion timing of getting the latest trend in the store determines the success of the growing fashion industry time is the crucial factor in the fast fashion industry also by constantly renewing the product in shorter time. Decreasing the lead time is the biggest factor in the fast fashion business. Three points those are effective to be studied thoroughly to make the product available in the shortest time. Time to market It is the time required to analyze the market, determining the latest trend and finally making that product available in the store in the shortest possible time. The product life cycle is very short in fats fashion industry. Also, changing trends creates opportunity for the profit, even though, this large inventory is accumulated which led to decrease in the cost of the product if it is delayed in the market. Earlier, the trend used to change with the change in season. It used to take months for the product to reach the customer (Cachon Swinney, 2009). Now, the latest trends are copied and made available to the customer in less than a month time. Time to serve It is the time required for the delivery of the product to the store. This process is time consuming as it involves various steps like reviewing the customers demand, placing the order, completing the paperwork regarding the documentation, like the letter of credits. The next step is manufacturing of the product. All this needs to be done at a very faster pace otherwise the philosophy which helps in keeping the cost low will get disturbed. The cost of the product and time are directly proportional if time increases, it will lead to increase in cost of the products. It also faces the problem at the front of the inventory. Time to react It is the time required in reviewing the changing demand and how quickly the decision is taken for renewal of the product. Suppliers usually face the obstacle in predicting the change in product as huge inventory, creating the space for the variance for the customers helps in handling the situation. This underlying predicament can be resolved by having smaller supply chains and transferring of proper information among the partners. Research Paradigm: Scheming the Fast fashion Business Business of fast fashion is based upon three criteria Agile response Periodically sorting out the change The latest designs at low price (Market Research, 2016) The first two points are more essential for the fast fashion industry even hypothesis is formed to calculate the risk involved. So, appropriate metric measure is incorporated to calculate the efficiency in quick response and margin return with stocked inventory (Barnes Lea Greenwood, 2010). Analysis The strategy which is followed by the companies of the fast fashion industry is about the communication and the time. The Zara biggest brand is following the strategy of bringing the production house and distributor close to each other. The fast fashion industry depends upon quick response by the companies to the changing trend (Brusset, 2016). Zara, the big name in the fashion industry has adopted the strategies for fast fashion. The key feature is about focusing on reducing the time of action and fast communication about the chain in the chain. In order to react fast, Zara has brought production house and the distributors close to have fast response. Zara has adopted the policy of side by side integrating the supply chains in order to make the latest product available in the shortest possible time. On the other hand, HM has been focusing on time strategy (Mau, 2014). HM is not in favor of bringing the production house and distributor close as they want to offer the latest fashion i n least possible time that too at low prices. HM is the brand which is successful in providing the latest trending apparel at low prices. HM follows the policy of buying the product from nearly more 750 suppliers in Europe and Asia. Organization of the study Chapter one- Covers the introduction of the research what it is all about Chapter two- What are problems which need to be discussed Chapter three- this includes the research methodology literature review, data series and surveys (data collection methods), observing how the market has changed from fashion to fast fashion and data analysis methods. Chapter four- Data Analysis Chapter five- Discussing the budget Gantt Chart Project Budget and budget Justification This budget has been specified for the following reasons: The Literature Review which requires keen study of various paid journals online resources which cost nearly $500. Data is collected by various forms of surveys and questionnaires. For which further cost is included like printing, travelling and postage cost. This will cost around $350 Also, in order to access charts/tables/government figures for Data Analysis, some amount is required for that purpose also. Allot $150 for this. 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