Supply Chain Performance: The Case of World Co. Ltd

1. Supply Chain Performance:
The Case of World Co. Ltd.
Ali Yudhi Hartanto - 1206185053
Azhar Harris - 1206185356
Dame Reiny E. Manalu - 1206185570
Irawati Cipto - 1206186522

2. gg
1959 Established World Co., Ltd., wholesaler of women's knit sweaters, Kobe, with 2 million in capital. Mamoru Kiguchi assumed the position of President with Hirotoshi¥
Hatasaki serving as Managing Director.
1968 Moved the Head Office to the company's new building, constructed in Sannomiya, Kobe.
1980
Established a subsidiary that undertakes production management, development, and trade operation of textile materials; expanded into a textile trading business.
Established World Industry Co., Ltd., which undertakes manufacturing and planning, and expanded into the apparel manufacturing business.
1988 Established World Taiwan Fashion Co., Ltd., in Taipei, and started sales in Taiwan.
1992 Announced the SPARCS Concept, our medium-term business plan.
1995 Launched UNTITLED as our second SPA brand.
Damage from the Great Hanshin Awaji Earthquake led to the demolition of the company's building in Sannomiya, Kobe.
Opened a select shop, AQUAGIRL, starting the Highly Fashion-Conscious Buying SPA business model.
1997 Appointed Hidezo Terai as President.
1999
Introduced the executive officer system and WEL (World Entrepreneur Leader) to accelerate decision-making and clarify business responsibility.
Transferred listing to the First Sections of the Tokyo Stock Exchange and Osaka Securities Exchange.
2000
Opened HUSHUSH, a brand for young families, and started the FCOM Business Model based mainly in shopping centers located near major cities and suburban areas.
Announced World Production Partners (WP2) concept as part of our production operation innovation and formed system synchronizing retail outlets, development and
production, and factories.
$1.8 billion in net sales and $32 million in net income for fiscal year ending March 31, 2000
2002 Started the mail order magazine, RUNA, in order to enter the Direct Marketing Business.
Exceeded 200 billion in annual sales. (As of March 31, 2002)¥
Established World Fashion (China) Co., Ltd. in Beijing to strengthen sales operations in China.
2010 Buyers Club specialist apparel purchasing site launched.
Offered official suits for Nadeshiko Japan, the Japanese national women's football team.
WSP Role Playing Contest held at sales subsidiary World Store Partners Co., Ltd. to improve customer service.
Consolidated our office functions in Tokyo into WORLD Minami-Aoyama Bldg. and WORLD Kita-Aoyama Bldg.
2012 Transferred all the stocks of Le Monde Des Gourmet Inc., which developed the restaurant and cafe business.
Launched WORLD BASIC, a new cross-functional brand, in order to strengthen the development of basic item products.
Launched ANIMA, a sports brand featuring a fusion of sports and fashion, and opened its first flagship store in Harajuku

4. World has created many product and store brands with various values in the past. These brands
are the result of our unique creativity and have served to enhance the values of fashion in
society. However, such values do not remain unchanged; instead, they change as customer needs
change over time. In order to continue evolving as a “Value-Creating Enterprise,” we at
World must keep creating new values in response to ever-changing customer needs.
Wholehearted Creation and Sharing of Values—
Always Strive to Go Beyond
Our enduring aspiration in this statement reflects our strong determination to continue self-
transformation and evolution—now and into the future. We strive to attract customers and keep
innovating ourselves toward new possibilities by building a system that enables us to constantly
offer values to customers and by putting that system into action.
Hidezo Terai
President

5. The Problem
1. Although SPARCS has introduced since January 1992 and has been a
mainstay in managing the Supply Chain Management, however, Whether
the system that has developed meet the challenges of the very dynamic
fashion industry and wheter the system is able to answer the needs of
World that will expand out of Japan.
2. Whether demand forecasting which has been implemented to achieve
relevant monitoring sales trends and consumer demand to deliver right
product to right store at right time to maximize profitability.
3. How to build World supply chain performance.

6. The Theory
 The use of resources, and flexibility desired output has
been identified as a critical component to the success of
supply chain. Therefore, supply chain measurement
system should emphasize on three separate types of
performance measures, namely: measurement of
resources (R), the measurement of the output (O) and
measurement fleksibility (F), each of the three types of
performance measures have different goals different.
Supply chain system must perform measurements on
each of the three types (R, O and F) measure of
performance, because each type plays an important role
for the success of the overall supply chain performance.

7. Analysis Problem 1
 Although SPARCS has introduced since January 1992 and has been a mainstay in managing the Supply Chain Management,
however, Whether the system that has developed meet the challenges of the very dynamic fashion industry and wheter the
system is able to answer the needs of World that will expand out of Japan.
Despite all the advantages of the scheme SPARCS system , the gross data errors are quite high,
about 1 % ( an average 20 pieces out of 2000 pieces per store ) on the condition that describes the
regular season sale inaccuracies SPARCS system is being developed by the World .
On the other hand , the statement Hidezo Terai " Our lead time for replenishing fashion apparel
is two weeks . We can also design , produced and ship new products to our store in six weeks " .
Have not been able to demonstrate the superiority of the world co ltd SPARCS system is able to
respond to the dynamic development of fashion industry forward that demands speed and
responsiveness to meet consumer needs.
World co ltd would face the risk of serious problem if the product they produce and presented
in – stores are not in accordance with the demand of the market being targeted .
The time is long enough, lead time of about 2 months ( lead time production and replenishing )
feared to have an impact on losing momentum to dig profit margins in a seasonally high demand
at the time ( lost sales opportunity) .
World co ltd can develop SPARCS system with a system of real-time information that is based on
information demand and not only based on historical data alone. System developed by SPARCS
expected to answer fundamental questions in the form of supply chain management How much
to the make ; What to makeup ; When to make it and

8. SPARCS system
through world supply chain management

9. Analysis Problem 2
 Whether demand forecasting which has been implemented to achieve relevant monitoring
sales trends and consumer demand to deliver right product to right store at right time to
maximize profitability.
In order not to miss a sales opportunity, then the
World should be able to provide 40% - 50% in-
seasons product inventory commitments with not
less than two (2) weeks.
A variety of things that can be applied by the world
include:
1.Build distribution center near kobe Japan and build​​
Distribution center overseas with the largest market
share.
2.Building a responsive logistics system by relying on
the speed factor. Logistic fleet should be able to
meet applicable to the entire network of stores
within 72 hours to a maximum of asia.
3.Increase the capacity of industry and vertical
integrations in the fashion industry.
In pursuit of the chain responsiveness on its supply
chain, the World co ltd forecasting demand to
construct a series of stages
1.Calculating the initial demand forecasts in two ways,
namely the distribution side side forecasts and
forecast category;
2.Aggregate demand is obtained and the ranking of
individual SKUs carried out by following the method
obemeyer system; ranking then grouped with ABCD
analysis;
3.Updating forecast with regard during the product
life cycle sales.
4.Calculate inventory and production planning that
aims to (1) the material preparations, (2) first-order
quantity, (3) the replenishment quantity.
Current Futures

10. Analysis Problem 3
 How to build World supply chain performance.
Nigel Slack and Michael Lewis, Operations Strategy, 3rd Edition, © Nigel Slack and Michael Lewis 2012
Slide 7.27
Customer performance
measures
To achieve strategic
impact how should we
be viewed by
customers?
Financial performance
measures
To achieve strategic impact
how should we be viewed by
shareholders?
Internal process
performance measures
To achieve strategic impact
what aspects of
performance should
business process excel at?
Learning and growth
performance measures
To achieve strategic
impact how will we build
capabilities over time?
Overall
strategic
objectives
The measures used in the balanced scorecard
World can arrange supply chain performance
with the help of a balanced scorecard,
finance performance, customer performance,
internal process and learning and growth
performance in all aspects of corporate
performance
One factor that is also important to the success of
the supply chain, the world can establish a
remuneration system by combining salary with
bonuses of sales in each storenya and linking them
with sales forecasts and sales growth in each store.
On Time Delivery
Customer
Response
Manufactoring lead
tme period
Customer
Complain
supply chain performance
Measurement of Output
Measurement of
Resources
Compare the total
cost of the current
year with previous
years.

11. Conclusion
The purpose of Supply Chain
Management Hidezo Terai emphasized
monitoring sales trends and consumer
demand to deliver right product to
right store at right time to maximize
profitability.
SPARCS system integrates customer
relationship, order fulfillment,
manufacturing processes and supplier
relationships. The overall aspect is
developed by engaging groove services,
materials, informations with customer
demand.
The time is long enough lead time of
about 2 months (lead time production
and replenishing) feared to have an
impact on the World co ltd losing
momentum to dig profit margins in a
seasonally high demand at the time
(lost sales opportunity).
World defines a supply chain system that
is built up over its performance by
measuring the resources (R) and the
measurement of output (O).

12. Suggestion
In order not to miss a sales opportunity, then the World should be
able to provide 40% - 50% in in-seasons product inventory
commitments with not less than two (2) weeks.
Build distribution center near kobe Japan and build Distribution​​
center overseas with the largest market share.
Building a responsive logistics system by relying on the speed factor.
Logistic fleet should be able to meet applicable to the entire network
of stores within 72 hours to a maximum of asia.
Increase the capacity of industry and vertical integrations build the
fashion industry.
Establish a remuneration system by combining salary with bonuses of
sales in each storenya and linking them with sales forecasts and sales
growth in each store

13. Lessons Learned
 The purpose of Supply Chain Management to deliver
right product to right store at right time to maximize
profitability.
 The success of supply chain management is measured
through the measurement of resources (R), the
measurement of the output (O) and measurement
fleksibility (F) and contrasting with periods that have past
or compare it to measurements competitors.