Case Analysis, 2005
Supply Chain Management at World Co., Ltd.
Japanese consumers have a reputation of being highly brand name conscious. Although
this trend still remains for some categories of people, especially young women who are
sensitive to latest fashion trends, nowadays Japanese consumer are also starting to choose
apparel that matches their tastes and life styles.
Japanese apparel manufacturers design and develop their own products, oversee a number
of production subcontractors, and manufacture and market products under their own
brands. Nearly all of these apparel manufacturers also function as wholesalers, selling
products directly to retailers. Larger manufacturers even have their own boutiques within
department stores, and some also operate outlet stores.
Japan has a mature apparel market, and simply offering low prices does not guarantee
success. Manufacturers have to establish a brand identity. Products that offer what
Japanese consumers are looking for in material, technical skill and styling will be accepted
and will fare well in competition with others. The three factors that distinguish Japan from
other countries are:
Delivery Schedules: Special attention should go to seasonal goods and fashion
merchandise, especially when produced in lands without four distinctive seasons. It takes
time to assemble raw materials, acquire accessory items and ship the finished merchandise.
Sometimes the merchandise ends up getting delivered after the sales season is already
over.
Production Lots: Because apparel production in other countries has historically been for
export to Europe and the United States, production lots have always been large. This
practice does not match up well with the preference of the Japanese market for small-lot
orders, multiple product types and short-term production cycles.
Quality Control Standards: Many products can pass inspection in their home countries but
sometimes fail inspection in Japan. European and American quality standards emphasize
external appearance rather than the minute details of workmanship. However, Japanese
consumers tend to demand perfection in the products they buy, and they judge products
harshly for their flaws even if those flaws in no way take away from their utility.
World Co., Ltd. is a Japanese apparel manufacturer. The Groups principal activity is to
operate womens apparel business; handling mainly mens and childrens wear specializing
in knitted garments. The Group is also involved in developing a nationwide retailing
network based on the SPA (Specialty store retailer of Private-label Apparel) business
model and pursuing vigorous structural reform of our wholesale business. Operations are
carried out through the following divisions: Womens clothing, Mens clothing, Accessories
and jewelry, Childrens clothing and other.
