Supply Chain Performance:

The Case of World Co. Ltd

1. 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. 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
3. 3. 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
4. 4. 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.
5. 5. 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.
6. 6. 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
7. 7. SPARCS system through world supply chain management
8. 8. 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
9. 9. 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.
10. 10. 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).
11. 11. 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
12. 12. 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