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Supply

Chain
Architectu
re

SCM
Of
Benetton

Manufacturing

&
Logistic
s

IT
And
Subcontracti
ng

Asian
Perspecti
ve

Supply Chain Architecture:


The four supply chain network zones

UPSTREAM

MIDSTREAM

DOWNSTREAM

PONZANO
VENETO

MONZAMBANO
SUPPLIERS
SUB CONTRACTORS

REGGIO
EMILIA
SUPPLIERS

RESANA
VILLORBA

CUSIGNANA

CASTRETTE
WAREHOUSE

c
CUSTOMERS

Supply Chain Management of Benetton

The Supply Cycle


Innovative model of Benetton allows both
- Pull model @ Benetton (80% of orders)
- Feb Apr: New design proposals & Samples
- May Jul: Elimination by management, agent, retailers, etc.
- Jun Jul: Rough production plan (based on products)
- Jul Next may: Firm orders (lead time: 7 months)
- Push model @ Benetton (20% of orders)
- Flash collection
- Add @ 50 items.
- Based on customer taste fabric, color, style, etc.
- Re-assortment
- Additional Order for rapid delivery (5 weeks)

MANUFACTURING & LOGISTICS STRATEGY

Dying unit is acting as a decoupling point where the lean manufacturing exists.

Only Dyeing is done In-House


Other Processes work on outsourced model
High No. of contractors
builds responsive supply
High Capacities
chain
Location of subcontractors : Close to Benetton
factory

Logistics : Warehousing & Transportation


Single Central Warehouse in Production centers to serve as

finished goods inventory.

Inventory

centralization reduces inventory


carrying costs.-Carefully Scheduled.

and

inventory

Goods shipped directly from warehouse to shops through

air/road/ship as required.

No middlemen/agents ensures quick response to demands.


Warehouse management and Transportation services outsourced

to a 3rd party logistics provider.

Benetton maintained central Pole located near Head Quarter

to manage production logistics and distribution.

Consolidated central shipping center saves around 20% of the

transportation cost.

Postponement
* postponement

is helping the Benetton to


produce
the
fabric
under
lean
manufacturing process while reducing and
eliminating cost and waste.
* It also involves the flexibility to produce
variety of colors in a short lead time.
* This also helped the Benetton to
standardize the manufacturing process and
further led to gain cost leadership and
differentiation strategies.

Advantages
Cycle time reduction
Quick responses to demand signals
Avoiding seasonality
Cost saving
Focuses on consistency in product
quality, efficiency, and cost control
Increased customer satisfaction

Subcontracting with IT

Glue to supply chain


Provides visibility to entire supply chain
Reduces unnecessary inventory
Allows informed operational decisions in variety of areas
Allows supply chain partners to coordinate operations using common data
Synchronized operations and functional activities