Question:
Discuss about the Supply Chain Management of Topshop.
Topshop is one of the leading apparel chain stores in the market of United Kingdom as well as in the global market. The organisation has established more than 150 stores in more than 50 nations across the world and is aiming to establish more shops in the market of Asia. The target clients of the organisation are teenagers, adults in the agegroup of 20 to 30 year olds and also the pregnant women and the kids with higher spending capability, as they delivers exotic garments made out of the finest materials that can be found commonly.
Currently Topshop aims to reach to as many as customers they can and they want to ensure the customer satisfaction. The management of Topshop wants to make sure that the material they are using to make the cloths has to be of the finest quality and as they sell cloths for the kids and would be mothers too they do not want them to get into any sort of troubles that can occur from the poor quality of the material of the cloths (Crandall, Crandall and Chen 2014). In most of the cases the management makes their apparels using expensive Egyptian cotton and materials like linen and polyester so that their customers do not have to face any kinds of challenges. Apart from that the management wants to establish more shops in countries like India, Peru and Mexico.
The management of the organisation is dedicated to the sustainable clothing action plans and eyes to improve the sustainability of the clothing across its lifecycle and along with it reducing the carbon waste and water foot prints. In most cases, the management of the organisation use recycled wools in some of their particular products like sweaters and coats in their 2015 winter collection (Wathne and Heide 2013). They receive most of the raw materials from the clothing industry of Liverpool and they mostly use domestic raw materials and for some expensive goods they only use imported cottons and linens. With time the management of Topshop managed to improve the qualitative side of their goods and as they are selling cloths which are on the higher end of the pricing structure they are not at all interested to take any kinds of risks by using any cheap materials for their apparels (Crandall, Crandall and Chen 2014). In recent years there have been some movements and protests noticed in UK regarding overuse of water and the issues that can affect the nature from releasing the waste products in the nature. Thus, the management of Topshop is arranging various workshops with an intention to lower the harms their waste products are causing to the Mother Nature. The main issue in the supply chain management is that the production of raw cotton of the best quality is not a common thing in England nowadays and it is also seen that to maintain the quality the manufacturers has to consider the harmful effects of the synthetic color and overuse of water in the factory (Plambeck 2012).
The target customers of the organisation are the teenagers and adults who have the spending capability on the higher side and along with that Topshop’s management has launched clothing line for the individuals who are soon to become mothers and for kids (Mangan and Lalwani 2016). The organisation has earned a reputation for maintaining the quality of their products and thus their pricings are sometimes a bit higher than any other organisation working in the same field of business. Over the time the organisation has built a target client’s group of their own and statistics have shown that there are clients from a specific socio-economic background who are the main clients of the organisation.
Inventory management is nothing but making it possible to provide uninterrupted service to the production of the goods and it is very important for the organisation to be successful commercially (Christopher 2016). The organisation was going through some distress because of the wrong type of managing the inventory but the management of the organisation somehow managed to locate and resolve the issues and with proper security and transportation management the organisation has overcome those problems. Apart from that the organisation has introduced various technologically advanced machineries and that has influenced the work rate positively and making it more successful to maintain the productivity and the profitability of the corporation (Crandall, Crandall and Chen 2014).
Bullwhip effect can be considered as a distribution channel phenomenon that forecasts yield supply chain inefficiencies and it refers to the increase in swings in the inventory in response to shifts of the client’s demands as one move further up in the supply chain. This notion was initially noticed in the year of 1961 and it was then named as Forrester effect. This effect was named Bullwhip effect as the way the amplitude of a whip increases down the length. The further from the originating signal, the greater the distortion of the wave pattern. In the same manner, the forecast accuracy decreases as one moves upstream along with the supply chain, and as an example it can be said that, various consumer products have fairly consistent consumption in retailing but the signals become more chaotic and unpredictable too if the focal point shifts from the client’s buying behavior (Wathne and Heide 2013).
Information Technology is currently the backbone of the operations of this particular organisation as the organisation has established over 150 shops throughout the globe and it would have been a very troublesome to keep the statistics in hand and maintaining a continuous cycle beginning with acquiring the raw materials and ending with delivering the finished goods to the customers. IT is the vital tool that has been helping t organisation to grow over the years and no one can deny the importance of advanced technologies in today’s ever-changing market pattern (Crandall, Crandall and Chen 2014).
Collaborative supply chain practices have a huge impact on the business of Topshop on the basis of the quality of the information shared throughout the supply chain management. For the organisation like Topshop the focus should be on the information sharing practices as the organisation has already established over 150 shops in different countries and has to deliver the finished products to all the outlets within time, so the management has to consider that there must not be any kinds of loopholes in the entire information sharing process in the supply chain management (Plambeck 2012).
Integration issues
Figure: Model of supply chain management of Topshop
(Source: Wathne and Heide 2013)
In order to assess the supply chain integration of Topshop it is necessary to follow the supply chain management framework. In order to do so, the managers need to formulate strategies that underline the main objectives of the organisation. The objective of the oragnisation is to develop the best quality product and sale it at a reasonable price. In order to achieve this objective it is necessary that the company validate the business line that is required for production of the materials. In this regard, the Triple-A supply chain can also be used in order to understand the integrity of the organisation. The Triple-A supply chain analysis focuses on the agility, adaptability and alignment of an organisation in order to achieve its goals (Crandall, Crandall and Chen 2014).
In the case of Topshop, the company needs to be agile in terms of identifying the potential opportunities that may come for the company. For example, the company can come up with strategies that provide opportunities to identify the change in tastes and preference of the customers. The changes in the taste of customers are sudden and thereby it is necessary that Topshop recovers quickly in order to maintain a competitive advantage in the market.
The adaptability of the company needs to be done keeping in mind these changes. In the modern days, most customers prefer to wear clothes that provide a sense of sustainability. The selection of clothing materials is done based on the harm it may cause to the skin. Hence, the normal production of clothes needs to be stopped in order to adapt to the changes in the market (Mangan and Lalwani 2016). Topshop needs to follow the trends that are of major demand in the market in order to ensure that it remains one of the top brands in the Australian clothing market.
In order to execute the strategies in an effective manner, it is necessary that the company align its ideas with other companies of the industry. This can help in monitoring the strategies of other companies and formulating plans in order to make the products unique. Another advantage that can be drawn from the alignment is the fact that the rules and regulations that are required to be maintained in the industry can be updated. Hence, it can be said that the use of Triple-A framework can help Topshop to remain the best in the industry.
According to modern fashion industry, there are 101 stages in the supply chain. In the process the farmers farm, the weavers weave, the sewers sew, dyers dye, goods are packaged and stored in warehouses, then the goods gets delivered to the stores and in the final stage it gets delivered to the customers. It is seen how the supply chain management gets longer and longer day by day and especially in the case of Topshop, as they are delivering exotic goods the supply chain gets longer than any other apparel producers. The main point in this sector is that due to a long supply chain sometimes it becomes impossible for the organisation to maintain the sustainability issues. The most concerning issue that is rising in this context is excessive use of water in this industry and releasing harmful waste products into the nature is another concerning issue (Plambeck 2012). The organisation needs to understand that they must not use any harmful materials for production of the clothing as pregnant women and kids are also important customers for them and in general they should not use any type of harmful elements in their apparels. Currently the organisation is working to make a successful sustainable supply chain by introducing highly advanced technologies in the production system and making the supply chain continuous and making the process immensely sustainable (Wathne and Heide 2013).
Topshops supply chain management follows the Lean management method and in this way the organisation faces issues regarding waste products. This method introduces seven steps and those are mentioned in this section.
This particular Lean thinking management allows eliminating the waste and the most important object of this method is to eradicate the work in progress in the value stream and have the parts needed for the next step of the supply chain.
Topshop currently is one of the leading apparel retailer chain throughout the global market and they have over 150 shops in various countries across the world. There are some issues in their supply chain management that seems to be concerning for the management of the organisation. It is seen that the organisation believes to produce more goods than required at a time and has a tendency to stockpile the finished products in the inventory and that makes the organisation lose time, money and space (Mangan and Lalwani 2016). There has to be an issue related to space if an organisation incessantly stockpiles goods and if those products get outdated due to change in fashion trends the buyers would not ever buy those. In that case the organisation would surely incur heavy loss. In some cases due to lack of security system, goods can be stolen from the warehouses and that leads to a heavy loss for the corporation (Christopher 2016). If these issues get resolved and if the management of the organisation agrees to introduce some high end technologically advanced machineries the company can get over the issues in a gradual manner.
Conclusion
Thus to conclude, it can be said that Topshop is one of the most commercially successful apparel chain business that operates in more than 50 countries across the world. The supply chain management of the organisation is currently facing some minor issues and in this paper it is shown how the company can overcome those challenges.
References
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Chan, T.Y. and Wong, C.W., 2012. The consumption side of sustainable fashion supply chain: Understanding fashion consumer eco-fashion consumption decision. Journal of Fashion Marketing and Management: An International Journal, 16(2), pp.193-215.
Chen, J., Sohal, A.S. and Prajogo, D.I., 2013. Supply chain operational risk mitigation: a collaborative approach. International Journal of Production Research, 51(7), pp.2186-2199.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Crandall, R.E., Crandall, W.R. and Chen, C.C., 2014. Principles of supply chain management. CRC Press.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Fernie, J., 2014. 02 Relationships in the supply chain. Logistics and retail management: Emerging issues and new challenges in the retail supply chain, p.35.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education India.
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Plambeck, E.L., 2012. Reducing greenhouse gas emissions through operations and supply chain management. Energy Economics, 34, pp.S64-S74.
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