Roy Andersson
School of Engineering, University College of Borås, Sweden
Tina Ottosson
The Swedish School of Textiles, University College of Borås, Sweden
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Published in: 10th QMOD Conference. Quality Management and Organiqatinal Development. Our Dreams of Excellence; 18-20 June; 2007 in Helsingborg; Sweden
Linköping Electronic Conference Proceedings 26:30, p.
Published: 2008-02-15
ISBN:
ISSN: 1650-3686 (print), 1650-3740 (online)
Surviving in a volatile global economy; requires not only supply chain risk management. Equally essential to any business is the design of products and the resilience of the supply chain. Key factors for the future are management and the mitigation of supply chain risks to ensure maximum flexibility and responsiveness to customer demands. The right design can speed up the product development process and create a more agile approach to demand. In a quick-response market; such as the apparel market; where risks tend to increase; the failure to meet customer demands may have severe consequences (Mughal and Osborne; 1995).
Western European companies in the textile sector can compete in a global economy from a low labour cost market; by making the demand chain more robust and resilient and creating a risk management culture with an agile demand chain; design and innovation-led and collaborated. Several hidden risks are generated by outsourcing and offshore manufacturing; of which increased logistic costs and delays; natural disasters; transport disruptions; increased levels of inventory and increased lead times are only a few. These types of risks can; for example; cause product obsolescence (Christopher and Peck ; 2004).
The Spanish apparel retailer Zara has been able to reduce the lead time from design to store down to two weeks. By outsourcing the manufacturing processes to workshops within Europe; the company ensures flexibility and closeness to customers as well as minimizing the risks. To adapt to demand; clothes are procured in four different neutral tones that can be dyed in the last minute. This makes the supply chain extremely responsive; flexible and costefficient (Walters; 2006).
The development and change of a supply chain is related to a number of decisions; out of which several may be short of basic data and serve to increase the level of uncertainty. The present study aims to provide a basis for making such decisions. By visualizing the most obvious risks involved in the interface between the focal company and its suppliers and customers; measures for risks can be implemented from a demand chain perspective. The purpose is also to visualize risks for further assessment in a future parallel demand chain.
