15. Technology, Innovation and Supply Chain Management Competitive Sessions Demand-supply Chain Management for the Chinese Fast Fashion Apparel Industry Ying Ye School of Business IT and Logistics, RMIT University, Australia Email: [email protected]Dr Kwok Hung Lau School of Business IT and Logistics, RMIT University, Australia Email: [email protected]Leon Kok Yang Teo School of Business IT and Logistics, RMIT University, Australia Email: [email protected]
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Demand-supply chain management for the Chinese fast fashion apparel industry
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15. Technology, Innovation and Supply Chain Management Competitive Sessions
Demand-supply Chain Management for the Chinese Fast Fashion Apparel
Industry
Ying Ye
School of Business IT and Logistics, RMIT University, Australia
15. Technology, Innovation and Supply Chain Management Competitive Sessions
Demand-supply Chain management for the Chinese fast fashion apparel industry
Abstract
This paper explores the applicability of the demand-supply chain management (DSCM) approach to help improve the supply chain performance of the Chinese fast fashion industry. Based on a comprehensive desktop research, the paper provides a thorough literature review on the paradigm evolvement from demand chain management (DCM) to DSCM and investigates the current supply chain approaches used by the apparel industry in China. The paper attempts to develop a theoretical DSCM framework that incorporates the various underlying drivers and obstacles of DSCM application. The proposed DSCM framework extends the conventional one-size-fits-all solution by advocating a dynamic outside-in thinking that integrates marketing value stream with multiple supply chain network solutions under an aligned organizational culture and leadership style. Keywords
Lau, 2012) and SC strategic design for the textile and the apparel industries (see for examples (Bruce &
Daly, 2006; Bruce et al., 2004; Cao, Zhang, To, & Ng, 2008; Jacobs, 2006; Kumar & Arbi, 2007).
A systematic information retrieval was undertook which include 64 databases on business relating
databases which includes 9 main peer-reviewed logistics and supply chain management journal databases
and 10 databases on latest fashion and textile industry news, marketing databases. e-book collections, e-
videos and news and newspapers. A two-stage literature review was performed. First, relevant articles
15. Technology, Innovation and Supply Chain Management Competitive Sessions
published in reputed international journals, especially those reporting findings on fast fashion studies,
were reviewed and summarized. Then, information was also collected from industry news and reports as
well as recent conference and seminar papers and newspapers. Special focus was also placed on studies
on the application of DCM and DSCM in the current Chinese fashion textile development. The priority of
resources take the sequence from broad syntheses of the literature from around 500 articles to 50 specific
journal articles and books then followed by looking for recent conference papers on the keyword topics
by regular time.
5. CONCLUSION AND FUTURE RESEARCH
Through a comprehensive desktop research with analysis of secondary data, this study has
investigated the current studies of cutting-edge DSCM and its nascent understanding for Chinese fast
fashion apparel industry. DSCM as an overarching contemporary approach has not been fully investigated
in the real market. A comprehensive literature review on the Chinese apparel industry reveals that most of
the studies about Chinese FT market stand on the ground of either SCM or marketing management
perspective in a broad sense. This study contributes to knowledge by proposing the integration of both
from managerial outside-in manner under DSCM perspective. The value of applying the dynamic
approach of DSCM will be amplified when it is tested in a dynamic Chinese environment with multi-
purpose consideration. This paper fills the gap by proposing the framework and finding the potential
drivers and obstacles of DSCM to understand the appropriateness of applying DSCM to the Chinese FT
industry for network improvement. Supported by further studies in actual practice, the findings of this
research will contribute both to knowledge as well as actual supply chain management practices in the
industry.
The proposed framework gives a preliminary guidance for the industrial development and testing
based on the preliminary research of literature review and desktop research. Although, it has contributed
to knowledge by providing a snapshot of the current situation, the use of secondary data inferior to using
primary data to gather more in-depth information to explore how DSCM could be imbeded to optimize
15. Technology, Innovation and Supply Chain Management Competitive Sessions
the real local fast fashion industry in the case of China. Some practical drivers and obstacles to implement
in the identical Chinese industry needs more experimenting research to further validate the feasibility
result. Therefore, future research could focus on employing in-depth case study or questionnaire survey to
collect disaggregated data and business case-study from practitioner to further refine the framework and
facilitate the development of DSCM practice.
15. Technology, Innovation and Supply Chain Management Competitive Sessions
Figure 1- Challenges faced by Local Fast Fashion Industry in China
Figure 2- Demand Chain Structure (Porter, 1985)
Table 1- Two Developing Stages of DCM Stage Synopsis Studies
Phase Ⅰ : Replacement of SCM (Ontology)
§ A more narrow definition of DCM based on distinction between the efficient physical supply and the market mediation roles, which defined the term as market mediation supply chains
§ Regarding demand as exogenous condition § Addressing the issues in the frame of SCM definition
Table 2- Definitions of DSCM Definition Studies “The management of supply production systems designed to promote higher customer satisfaction levels through electronic commerce) that facilitates physical flow and information transfer, both forwards and backwards between suppliers, manufacturers, and customers” (p. 692).
Williams et al. (2002)
‘’A set of practices aimed at managing and coordinating the whole demand chain, starting from the end customer and working backward to raw material supplier” (p. 667).
Selen and Soliman (2002)
It aims to provide superior customer value at lower cost by organizing the company around understanding how customer value is created cost efficiently (from demand management), how customer value is fulfilled cost efficiently (from supply management), and how these processes and management directions can be aligned.
Hilletofth (2011)
An approach to gain a superior competitive advantage by balancing the cost efficiency, responsive effectiveness, differentiation and innovativeness process across functional, organizational and inter-‐organizational boundaries.
Hilletofth and Ericsson (2007); Juttner et al. (2007); Walters and Rainbird (2004)
Table 3- Historical Researches on DSCM from Different Research Perspectives
Study Industry related Preliminary theoretical
study
Macro business strategic overview
Micro process-‐driven
Functional breakage Specific logistics perspective
Furniture industry demand and supply chain management
√ √
(Van Goor, 2007) FMCG DSCM/SC collaboration
√ √ √
(Esper et al., 2010)
Enterprise based demand supply integration based on knowledge based theory
√ √ √
(Jüttner et al., 2007) Range of different industries
√ √ √
(Rainbird, 2004; Walters & Rainbird, 2004)
Australia Fast food industry: McDonalds
√ √
(Lau, 2012) Downstream wholesale and retail distribution
√ √ Delivery/ distribution
(Canever, Van Trijp, & Beers, 2008)
Beef industry from DSCM perspective
√ √
(Holmström et al., 2008) OEM Industry √ √ Segmenting service delivery and asset management based on industrial service operations
15. Technology, Innovation and Supply Chain Management Competitive Sessions
Table 4- The enablers and Obstacles of Applying DSCM
Enablers References Obstacles References Supply chain strategic designing based on marketing/ demand research
(Esper et al., 2010; Hilletofth, 2007; Jacobs, 2006; Jüttner et al., 2007; Walters & Rainbird, 2004)
The revolutionary supply chain reconstruction from physical and mental perspective
(Hilletofth, 2007, 2011; Jacobs, 2006)
The proper balance between demand creation and fulfillment, between revenue growth and cost reduction
(Ericsson, 2011; Esper et al., 2010; Hilletofth, 2011; Jacobs, 2006; Jüttner et al., 2007)
Challenge to create acceptance for new mindsets and new ways of behavior (many approaches are still based on old business paradigm with focus on intra company effectiveness and efficiency
(Ericsson, 2011; Jacobs, 2006; Van Goor, 2007)
Advanced market segmentation and intelligence
(Hilletofth et al., 2009; Juttner et al., 2007; Walters and Rainbird, 2004)
Conflicts of interest along supply chain (Ericsson, 2011; Jacobs, 2006; Van Goor, 2007)
Trust and loyalty (Charlebois, 2008; Childerhouse et al., 2002; De Treville et al., 2004; Esper et al., 2010; Frohlich & Westbrook, 2002; Heikkilä, 2002)
Integrated IT support (Al-‐Mudimigh, Zairi, & Ahmed, 2004; Selen & Soliman, 2002; Walters, 2008)
Commitment from senior leadership style fit (culture change/business strategy alignment/functional process and department fit)
(Esper et al., 2010; Hilletofth, 2011; Jüttner et al., 2007; Langabeer & Rose, 2001)
15. Technology, Innovation and Supply Chain Management Competitive Sessions
Table 5- The DCM and DSCM Studies in Fashion Apparel Industry and Chinese Fashion Industry Research areas Literature reviews Main perspective Marketing oriented SCM/ Lean agile leagile coordination/ internal SCM perspective
(Bhamra, Heeley, & Tyler, 1998; Bruce & Daly, 2006; Bruce et al., 2004; Cao et al., 2008; Chandra & Kumar, 2000; Christopher et al., 2004; Fernie & Sparks, 2004; Jones, 2002; Lowson, 2002; Mason-‐Jones, Naylor, & Towill, 2000; Stratton & Warburton, 2003)
It is proposed the effective buying behavior for fast fashion focuses on the management of portfolio of suppliers, relationship building as well as interfacing effective with internal activities
DCM perspective from NPD, CRM and marketing management
(Hoover Jr et al., 2002; Jacobs, 2006; Stockert, 2005); To assess the actual state of DCM compared with its promises of a few years ago
Development of Chinese fashion apparel industry
(Chan, 2011; Dickson et al., 2004; Hui & Jun, 2010; International Trade Centre, 2011; Kwan, Yeung, & Au, 2003; Lam & Postle, 2006; Li & Fung, 2011; Zhenxiang & Lijie, 2011)
Most of studies still focus on studying internal supply chain integration and specifically looking at some operational issues or technical problems under SCM definition.
Table 6- Key demand supply chain research for Chinese Fashion Apparel and Textile Industry Literature Title Research focus Research methods Type (Kwan et al., 2003)
A statistical investigation of the changing apparel retailing environment in China
Holistic industrial report— Examination of China’s demographic and economic indicators over the past 20 years, and the changing pattern of other macro-‐factors and micro-‐factors
Desktop Research Business report
(Taylor, 2004) China textile trade Industrial trading report— Introducing the special issue on the textile trade in China. Outlining its growth which has reinforced its role as a preferred supplier to major markets, and its alignment with other members of the WTO.
× Editorial
(Chan, 2011) Fashion retailing in China: an examination of its development and issues
Holistic industrial report— Examining the macro development issues of fashion retailing in china
Desktop research and exploratory research techniques
Business report
(International Trade Centre, 2011)
The Chinese Market for clothing
Holistic industrial report—Focusing on giving a comprehensive business overview on local Chinese FT market. The topic delivers through many perspectives, such as macro economy, trading, marketing and logistics perspectives.
Business case study and desktop study
Business report
(Yi, 2012) Fast fashion model questioning to be ‘Fast’ in China
Industrial news report— Analyzing the issues in the local FT companies for recent years.
× Editorial
(Zhang et al., 2002)
Casual wear product attributes-‐-‐A Chinese consumers’ perspective
Marketing/consumer behavior perspective—the importance of product attributes of casual wear for Chinese consumers was investigated. A total of 15 attributes were identified. It is found geographic and demographic factors had great impact on these attributes.
Quantitative survey study
Research paper
(Dickson et al., 2004)
Chinese consumer market segments for foreign apparel products
Marketing/consumer behavior perspective-‐-‐ Identifying the product attributes salient to consumers’ apparel purchase intentions
Quantitative cluster, multiple regression and other statistical analysis.
Research paper
(Chuang, 2008) A strategic study for quickening brand building of Chinese textiles and garment industry
Marketing/consumer behavior/branding—analyzing the favorable and unfavorable factors for brand development for local apparel industry and putting forward some main measures and strategies for brand development
Desktop study Business report
(Wang, 2009) The empirical study on the ladder like development trend of Textile industry
Marketing/consumer behavior perspective—Analyzing the regional development characteristics of China’s textile industry. , namely regional ladder-‐like development mode. Pointing out the big distinction between strong and weak region.
Quantitative clustering analysis methods
Research paper
(Li & Fung, China’s apparel market Marketing/branding perspective—statistic industrial Business case study Business
15. Technology, Innovation and Supply Chain Management Competitive Sessions
2011) report for these five years. Introducing the latest development on local FT industry and bringing the future trend about this industry.
and desktop study report
(Eng-‐Meng, 2013)
Clothing brand Metersbonwe takes cue from Zara’s fast fashion
Branding—news report on famous local brand Metersbonwe business model reconfiguration
× Editorial
(Flaven, 2013) In China, Hangzhou Brands Face Identity Crisis
Branding—In today’s large and highly competitive China market, developing a real brand identity is crucial to success.
× Editorial
(Lam & Postle, 2006)
Textile and apparel supply chain management in Hong Kong
Internal supply chain perspective—the paper focuses on reviewing the concept of supply chain management and Fisher SC strategy. Analyzing how to use Fisher’ s SC strategy to balance tradeoff between efficiency and effectiveness for Hong Kong textile supply chain
Case study Research Paper
(Candace et al., 2011)
Supply chain flexibility in an uncertain environment: exploratory findings from 5 case studies
Internal supply chain perspective-‐-‐ To illustrate and examine the different flexibility strategies adopted by supply chain participants as a result of different environmental uncertainties
An exploratory multi-‐case study involving 5 Chinese FT companies
Research paper
Figure 3 - Dimensions of Strategic Fit (Chorn, 1991)
15. Technology, Innovation and Supply Chain Management Competitive Sessions
Figure 4- Proposed Framework for Applying DSCM in the Chinese Fashion Apparel Industry
REFERENCES
Al-Mudimigh, A. S., Zairi, M., & Ahmed, A. M. M. (2004). Extending the concept of supply chain:: The
effective management of value chains. International Journal of Production Economics, 87(3),