The Japanese Traditional Structure of Quick Response - Assignment Example

 The Japanese traditional structure of Quick Response Introduction The Japanese traditional structure of Quick Response (QR) has proved ineffective following the surfacing of the 1990s fast-changing fashion styles. This has initiated a Tokyo-Seoul business collaboration where small-scale business dealers in Dongdaemun are coming together to come up with ways of meeting the demands of the fast fashion products. This they do in their organic networking with other small-scale suppliers in the glomeration. The connection of Seoul and Tokyo has also enabled both the parties to realize each other’s uniqueness. There are remarkable differences between the past casual fashion trends and the fast fashion method in Dongdaemun district. Light has been shed on how the supply chain structure leads to success of such a business. Moreover, an analysis of the future effects of the Japan-Korean fashion collaboration in the setting of globalization in the fashion industry is elaborated. Competitive and Strategic priorities affecting the lead organization Major apparel firms work at introducing new styles every week. This is to be able to meet the demand of the Japanese young women market that is characterized with a fast moving trend cycle with a great diversity of choices in styles. Studies show that fast fashion has a real effect on the supply chain for the fashion product, but the consumer demand is the main driving force that determines this fast fashion. This contrasts with the previous theories on supply chain, which have been solely supply driven aspects. Fast fashion is a phenomenon that is developed as a direct result of changing anticipations and demand from customers (Lea-Greenwood, 2006, p. 266). In addition, there is a tradition among the Japanese people that makes them prefer many varieties and have an interest in craft. This calls for their fashion styles to be always changing apart from being unique from those of their counterparts. The organizations do not mainly depend on seasonal collection, but they ensure that there is a compressed time interval between the moment a product is designed and the moment that is used. This compression is attained either by lumping together selections that are more regular or through an ongoing redesigning and unchanging new production. In other words, the Just - in - Time (JIT) supply chain management theory is upheld. It entails “having the items of the right quality and quantity in the right place at the right time” (Cheng et al, 1996, p.2). Research shows that application of JIT has contributed to improved quality, productivity, efficacy, better communication and a decline in costs and wastes. The potential of getting these benefits has made numerous manufacturing companies to consider this criterion to manufacturing. This approach is mainly applicable in a competitive environment. The ability to uphold higher levels of productivity, while at the same time retaining quality, is a very vital goal of any manufacturing firm. JIT comprises of various elements that must work together in harmony to attain the JIT objectives. First, there should be support from all people who play a role to ensure that the organization’s goals are met. These involve stockholders and owners of the company. Focus should be placed on the long-term generation of profit implying that short-term revenue should be ploughed back into the business. Labour organizations should also be informed about the goals of JIT and be made to understand how the new approach will influence the working tradition. There is also need for management support to mean that managers should initiate the process and be examples for the other employees to emulate. In addition, any organization intending to practice JIT requires support from the government. The JIT approach is founded on the organizational theory that states that people are willing to work towards the fulfillment of certain goals when they are involved in the development of those goals. Secondly, we have plants that are supposed to undergo several changes. These include plant layout, which should be arranged according to the product and not the process. There is the aspect of the demand-pull, which allows for production of what is required in the suitable quantity and at an appropriate time. Moreover, there should be an ongoing improvement within the company to ensure that there is a transformation in the way people think towards the general efficacy of the organization. The third element is systems, which refer to the technology, and processes that connect activities and materials used in production (Cheng et al, 1996, p.8). Most apparel firms opt to shift their production offshore. This is mainly brought out by financial upgrading in the neighboring countries and the costly distribution structures in the home country. Because fashion industry entails very many labour intensive processes, apparel organizations still find it challenging to retain home-based manufacturing unless there is existence of competitive factors that are favored by a specific country. Although a series of environmental transformations has had a negative effect on the Japanese domestic fashion industry, there is a unique movement of fashion exchange between Seoul and Tokyo. After the occurrence of the mid 1990’s Bubble economy, the Japanese fashion industry found itself entangled in the intricacy of keeping up with the minimum fashion life cycles in the young women’s casual fashion market through a traditional structure of supply chain configuration. Although there is an affordable and a prompt response fashion production present in areas that are close to offshore sourcing markets with quality standards that meet the required levels, the pace of the fashion change affecting young women users in Tokyo is very fast and non-anticipative to be dealt with through a normal offshore supply chain. On the other hand, higher distribution costs and low retail prices for casual wear caused domestic manufacturing in this sector to be unachievable. Some classical Japanese fashion retail firms like Echoist and Cocolulu attained a great level of success in the young women fashion casual wear market by executing quick response methods in Liaison with the Dongdaemun partners integrating their marketing with both weekly and daily variations of trends in the streets. These two manufacturers have moved their manufacturing to China, having developed store brand identities and built a reasonable level of business. Apart from this, they have initiated exchange in the fashion industry between Seoul and Tokyo from their concerted efforts with Dongdaemun. Collaborating with the Japanese firms has enabled the Dongdaemun small and medium enterprises to both expand their quick fashion style besides boosting the quality in the casual fashion sector to help fulfill the needs of the Japanese customers. The collaborative strategy between Dongdaemun and the Japanese firms was also meant to lead to a transfer of ‘hands on’ skills that was to be of great benefit to Marukyu manufacturers who needed to update their experience in apparel production. Acquisition of new knowledge and skills would inevitably lead to production of quality products that would go a long way to influence the customers’ choices. The Supply Chain structure The supply chain refers to the organizations and procedures for the acquirement, storage, and trade of raw materials, in-between products, and completed goods. Supply chain commodity flow is connected to the material, financial and information flows. A one-dimensional supply chain clearly portrays a supplier and the direct consumer. A multi-dimensional supply chain on the other hand can go to an extent of showing raw materials on one side and the disposal of products on the other side. The intricacy increases with an increase in the number of dimensions. Most organizations lack the machinery to monitor supply chain network. This makes them focus on either one or two dimensions (Poluha, 2007, p. 11). In its uncomplicated form, the supply chain encompasses three important parties. They include the company, the company’s suppliers, and its customers. Elaborative supply chains have three more participants. To begin with, there is the supplier’s supplier at the beginning and secondly, we have the customer’s customer at the end of it. Finally, there is another group of organizations that provide services to those organizations in the supply chain. These organizations avail services in finance, sales, and information technology. In most supply chains, there is some blend of organizations that play different roles such as producing, wholesaling, and retailing, among other roles (Hugos, 2003, p. 23) as illustrated in the diagram below. The capabilities and efficacy of a firm’s supply chain is based on decisions made in five of its key areas. First, there is production, which deals with the kind of products that match the consumers’ needs, the amount needed and when they ought to be produced. The fashion industry is concerned with fast changing items that are on high demand especially in Seoul. The pace at which trends change requires that products be produced within the shortest intervals possible to meet the demand. Secondly, the inventory is also essential. It dictates how much stock the firm should have at each given stage of the supply chain. Due to the fast changing fashion trends in the markets, the fashion industry aims at ensuring that there is sufficient stock to meet the customer needs and to withstand competition. Thirdly, location of the facilities for both production and inventory storage is crucial. Source: Essentials of supply management (P. 27) In Dongdaemun, most business owners have located their premises close to the buyers, which help to minimize transport costs and monitor changes in the market. Fourthly, transportation of the inventory from one place to another should be done using transport means that is neither too slow nor expensive. Moreover, the kind of information to be collected and shared influences accuracy of decision-making. For instance, there is an effective flow of relevant information from Seoul business dealers to Tokyo based ones that enhances quality business operation in terms of improved quality and sales. Logistics is that element of management that involves movement of all materials. Inward logistics refer to the motion of materials from suppliers into the organization. Outward logistics on the other hand refers to movement of materials from the firm to customers. Materials management is the movement of materials just within the organization. However, organizations do not operate in alienation. When purchasing materials from own suppliers, an organization acts like a customer but it acts like a supplier when distributing its materials to the clients. Therefore, it means that a wholesaler is a customer when purchasing items from producers and a supplier when selling them to retailers. Products go through the hands of numerous organizations while flowing from original dealers of raw materials via in-between organizations and eventually to the final customers. For example, milk as a basic product that comes from the farm, collected by tankers, goes to the dairy and bottling firms, then to the distributor who takes to the retailer where customers buy it from (Waters, 2007, p. 36-37). Some people have felt that logistics revolve around movement of materials within one organization, and as such, is narrower. Therefore, supply chain management has often been used in place of the former. It refers to a broader flow of materials within organizations that that constitute the supply chain. However, profound studies show that the two mean the same thing (Waters, 2007, p. 38). The basic view of a supply chain is that of one product moving through many organizations, and each of them ensures there is value addition to the commodity. From the perspective of one organization, activities that come in front of it that mainly entail the inward flow of materials are known as upstream. On the other hand, those activities that come after the organization are referred to as downstream. Activities that comprise the upstream are categorized into tiers of suppliers. A supplier who directly delivers materials to the organization is the first – tier supplier. The one who provides the firs – tier supplier with materials is the second – tier supplier and so on up to the initial sources. Customers also form different types of tiers. A first tier customer is the one who obtains commodities directly from the organization while a second tier customer is one who obtains the product from the first tier customer. This goes on up to the final consumers. On the other hand, the producer may regard sub-assembly developers as first tier suppliers, those who construct the component as second tier suppliers and those who avail materials as third tier suppliers. In the same vein, a manufacturer may view wholesalers, retailers, and final customers as first, second and third – tier customers respectively. Supply chains are of diverse kinds. Some are very precise and easy to comprehend, for example, a hotel purchasing vegetables right away from the farmer. Others are lengthy and intricate such as a blouse moving all the way from the silk farmer all through to the end user. Majority of organizations obtain their raw materials from diverse suppliers making the supply chain to appear to converge on the firm in focus as the materials needed for production flow across the tiers of suppliers. They also seem to diverge as the commodities move to meet the needs of various kinds of consumers. The concept of supply chains is getting more intricate, and the certainty can be exceedingly sophisticated. For instance, the entire supply chain of a vehicle comprises of thousands of various firms, with perhaps each of those firms dealing with thousands of varying parts. The flow in a supply chain should not be limited to the flow of materials only because there are other flows as well. These entail the flow of both expertise and funds (Waters, 2007, p. 39).Therefore, a computer firm such as Compaq can be on several supply chains due to its production of personal computers and on several other chains through its information processing. Logistics of Supply Chain Management Inward Logistics Materials Management Outward Logistics Diagram 1.1. Source: Supply Chain Risk Management: Vulnerability and Resilience in Logistics How strategic decisions affected vertical integration or outsourcing The different economic features of the Japanese and Korean business players made them to come together, complete each other by replacing the other’s weakness with matching business strength. Some environmental factors made it hard for the Tokyo based firms to conduct business. This includes, for instance, high distribution costs and reduced retail costs. This implies that going on with the business will not generate substantial gains enough to sustain the running and further growth of the industry. On the other hand, the Korea based industries are reported to have a strong fiscal base that can enable them not be adversely affected in the face of similar challenges. Therefore, outsourcing helps the Japanese based fashion industry to manufacture its products at reduced prices. This is a desirable business aspect that every firm aims to achieve, since by doing so, gains can be maximized. However, for this to be fully implemented, there will be need for the Seoul and Japanese fashion industry to define quality levels, come up with new prices, re-negotiate and perhaps come devise a cost restructuring among most of their products. Secondly, the fast changing young women’s fashions could not to be sustained by either the Japanese Company’s supply chain or even their collaboration with an offshore supply, On the contrary, the Japanese Marukyu style have been known for their long term success that enables them to keep pace with the fast moving young women trends and fashions. Their collaboration with the Korean Dongdaemun is what brings the difference. This strategy produces excellent results because the Seoul based firms have sufficient machinery that can necessitate a frequent supply that is abreast with the demands of the clients. Marukyu fashion style retailers are also reported to have had little experience in apparel manufacturing. The Korean based firms on the other hand have a practical experience such that linked with their Japanese counterparts will result to a highly productive integration. Thirdly, the decision to collaborate with the Korean fashion industry has caused the vertically integrated partners to focus on the core aspects of their business. There is a reported networking in Dongdaemun that ensures that nothing disrupts the flow of the business right from design to marketing. The transactions of small-scale business owners in the region reveal how the business culture in Seoul is deep rooted. The 24-hour operation of the both the wholesale and retail business clearly reveals a full focus on the fashion-based business. It shows a total preoccupation of both traders and customers with dealings of the fashion business. This is also evidenced in the Dongdaemun fashion based industry commitment to hiring competent Japanese graduates as a way boosting the business’ human resource aspect. Additionally, the introduction of glomeration flavors by the Dongdaemun traders to the Japanese buyers is an investment that is meant to encourage an active market environment that will enhance the focus of both on the core aspects of their business. Fourthly, the strategic decision to link up with the Korean fashion industry has enhanced transfer of knowledge and skills from the Dongdaemun fashion dealers to the Tokyo ones. The sales people have a lot to learn from both their observation of what unfolds in the Korean streets and their interaction with customers. This makes them to be creative enough and produce items that are in line with the latest market demands and of improved quality. Influence of strategic decisions on globalization, the choice of suppliers and the kind of relationships. The vertical integration between the Japanese based fashion industry and the partners Korean facilitated an economic interdependence with other business players within the region. For example, the presence of the Impanatore ensures that there is an ongoing flow of latest ideas and design. This does not just encourage improved quality of the impanatore’s products, but it also allows upcoming firms to utilize the new ideas and become more creative in their business ventures. The increased need for immediate changing fashion styles in Dongdaemun will encourage the autonomous small business owners to network since their transactions play a bigger role in the supply chain, right from designing and manufacturing to selling. Due to the reduced presence of large-scale business organizations and conglomerates, there is an opportunity for the small-scale business dealers to network. The absence of such corporations also enhances the supply chain to be confined within Seoul. In Dongdaemun, small-scale fashion traders control the fashion supply chain through their own mechanisms and also rely on other suppliers and provide completed fashion items within the shortest time possible. This is because the nature of the fashion trends and the absence of other large scale corporations upon which they can depend for supplies require that they establish good business relationships with each other to meet the customer demands. The Korean quick fashion system has not only established a robust economic relationship between Korea and Japan, but also with both the Italy and France dealers who have been attracted to it. The fact that most manufacturers carry out production of short cycle fashion items has caused them to be located near the market region and its outskirts where they are not far from the customers. They rarely get out of this region since their aim is to meet the immediate needs of their customers. The frequent usage and quick fashion trends by the school-going girls (kogal) required that Dongdaemun play a significant role in the supply of these products. The conformity of Dongdaemun firms to Japanese standards during 1990’s in terms of both quality and design has caused a strengthening of ties between the two parties enabling them to conduct more business transactions with each other. Additionally, business owners in Dongdaemun have devised a flavor of glomeration effects, which is meant to excite the Japanese customers. This has been replicated in other places within Japan too. Moreover, labor interdependence has been manifest through Korea hiring some of the Japan based graduates to work in its business premises. Conclusion and Recommendations The Japanese market demand for fashion products is fast changing. It therefore calls for fashion-based firms to be quick enough in all their operations to meet these market demands. Conventionally, fashion industry in Japan has been a pro\duct of in-house urban designers and SME specialists. Their operations were successful when the national economy was thriving. However, factors such as economic saturation at home, economic upgrading in the neighboring nations and expensive distribution structures compelled them to move their operations offshore. This led them to outsource with the Dongdaemun fashion market in Tokyo that has seen an improved production, continuous supply chain, ex\change of knowledge and generally a sound economic relationship between Japan and Korea in the fashion industry. Although the Seoul –Tokyo business relationship is thriving, a few recommendations will make their operations even better. First, the fashion manufacturers should consider decentralizing their business to other cities in Korea rather than just Dongdaemun. This will increase their customer base and sales. Secondly, an expansion of their business operations to other nations such as China may also bore fruits. Thirdly, should devise means of enhancing capacity for innovation. They can seek other international specialists in fashion design to help equip them with relevant expertise that will boost business performance. References List Cheng, T. C. et al. 1996. Just – in –Time Manufacturing: An introduction. London: Chapman and Hall. (Online). Available from: http://books.google.co.ke/books?id=WL95yzpj1TIC&printsec=frontcover&dq=jit+manufacturing&hl=en&ei=ZaXvTOiHD4WclgfPqfnFDA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC4Q6AEwAA#v=onepage&q=jit%20manufacturing&f=false (Accessed November 26, 2010). Hugos, M.H., 2003. Essentials of Supply Chain Management. New Jersey: John Wiley and Sons. (Online). Available from: http://books.google.com/books?id=83x0CNLuqJEC&printsec=frontcover&dq=supply+chain&hl=en&ei=YPDwTLepJoKe4AaWnojIAQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCwQ6AEwAA#v=onepage&q&f=false (Accessed November 26, 2010). Lea-Greenwood, G., 2006. Fast Fashion. Journal of Fashion Marketing and Management. Emerald group publishing. (Online). Available from: http://books.google.com/books?id=E2btlKDHEIoC&pg=PT12&lpg=PT12&dq=Guercini,+2001&source=bl&ots=ylVw7pGL77&sig=hI2xv2PvtnUoqTo4zLTvcbSwkiI&hl=en&ei=CWXvTNH2C8KxhQeKzsSOCg&sa=X&oi=book_result&ct=result&resnum=6&ved=0CD8Q6AEwBQ#v=onepage&q=Guercini%2C%202001&f=true (Accessed November 26, 2010). Poluha, R.G., 2007. Application of the SCOR model in the Supply Chain Management. New York: Cambria Press. (Online). Available from: http://books.google.com/books?id=lSgPTk-dfnMC&pg=PA8&dq=definition+of+a+supply+chain&hl=en&ei=cZTwTMW-NYeg4Qamu8WkBw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCUQ6AEwAA#v=onepage&q=definition%20of%20a%20supply%20chain&f=false (Accessed November 26, 2010) Waters, D. J., 2007. Supply Chain Risk Management: Vulnerability and Resilience in Logistics. London: Kogan Page Limited. (Online). Available from: http://books.google.com/books?id=HhVveSOyKwQC&pg=PA38&dq=organizations+found+in+a+supply+chain+structure&hl=en&ei=HJLwTNmbIsaA4QbtktikBw&sa=X&oi=book_result&ct=result&resnum=9&ved=0CFYQ6AEwCA#v=onepage&q&f=false (Accessed November 26, 2010). Read More