The challenge gets even worse with the great variety of products presented with every single wear vendor. Product lines vary in styles, cloths and sizes - the range of goods a vendor must produce to attract the attention of buyers is enormous. Minding the fact that only a small part (50% in the case of Jossey Menswear) of the whole stock is sold at full price it becomes clear that wear vendors put up with significant wastes. And because of what Because of inaccuracies and misconceptions of fashion forecasts. Since the production cycle of clothes is rather long (it takes 18 months from the first sketch of a designer) companies have wear in their stores, which were presumed to be popular a year and a half ago.
Obviously, there are two ways a company can take to improve its chances of hitting the bull's eye of customers' popularity. The first one, extensive, lies in broadening its product range and increasing volumes of production. The second path is intensive, and tries to improve the accuracy of forecasts, which only can be made through shortening the production cycles. Of course, the second path is better for Jossey Menswear since it leads to full price sales proportion increasing, while keeping the production volumes the same, or even lower than before, which increases profits for the company. Meanwhile, the first way simply increases revenues along with manufacturing costs. Thus, the efficiency of forecasts falling over time and wastes associated with manufacturing of unpopular products are the main reasons behind the choice of quick response (QR) manufacturing system.
The main driving factor between the strategies based on QR manufacturing is the reduction of lead time - this business concept is also known as 'agile manufacturing' (Suri, 2003). Another business concept, known as 'lean manufacturing' uses wastes elimination as the main driving factor. Despite the common opinion these two theories are not mutually exclusive and can be applied together (Martin and Towill, 2000). So the question for Jossey Menswear is not stated as "agile or lean approach" - both concepts should be used, because the main objectives of supply chain improvement for Jossey are both reducing lead time and eliminating wastes.
Inevitably, every improvement action taken by the company should be monitored in order to learn lessons from it. The implementation of QR manufacturing requires to be monitored from several dimensions: informational, financial and external (customer). The informational perspective can be considered primary, as it reflects the main goal of improvement increase the speed of information flow between different segments of supply chain.
Financial perspective can be analysed with the help of total cost analysis. TCA assessment offers a final statement reflecting not only the cost of improvement but all aspects in the further use and maintenance of inventory. For instance, TCA may show that while direct costs of the improvements may be high, a further reduction of material and inventory costs acquired from the increased velocity will be beneficial (Kauffman, 2004).
The customer perspective may be reviewed through customer profitability analysis (CPA). This technique assigns revenues and costs to groups of customers rather than to organisational units, products, etc. By doing so, CPA gives its users the information, which customers are the most beneficiary for them, which in our case will show how helpful is the improved supply chain in adding revenue from customers.
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