G.KARTHIK MUKESH CHOUBEY MADHUSUDAN PATTANAIK RAMESH MENON SUSHIL KUMAR
PRESENTED BY --
GROUP-2
Introduction
Benetton
Benetton was founded in Italy in 1965. The first Benetton store was started in 1968 and by 1978 there were 1000 franchised outlets worldwide. Benetton is well established in Europe with a diversified range of clothing. Woolen garments, which are seasonal products, are the main stay of the business. The Supply chain caters to following main seasons Spring/Summer: February to July Fall/Winter: September to December –
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Manufacturing DYEING Performed In house
THREAD
Scale Sensitive
KNITTING
STITCHING DYEING
Thread purchased and Supplied to Contractors by Benetton Dyeing @ Benetton does not follow the “Traditiona “Traditional l Process”
FINISHING
GARMENT
Manufacturing (Outsourced Model) •
Only Dyeing is done In-House as it is “Scale Sensitive Sens itive” ”
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Other Processes work on outsourced outsourced model –
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Knitting : 80 subcontractors Stitching : 100 subcontractors Finishing : 20 subcontractors
High No. of contractors High Capacities
exclusive to
BENETT ON ON
build responsiveness to supply chain
Manufacturing (Outsourc ( Outsourced ed Model)…
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Location of subcontractors : Close to Benetton factory Machines: Provided by Benetton Financial support support is also provided provided
Design
Designing done by freelancers & best be st designer. designer. Every season has around 1000 1 000 designs. Meeting of designers with Guilana Benetton helps finalization of about 50 designs. These are mainly the hit styles presented in the fashion shows of the season. Product development - “012 Benetton, Sisley & Merceric”
Purchase
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World’ World’ss largest largest purchaser purchaser of wool thread thread Purchase is totally centralized Contracts with 2/3 thread suppliers –
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Availability Availability @ Competitive prices
Marketing Channels •
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Global Player: 2000 retail outlets. Agents Agents –
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about 100 commissioned agents chosen directly by Luciano Benetton on entrepreneurial spirit rather than experience. co-ordinated by Area Managers Managers (employees (emp loyees of Benetton). supervise all retail outlets in their assigned exclusive sales territories. encouraged to own own the shops themselves. t hemselves.
Marketing Marketing Channels contd… contd… •
Retailers –
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No experts in garment business. Florists, hairdressers hired and helped to set up shops. This ensures loyalty. Larger cities have large shops owned by Benetton.
Rules for Retailers –
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Only Benetton merchandise. Benetton plans layout of shops. Furniture from one of three designated Italian Italia n suppliers. Local advertisements to to be approved by Benetton. No discount sales without approval of Benetton. All stock displayed displayed on shelves shelves – tracking fast moving stock is easy and further furth er orders can be customised.
Supply Chain : Ordering & Delivering System •
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StylesFinalized before Spring/Summer & Fall/Winter. Orders
Ph – I : 7 Month in Advance - 80% of Vol.
Ph – II : Flash Collector - Quantity Flexible Orders -10% V
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70% Specific (size, color…) 30% unspecified – to be decided according to demand witnessed.
Ph – III : – Re Assortment -10% Vol.Vol.- Rapid delivery
Shops Shops Supplied Suppl ied Twice Twice a week
Supply Chain Of Benetton
Company outsourced outsourced labour l abour intensive production such as tailoring,finishing,ironin tailoring,finishing,ironing g Investment strategy,operatio strategy,operations ns such as weaving, cutting, dying & quality control kept internal Benetton maintained “ central Pole”located near Head Quarter to manage production productio n logistics logistic s and distribution Consolidated central shipping centre saved saved 20% of the transportation cost
Historic Historic Supply Chain of Benetton Benetton
Logistics : Warehousing & Transportation •
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Single Central Warehouse in Production centers to serve as finished goods inventory. Inventory centralization reduces inventory and inventory carrying costs.-Carefully Scheduled. Goods shipped directly from warehouse to shops through air/road/ship as required. No middlemen/agents ensures quick response resp onse to demands. Warehouse Warehouse management management and Transportation ransportation services outsourced to a 3rd party logistics l ogistics provider. provider.
Improvement on logistic system: - Elaborated new Information system, relaying on automatic
cash register in cluster of 10. - Additional Additional 20,000 sft central central ware ware house facility ….
Information System
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Push Based Stock System System Push/Pull Based System System –
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Point of Sales (POS) data collected directly from retailers to discern the products in demand. Make Ready the Right Product Dyeing & Distribution based on Point of Sales (POS)
SWOT analysis STRENGTH : strength Benetton Group is a world leader in the design, manufacture and marketing of distinctive casual apparel for men, women, and children. Benetton clothes are high quality products usually made of wool. Benetton is traditionally known for knitwear and casual clothing in a wide array of colors, featuring fashionable Italian design and projecting a youthful image. WEAKNESS : In Europe, Benetton products are expensive which gives opportunities to many competitors who provide lower prices for the same quality. - Increase in competition due to direct selling by others. OPPORTUNITIES : Benetton does not have market shares in the United States, so it can improve its position in that market. Benetton can capitalise on the strong image of Italian design. THREATS : THREATS The clothing market is getting saturated and the competition is getting tougher and a nd tougher toughe r (GAP, (GAP, Old Navy, Ralph Lauren, La uren, Tommy Tommy …).
Challenges/ dilemmas
Rise of new fashion houses in Europe Benetton products reaching saturation in Italy What should be the future future strategy? strategy? Whether only Europe Centric or explore Avenues Avenues in US,Japan US,Japan etc. Competition from Levis, large retail chains such as The Limited,Charming Shops, Petrie etc in US Whether to apply European European supply chain model in US? US?
Challenges/ dilemmas
Whether Italian Italian fashion fashion will be acceptable acceptable in US? What should be the product mix in these new markets? Whether to open lead store or take space in departmental stores? Whether to open plant in US or to import from Italy? Italy? Should they acquire an existing plant in US ?
Recommendations for Europe Market
There is a still a scope scope of sales sales increase of 15% annually in Europe Benetton should introspect, whether the “ Flash Collection” can become a regular trend in next season onwards. In addition to their regular distributors , Benetton Ben etton should explore possibility of new range range of distributors dealing with with competitors products. products. Benetton should increase the no of stores in other European counties
Recommendations for US
Gradual presence in US to be increased by occupying space in departmental stores Import from Italy in the beginning be ginning to cater to the requirements requirements of US Focus on advertizi advertizing ng After getting getting noticed in the market for a while Lead Store of Benetton can be opened Open new ware house and strengthen distribution channel Acquire Acquire a plant in US for manufacturing
Developments after 1990 in Benetton
Growth of business b usiness encouraged to set up additional regional poles to identify production needs and source to local manufacturing network “Networked manufacturing” & “Postponement of Dying” are key steps in development of Benetton supply chain industrial operations are based on a "double supply chain", which balances efficiency and speed.
Current Supply Chain of Benetton
Current Supply Chain of Benetton
Thank You