Jossey Menswear – the supply chain projecti

By: Nigel Slack

Founded more than a century ago, and now part of Amedox Fashion Retail division, Jossey had

developed a reputation for skilful retailing. Its success had been due to several years of changes,

not only to the 160 Jossey Ladieswear shops and 60 Jossey Menswear shops, but also in the

separate Design, Manufacturing and Merchandising functions which backed up these two parts

of the company.

Both Jossey Ladieswear and Menswear operated in the mid-range fashion sector. Not high

fashion, but reasonably stylish, serving the middle to up-market clientele. Menswear did not have

as diverse a range of products or as wide a geographical spread. The nature of „fashion‟ itself

was also different. What constitutes „fashion‟ in Ladieswear was regarded as being inevitably

more subjective. Sometimes it was difficult to identify exactly why a particular product or look

had sold. Whereas, fashion in menswear was more evolutionary than revolutionary. There were

relatively few of the major fashion swings which characterised even the middle-of-the-road

sector of the Ladieswear market. However, Menswear fashion was moving towards Ladieswear.

Brenda Wright, Merchandising Director, Jossey Menswear, explained:

„It is the overall “look” which is now becoming important. If single-breasted grey Prince of

Wales check suits were in high demand, it would not necessarily be the right thing to do to go

and buy more of that kind of cloth. Rather, it is important to ask ourselves, „What is it about this

product that is making it sell?‟ Then we can make an equivalent, or perhaps even better, product

with the same look. You might even get the same customers who bought the first product

returning to buy the second.‟

Market, demand and products

Traditionally, the fashion retail industry has, in the Northern Hemisphere, been based on two

seasons. January to July as the spring/summer season and August through to December as the

autumn/winter season. Both break points between seasons have traditionally been marked by

„sales‟ where surplus product is reduced for clearance. To some extent this neat division of the

year has broken down in recent years, with „transition‟ seasons between the two major seasons

extending to provide more of a rolling change of product offering.

Tailored products – jackets, trousers and suits – were the backbone of the Menswear product

range. The company had five suit „blocks‟ which determined the underlying shape or style of a

jacket (two classic blocks and three contemporary). Each of these was offered in a range of

cloths to produce about 40 „suit cloths‟, each of which was offered in 21 sizes. These, along with

knitwear, shirts and accessories were sold through around 60 shops. Shops varied by size. Larger

shops offered a wider range of products. However, only one store, the flagship shop in London,

offered all the 40 „suit cloths‟ which typically make up a season, while the average of all shops

was around 12.

As far as retail business was concerned, the key indicator of sales success was the proportion of

„full price sales‟ (FPS) achieved by the company. These were the garments which were sold on

to customers at full price (therefore full margin), as opposed to being sold at a discount (often

significant) during the sales period or through factory shop outlets. The FPS in Jossey Menswear

had been around 50 per cent for several years.

A number of factors seemed to determine the FPS percentage. A major influence was the

appropriateness of the „collection‟ (that is, the range of styles put together each season by the

company‟s designers). Designers worked from an understanding of their customer base, the way

styling trends had moved in recent years, the trends foreshadowed in the relevant „directional‟

fashion shows, and any new cloths available on the market. However „gut feeling‟ inevitably

played some part. Inevitably, design decisions were better some years than others. According to

David Jossey, Managing Director, Jossey Menswear:

„In a typical five year span we are going to have two quite good years because we get things

right, probably two very good years, and one year where we just get it wrong. This can swing our

sales volumes up and down by around 20–25 per cent.‟

Getting the styles into the right locations was also a factor in determining FPS. Each style had a

slightly different trading pattern across the country, so the better the match between the

availability of stock and the characteristics of each location‟s trading pattern, the better the FPS.

In addition, even with the right products in the right location, the sizes in which that style was

supplied to the shops could be wrong. Brenda Wright explained:

„It is difficult to predict exactly what size of customer will want what kind of product. We tend

to work on averages. So for example, we have an average for a double-breasted contemporary

suit. However, in reality the size and shape of customers who actually buy a particular style will

deviate from this average. I suppose it would be possible to look at the characteristics of a suit

within a particular block and make a judgment of what sizes are likely to buy it. However, we

just don‟t know our customer base well enough to do that.‟

Choosing the right cloth for each style was also important. Designers would visit cloth shows,

always on the lookout for new cloths which would enhance their styling decisions. Even so,

often the choice of cloth was made on a relatively small sample, sometimes only a few square

centimetres in area. As well as the obvious difficulties that gave the design team, it also made it

difficult for the factory to predict how the cloth would behave during the manufacturing process.

Brenda Wright commented:

„Six to eight years ago we used to say, “That is the right cloth for that style”. We couldn‟t have

used the cloth on anything else. If you got it wrong, well it was just too bad. Whereas I think

we‟ve now got better at buying cloths that can work in different styles. The ultimate would be

that we buy cloths that can be made into anything. Those cloths are few and far between.‟

Supply chain management and quick response

In recent years the company‟s management had been debating their overall supply chain issues,

especially quick response (QR) supply chain management. Their hope was that fast throughput in

the supply chain could not only save working capital but could also give the merchandising

function sufficient flexibility to respond to the reality of a season‟s sales pattern rather than work

entirely from forecasts made well in advance of the sales period. What was needed was the

ability to cope with inherently uncertain markets. Within Menswear, a paper which had been put

together raised a number of issues. Chief amongst them was the question of how Jossey

Menswear could shorten time in its manufacturing process to enable it to make merchandising

decisions closer to the point at which it sold the garment. David Jossey outlined the case for QR:

„Traditionally in this business we have made immense efforts to get costs down to save £1 or £2

on the cost of a suit. Yet if we don‟t sell a suit, the average markdown on that suit can be £100.

It‟s far more important to make exactly what you can sell than it is to save a few per cent on the

manufacturing costs of what you are making, especially if it is not what the customer wants to

buy. By far the most significant way of improving our bottom line is by driving up revenue

through increasing our volume of full price sales. To do this we have to have the right product in

the right place at the right time. Typically our customers are not frequent visitors to our stores.

They may come in, say, around twice a year. If they don‟t find what they want they are unlikely

to return just in case we have it next time. What is really frustrating is our belief that sometimes

customers come into our stores and might have purchased one of our products if it had been

there. The reverse is also a problem for us. We don‟t want our stores full of product which, in

hindsight, is not going to be a major seller. The faster we can replenish our stocks which are held

in the shops, the less initial stock quantities are needed, and therefore the less risk we take of

overstocking on low-selling items.‟

Even so, not everyone in the industry, or even in the company, was convinced that QR would

improve FPS. They argued that in the niche of the market a 50 per cent FPS was a given, though

David Jossey disagreed.

„I just didn‟t believe that was right. OK, so you might have to change several things in order to

improve it. Of course, if we carried on making decisions a year before the customer had the

opportunity to buy the product, if we carried on buying our fabric nine months before, if we

carried on making the stock three months before the sales period, and delivering it to the stores

with no opportunity to back our winners once sales trends became evident, yes it is a given. But

if we changed the rules of the game we were convinced that we could do better.‟

Two issues were being seen as interrelated by the Menswear team. The first was the

effectiveness of the design effort. The second was the effectiveness of their ability to get the

right products in the right place at the right time. Yet a perfect range of products would be no

good if the supply chain could not get them to the right locations in time. Furthermore, fashion

products which were designed 18 months before the season were less likely to catch the right

trends than ones which were designed nine months before the season. Brenda Wright

commented:

„Clearly, however, there was a danger of improving supply chain systems merely to compensate

for inappropriate design decisions. That would be a total waste of potential. Anyway, it would

also mean that the factory would be busy making poor-selling products which adds to the

complexity of the factory and makes it more difficult to maintain its quick response.‟

The Cornwall plant

The Cornwall factory manufactured all tailored menswear products for the company. In 1998 the

plant was manufacturing around 1200 suit equivalents (SE) per week; by 2002 output had

increased to 1900 SE per week; with fewer people.

The plant operated as a profit centre with its own set of accounts, with the price paid to

manufacturing set on a „cost plus‟ basis. The factory‟s costings were used as a basis for this,

though there might be some negotiation between product managers and the factory. However,

when reporting to the Division or to the Group, Menswear was judged as a single vertical

business, a point stressed by David Jossey.

„It is useful to have Cornwall as a profit centre, even though by adjusting the transfer price we

could swing profitability significantly up or down. But wholesale and factory shop production

make genuine contributions to Menswear profits. It is also good to have the plant know that they

are a contributor to overall profitability. However, it is also important that Cornwall management

are not over-worried about their own profitability to the detriment of the whole business.‟

In order to help the plant contribute to the supply chain initiative, an experienced operations

manager, Frank Hawkins, was moved to an advisory role in the plant. When Frank arrived at the

factory his task was to identify all the barriers which might inhibit the move to QR

manufacturing. These barriers seemed to include limited factory space, a rigid payments system

and limited skills flexibility and specialist machinery. Frank was also sounding out opinion in the

factory. Rumours had already been circulating about QR and there seemed to be mixed feelings

about any change to the work organisation. Some people were either enthusiastic, or at least

willing to acquiesce in any changes; others were hostile, seeing the ideas as either unworkable or

a threat to their earnings. Frank Hawkins found that many, however, took a wait-and-see attitude.

„As far as the factory floor were concerned, QR meant a move from traditional “individual

operator” based training to “team” working. Team working was not welcomed by everyone,

although it was being used by a number of other companies.‟

Frank and his supply chain team soon reached the conclusion that not all the factory‟s resources

need necessarily be organised on a QR basis to achieve substantial benefits. Their plan was to

convert only 30 per cent of assembly to quick response, leaving the rest as conventional

manufacturing.

„Looking back, partial conversion was not too risky. It allowed us to retain 70 per cent of our

core machining processes as before, so we were not risking the whole factory to the new way of

working.‟

Even so, Frank‟s proposal meant an upheaval for the plant, whose operatives were in need of

some reassurance. David Jossey outlined the assurances that were given:

„One of our commitments to Cornwall was that this supply chain project would not put them out

of work. We promised them that we would give them something to make every working hour.

Exactly what we would be asking them to make might not be known until a week before, but

there would always be something. We also warned them that we might have to change our

minds; we may have said that we wanted 500 navy-blue suits but now we only want 300. We can

either, make them and put them in the warehouse, or we can change our minds and make

something that we know we are confident that the customer wants.‟

Forming the teams

Frank‟s proposal called for two QR teams, one for jacket assembly and other for trouser

assembly. One debate was the basis for selecting these QR team members. Should they be

volunteers, or should the management team select them on the basis of overall factory skill

deployment? The obvious advantage of volunteers was that they would be the people presumably

most committed to making the new system work. On the other hand, if the volunteers were the

most skilled, then, how could the remainder of the sewing department manage without them?

The pivotal meeting came in March 1998. The Plant Foreman at Cornwall reported:

„The workforce had been regularly briefed on the progress of the whole supply chain project.

Now, with Frank‟s proposal agreed, was the time to ask the workforce for volunteers for the QR

teams. I explained the reasons for such a radical change in some depth and demonstrated my own

support for the project and belief that it would be essential for our continuing success. We were

delighted by the response. We needed 25 volunteers but got 168!‟

The issue of whether the teams should have supervisors was also debated. The majority of team

members preferred to do without them, a decision welcomed by Frank who nonetheless knew

that the teams would need careful handling. Because of the novelty of the system, many people

would come and see the teams. Presenting them as the „elite‟ of the factory would merely

demotivate the rest of the workforce. In fact, whenever visitors came or information needed to be

passed out, it was the conventional manufacturing parts of the department who were visited first

before the QR teams. The teams were also encouraged to give themselves names, the „Supreme

14‟ and „The Commitments‟ for example. This seemed appropriately informal and, if the team

members chose their own name, they would feel more comfortable with the idea of working in

the new system.

The payment system barrier

The payments system proved to be one of the biggest implementation issues. How could a

payments system be devised for the new teams which would at the same time keep the operators

motivated to maintain output levels while still allowing them to maintain their earnings levels?

Frank Hawkins outlined the payment system issues:

„Getting the team payment system right was probably the single most important thing that we

had to decide. The system was far from ideal. The more skills an operator had, the higher was

their base rate. However, the skill differential was relatively small. In fact the common opinion

on the shop floor appeared to be that the slightly higher rates for multi-skilled operators was

compensation for not being able to make the incentive performance levels because they were

continually changing jobs. It certainly wasn‟t regarded as a motivator to acquire more skills. The

QR team payment system had to be better. If the operators liked the payment system and it

seemed to them equitable and progressive then they would buy the whole team idea, but if they

distrusted the payment system then it would be difficult to sell them the idea no matter how good

it was. On the other hand, if the payment system was too generous and after a few months we

had to go and take some money out of the system, again they were going to be less than happy.

We never had to do that because we spent a long time simulating the payments system before the

new teams went in.‟

Not everyone liked the changes

At a regional level, the changes were supported by the trade union, though a minority of its

members at plant level remained hostile. Frank Hawkins recalled, „At one public meeting one of

the workforce looked me straight in the face and said “You, you‟re going to close this factory

with your ideas”.‟ The vast majority of the workforce, though, seemed willing to give the new

system the benefit of the doubt. Even so, some parts of the plant were more welcoming of the

new system than others. In the jackets assembly section there was general enthusiasm for the

idea and no shortage of volunteers to staff the new teams; in the trouser section there was less

enthusiasm. Eventually a team was selected but they were not regarded as being amongst the top

performers in their department. In fact their performance had, historically, been lower than the

departmental average. Yet, a year later there had been a transformation, as Frank Hawkins

commented:

„These people who were previously low-skilled, low-performance operators were developing

into a multi-skilled team achieving a higher performance than they would have been able to in

the conventional system.‟

Measuring supply chain performance

Brenda Wright outlined the supply chain performance issue:

„We felt, early on in the project, that it was very important to set up measurements of supply

chain performance that were not conflicting. For example, if we were too obsessed with output

from the factory or standard hours of production, that could be in conflict with the retailing

imperative of getting the right product to the right place at the right time.‟

The set of performance measures used by the supply chain team to assess the effectiveness of the

new QR system operated at a number of levels, listed below from macro to micro:

Net achieved margin – the margin delivered, including all sales, as a percentage of revenue

(without value added tax)

Full price sales volume:

− for the whole of Menswear

− on „key lines‟ (constituting 7 per cent of lines offered, but 25 per cent of sales)

− the 15 top key lines (mainly sourced from Cornwall)

Throughput time for orders placed to Cornwall

On-time delivery of all orders from Cornwall (monthly)

A „root cause‟ report on all problems affecting supply chain performance – late cloth

deliveries, late design decisions, process blocks, etc.

The future

Several opportunities were on the supply chain team‟s agenda for the future.

Extend the proportion of work made on a QR basis

The team had already decided to increase the proportion of trousers being made under quick

response conditions from 35–40 per cent of production, and increase the proportion of jackets

from 30–35 per cent in July 2000. This would mean enlarging the quick response teams in both

sections. Even further expansion of both teams was likely.

Speed up the product development process further

Brenda Wright explained the need for speeding up the product development process:

„One of our major opportunities is still in product development. What we have been

concentrating on is how we can replenish within the season. What we need to be able to do more

is trial new products so we are not taking the same risks in launching new designs. This means

we have to get a brand new idea from nothing to being in front of the customer in the shortest

possible time. We‟ve still got some work to do around that.‟

Rethink how market information is captured

The merchandising team were acutely aware that, although they had made big strides in

sharpening up their market information, an increasingly flexible supply chain, giving faster

response, would even further increase the potential for appropriate and timely market

information to increase sales effectiveness. Brenda Wright commented:

„One way of getting good information is through appropriate categorisation of our product

groupings, which is a key issue for us. You have to find ways of grouping the products such that

emerging trends can be spotted early.‟

Explore ways of choosing even more flexible cloth

The supply chain team, were aware that even with perfect information on market trends, they

would always be limited by the availability of cloth. One of the benefits of the supply chain

project was seen by the team as increasing the awareness by designers of how their decisions

influenced the performance of the factory. In spite of some initial resistance by designers in

moving towards more flexible cloth purchasing, the supply chain team believed that designers

had achieved a far more sensitive understanding of the flexibility implications of their choice of

cloth. The task was to do this without inhibiting their design skills. David Jossey summed this

up:

„You must not undermine the confidence of your product design people. Remember they are

putting a lot on the line. It‟s them who are taking the risk with their reputations by accepting

some curbs on their creative process. Getting the whole team aligned to the single supply chain

goal of improving full price sales helped us get the message over.‟

Improve cloth suppliers’ responsiveness

The big limiting factor on getting appropriate availability of styles into the shops was seen as the

lead times from cloth suppliers. To some extent designers could mitigate this by flexible styling

– buying cloth which is not limited to a single style – thereby increasing the chances of being

able to use surplus cloth in the styles and designs that were selling well. But far more potential

for shortening the overall product development and „in-season‟ lead times was seen as coming

from more responsive cloth supply.

Work on cloth development with suppliers

Typical of this issue was the way the average weight of cloths had been getting lighter over the

last few years. This itself had made the cloths more difficult to machine, although by working

with machinery suppliers the company had largely overcome problems associated with

lightweight cloth. However, cloths, even of the same weight, could vary considerably in their

machinability. Frank Hawkins outlined a further aspect of this issue:

„We are a lot closer in understanding which characteristics of a cloth make it more or less

machinable, but we still can‟t fully predict it. What disappoints me is that when we do have to

abandon a cloth because it just isn‟t machinable, we don‟t get close to the suppliers and

brainstorm the issue until we know exactly why it didn‟t work out.‟

Finally

The QR supply chain project was regarded by the whole team as having profoundly affected

their views. Brenda Wright summed this up:

„Having capacity under our own management has the potential to give us a tremendous edge in

the marketplace. It also allows us to develop ourselves as managers. If you are a buyer who has

no responsibility for manufacturing problems it is easy to say to your supplier, “I want it, just

sort it out”. Having to understand the implications of our decisions for our own manufacturing

plant has made us better managers. It has helped us to develop our thought processes and think

around problems to find solutions.‟

Questions

Q.1. Why was the QR approach significant in improving the company’s supply chain

performance?

Q.2. Do you think the Cornwall plant’s approaches to introducing QR ideas were

appropriate?

Q.3. Which of the possible future actions identified by the supply chain team do you think

worth pursuing and why?

Ref: Robert Johnston, Stuart Chambers, Christine Harland, Alan Harrison and Nigel Slack, Cases in Operations Management, 3

rd Ed.,

Prentice Hall, Pp 82 – 90.