SCM Assignment Supply Chain Management In apparel Industry Group 5:- Submitted to: Dr.S. Venkataramanaiah IIM Lucknow Supply Chain Management (SCM) In Apparel Industry: With the success of e-retailing and growing numbers of large malls and shopping centers, the nature of consumer shopping is becoming unpredictable and the textile industry players have to focus and rethink their supply chain management to effectively respond to the unpredictable demand of modern consumers. A well-integrated supply chain will help the company get maximum benefits. The market conditions, nowadays are rapidly changing and since the customer seeks the best value, long-term relationships with the vendors became very critical in the apparel industry. The application ofanSCMsystemhelpsinachievingpositivebusinessoutcomesbystrengtheningtherelationship between both parties. Since the apparel sector encounters the problem of demand uncertainty, SCM allows the companies tointeract with their retailers andenables them to forecastproduct demand jointly through SCM. The apparel retailers often look for the vendors who provide the best cost in the fastestway.Sucharelationshipisregardedaspartnershipsinceitincludesactivitiessuchas information sharing, joint product design, or sharing storage spaces.The participation of the retailers with the SCM system of the company helps the apparel companies toobtainvaluableconsumerdatasuchasend-customerdemandlevels;thishelpsinreducingthe manufacturers errors in determining raw material and production volume. AsitPGP29084 Aakash SahaPGP30063 Aishvarya AgrawalPGP30066 JaideepPGP30078 Jairaj TPGP30079 Sowmya GPGP30108 Structure of Apparel supply chain: Thegarmentsupplychaininvolvesthemajorstagesoffiberandyarnproduction,fabrication, garmenting,distributionandretailing(Sen,2008;VarukoluandPoaps, 2009;ChaudhryandHodge, 2012; Wilson, 2001; Fin, 2006). Stage IIIStage I Stage II Stage IV Stage V Distributor Weaving Knitting Non-woven process Fabric production Yarning / Spinning Regular Yarn Fancy Yarn Fiber Production Natural Fiber Synthetic Fiber Blended Fiber Plant Fiber Animal Fiber Nylon Polyester Acrylic Designing Cutting Stitching Finishing & Packing Labeling Garment Production Specialized Chains Department Stores Discount Stores Factory Outlet Off-Price Stores e-Retailers Retailing Customers Supply chain structure of garment Industry in India is varied according to the players involved. There aremanyorganizedentitiesaswellasmanysmallunorganizedentitiesintheIndustryandhave variabilitywithlotsofstructural,operational,andperformancedifferences.Eachstagehasits importance as the raw material Stage to finished goods stage leads to value addition of 300% - 400% (Verma,2000).Sincetherearemanylargeandsmallplayersateverystageofthesupplychain associated to organized and unorganized sector involved in many supply chains at the same time leads to high variability and complexity. Supply Chain Problem in the Apparel Industry AlthoughtheIndiantextileIndustryhasitssignificancegloballyandhasdevelopedovertheyears. Significant work is needed to be done in India with respect to supply chain practices. Indian companies are facing the wide issues of Inventory Management, Wastes, Visibility, Responsiveness, Longer Lead Time, Technology, logistics and Transportation problem. Inventory Management:It is one of the major issues faced by the apparel Industry in India. The fashion trends are changing day by day and consumer behavior is becoming more unpredictable. So, the apparels are have shorter life cycle and is highly volatile especially in case of fashion and innovative products. Due to this demand variability, the Inventory level needs to be optimum. Excess inventory causes overstocks, uselessness and blocking of inventory spacefor demanding products. Overstocksare then needed to besold in discounted price leading to markdowns. On the other hand low inventory causes lost sales due to out of stock products. Wastes:Thetextileprocessesandsupplychainsproducearangeofdifferenthazardous(e.g.dyestuff, adhesives, petroleum products) and non-hazardous (e.g. paper and fabric) waste products. The waste generatedinthesupplychainmustbedisposedproperlyasitleadstovisualdisamenitiesand pollution.Alsotherearemanyenvironmentallegalcompliances.Businessmustgobeyondmere compliance to facilitate green growth. Lead Time:Despite of the short lifecycle and volatile demand the Apparel industry faces major issue of very high lead time. The buying order of the materials is generally in year advance and the companies have to place manufacturing order from six months to one years in advance of the season the products are required. The higher lead time leads to reduced responsiveness and increases risk of high inventory holdingandoverstocking.Theorderisplacedayearearlierandthefashiontrendmaychange considerably hence high lead time is one of the major issue that needs to be tackled. Visibility:Thereisvisibilityissueateverystageofthesupplychain.Visibilityisimportanttoimprove transparency through delivery of accurate and fast information. The lack of accurate information leads to Bullwhip effect and results in useless inventory, overstock and stock outs. Logistics: Logistic Infrastructure in India is fragmented with large number of unorganized companies consisting of individual or small truck owners, brokers and warehouse operators etc. High fragmentation of the logisticalIndustryresultsinthelackofeconomiesofscale.Ittakesthreetimesmoretoreachthe destination when compared to same distance in European counties, China and USA. Technology: Indian companies need more development when compared to European or American counterparts. Companies have insufficient technology and information system framework including real time point of sale information among the supply chain members. Indian garment companies are also lacking in the sufficient use of RFID technology in their supply chain in order to enable the real time traceability of the garment products throughout the chain. Suggested Framework: Differentcollaborativestrategies suchasQR,ECR,VMI, orCPFRhavebeenproposedforquickand accurateflowofinformationinthesupplychain.QuickResponsestrategywhichisprominentin American and European Market can be implemented. A QR is a strategy where the retailers and the suppliers work together to serve consumer needs quickly by information sharing (Troyer and Denny 1992). Continuous replenishment policy (CRP): CRP is a process of restocking where the producer sends to the distribution center full loads whose composition varies according to sales and in conformity with a prearranged level of stock. It reorganizes the traditional system of ordering and replenishment. Vendor Managed Inventory:In this the vendor becomes the primary decision maker and in inventory control and order placement. Collaborative Network Model: It is the operation and communication framework of a textile Supply chain that links business partners, textile suppliers together. Using Technology: Number of new technologies are being introduced as the product life cycle is reducing. Using latest technology can help companies make their Supply chain more efficient. One such Technology is RFID (Radio frequency Identification). The product tagging with RFID chips or labels help trace its lifecycle rightfrommanufacturingtosales.Otherexamplesareimplementingcloudcomputingtohelp integrate ITSM (IT service management) of different entities in the supply chain. Learnings and conclusion: ApparelIndustryinIndiaconsistsofmanyentitieswhodiffersintermsoftheiroperations,target consumers and their supply chain. The supply chain is full of complexity and there are many problem relating to inventory management, lead time, collaboration etc.These issues can be addressed if the companiesadoptthevariousstrategicsupplychainchoicesaccordingtotheirsizeandscaleof operations.TheIndustrycanlearnandimplementsupplychainpracticeslikeitsEuropeanand American counterparts. Application of the QRpractices,CPFR, VMI and use of RFID technology and other Information technology techniques will resolve many issues such as traceability of products and errors, visibility, collaboration, the real time customer demand analysis, and the scope of use of POS data will be increased. References S Giri; S Rai, DYNAMICS OF GARMENT SUPPLY CHAIN, International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 4, December 2013 Supply Chain Management in the European Textile industry - GS1 Germany & WP7 partners, Journal of System and Management Sciences Vol. 1 (2011) No. 1, pp. 1-17 MSIslam,GQLiang,SupplyChainManagementonApparelOrderProcess:ACaseStudyIn Bangladesh Garment Industry, Asian Journal of Business and Management Sciences ISSN: 2047-2528 Vol. 2 No. 8 R.Cigolini,MCozzi, MProna,Anewframeworkfor supplychainmanagement:Conceptualmodel and empirical test, International Journal of Operations & Production Management, 12/2003. 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