Fashion and aviation share one commonality, their production process is usually based on just in time. In the fashion world Zara work on constant measurement of return data to predict relatively well what to produce for what stores in a fast turnaround.
Boeing make aircraft on a just in time process, albeit at a slower pace to Zara, with suppliers delivering parts on the day of assembly. For Boeing it keeps stock off the balance sheet and keeps the accounts department happy. The worst thing you can have at month end is a huge stock balance sitting on the shop floor.
In an ideal world this just in time process all ticks along just nicely. Then when something happens the process grinds to a halt and those quick reaction times cease.
The story of Luluemon’s over sheered Yoga pants has been doing the rounds in the tech/business media. The issue is though when you work on a scarcity model and the illusion is made a reality customers have options and they tend not to hang about. The model is important as it ensures that the majority of stock (95% in this instance) is sold at full price.
There’s a fine line of overstock and running out, being from a supply chain background where I controlled £2m worth of raw material it’s easy to render a whole production line worthless in a matter of hours. You may have never seen three tons of chocolate eclairs going to waste, I have.
From Luluemon’s perspective a 17% loss in general stock is a big problem and the real issue is turnaround lead times of the base product. The time to pull in those favours is now and restore the process the best you can. The endgame is customers walking and they can do relatively quickly these days.
Process is one thing, the backup process is certainly another.
One response to “[Luluemon] – Just-in-time needs a Just-In-Case”
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