Shortening Lead-Times to Create an Agile Supply Chain for Esprit

Topics: New product development, Management, Marketing Pages: 17 (5618 words) Published: December 1, 2012
1. Introduction
The last decade has witnessed a significant transformation that fast fashion has become a key feature in current fashion industry. Although it was regarded as a niche concept offered by a few winners such as Zara and H&M, fast fashion has now been adopted as a key operation mode by many brands in the fashion market (Baker, 2008), using advanced and more efficient supply chains to be more responsive to changing trends towards customer demand. Hence, Fast fashion brands perform relatively better than other fashion brands in various aspects. (Mattila et al. 2002: 340 – 351)

Esprit is a fashion brand owned by Esprit Holding Ltd., manufacturing apparel, accessories, footwear and housewares under the Esprit label. In the previous fashion market, Esprit is generally recognized as the originator of fast fashion. As one of the pioneers in the fashion industry, however, Esprit has lost its way in recent years. (Best Retail Brands, 2012) "In essence, Esprit is a strong and profitable brand, but the brand has gradually lost its soul over the past few years,'' Ronald Van Der Vis - chief executive of Esprit admitted. (, 2011) The company is now focused on a brand revival with significant investment planned for marketing and the retail experience, as well as plans to exit some European markets and sell off the U.S. business. (Best Retail Brands, 2012) The most notable action is that the company has appointed Jose Manuel Martinez Gutierrez, who was group director of distribution and operations at Zara, as the CEO position in September 2012. This evidence shows that Esprit is going to struggle with fast fashion leaders like Zara and H&M.

From an operational perspective, agile supply chain strategies have been relatively well studied, and can yield significant value to firms through faster supply chain. (Fisher and Raman 1996) Esprit has started realizing that how to make its products and services to reach customers in the shortest time is most important in today’s fashion market. As a result, rapidly changing competitive fashion market and dynamic customer expectations require Esprit to seek agility in its whole supply chain.

This paper focuses on the brand reformation in the aspect of creating agile supply chain for Esprit, with an analysis of the key problem that Esprit is currently facing and provide three solutions, which are: 1. Designing new products following fashion shows

2. Establishing smaller-scale operational mode
3. Using quick response strategy

2. Literature Review
2.1 The conception of fast fashion
Fast fashion is a contemporary term used by fashion retailers to acknowledge that designs move from catwalk to store in the fastest time to capture current trends in the market. (Bruce et al. 2001) In an operational level, Barnes and Lea-Greenwood (2006) defined “Fast fashion” as a business strategy which aims to reduce the processes involved in the buying cycle and lead times to get fresh fashion product into stores, in order to satisfy consumer demand.

2.2 Agile supply chain in fast fashion
The supply chain is central to the creation of fast fashion. If suppliers cannot respond quickly enough, inefficiency will occur, and clothing will be unsalable and finally result in the increase of inventory. Fashion market has been defined that it has four characteristics which are short life-cycles, high volatility, low predictability and high impulse purchasing (Martin et al. 2004), as a result, building up agile supply chain is highly essential in today’s fashion market. Bruce et al. (2004) has described agile supply chain that it is shorter, more flexible and demand driven than the normal supply chain. Christopher et al. (2004) pointed out that agile supply chain is driven by information such as market demand and information sharing between businesses in the supply chain.

2.3 Three critical lead-times
According to Martin et al (2004), retailers should concentrate on using different...
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