Lean Agile Supply Chain Case
Supply Chain Management in the Textiles and Clothing Industry:
Case of Four UK based Companies
Introduction
Textiles and apparel is a major sector for both the industrialised and the lesser developed economies, contributing both to wealth generation and employment. The sector represents a key part of employment in Europe, and world-wide, and in Europe alone employs in excess of two million people. Turnover for 2000 was Euro 198 billion. The European industry sector is dominated by large numbers of small- and medium-sized enterprises (SMEs), and in 1999 the average sized company had 19 employees. The major constraints that SMEs face include limited financial resources, a lack of personnel and time, little or no experience, and limited confidence in implementing new systems. As a result, many small companies are either unable or unwilling to invest in marketing, design and innovative activities. Globalisation is a key factor in the industry, and one of the biggest problems affecting the UK manufacturing industry is the increasing threat from low labour cost countries. The UK clothing manufacturing industry has been facing major problems during recent years. There have been 50,000 jobs lost in the last two years (as of 2000 A.D), and it is expected that this trend will continue. In July
2000 Marks and Spencer asked its suppliers to cut the prices of garments already produced by
2 per cent. Two of their main suppliers, Coats Viyella and Dewhirst, both refused to accept the cuts, and Coats Viyella has since announced the loss of 1,900 jobs. The low valuation given to key brands in the sector reinforces the lack of confidence in the sector as a whole and the perceived risk of investing in them. In February 2000, the stock market valuation of the entire sector was calculated to be £740 million, a figure less than that of a single dot.com auction company, and considerably less than the combined turnovers of the companies within the sector. This resulted in take-over bids
Case of Four UK based Companies
Introduction
Textiles and apparel is a major sector for both the industrialised and the lesser developed economies, contributing both to wealth generation and employment. The sector represents a key part of employment in Europe, and world-wide, and in Europe alone employs in excess of two million people. Turnover for 2000 was Euro 198 billion. The European industry sector is dominated by large numbers of small- and medium-sized enterprises (SMEs), and in 1999 the average sized company had 19 employees. The major constraints that SMEs face include limited financial resources, a lack of personnel and time, little or no experience, and limited confidence in implementing new systems. As a result, many small companies are either unable or unwilling to invest in marketing, design and innovative activities. Globalisation is a key factor in the industry, and one of the biggest problems affecting the UK manufacturing industry is the increasing threat from low labour cost countries. The UK clothing manufacturing industry has been facing major problems during recent years. There have been 50,000 jobs lost in the last two years (as of 2000 A.D), and it is expected that this trend will continue. In July
2000 Marks and Spencer asked its suppliers to cut the prices of garments already produced by
2 per cent. Two of their main suppliers, Coats Viyella and Dewhirst, both refused to accept the cuts, and Coats Viyella has since announced the loss of 1,900 jobs. The low valuation given to key brands in the sector reinforces the lack of confidence in the sector as a whole and the perceived risk of investing in them. In February 2000, the stock market valuation of the entire sector was calculated to be £740 million, a figure less than that of a single dot.com auction company, and considerably less than the combined turnovers of the companies within the sector. This resulted in take-over bids