Sunshine Fashion
Company Bio
-Sunshine Fashion (sino-Japanese joint venture, founded in 1993, based in ShenZhen)
-high end fashion brand selling sweaters
-Manufacturer retailer
-vertical integrated organization, product cycle within 20 days from producing and distributing
-domestic sales made up to 2/3 of sunshine’s business, (rest in export)
Factory | Located in ShenZhen, Shanghai, Taiyuan | Retail stores | 220 sales counters in departmental stores across country, managed by 14 branch offices, reported to 3 regional office**Company had franchised some retail points outside the major cities****some decisions decentralized to regional offices** | Workforce | More than 1000 employee | # of sweater produced | 300,000 pieces/year | Sales turnover | RMB 150M | Sales | 50,000 pieces/year (RMB $3000/piece) [16% inventory turnover]*should reduce inventory? Cut expenses | Lost of goods | 9,000 pieces (3%) lost during transportation | Employee Fraudulence | 5% of total sales | Total profit | 8% (16-3-5) of sales volume |
Stock
-head branch retail stores. 3% goods lost during transportation
-branch - head stock returned end of season and refunded the cost of returned goods
Sales
-used to be manually reported to head office, now using ERP system, sales info at retail counters updated every 4 hours to head office
-inventory information entered manually
-
-reducing fraudulent behavior to 2% of retail sales
-pocket in difference loss=3M
-changing barcode loss=1.5M
-current loss of fraudulent behavior is 5%, if we can reduce the above two misbehaviors, we will be able to reduce fraud to 2%
-using technology and social corrections together?
SOLUTION:
-problem not only lies in fraud, but also the control of inventory turnover, loss of stock on transportation.
-how to stop employees from pocketing in the difference?
-set co. code of conduct. Clearly communicate store policy to every store. There should be no difference in reward/punishment
-Sunshine Fashion (sino-Japanese joint venture, founded in 1993, based in ShenZhen)
-high end fashion brand selling sweaters
-Manufacturer retailer
-vertical integrated organization, product cycle within 20 days from producing and distributing
-domestic sales made up to 2/3 of sunshine’s business, (rest in export)
Factory | Located in ShenZhen, Shanghai, Taiyuan | Retail stores | 220 sales counters in departmental stores across country, managed by 14 branch offices, reported to 3 regional office**Company had franchised some retail points outside the major cities****some decisions decentralized to regional offices** | Workforce | More than 1000 employee | # of sweater produced | 300,000 pieces/year | Sales turnover | RMB 150M | Sales | 50,000 pieces/year (RMB $3000/piece) [16% inventory turnover]*should reduce inventory? Cut expenses | Lost of goods | 9,000 pieces (3%) lost during transportation | Employee Fraudulence | 5% of total sales | Total profit | 8% (16-3-5) of sales volume |
Stock
-head branch retail stores. 3% goods lost during transportation
-branch - head stock returned end of season and refunded the cost of returned goods
Sales
-used to be manually reported to head office, now using ERP system, sales info at retail counters updated every 4 hours to head office
-inventory information entered manually
-
-reducing fraudulent behavior to 2% of retail sales
-pocket in difference loss=3M
-changing barcode loss=1.5M
-current loss of fraudulent behavior is 5%, if we can reduce the above two misbehaviors, we will be able to reduce fraud to 2%
-using technology and social corrections together?
SOLUTION:
-problem not only lies in fraud, but also the control of inventory turnover, loss of stock on transportation.
-how to stop employees from pocketing in the difference?
-set co. code of conduct. Clearly communicate store policy to every store. There should be no difference in reward/punishment