Benetton's 'Dual Supply Chain' System

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In retailing, managing the supply chain effectively is crucial to success. In fashion retailing, the supply chain must not only be efficient and cost effective; it must also be responsive, so that changes in fashion trends can be quickly incorporated into the merchandise. Benetton, the Italian clothing company learnt this the hard way. Once a leader in fashion retailing, it saw its dominance vanish in the face of 'fast fashion', where nimbler rivals such as Zara and H&M came out with several collections every year, filling their stores with new merchandise frequently, even as Benetton continued with its practice of offering just two collections a year.

"Benetton's Dual Supply Chain System", discusses the supply chain system implemented by Benetton in 2004 to deal with this problem. Under the new system, production was carried out in different locations depending on the time required to market the product.

The dual supply chains used by Benetton consisted of a 'sequential dual supply chain' which was used to supply garments ordered by the stores at the beginning of the season, and an 'integrated dual supply chain' which was used to satisfy pull-based demand, i.e., demand that arose during the season. With this, Benetton was able to bring out more collections per year, in keeping with the demands of 'fast fashion'.

Keywords:

Benetton SpA, Supply Chain Management, Dual Supply Chain, Fast Fashion, Vertically Integrated Model, Production, Distribution Center, Retailing, Postponement Strategy, Retail Management, Delocalization, Sorting System, Product Delivery

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