Benetton's 'Dual Supply Chain' System

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Case Details:

Case Code : OPER065
Case Length : 19 Pages
Period : 1998-2006
Organization : Benetton SpA
Pub Date : 2008
Teaching Note :Not Available
Countries : Italy
Industry : Apparel Retailing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

The Problems

During the late 1990s, Benetton failed to keep pace with the changing fashion industry. Compared to the competitors, Benetton lacked clear positioning and could not maintain the 'cool' factor with which it was earlier associated, resulting in dwindling profitability.

That was the time when 'fast fashion' had emerged and made a huge impact across Europe. Buyer behavior changed drastically, and the customers, especially younger customers, started demanding new products more often - in some cases every month. For Benetton, the challenge was to address the needs of this segment of customers...

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The Dual Supply Chain

In 2004, Benetton began implementing its dual supply chain model. A dual supply chain has a better ability to respond to changes in demand and to balance activities like production, sales, and product design. Using this system in Benetton, production was carried out in different locations depending on the time required to market the product...

The Results

The dual supply chain helped Benetton offer new products to its customers on a continuous basis. The company was able to maintain the sales momentum even after the season by minimizing the time to market and offering products based on demand pull...

Exhibits

Exhibit I: Benetton - Brands
Exhibit II: Benetton - Factories
Exhibit III: Visuals of Sorting System and Distribution Center
Exhibit IV: Benetton's Dual Supply Chain
Exhibit VA: United Colors of Benetton - Deliveries to Stores (2007)
Exhibit VB: Sisley - Deliveries to Stores (2007)

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