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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The Operations

Benetton operated a three-tier model. The first tier consisted of suppliers of raw materials and unfinished products, and production plants. The second tier had contractors and sub-contractors, and the third tier had retail outlets spread across several countries, which operated as franchisees and agents...

Production and Distribution

Benetton operated through production facilities which produced garments in high volume and with few varieties. In 1984, Benetton planned to invest in advanced production facilities in Castrette, Italy. The plant became fully operational in 1986. However, investments in this plant continued through the 1990s, leading to an increase in production capacity. By the year 1999, the plant covered an area of 190,000 sq. meters, and capacity to produce upto 100 million units every year. By 2006, the automatic sorting system in the plant, could sort garments for more than 5,000 Benetton outlets...

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies


Benetton functioned through a licensor-licensee relationship, where the needs of the retail market were catered to by agents, who obtained a license from Benetton to sell its products. The agents were responsible for recruiting retailers, showing Benetton's collections in a particular region in a country, processing retailer orders, selecting retailer locations, training, and letting the company know the latest trends in a particular region...

The Postponement Strategy

Every year Benetton came out with two collections, one for each season (spring/summer and fall/winter). The collection primarily comprised of a base collection , which included the classic items, and garments according to the prevailing trends. For collections that were to reach the stores in January every year, the final designs were decided in March of the previous year. The store owners could place orders for the new designs till July. In July, Benetton began producing the clothes, considering the first 10% of the orders...

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