Sunshine Fashion

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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 between...
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