A case study on Arvind Mills Ltd Supply Chain
A very distinct feature of Arvind Mills Ltd is the fact that its brands work across multiple channels, price points and customer segments. These are brands that are distinctive and relevant across diverse customer segments. Some of the brands under Arvind Mills are: Wrangler, Excalibur, Flying Machine, Newport, Ruf & Tuf, Arrow, Izod etc and its customers include Levis, Lee, Tommy Hilfiger etc.
The supply network finally reaches the customer touch points through over 275 stand alone brand stores across the country and more than 975 counters selling multi brand retail outlets an key accounts across India. Arvind Mills Ltd is one of the largest denim manufacturers in the world and has configured its supply chain based on “push” system. Under normal operating conditions, Arvind manufactures denim “sorts” based on monthly forecast to stock at various warehouses. As Arvind Mills “pushes” its products (sorts) to ware-houses, actual selling takes place on an ongoing basis with the “sold sorts” are being replaced subsequently. The “Push” system operates under the “make-to-stock” environment.
While the system has worked efficiently at Arvind for years it becomes difficult for a company to follow the same where a high demand fluctuation exists. A Push-based supply chain accumulates excessive inventory (“cycle stock” and “work-in-process”) by the time it responds to the changing demand. In addition, since long-term forecast plays an important role, it is difficult to match supply with variable demand. “Push” supply chain also entails larger production batches, incompatible for catering demand of short quantity.
Another interesting feature of the supply chain is the intense reach Arvind Mills is targeting. With increasing disposable income available in the rural areas as well, the company is trying to make shirts at affordable rates available at grocery stores and petrol pumps. It has also started selling shirt bits...
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