G.

KARTHIK MUKESH CHOUBEY MADHUSUDAN PATTANAIK RAMESH MENON SUSHIL KUMAR

PRESENTED BY --

GROUP-2

Introduction
Benetton was founded in Italy in 1965.

Benetton

The first Benetton store was started in 1968 and by 1978 there were 1000 franchised outlets worldwide. Benetton is well established in Europe with a diversified range of clothing. Woolen garments, which are seasonal products, are the main stay of the business.

The Supply chain caters to following main seasons Spring/Summer: February to July Fall/Winter: September to December

Manufacturing
DYEING Performed In house Scale Sensitive
KNITTING

THREAD

STITCHING DYEING

Thread purchased and Supplied to Contractors by Benetton Dyeing @ Benetton does not follow the Traditional Process

FINISHING

GARMENT

Manufacturing (Outsourced Model)

Only Dyeing is done In-House as it is Scale Sensitive Other Processes work on outsourced model Knitting : 80 subcontractors exclusive to Stitching : 100 subcontractors BENETTON Finishing : 20 subcontractors

High No. of contractors

High Capacities
build responsiveness to supply chain

Manufacturing (Outsourced Model)

Location of subcontractors : Close to Benetton factory Machines: Provided by Benetton

Financial support is also provided

Design
Designing done by freelancers & best designer. Every season has around 1000 designs. Meeting of designers with Guilana Benetton helps

finalization of about 50 designs. These are mainly the hit styles presented in the fashion shows of the season. Product development - 012 Benetton, Sisley & Merceric Worlds largest purchaser of wool thread Purchase is totally centralized Contracts with 2/3 thread suppliers
Availability @ Competitive prices

Purchase

Marketing Channels
Global Player: 2000 retail outlets.

Agents about 100 commissioned agents chosen directly by Luciano Benetton on entrepreneurial spirit rather than experience. co-ordinated by Area Managers (employees of Benetton). supervise all retail outlets in their assigned exclusive sales territories. encouraged to own the shops themselves.

Marketing Channels contd

Retailers No experts in garment business. Florists, hairdressers hired and helped to set up shops. This ensures loyalty. Larger cities have large shops owned by Benetton. Rules for Retailers Only Benetton merchandise. Benetton plans layout of shops. Furniture from one of three designated Italian suppliers. Local advertisements to be approved by Benetton. No discount sales without approval of Benetton. All stock displayed on shelves tracking fast moving stock is easy and further orders can be customised.

Supply Chain : Ordering & Delivering System

Styles-

Finalized before Spring/Summer & Fall/Winter.

Orders Ph I : 7 Month in Advance - 80% of Vol.
Ph II : Flash Collector - Quantity Flexible Orders -10% V 70% Specific (size, color) 30% unspecified to be decided according to demand witnessed. Ph III : Re Assortment -10% Vol.- Rapid delivery

Shops Supplied Twice a week

Supply Chain Of Benetton

Company outsourced labour intensive production

such as tailoring,finishing,ironing Investment strategy,operations such as weaving, cutting, dying & quality control kept internal Benetton maintained central Polelocated near Head Quarter to manage production logistics and distribution Consolidated central shipping centre saved 20% of the transportation cost

Historic Supply Chain of Benetton

Logistics : Warehousing & Transportation

Single Central Warehouse in Production centers to serve as

finished goods inventory. Inventory centralization reduces inventory and inventory carrying costs.-Carefully Scheduled. Goods shipped directly from warehouse to shops through air/road/ship as required. No middlemen/agents ensures quick response to demands. Warehouse management and Transportation services outsourced to a 3rd party logistics provider.

Improvement on logistic system:

- Elaborated new Information system, relaying on automatic

cash register in cluster of 10. - Additional 20,000 sft central ware house facility.

Information System
Push Based Stock System
Push/Pull Based System Point of Sales (POS) data collected directly from retailers to discern the products in demand. Make Ready the Right Product Dyeing & Distribution based on Point of Sales (POS)

SWOT analysis
STRENGTH : strength Benetton Group is a world leader in the design, manufacture and marketing of distinctive casual apparel for men, women, and children. Benetton clothes are high quality products usually made of wool. Benetton is traditionally known for knitwear and casual clothing in a wide array of colors, featuring fashionable Italian design and projecting a youthful image.
WEAKNESS : In Europe, Benetton products are expensive which gives opportunities to many competitors who provide lower prices for the same quality. - Increase in competition due to direct selling by others. OPPORTUNITIES : Benetton does not have market shares in the United States, so it can improve its position in that market. Benetton can capitalise on the strong image of Italian design.

THREATS : THREATS The clothing market is getting saturated and the competition is getting
tougher and tougher (GAP, Old Navy, Ralph Lauren, Tommy ).

Challenges/ dilemmas
Rise of new fashion houses in Europe
Benetton products reaching saturation in Italy What should be the future strategy? Whether only

Europe Centric or explore Avenues in US,Japan etc. Competition from Levis, large retail chains such as The Limited,Charming Shops, Petrie etc in US Whether to apply European supply chain model in US?

Challenges/ dilemmas
Whether Italian fashion will be acceptable in US?
What should be the product mix in these new

markets? Whether to open lead store or take space in departmental stores? Whether to open plant in US or to import from Italy? Should they acquire an existing plant in US ?

Recommendations for Europe Market

There is a still a scope of sales increase of 15% annually

in Europe Benetton should introspect, whether the Flash Collection can become a regular trend in next season onwards. In addition to their regular distributors , Benetton should explore possibility of new range of distributors dealing with competitors products. Benetton should increase the no of stores in other European counties

Recommendations for US
Gradual presence in US to be increased by occupying

space in departmental stores Import from Italy in the beginning to cater to the requirements of US Focus on advertizing After getting noticed in the market for a while Lead Store of Benetton can be opened Open new ware house and strengthen distribution channel Acquire a plant in US for manufacturing

Developments after 1990 in Benetton

Growth of business encouraged to set up additional

regional poles to identify production needs and source to local manufacturing network Networked manufacturing & Postponement of Dying are key steps in development of Benetton supply chain industrial operations are based on a "double supply chain", which balances efficiency and speed.

Current Supply Chain of Benetton

Current Supply Chain of Benetton

Thank You