fashion buyer

Integratingdesignandretailin

theclothingvaluechain

Anempiricalstudyoftheorganisation

ofdesign

Ce

´

lineAbecassis-Moedas

SchoolofEconomicsandManagement,CatholicUniversityofPortugal,

Lisbon,Portugal

Abstract

Purpo–Newproductdesignisanestablishedfitheranalydinsidethe

firm;orwhenusingavaluechainperspectiveitislimitedtotheinteractionsbetweenmanufacturers

andsuppliers(inproducer-drivencommoditychains).Thecurrentrearchadoptsadownstream

perspective,analysingtherelationshipsbetweenmanufacturersandretailersinrelationtothenew

oconductrearchintheclothingindustry;thathasthespecificityof

beingabuyer-drivencommoditychainwherefashionmakesdesignakeydimensionforthesuccess

ofaproduct.

Design/methodology/approach–Therearchwampiricalinnature,involving

50mi-structuredface-to-faceinterviewsinFrance,theUSAandtheUKatallpointsalongthe

clothingvaluechain.

Findings–Intheclothingindustry,thestrategyofintegratingdesignandretailhasresultedina

moreflexibledesignprocessandtherefore,rategyhas

ategyofintegratingdesignandretailhas

resultedinachangeofboundariesintheclothingvaluechain.

Rearchlimitations/implications–Resultsarecurrentlylimitedtotheclothingctors,and

theyareyettobegeneralidtootherbuyer-drivencommoditychains.

Practicalimplications–Managersinclothingretailfirmsorinclothingdesignfirms,wantingto

increaproductperformance,shouldimplementthestrategyofintegratingdesignandretail.

Originality/value–Thepaperopensanewfieldofrearch,namely:thefocusonnewproduct

designwithavaluechainperspectivethatconcentratesondownstreaminthechain.

KeywordsDesign,Clothing,Retailtrade,Newproducts,Valuechain

PapertypeRearchpaper

Introduction

Themanagementliteratureonnewproductdesignisprolific,andtwomainstreamscan

firstperspectiveisinternaltothefirm,andthecondincludesthe

relationshipofthefieratureonproductdesignthathasa

valuechainperspectiveconcentratesontherelationshipbetweenmanufacturersand

theirsuppliers,andconquentlyfocusontheupstreamactivitiesofthevaluechain.

Therefore,thereisagapintheliteratureonproductdevelopmentfromavaluechain

perspective,fill

thisliteraturegap,thispaperconcentratesontherelationshipbetweenmanufacturers

oftherearchistoreplicate

thestudiesonnewproductdesignintheupstreampartofthevaluechain

(inproducer-drivencommoditychains)tothedownstreamcomponentofthechainin

Thecurrentissueandfulltextarchiveofthisjournalisavailableat

/

IJOPM

26,4

412

InternationalJournalofOperations&

ProductionManagement

Vol.26No.4,2006

pp.412-428

qEmeraldGroupPublishingLimited

0144-3577

DOI10.1108/50567

ecificallycarriedoutintheclothingindustry,

whichisatypicalbuyer-drivenchain,andwherethefashiondimensionaccentuatesthe

importanceofnewproductdesign.

Newproductdesigncanbedefinedas:

...acreativeactivityusingmarketandcompanyinformationtoproducea2or3-dimensional

productthatsatisfiestheconsumerandaidscompanyprofitability(Cooperetal.,2003,p.368).

Theclothingindustryisaninterestingcafromadesignpointofview,asapparelis

subjecttochangesmorethananyotherconsumergood;itiswellillustratedbythe

conceptoffashion(Lipovetsky,1987).Clothingproductshaveashortshelf-life,their

demandisdifficulttoforecast,thereisahighlevelofimpulpurcha,andstrong

valuechaininterdependence(Jin,2004).Clothingisalsoatypicalcawherenew

productdesignencompassbothcreativedesign(relatedtotheimageandaesthetics

ofaproduct)andtechnicaldesign(relatedtothedifficultyofworkingwith

three-dimensionalfabric).Thispaperconcentratesoncurrentdevelopmentsinproduct

designintheclothingvaluechain,withparticularreferencetomass-market

ready-to-wear(asoppodtohautecoutureorluxury)clothing.

Thispaperdemonstratesthatthestrategyofintegratingdesignandretailinthe

ultofthisintegration

isachangeofboundariesinthevaluechain,atransferofdesignskillsfromonecategoryof

agents(manufacturers)toanother(retailers)andsymmetricallyatransferofretailskills

,itprentsthe

describestherearch

ightofthebackground,thesubquentctionreportsonthe

obrvations,clusionidentifiessomegeneral

implicationsaboutthenatureofthecurrentdesign-retailrelationship.

Background

Theaimofthispaperistoinvestigatetherelationshipbetweenmanufacturersand

ret

so,twostreamsofliteratureareexaminedinthecontextoftheclothingindustry:the

organisationofthevaluechainandofnewproductdesign.

Valuechainorganisation

orityofmanagementliteratureudtobecentredon

thefirmasthemainproductionentity,but,intherecentpast,anotherlevelof

analysishasbeenudwhichgoesbeyondtheboundariesofthecompany:namely,

rearch,thevaluechainisthelevelthatisthemost

iterature,twomainexpressionsareud:“value

chain”,and“commoditychain”.Thevaluechainconceptwasfirstdevelopedby

Porter(1990).Thisconceptistheobjectofafast-growingliteratureineconomics

andmanagement(Milltal.,2004).Sturgeon(2000,p.6)definesavaluechainas

“thequenceofproductive(-added)activitiesleadingtoandsupporting

end-u”.Theword“chain”mapsthequenceofeventsleadingtothedelivery,

consumption,andmaintenanceofgoodsandrvices–recognizingthatvarious

valuechainsoftensharecommoneconomicactors;andaredynamicinthattheyare

re-udandreconfiguredonanongoingbasis.

Designandretail

intheclothing

valuechain

413

Gereffi(1994)introducedthealternativeexpression“commoditychain”.Hecreated

the

-drivencommoditychainsrefersto

thoindustriesinwhichlargeretailers,brand-namedmerchandirs,andtrading

companiesplaythepivotalroleinttingupdecentralidproductionnetworksina

varietyofexportingcountries(typicallyindevelopingcountries).Thispatternof

trade-ledindustrialisationhasbecomecommoninlabour-intensive,consumer-goods

industriessuchasgarments,footwear,toys,consumerelectronics,andhouwares

(Gereffi,1994).Producer-drivencommoditychainsarethoinwhichlarge,usually

transnational,corporationsplaythecentralroleincoordinatingproductionnetworks.

Thisisacharacteristicofcapital-andtechnology-intensivecommoditiessuchas

automobiles,aircraft,miconductorsandelectricalmachinery(Gereffi,1994).The

distinctionbetweenbuyer-drivenandproducer-drivencommoditychainsiskeytothis

,theroleofthecentralfirminthechainisntialtounderstanding

lysisofthedesignprocessformanufacturers

inproducer-drivenchainshaspreviouslybeendone(Clark,1989;ClarkandFujimoto,

1991);itremainstobedoneforretailersinbuyer-drivenchains.

thingvaluechainis,asdefinedbyGereffi(1994),a

buyer-drivencommoditychain;whichmeansthatretailersandbrand-named

merchandirsarethekeyplayersinthechainandthatitisahighly

oacombinationofveralfactors,customershave

gainedbargainingpower,anddemandhaswonoversupplyintheclothingindustry

(Gereffi,1999).Simultaneously,along-termdownturninexpenditureonclothinginboth

EuropeandtheUnitedStates,higherimportsandoverasmanufacturinghave

increadthelevelsofcompetitionandsupply(Abecassis,1999).Theeaof

transportationfortheproductshasaccentuatedcompetition,withdomesticproducts

inNorthAmericaandWesternEuropecompetingagainstimportsfromdeveloped

countriessuchasEasternEurope,NorthAfrica,ngis

clearlyaglobalidindustry(Abernathyetal.,2004;Buxey,2005;Jin,2004).Growing

supplyandcompetitionhaveresultedinanincreainthenumberofproducts

developedeachyear(Abernathyetal.,2004).AmphasidbyGereffi(1999),

buyer-drivencommoditychainsareorganidaroundlargeretailersandbrand-named

CommoditychainBuyer-drivenProducer-driven

TypicalexampleindustryLabor-intensiveindustriessuchas

apparel,footwear,toys,consumer

electronics,handcrafteditems

Capitalandtechnologyintensive

industriessuchasautomobiles,

miconductors,computers,and

aircrafts

WhotakethepivotalroleLargeretailers,brand-named

merchandirsandtrading

companies

Transnationalcorporationsor

otherlargeintegratedindustrial

enterpris

ProductionsystemDecentralizedandhorizontalCentralizedandvertically

integrated

SourceofprofitDesign,value,rvicesand

marketing

Economiesofscale,volumeand

technologicaladvances

Source:DevelopedbyJin(2004)badonGereffi(1994)

TableI.

Characteristicsoftwo

globalcommoditychains

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merchandirs,anddesignandmarketingarekeyactivitiesthatdeliverprofi

confirmsthatretailersandbrand-namedmerchandirsinrelationwiththeirpartnersin

thechainaretheonestobestudiedintheclothingdesignprocess.

Regardingtherelationshipbetweenclothingmanufacturersandretailersinthe

designprocess,Richardson(1996)hashighlightedthatinfashion,competitionhas

shiftedtothearenaoftimingandknow-howwhereverticallyintegratedfirmsgained

egratedfirmsthathavelinkedquickresponintoretailinghave

rticalintegrationincludesdesign,retailand

dson(1996,p.409)concludesthat:

...bylinkingdesignandproductionclolytoretailingthroughintegration,fashionapparel

makersarebetterabletomanageflexibleproductiontomeetdemandvolatility.

BruceandMoger(1999)andBruceandDaly(2004)havealsoudsupplychain

ultoftheiranalysis

showedthatco-partnershipbetweenretailersandmanufacturersofferssignificantly

enceofin-houR&D

capabilitiesisanimportantfactorunderpinningretailers’difficultiesininnovating.

ereisaparationofretailfirms

frommanufacturingfirms,thereisarequirementforcoordinationbetweenthemfor

nbecarriedoutmanually,byphone,byfaxor

electronicallyviaelectronicdatainterchange(EDI).EDIhasbeenimplementedinother

industries,whichhaveajust-in-timeapproach,toimproveflexibilityandresponsiveness

(MillarandPorter,1985).Ithasbeenudbyretailerstofacilitatelogisticsoperationswith

theirsuppliers(Nidumolu,1995)andtomanageinventoryonajust-in-timebasis,ordering

epispeciallypertinenttothe

clothingctorbecauaspectssuchassizeandcolour,whichpocomplexmanagement

problems,arenonethelessfundamentaltoproductquality(Abecassis,2000;Forzaetal.,

2000).Theinformationchainstartsatthepointofsale,whereaproduct’sbarcodeis

,

productionschedulesandreplenishmentaredeterminedbyactualsales(Abecassis,1999).

Croom(2005)studiedtheimpactofe-businesssystemsonsupplychainorganisation

usingasampleof98largeEuropeanorganisations(acrossindustries).Heanalydthe

topsupplychaininitiativesandtheirrelativeimportanceforthedifferentactorsinthe

ailers,

manufacturers,

Croom’ssample,foundthatthee-business

strategiesofagivenfirmweremostheavilyinflr

words,therequirementsofanorganisation’sthreeorfourmajorcustomers,dictated

firmsthatEDItechnologyisudinthevaluechainto

facilitatecoordinationasrequestedordemandedbyretailers.

Thebenefitsofactualverticalintegrationaretemperedbythepotentialitiesof

tance,WalmartandK-Marthaveinvestedinthe

necessaryinformationtechnology(likeEDI)toachievetheclocoordinationandrapid

informationexchangesrequiredtolowerinventoryandrapidlyre-stockproducts

(Richardson,1996).Ithasbeenshownthattheclothingvaluechainisledbybuyers

(retailers)andthattheuofelectronictoolsincreastheircontrolovertherestof

thechain.

Designandretail

intheclothing

valuechain

415

Newproductdesignorganisation

,highquality,ontargetproductdevelopmentiscentralto

competition.“Firmsthatconsistentlydefine,resourceandexecutenewproduct

development(NPD)projectssignificantlymoreeffectivelyandefficientlythantheir

competitorsarerewardedbysignificantstrategicadvantage”(WheelwrightandClark,

1994,p.32).Speedisattheheartofthatadvantage:

Afirmthatdevel

maystartaNPDprojectatthesametimeascompetitors,butintroducetheproducttothe

atively,itmaydelaythebeginningofanewdesignprojectinorderto

acquirebetterinformationaboutmarketdevelopments,customerrequirements;andthen

introduceitsproductsatthesametimeasitscompetitorswhilstbringingtomarketaproduct

muchbettersuitedtotheneedsofitscustomers(WheelwrightandClark,1994,p.32).

Previousstudieshavedemonstratedthatfirst-tiersupplierinvolvementinco-design

activitieshasapositiveimpactonNPDandprojectperformancesintermsofcost,

qualityandlead-times(ClarkandFujimoto,1991).“Thereisagrowingrecognitionin

theautoindustrythatanetworkofcapablesuppliersintegratedintheengineering

processhassignificantadvantages”(Clark,1989,p.1261).Therefore,inorderto

enhanceorganisationalandproductperformancetherehasbeenagradualshiftfrom

intra-organisationaltointer-organisationalconsiderationofthedesignfunction

(Benghozietal.,2000;SharifiandPawar,2002).

Theliteratureonproductdesignthatincludesavaluechainperspectiveismainly

con

therefore,-developmentisthekeyconcept

discusdinmuchoftheliterature(Clark,1989;ClarkandFujimoto,1991;Midler,1993;

GarelandKesler,1998).PublicationsintheInternationalJournalofOperations&

ProductionManagement(IJOPM),forexample,canbeconsideredasreprentativeof

nuary2002toSeptember2005(46ofthe

mostrecentissues),thearticlesondesignpublishedbyIJOPMareeitherondesign

fromaninternalperspective(O’DonnellandDuffy,2002;BeckerandZirpoli,2003;

DeToniandNassimbeni,2003;VandeveldeandvanDierdonck,2003;Moy,2005;

vanOorschotetal.,2005)orarerelatedtoco-designorbuyer-supplierrelationships

(SharifiandPawar,2002;Spinaetal.,2002;ZirpoliandCaputo,2002).Thereisno

publicationondesignmanagementfromasupplychainperspectivethatfocuson

downstreamaspectsofthevaluechain.

lothingvaluechain,theterm“newproduct

design”encompassallactivitiesfromthepreliminarydesignsketchtothelection

ductdesignstartswithadesignsketchofthesilhouette,

tiondevelopmentoftheproduct

oductmaythenbetheresult

ofeitheranewdesignorchangestoanexistingpattern(Abecassital.,2000).Asa

resultofthehighcompetitionintheclothingindustry,thenumberofcollectionsoffered

eachyeartoconsumershasincread(fromtwocollectionsperyearunderthe

traditionalsystemtomorethanadozeninthemostfashion-consciouscompanies).

Lead-timehasshortenedduetothegreaternumberofcollectionscomingouteachyear,

andalsoduetothegreaterfll,

intheclothingindustrythedesignprocesshaschangedfromafixedbi-annualexerci

toacontinuousandflexibleadaptationtotheneedsandtastesofcustomers.

IJOPM

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416

er-aideddesign(CAD)hasnumerous

y,itallowsastylisttocreateadesigndirectlyon-screen;tostore,

retrieveandmodifyimages,patterns,colours,fabricsandshapesatwill;toconsult

databas;ly,theabilitytomodifythe

basicimageallowsdesignmodelstobetakenfrompastcollectionsandupdatedto

lsareinterfacedwith

lshaveinfactinternalidalarge

ason,new

populartechnology;itisudbynearly50percentofCroom’s(2005)sampleacross

productdesignprocessintheclothingindustry

needstobeflexible,totakeintoaccountthelatestfashiontrendsandthesales

ofCADtoolscontributestotheprocessflexibility.

Therearchreplicatesintheclothingindustry(anarchetypeofabuyer-driven

commoditychain),theprojectsstudyingtherelationshipbetweenmanufacturersand

eratureon

NPDandtherelationshipbetweenmanufacturersandsuppliershasconcentratedon

theautomotiveindustryandhasdemonstratedthebenefitsofco-designontheNPD

processperformancemeasuredintermsoflead-time,costandqualityoftheprocess

(Clark,1989;Midler,1993;ZirpoliandCaputo,2002).Theaimofthisrearchisto

evaluatehowtherelationshipbetweenmanufacturersandretailersregardingnew

productdesign–andmorespecificallythestrategyofintegratingdesignandretail–

relatestotheperformanceofthedesignprocess(intermsoflead-time)andultimately

ontheperformanceoftheproduct(intermsoffittomarketneeds).Theproductfitto

marketneedsresultsfromaflexibledesignorganisationinwhichchangestothe

productscanbedoneaslateaspossiblesoastobeabletotakeintoaccountthelatest

teraproductfitsto

marketneeds,thehighertheproportionofproductsthataresoldatfullpricerather

thanthroughsalesanddiscounts.

Methodology

Themainobjectiveoftherearchwastoconductanexploratorystudyoftherelationship

betweenclothingmanufacturersandretailersregardingthenewproductdesignprocess.

Itaimedtoreplicatepreviousrearchontherelationshipbetweenmanufacturersand

,a

sampleoffirms(atdifferentstagesinthevaluechain)waslectedbadontheirleading

involvementinthenewproductdesignprocess,theirrelationshipswithretailandtheiru

ofelectronicintegrationtools(likeEDIorCAD).Asmuchaspossible,thesamplewas

aimedatbeingreprentativeoftheindustryprofitance,thedifferentformsof

clothingretailarereprented:specialist(chainstoresandspecialtystores),andgeneralist

(departmentstores,discountersandhypermarkets).

Thedatacollectionprocesswasundertakeninthreedifferentcountries:inFrance

(1997-1999),theUnitedStates(1998-2000)andtheUK(2002-2003).Thedifferencein

timeframe,weargue,doesnotdistorttheresults,asweareanalysingfirms’strategy

iricalbasis

forthisstudyconsistsof50companies,wheremi-structuredface-to-faceinterviews

havebeencarriedoutwithmanagers(fromCEOtoVP)alongtheclothingvaluechain.

Designandretail

intheclothing

valuechain

417

akdownpercountryand

perorganisationtypeisdetailedinTableII.

Theinterviewswithindustryplayers(manufacturers,designersandretailers)

initiallyaimedtocapturethegeneralprofileoftheorganisation,theroleofthefirm

withinthevaluechainandtherelationshipswiththerestofthevaluechain(upstream

anddownstream).Thereafterawholectionoftheinterviewguidewasdedicatedto

thenewproductdesignprocess(organisation,interactionwithotherfirmsinthechain,

flexibility,lead-time,anduoftechnology).Next,theperformanceofthedesign

erviewguide

containedamixtureofopenandclodquestionsandallowedsufficientflexibilityfor

fthefirm

wasusuallytaken,ntitiesofthe

firmsinterviewedarenotcitedinthepaperasanonymitywasguaranteed.

Interviewswithclothingindustryfederationsandtechnologysupplierswerealso

hor’sobrvations

onthesamplewerediscusdandvalidatedbytheclothingindustryfederations,to

logysuppliers(of

systemssuchasEDI,CADandproductdevelopmentmanagers)offereda

complementaryperspective,astheirunderstandingoftheircustomerba(from

clothingmanufacturerstoretailers)isanotherviewofthestrategythatisdiscusdin

ourcesofdata,suchasbusinessandindustrynewspapersand

consultancystudies,poofcollectingdatafrommultiple

sourcesisnotmerelytoenrichthedepthofthestudy,butalsototriangulatethedatain

ordertoensurethevalidityandreliabilityofthefindings(MilesandHuberman,1994).

Datacollectedfromthevarioussourceswereanalydbadonthecodingtechniques

propodbyMilesandHuberman(1994).

Thimpiricalrearchhasbeenlimitedtoasmallsampleinasingleindustry;

therefore,toestablish

resultsthathaveyettobegeneralidtootherbuyer-drivencommoditychains.

Findingsandanalysis

Theobrvationsandanalysfromtheinterviewshaveallowedtheidentificationof

ologyoforganisationshasbeenvalidatedbythe

federationandtechnologysuppliers,andisprentedbelow.

Typologyoforganisations

Thetypologyoforganisationshighlightstwotypesofmanufacturer:specifically,the

traditionaloneandthemanufacturerwithoutplant;inaddition,itidentifiestwotypes

Organisationtype/CountryFranceUSAUKTotal

Manufacturers43310

Designers(brand-namedmerchandirsandspecialtychains)3339

Retailers44311

Federations5319

Technologysuppliers54211

Total21171250

TableII.

Distributionofthe

interviewsbycountry

andbyorganisationtype

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ofdesigners:thebrand-namedmerchandirandthespecialtychain;italsoshows

threetypesofretailers:departmentstore,ofthis

typologyistodescribetheorganisationofdesigninaclothingvalue-chain.

ditionalmanufacturerisafirmthatdesigns

newproducts,andmanufacturesthemin-hou(domesticallyoroffshore).

Manufacturingknowledgeensuresbetterproductdesign(throughunderstandingof

technicalandcostingconstraints),whichjustifiesthebundlingofmanufacturingand

manufacturerisawareofmarkettrends,onlyasmuchastheretaileriswillingtoshare

information:

Ourcustomers[retailers]buy70percentoftheirproductsdirect[fromsub-contractorsthat

canmanufacture,butcannotdesign]and30percentthroughcompanieslikeus...Wehavea

fulldesignteamhereandweownourfactories(USManufacturer).

Everyday,wearegettingthevolumeofsalesperproductfromtheretailer’s

usorganithedeliveries,theordersfromfactories...(FrenchManufacturer).

peoftheTraditionalManufactureris

graduallychanging,withanincreadproportionofmanufacturingbeingoutsourced

ca,themanufacturerdoesnotproduce,butinsteadit

ufacturerisinvolvedin

productdesign,butwithouthavingsuffiufacturer

withoutplantendsupbeingonlyadesignerworkingforretailersorforbrand-named

eitisnotmanufacturinganymore,themanufacturerwithout

ersandbrand-namemerchandirsare

temptedtoby-passthemanufacturerwithoutplant(enexttypicalorganisations)as

dbeing

by-pasdbyitscustomers,themanufacturerwithoutplanthastodevelopabrandor

firstoptioniquivalenttoanoriginalbrandmanufacturing

(OBM)strategyasdescribedbyGereffi(1999);thatis,“movinguptheladder”and

hthecondoption–retailintegration–thefirmgets

marketinformationtodesignproductsthatfitbettertomarketneeds:

...forlackofabetterdescriptiveterm,tainlyweare

notwholesalersbecauweowntherawmaterialanddesignit,sowehavecaudthe

ievethatwhilstwedonotdirectlyownthemachineryandthe

peopletomanufactureIthinkwearecloenoughtobeabletocallourlvesamanufacturer

(UKManufacturer).

Weactuallydonomoremanufacturing,

wsustobetter

understandcustomerexpectations.[...]Integratingtheretailfunctiongivesusaccessto

salesdata,whichisthenudtodesignproductsthatareinlinewiththemarket

(UKManufacturer).

Thisquoteillustratesthemovefrommanufacturerwithoutplanttodesigner

integratingapartoftheretailfunction(concessioning).

Thebrand-namedmerchandir(US).Thebrand-namedmerchandircontrolsits

design,brand-named

merchandirrealisthatowningstoresunderthebrandnameisawaytobetter

understandcustomers’needs;and,moreover,thentoknowwhattodesignforthe

Designandretail

intheclothing

valuechain

419

artmentstorehascreateditsown-labels,andasaresult

why

thebrand-namedmerchandirneedstodiversifytheriskandsubquentlyopensits

ducts’performanceisrelatedtothedesignprocesslead-time,tobe

abletodesignproductsquicklythatfier,beingaretailer

givesabetterunderstandingofthemarket:

Fromtraditionaldesignandmanufacturing,wehaveevolvedtoabrandanddistribution

network:subsidiaries,affiliates,franchis,upgradedour

formanceofoursales

outletslargelydependsonarapidturnoverofavailablestyles.[...]Thenewproductsare

designedbadonthebest-llers(USbrand-namedmerchandir).

Thespecialtychain(FranceandUK).ThespecialtychainistheresultofaTraditional

Manufacturerowningabrandandopeningitsownchainstores,afterrealisingthat

reta

specialtychainbypassthetraditionalretailers(departmentstores,localmulti-brand

stores...).Itinterfacesitsdesigndepartmentwiththesalesinformation,toreduce

lead-timeintheNPDprocess:

Ithinkwewouldalwayswanttoretainanabilitytoquicklydevelopproductsbecauatthe

endofthedaythatiswhatcustomersbuy(UKChain).

Wetakethepatternofabest-llingskirtproducedforwinternandchangethefabricand

thepockets,sothattheskirtforsummernþ1cangointoproductionmorerapidly.

Adaptinganexistingproductmakestheprocessmoreflexible,anditalsoincreasthe

chanceofsuccess(FrenchChain).

Thedepartmentstore(USandUK).Thedepartmentstorellsbrandedproducts(e

thebrand-namedmerchandirorganisation)andalsoanincreadproportionof

,thedepartmentstorecaneitherbuyfinished

productsfrommanufacturersorinternalidesignandsub-contractmanufacturing.

Becautheproportionofown-labelproductshasincreadtoupto60percentofthe

productssoldinsomecas,andbecauthemanufacturersthemlvesare

sub-contractingthemanufacturing,thedepartmentstoreinternalisthedesignstage

andsub-contractstheindustrialpart,inordertoreducethenumberofintermediaries

andmakethedesignlead-timeshorter:

...50percentofoursalesareown-label,wehave50-60designersin-houandCAD

systems.[...]Wemakeabettermarginonown-labelproducts.[...]Thisneworganisation

allowsustomakedecisionsaslateaspossible,andtoreducelead-time(UKDepartment

Store).

Thediscounter(US).Thediscounterllsalargerangeofproducts(food,clothing,

electronics,furniture),includingown-labelproducts(between25and50percentof

clothingproductsinoursample),withaproductpositioningstrategythatisquite

different:specifically,ecaforthedepartment

store,productdesignis

badonthesuccessofpastproducts;thatisawaytofittomarketneeds:

Wedesignourproducts,andthenwendittooutsourcedmanufacturingcompaniestodoit

forus[...].ReplenishmentordersareallautomatedthroughourEDIsystem.[...]By

interfacingsalesdatawithproductdata,thedesignprocessismoreflexible(USDiscounter).

IJOPM

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Thehypermarket(France).Thehypermarketllsmostlygroceries,butalsoother

ermarkethasimplementedanumber

ofown-labelproducts(inaproportionof30to60percentofclothingproductsinour

sample)nternalidthedesign

stage,toreducelead-time:

gesmore

thanathous

justimplementedPDM(ProductDevelopmentManager),ontopoftheCADsystem[...],

standardisation,timesavedandreliabilityarethethreebenefitsofthisneworganisation

(FrenchSupermarket).

Itisbadonproducts’twehaveadesign

team,thechoiceofwhatproductstodesignisalsobadonsalesinformation(French

Hypermarket).

Obrvationsatindustrylevel

Thefollowingquotesontheproportionofdesignersworkingforretailersandthe

proportionofretailersacquiringCADsystems,confirmthatretailersareintegrating

thedesignfunction:

Themajorityofstudentsgraduatingindesignfromfashionschoolsarenowworkingfor

sonlyasmallproportionthatisstillworkingformanufacturers(British

industryfederation).

Theprofiorityof

ourcustomersweremanufacturers;itisnowretailersthatpurchaCADandPDM(Product

DesignManagement)systems(Frenchtechnologysupplier).

Badonthepropodtypologyanddesignorganisationdetailedabove,thenext

ctionisdevotedtodiscussingthestrategyofintegratingdesignandretailinthe

clothingvaluechainanditsbenefits.

Discussion:integratingdesignandretail

Thestrategyofintegratingdesignandretail

Ashasbeenobrvedanddescribedinthepreviousction,thestrategyofintegrating

designandretailhasbeenadoptedbytwotypesoffirms:

onecomesfromadifferentsituation,andintegratesthefunctionthatitwasmissing.

Theretailershaveinternaliddesign,andthedesigners(ex-manufacturers)havekept

thedesignin-hou,

importanttokeepinmindthattheintegrationstrategyisnotfollowedbyeveryfirmin

ore,itprovidesacompetitiveadvantagetotheonesthathave

implementedit.

redifferentreasonswhyretailershave

y,retailersnolonger

merelyllothers’products,

departmentstore,thediscounterandthehypermarkethavealldevelopedtheirown-labels,

asitimprovesprofitmarginsandcustomerloyalty(KotlerandArmstrong,2004,p.293).

TheretailersareawareofthedecreasingroleofTraditionalManufacturers

(asillustratedinthemovefromTraditionalManufacturertomanufacturerwithout

plant).Infact,becaumanufacturingactivitiesaresub-contracted,manufacturers

Designandretail

intheclothing

valuechain

421

arationofmanufacturingand

designactivitiesresultsinalossoflegitimacytodesignforthemanufacturerwithout

ore,retailershaverealidthatiftheycouldundertakedesign,thenthey

ngoneofthemiddlemenallows

retailerstosavelead-timeandtogainflexibilityintheproductdesignprocessandsoto

improvethefittomarketdemands.

ormationchainisimprovedby

interfacingsalesfeedbackwithdesigndata(thatudtobeunderthecontrolof

manufacturersordesigners).Designudtobecoupledwithmanufacturing(underthe

manufacturer’scontrol),duetotheneedfortechnicalknowledge,suchassize

standards,uoffabric,rgepartoftheknowledgeis

nowembeddedinthetechnicaldesigntool(CAD),thatin-turnsimplifiesthecreative

thanhavingtore-createamodelfromscratch,firmsualibraryof

modelsandpatterns,whicharemodifiedfromasontoason.

igners–suchasthebrand-named

merchandirandthespecialtychain–havethesameinterestinintegratingretailand

themainissueismeetingcustomerexpectationswithinvery

shortdeadlines,thecontrolofretail,andparticularlyofsalesfeedback,

onthebasisofthelatterthatdecisionsonreplenishmentandonnewproductdesign

nerintegratingretailisinfactby-passingtheretailer.

Ma

developinganOBMstrategy(Gereffi,1999),theyhavebecomebrand-named

tingaretailnetwork,

bothcas,theyaregainingcontrolovertheirrelationshipwithendcustomers.

Designerswithretailnetworkscanusalesfeedbackfromtheirstores(whichreveals

consumertastes)todecideonproductreplenishmentandtodesignnewcollections.

ategyofdesignandretailintegrationinthe

clothingindustryallowsfirmsthatimplementittoincreatheirproducts’

project,thebenefitsoftheintegrationstrategyaremeasuredin

termsofperformanceofthedesignprocess(intermsoflead-time)andultimatelyonthe

performanceoftheproduct(intermsoffittomarketneeds).Badonthedata,the

mechanisms–throughwhichtheintegrationstrategyhasresultedinanincread

productperformance–havebeenidentifi,thetimeneededto

developanewproductisreducedwhenthenumberofmiddlemenisdecread–this

hasbeenobrvedwiththemanufacturersbeingby-pasdbyretailersand

d-timeisalsoreducedif

anewproductisdevelopedbyelectronicallyupdatinganexistingitemfromaprevious

collection,ofCADsystemsmakesthe

processmoreflexible:egration

strategyissupportedbytheintegrationofmarketdata(supportedbyEDI)and

productdata(supportedbyCAD).Thisdataintegrationiscoretotheincorporationof

marketpreferencesinthenewproductdesigns,whichresultsinincreadproduct

gthedesignprocesswithsalesfeedbackallowsthedesignofa

newproductthatresultsfromtheupdateofasuccessfulproductinthepast,andit

y,theperformanceofthedesign

processresultsinabetterproductfiroductcanbedeveloped

aslateaspossible,latestfashiontrendsandcustomerpreferencescanbetakeninto

IJOPM

26,4

422

velopmentreducesrisk,andmakesproductsmoreinlinewithmarket

quence,theproductperformanceisincreadandahigherproportion

ofproductsaresoldatfullpriceratherthanthroughsalesanddiscounts.

andretailintegrationalongthe

c

“retail-ledstructure”reprentsthesituationinwhichclothingretailershave

developedadesignintegrationstrategy(ethedepartmentstore,thediscounterand

thehypermarketorganisations).The“design-ledstructure”reprentsthesituationin

wen

theirownretailnetworksandmaintainthedesignfunction,andsub-contractallother

steps(ethebrand-namedmerchandir,andthespecialtychainorganisations).

Generalisabilityofresults

Generalising,firstis

linkedtotheexistenceoftechnologicaltoolsthatmodifytherelationshipsinthechain

andthecondisbadonretailers’growingdominancewithinthector.

eendiscusdintheliterature,how

informationtechnologiesingeneral,andEDIinparticular,havecontributedto

changingthemanufacturingorganisationbyallowingjust-in-timestrategies(Millar

andPorter,1985).Whatisnovelinthisrearchisthattheuofinformation

technol

andEDIprovidethebasisfortheprocessintegrationnecessaryforconcurrentdesign

(Forzaetal.,2000).

E-commercetechnologiesareevolving,

slowlyreplacingEDI;thetechnicaltooludisdifferent,buttheinformation

transferredandthedegreeofintegrationpermittedbythetoolissimilar(Angeles,

2005).Equally,CADmightbeconsideredagenerictermtodefinethetoolsthatare

otheireaofu,particularlyforslightmodifications

toexistingproducts,CADtoolsallowonecategoryofagents(theretailers)to

chnologyisalsoevolving,

offeringnewcapabilities,suchasthepossibilityofbeingsharedbetweendifferent

actors(e-design).AnotherkeycharacteristicofCADtoolsisthattheyembedpartofthe

hnologiesareliketheirpredecessors,theyareudto

Figure1.

Schematicreprentation

ofthechangeinthe

clothingindustry

structure

Stages

DesignManufacturingRetail

‘Design-led’structure

DesignerDesigner

Sub-contractor(s)

‘Retail-led’structure

RetailerRetailer

Sub-contractor(s)

Designandretail

intheclothing

valuechain

423

integratetheclothingvaluechainupstreamanddownstream:trackingproductsinthe

chain,incorporatingthefinalcustomers’requirementsanddecreasinglead-time.

Theimportanceofinformationsystemsinthesalesanalysisprocessishighlighted

byHetzelandFaure(1995)whohavestudiedsoftwarecalledPhebosthatus

multi-criteriamethodsinthefashionindustrytoanalyproducts’gthis

method,companiescanadapttheproductstotheneedsofthemarket,reducethe

developmentcostsofnewproducts,understandthesalesperformanceandthereby

improvetheupcomingsalesforecasts.

tralroleplayedby

retailersintheinter-organisationalco-ordinationofthectorhasbeenpreviously

highlightedintheliterature(Abernathyetal.,2004;Gereffi,1994).Itischaracteristicof

rationoccurredbadontheneedfor

companiestoorganitheirmanufacturingonajust-in-timebasis(Abernathyetal.,

2004).Theincreasingproportionofsubcontractingandinternationalsubcontractingof

clothingmanufacturingactivities,andtheincreasingproportionofown-labelshave

contributedtochangethebalanceofpowerinthevaluechain,infavourofretailers.

Finally,theimplementationofEDIbyretailers,hasallowedthemtoappropriatethe

tooltotheiradvantage.

Thetypeofrelationshipbetweenmanufacturersandretailersthatisnecessary

tobringbenefitsintermsofquickresponandproductperformanceiitherfull

verticalintegration(includingretail,manufacturingandretail)(Richardson,1996)

orco-partnershipfor(BruceandMoger,1999).Badonthecurrentrearch,

focudonthedesignprocessandonproductperformance,ourconclusionsare

thatitistheintegrationofdesignandretailonly(excludingmanufacturing)that

bringbenefiefitsofthedesignandretailintegrationstrategyconfirm

theneedforR&Dcapabilitiesforretailersinordertoinnovate,ashighlightedby

BruceandMoger(1999).

Examinationoftherootcausoftheintegrationstrategywillmakeiteasierto

tstep,

therefore,istoidentifywhethertheresultscanbegeneralidtootherindustries,

wheretheretailershaveadominatingrole(buyer-drivencommoditychains)andwhere

thetechnicalitiesofthenewproductdesignprocessaresimplified,becautheyare

oodindustry,retailersalsoholdamajorrole

(Sealey,1994)andinformationtechnologieshavealteredtheintermediation

relationshipsalongthechain(Coxetal.,2002).Thetwoconditionsmakethefood

ctoranidealcandidatetoextendthegeneralisabilityoftheresultsofthisrearch.

Conclusion

Thispaperhasdemonstratedthatthestrategyofintegratingdesignandretailinthe

ultofthe

developmentofthisstrategyisachangeofboundariesinthevaluechain,atransferof

designskillsfromonecategoryofagents(manufacturers)toanother(retailers)through

broadenWalshetal.’s(1988)results,

accordingtowhich,themostsuccessfulfirmsarethothatinvestindesign,andalso

haveotherstrengths–forexample,findings

underlinetheimportanceofthelinkbetweendesignandretailtoensurethatproducts

aresuccessful.

IJOPM

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424

Thispaperispositionedintheoperationsmanagementliteratureonnewproduct

designintheclothingindustry,theliterature

isdedicatedtotherelationshipbetweendesignandtheupstreampartofthechain,and

moreprecilytohowtheinvolvementofsuppliersinthedesignprocesshas

r,thereisagapintheliteratureonthe

relationshipbetweendesignanddownstreamactivitieslikeretail,andtheresultson

theupstreamofthevaluechainwoulddervetobetestedonthedownstreamofthe

perisafiegrationofdesignandretail

contributestoimproveproducts’performancethroughabetterintegrationofcustomer

immediatefeedbackfromcustomers

isquitediffiavetofindawaytogetsuch

nbedonethroughsurveys,focusgroups,customer

support(GoffinandNew,2001),eedbackisfastandcheapand

itcanalsobearguedthatitismoreaccuratebecauitisbadonactualcustomer

behaviour.

Thereisaneedintheliteraturetoconcentrateonthemethodsneededtoengage

rexampleisthemass-customisation

phenomenonthatrangesfrommade-to-measureshirtstoonlinemass-customisationof

allproducts(,Lands’End)(Bergeretal.,2005).Theideaofintegratingurs

intothedesignandproductionprocessisapromisingstrategyforcompaniesthatare

outby-passing

retailersandmakingthefinalcustomerthedesigner.

sanewfieldofrearch,

namelythefocusonnewproductdesignwithavaluechainperspectivethat

kbetweendesignandretail

needstobetestedinotherindustries:mainlybuyer-drivencommoditychainswhere

concentratedretailersplayaleadingroleanddrivethevaluechain,andwhere

informationtechnologieshavealreadycontributedtochangethemanufacturing

dindustryisaninterestingcandidateforexploration.

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Correspondingauthor

Ce

´

lineAbecassis-Moedascanbecontactedat:ceabec@

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