Uniqlo, a Japanese retail brand, has swiftly become a household name throughout the globe, challenging the likes of Zara, Gap, and H&M. Uniqlo has established a very streamlined supply chain to do this. Priority is given to establishing strategic ties with high-quality and creative Japanese partners in Uniqlo supply chain operations. Outsourcing the whole production process to a single third party is advocated by Uniqlo. When compared to the centralised distribution system used by Zara, Uniqlo has a regional distribution strategy that focuses mainly on Asia rather than Turkey’s four Zara distribution hubs(Asahi,2008). Uniqlo is combining a physical shop and an internet network as part of its service expansion. Uniqlo negotiates closely with suppliers throughout the globe and arranges large purchases to save money by gaining economies of scale. As part of Uniqlo’s “long-term fashion” strategy, the Japanese retailer seeks strategic alliances with other high-quality and forward-thinking companies.
Acquisition of goods, commodities, and services necessary for a company’s operation is an integral part of a company. It is vital to sit down and evaluate the information you have to work with to design a successful procurement plan. These elements will include the company’s goals, the available and current resources and supplies, the budget, and the time frame. The organisation may develop a successful procurement strategy as custom-made as feasible by considering these factors(Avittathur,2007, pp. 717). The strategy must help the organisation achieve its goals and objectives.UNIQLO is a current Japanese casualwear designer, producer, and retailer. They separate themselves from other firms by inventing unique items and making rapid alterations to manufacturing to reflect the newest market situation to decrease store-operation expenses. Uniqlo recommends outsourcing the complete production process to another third party to save costs and maximise productivity. It is simpler to regulate quality since each outsourced facility only manufactures a particular style of apparel.
At cheap pricing, UNIQLO collaborates with particular manufacturers to provide clothing that is both fashionable and useful. UNIQLO has developed new functional materials like HEATTECH and Silky Dry with TORAY, Japan’s most prominent textile makers. These materials are now significant components of UNIQLO’s core goods. When it comes to supplying its clients, UNIQLO relies on Just-In-Time (JIT) inventory procurement. They may lower their supply chain’s inventory by adopting JIT, which analyses weekly sales trends using cutting-edge technology in all of their locations. UNIQLO can deliver apparel ranges ahead of time since the information it receives is solely customer-oriented. Because they seldom over-order, distribution facilities save money by not having to store excess inventory.
The UNIQLO supply chain has mobility that distinguishes itself from its many rivals. When it comes to predicting trends, forecasting techniques like those used by UNIQLO are not always accurate. JIT, on the other hand, is tolerant of manufacturing mistakes since new clothing lines may be created in the factories practically instantaneously. If a cardigan is no longer in style, UNIQLO will take it back to the manufacturer and turn it into another item, such as a scarf or a sweater. According to Uniqlo, there are 242 companies in 11 countries in Southern Asia. There are a total of 128 places in China. With 44 factories, Vietnam came in second place. Twenty-four factories are located in Bangladesh. Six factories in India, where Uniqlo plans to launch its first shop later this year, are also owned and operated. Simpleton and adaptability are two of Uniqlo’s greatest assets. Unnecessary elements were omitted in the jacket design, saving Uniqlo 90 seconds total. That saved the firm a significant amount of money and time in the long term(Chua et al.,2009, pp 490). In order to ensure the safety and quality of their products, Uniqlo uses a third party to conduct pre-production testing of all materials(Carter et al.,2008, pp 360). After this last inspection, the product is ready to be sent out of the plant. Outsourcing manufacturing has the drawback of making quality control more difficult. Although Uniqlo was once a formidable opponent, the “Takumi” method has already triumphed. Each year, they deploy 400 professional textile artisans from their factory into outsourcing facilities to help preserve quality standards and protect the safety of their employees.
Every week, sales and inventory are tracked by the inventory management department, which subsequently deploys the required replenishment rate to meet requests. If a product is still available after the season, the market value will be modified again(Benton & Maloni,2005, pp. 3). For example, Uniqlo may utilise the material from a product’s decline in sales to produce another product. Uniqlo may, for example, transform goat fiber into scarves to sell if cashmere sweater sales unexpectedly decline. It is worth noting that Uniqlo’s regional distribution strategy in Asia ensures a transit time of six days or less (for offline sales) and no more than one day compared to Zara’s centralised distribution system in Turkey (online sales).
“Uniqlo is a technological firm, not a fashion one,” says the retailer. When robots replaced 90% of people at a Tokyo distribution facility in 2018, Uniqlo’s supply chain was modified significantly. Uniqlo’s order-to-ship time has been slashed by 95%, thanks to technological advancement. Additionally, Uniqlo is prepared to reject or return all purchases if any faults are discovered that might have a negative impact on the quality of the product or the health of its customers(Barney,1997, pp.137). Uniqlo concentrates on the “creating for everybody” attitude instead of following trends. Simple, necessary, and popular items with a longer life cycle are the hallmarks of its offerings.
The brand’s penetration pricing strategy keeps its product costs on the level with those of its rivals to boost sales. Uniqlo has always had a sizable portion of the market because of its high-quality standards and competitive pricing. Over the last several years, Uniqlo has opened more than 2000 retail locations across the globe, including in Asia and Oceania, North America, and Europe. This brand has a solid following in Asia. Uniqlo is also expanding Online-to-offline services as part of its O2O strategy. Customers may purchase online at a UNIQLO website after selecting the product that best suits their needs. It is a win-win situation for both parties. Leaders at Uniqlo appreciate the importance of adapting to the local culture when entering a foreign market. It means that businesses must customize their messaging to fit the specific needs of each market. In the United Kingdom and the United States, Uniqlo utilises Twitter and Facebook, whereas, in China, it uses Renren.
References
Asahi (2008), “Volatile Economies: Rapid Growth of Uniqlo with 1900 Yen Fleece Product,” January 26.
Avittathur, Balram, and Swamidass, Paul (2007), “Matching Plant Flexibility and Supplier Flexibility: Lessons from Small Suppliers of U.S. Manufacturing Plants in India,” Journal of Operations Management, 25 (3), 717–35.
Barney, Jay B. (1999), “How a Firm’s Capabilities Affect Boundary Decisions,” Sloan Management Review, 40 (3), 137–45.
Benton, W.C., and Maloni, Michael J. (2005), “The Influence of Power Driven Buyer-Seller Relationships on Supply Chain Satisfaction,” Journal of Operations Management, 23, 1–22.
Carter, Craig R., and Rogers, Dale S. (2008), “A Framework of Sustainable Supply Chain Management: Moving Toward New Theory,” International Journal of Physical Distribution & Logistics Management, 38 (5), 360–87.
Chua, Roy Y.J., Morris, Michael W. and Ingram, Paul (2009), “Guanxi vs. Networking: Distinctive Configurations of effect- and Cognition-Based Trust in the Networks of Chinese vs. American Managers,” Journal of International Business Studies, 40 (3), 490–508.
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