New Supply Chain Strategies at Old M&S
Operations Management
About the Business
- M&S is a company which was formed in 1884 in Leeds, has become an international group with an annual turnover of over £8billion by 1997.
- M&S experienced a troubling time after 1997 in the market downturn of autumn 1998.
Problems
- They lost a big chunk of their target market, which was women aged 35-55.
- What went wrong for M&S was that they only bought substantially for two seasons of the year, autumn and winter and only ‘phase bought’ for the rest of the year.
- Nimbler competitors exploited many more different seasons throughout the year and used this to their advantage.
- Pre 2000 — Supply chain was too long so long lead times, competitors had higher variety and choicer
- Post 2000 — Restructuring the supply chain so high costs, implementing the segmentation program
Solutions
- What they did was that they segmented their clothing into four ranges to give women more variety:
1. The Perfect Collection — Classic, stylish merchandise for core customers, 60 lines of clothing including plain, white t-shirts. Easy machine washable and iron able, these were aimed at people with busy lifestyles (working mums for example)
2. The Classic Collection — This range was more aimed at the mature customer by being advertised as comforting, long lasting and versatile. These were high quality, smart and elegant clothes made of the most high quality fabrics
3. The Autograph Range — This was where M&S pulled out all of the stops to attract more customers, bringing in top designers like Julien Macdonald and Phillip Tracey to design clothes and accessories. The aim of this was to allow the customer to have designer quality merchandise at high-street prices. Only in selected stores though.
4. ‘per una’ Range — Launched in September 2001, this range gave customers limited clothing which were deemed very ‘exclusive’ and ‘rare’ and therefore special. The aim of the range was to “provide superb designs at very affordable prices”. The cost of the products was 10% higher than the normal M&S ranges. Made in small batches and scaled down because of the too high customer demand so only in selected stores.
- Give feedback sheets to customers on what they would like from M&S in the future, so they can continue their flexibility in demand
- Outsource work to closer places than China to make sure that lead times are reduced and customer satisfaction is high.
Performance Objectives
- Quality — With their new segmentation of product ranges
- Cost — Good prices for good quality products
- Flexibility — Having more varied range of clothes to meet customer demand
- Dependability — Making sure that lead times are reduced to keep stock high so customers are not disappointed when they get to the store
What topics does this case relate to?
Operations Strategy — This is due to changing the way they do their operations (for example their supply chain) to make sure that performance objectives are met.
Scheduling — With the new ranges M&S have had to schedule the times to make sure that items, are on most occasions available and in stock for customers. A good example of this would be their perfect collection as they need to make sure every day, needed items of clothing, like white t-shirts, are always in stock for customers as their target customers are working women
Supply Chain Management — This is with the idea of having Business to Consumer relationships. Also they now use, especially in their per una and autograph ranges, an agile supply chain as there is high variety of products (with the designers) with short lead times.
