APICS Supply Chain Management Now

Carving Out Global Market Share

By APICS CEO Abe Eshkenazi CSCP, CPA, CAE - April 26, 2013

It’s an iconic American brand that has set its sights on growing internationally. Gap Inc. plans to create a responsive supply chain as part of its plan to take a more significant share of the trillion-dollar global apparel market, reports just-style.com, an apparel and textile publication.

At Gap’s annual investor meeting on April 17, CEO Glenn Murphy outlined goals to expand overseas, especially in China; franchise Old Navy stores globally; and build a seamless “omni-channel” experience.

According to just-style.com, Murphy emphasized three key developments to enabling the new goals:

  • realigning the business to focus on brands instead of channels
  • global assortment
  • speed to market.

Of course, speed to market is where a responsive supply chain is critical. The publication quotes Murphy: “You’ve got to move in this business. We’ve been known to be a little tardy.”

Gap leaders plan to use other strategies too, including vendor-managed inventory (VMI) and “fabric platforming,” which means cutting down the number of fabrics used by choosing fewer fabrics that work for multiple designs, including shorts, pleated pants, non-pleated pants, and more.

The APICS Operations Management Body of Knowledge (OMBOK) Framework defines VMI as follows: “VMI partnerships occur when downstream supply chain customers choose to partner with their suppliers. Agreements are made as to where the inventory is stored (either at the supplier’s site or the customer’s site) and when the billing for inventory will take place (either upon shipment to the customer or upon use of the part).

“Unlocking” inventory also plays a major role in Gap’s new plans. In the past, products went to a country and to the stores in that country, but if those items weren’t sold, they were stuck. “Now inventory can go anywhere. Now inventory is untrapped,” Murphy says. “It starts by being untrapped by country. Because when it leaves the vendor, it will go to the country where we can maximize our sales, our growth, and our [average unit retail]. Then the next step is outside of a country; you have to maximize that profitability.”

Murphy admits the company has work to do. However, once the challenges are overcome, Gap will be a long way toward fulfilling its global strategy—a strategy that relies on a responsive supply chain.

Keys to global business success

Inventory management and supply chain strategy are at the heart of Gap’s approach to grow globally.

These important business concepts also are at the heart of APICS, and nowhere is this more evident than in the APICS Certified in Production and Inventory Management (CPIM) and APICS Certified Supply Chain Professional (CSCP) credentials. APICS certification programs are recognized worldwide as the standard of supply chain management excellence by organizations, educators, and professionals worldwide. If you are like Gap and find yourself “a little tardy,” APICS can give you the tools to improve your organization’s global strategy. Consider earning your APICS certification. More information is available at apics.org.

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