2. A chain of women’s apparel retailers had all their products made by Lopez Industries, a small but high-quality garment manufacturer. They worked on the basis of two seasons:

Spring/Summer and Autumn/Winter. ‘Sometimes we are left with surplus items because our designers have just got it wrong’, said the retailer’s chief designer. ‘It is important that we are able to flex our order quantities from Lopez during the season. Although they are a great supplier in many ways, they can’t change their production plans at short notice.’

Lopez Industries was aware of this. ‘I know that they are happy with our ability to make even the most complex designs to high levels of quality. I also know that they would like us to be more flexible in changing our volumes and delivery schedules. I admit that we could be more flexible within the season. Partly, we can’t do this because we have to buy-in cloth at the beginning of the season based on the forecast volumes from our customers. Even if we could change our production schedules, we could not get extra deliveries of cloth. We only deal with high-quality and innovative cloth manufacturers who are very large compared to us, so we do not represent much business for them.’ A typical cloth supplier said:

‘We compete primarily on quality and innovation. Designing cloth is as much of a fashion business as designing the clothes into which it is made. Our cloth goes to tens of thousands of customers around the world. These vary considerably in their requirements, but presumably all of them value our quality and innovation.’ How should the retailers try to influence this supply chain in order to improve its performance????