Le Pensuer -- Supply Chain Strategy

CHANG SUN, YUFEI WANG, YAXIN TIAN & YIZHENG JIANG

LE PENSEUR GLOBAL SUPPLY CHAIN STRATEGY SCAD | LXFM 720 | Summer 2019 | Prof. Levy

EXECUTIVE SUMMARY Le Penseur is a brand that offers leisure wear clothing to men.

The brand is dedicated to provide its customers the most comfortable and stylish clothing , while minimizing its impact to the environment.

This report contains a plan that explains how Le Penseur will source, manufacture and distribute its products with the best price and quality. Multiple countries suppliers and supply chain solution providers are evaluated to develop a strategy that accords with the company's mission and sourcing guidelines, minizes risks and allows future growth.

TABLE OF CONTENTS COMPANY INTRODUCTION COUNTRY AND SUPPLIER SELECTION PLACEMENT PLAN SUPPLY CHAIN SOLUTION VENDOR SELECTION

INTRODUCTION A men’s lifestyle brand founded in 2019.

100% organic cottons with high quality Most comfortable clothing Minimum impact to the environment

MISSION

To deliver premium styling, superior quality, and comfortable feel through sophisticated design and thoughtful tailoring.

We show genuine care and consideration of our consumer from every detail.

Our Core Values

CONSISTENCY

COMMITMENT

Le Penseur will offer products with consistant quality and style to ensure that our customers feel comfortable and stylish when wearing our clothes.

We believe that not compromising the future of the planet is an essential part to deliver the best quality, the brand value, and show consideration to our consumer.

Products T-SHIRT

HENLEY SHIRT

POLL-OVER

HOODIE

$76

$160

$200

$250

PRODUCT DISTRIBUTION & VOLUMES BY SEASONS Company owned stores and official website two collections every year, Spring/Summer collection and Fall/Winter collection, following the major fashion week’s calendar. Items come in store on a seasonal basis

Sourcing Guidelines

ENVIRONMENT

LABOR AND EMPLOYEES

COMMUNITY

Minimal Chemical Usage All suppliers and vendors are required to comply to U.S. and local law and regulations.

Voluntary, No wages below minimum wages.

Employee benefits.

Nondiscrimination No child labor, harrasment or abuse

Empower our employees and local community through events and programs that are beneficial to the local community.

BASED ON COMPANIES MISSION AND VALUES

STRATEGY BASIS

Consistant quality.

Eco-friendly Ethical

MINIMIZE RISK In production and distribution

FINANCIAL SUCCESS Cost effective and cost efficient

COUNTRY AND SUPPLIER SELECTION

COUNTRY ANALYSIS HOW COUNTRIES WERE SELECTED FOR RESEARCH General research based on the list provided by professor Selected four countries based on our intuition As our company aims at producing organic products, we choose Turkey and Sri Lanka as the primary sourcing destination High quality of raw materials is the top priority Asian countries are also well known for qualified materials, while Mexico has advantages in terms of distance and fright cost.

HOW THREE COUNTRIES SELECTED

Applied three scenarios by eliminating different countries to make final decisions In Country rankings, we excluded the lowest scored country, which is Vietnam.

Overall well performance in the textile industry, with a long history and continuous industrial development

Country Highlight

VIETNAM Cheapest labor cost Relative stable political state Very frequent natural hazard and Textile industry is well developed with a long history Far from the U.S.with long lead time

TURKEY A long history of textile manufacturing.

High quality raw materials and trained skillful workers Good domestic business environment Highest labor cost among four countries Trade war risks

MEXICO Adjacent to the U.S. with controllable freight lead time Tight connection with the U.S. with FTA Low level of social stability Mature textile industry in the open economy environment

SRI LANKA Important apparel sourcing destination Low economy freedom No trade agreements with the U.S. in apparels Lack of sourcing guidelines Far from the U.S.with long lead time

HOW SUPPLIERS WERE SELECTED FOR RESEARCH General research through Panjiva Local big names with a outstanding reputation

SUPPLIER ANALYSIS

ANALYSIS AND RANKING CRITERIA Priority 1 Quality Priority 2 Cost Priority 3 Speed and Flexibility Priority 4 Sourcing guidelines Priority 5 Growth Opportunity

MINIMUM REQUIREMENT FOR SUPPLIERS Three preliminary placement scenarios to ensure minimum margin We set up our minimum requirement over 80% Can satisfy production need according to the line plan Gathering quote from suppliers

LINE PLAN

SUPPLIER RANKING

Supplier Selection CAPACITY

CAPABILITY

All highest scored suppliers have the capacity for production, according to our line plan.

Suppliers in Turkey and Sri Lanka has the ability to satisfy our needs for organic product line

SUSTAINABLE DEVELOPMENT Strict Code of Conduct Sustainability program and transparency is a must Environmental friendly¨ Non discrimination¨ Non child labor Non harassment or abuse

FINAL SELECTION ALPINE CREATIONS VIETNAM CO. LTD. TAHA GROUP GIOTEX COATS THREAD LANKA (PVT) LTD

PLACEMENT

SCENRAIO 1 HIGHEST MARGIN Eliminate the country with lowest scores:Â Vietnam All styles build in the country that provides the lowest price Pros: High Margin Cons: Long lead-time and low flexability

FINAL AVG MARGIN: 92.21%

SCENARIO 2 HIGH FLEXIBILITY HIGH MARGIN Keep Sri Lanka with lower risk.

Keep Mexico as our main sourcing to keep the short lead-time. and flexibility.

Source other styles from the country provide the lowest cost.

Pros: short lead-time and high flexibility.

Cons: relatively low margin than plan 1.

FINAL AVG MARGIN: 91.88%

SCENARIO 3 HIGH FLEXIBILITY HIGH MARGIN Keep Turkey with better social and economic stability.

Keep Mexico as our main sourcing to keep the short lead-time and flexibility.

Source other styles from the country provide the lowest cost.

Pros: short lead-time and high flexibility.

Cons: Low flexibility on Men's Pullover sweater.

Relatively low margin than plan 1 and 2.

FINAL AVG MARGIN: 91.64%

FINAL PLACEMENT HIGH FLEXIBILITY HIGH MARGIN Why Turkey: better business climate, sourcing guideline, trained workforce, quality, social and economic stability.

Why Mexico: High flexibility and short lead time Why Vietnam: High margin (low cost per minute) Pros: meets our value, mission and sourcing guideline with high margin and flexibility.

FINAL AVG MARGIN: 92.15%

FINAL LINE PLAN

SUPPLY CHAIN SOLUTIONS VENDOR SELECTION

DATA ACQUISITION QUESTIONNAIRE

DATA ACQUISITION QUESTIONNAIRE

DATA ACQUISITION QUESTIONNAIRE

DISTRIBUTION CENTER LOCATION

Dallas, TX

CEVA LOGISTICS PROS

CONTACT INFORMATION Customer Service Phone: 1-800-888-4949 Email:Â Â Cynthia.Cochovity@Cevalogistics.com

Complete strategy and 44% of the logistics budget is used for inventory Provide App for tracking the shipment in real-time Provide warehouse management system Offer a full range of supply chain solutions from order consolidation services, through freight management, domestic transportation, and distribution management, contract logistics to value-added services such as Garment on Hangers(GOH) services.

Has a global network covering over 160 countries/regions with over 1,000 sites.

CONS Located in Houston not Dallas May charge service fee

DISTRIBUTION CENTER LOCATION

Atlanta, GA

UPS PROS

CONTACT INFORMATION UPS Supply Chain Solutions: 1-800-742-5727

Advance and integrated technologies that can track and manage inventory.

Provide real-time tracking for shipments.

Technologies that aids e-commerce, good for multi-channel businesses.

Can hold the largest volume.

Has facilities across the globe, and its extensive experience can provide supply chain solutions such as freight management, custom broke, and other consulting services that will be beneficial for us in the future

CON UPS is the most expensive one.

DISTRIBUTION CENTER LOCATION Cerritos, Los Angeles, CA

DHL PROS

FEES DHL charges additional fees for customs services.

The shipping fee of 42 lbs package from Mexico to Cerritos is $261.95. The fee from Vietnam and Sri Lanka is $782.72

DHL provides innovative technology in improving operations, reducing costs and improving customer service.

DHL provides integrated solutions to improve our business’s efficiency and flexibility.

DHL contacts shippers with carriers every day to ensure thousands of loads arrive safely and on time.

DHL has 1,400 warehouses and offices, 11,700,000 m2 storage. It can handle massive inventory.

DHL offers full visibility into product movements.

CONTACT INFORMATION Customer Service Phone: 1-800-225-5345

CON The headquarter is in Ohio, far from CA.

Three Final Supply Chain Providers

DALLAS, TX Sets sustainability to be a very important element in company strategy.

Expert in fashion industry Supports consumer's Omnichannels logistics by ecommerce and e-fulfillment platforms Delivers the utmost services to the customers and add value throughout the supply chain

ATLANTA, GA Provides integrated technologies that is very convenient for us to track and manage inventories Offers additional services that can help us better manage our inventory and help us grow our business in the future Well-organized Can handle large volume Experienced in supply chain

CERRITOS, CA Organized structure Provides reliable supply chain management Reduces cost and increases efficiency by innovative technology Social responsibility plays as a key role in their overall business strategy Can handle massive inventory

LE PENSEUR

THANK YOU! Any Question?

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