TAL Apparel Limited is a Hong Kong-based textile manufacturer that supply predominately all the US companies such as Lands’ End, Banana Republic, JC Penney, Liz Claiborne, L.L Bean and Brooks Brothers with clothing’s. According to the article Technologies, “the United States accounts for 78 percent of TAL’s sales, and they produce one in every six dress shirts sold in the US.”1 TAL was founded on spinning and weaving and then diversified into one of the world’s largest apparel manufacturer. Furthermore, Dr. Delman Lee was responsible for transforming the company in light of, all the unfavorable changes in the external environment such as China joining the World Trade Organization (WTO) and the apparels retailing success of e-commerce; which posed competition to them.
Most importantly, TAL had the foresight that competition was building up against them. The company first technological initiative was using “SofTAL technology, which ensures that the fabric undergoes a chemical process that kept the shirt seams sharp and armhole areas smooth even after multiple washes.”2 Secondly, TAL had to align with the changing marketplace by expanding their third-party logistics and wholesale operation; to be more competitive. Based on Porter’s Value chain model, TAL was able to use Vendor-Managed Inventory (VMI), which is collaboration between the manufacturer, the supplier and the retail industry. Thus, solidifying its position in the apparel industry, TAL was able to gain valuable access to real-time market information allowing them to provide customer ordering, inventory management, and shipment dispatch functions to the US. One of the companies, which TAL worked with, was JC Penney together on a demand-driven replenishment system. Basically, at the point-of-sale data is collected directly from the retailer’s stores; in this case, JC Penney’s. This is done in real-time, and TAL can, therefore, respond instantly to changes in consumer demand. In this VMI system, when the supplier receives the data, this allows TAL to learn about the sales pattern. Moreover, allowing TAL’s to step up production and shipment for increased demand, or decrease and dial down if there was a slump in sales. Furthermore, the company invested a great deal in research and development to drive these technological innovations in the garment manufacturing industry and to create barriers for their competitors. The Vendor-managed inventory (VMI) system is a continuous replenishment program where the vendor creates the purchase orders based on the demand at store or warehouse. Thereby, reducing inventory on store shelves and shortens the replenishment cycle. On the other hand, JC Penney had to give up control of the customer or retailer initiated order process for the automatic stock replenishment system to work.
Technologies. TAL Group-The Innofacturer. Retrieved on June 6, 2018.
From http://www.talgroug.com/enpopups/tal technology popup.html.
Lee, H., Fafhoomand, A., & Ho, P. (Sept, 2004). Innovation Through Supply Chain Reconfiguration. MIS Quarterly Executive Vol. 3 No. 3. pp. 131-141.