Profitability quick response

Similarly, quick response programs in the apparel industry focused on decreasing apparel delivery lead time. The competitive benefit of lead-time reduction has been estimated to be equivalent to the profit associated with a 40% demand increase. In short, time can generate money for the supply chain. 

Quick response is the set of actions a supply chain takes to reduce the replenishment lead time. Supply chain managers are able to improve their forecast accuracy as lead times decrease, which allows them to better match supply with demand and increase supply chain profitability. We have discussed the benefits of lead time reduction for regularly stocked itans such as detergent in Chapter 12 (see Example 12-6). We now focus on the benefits of lead time reduction for seasonal items. 

If quick response allows multiple replenishment orders in the season, profits increase and the overstock and understock quantities decrease. Multiple replenishments allow the snpply chain to better match supply and demand hy being able to respond to trends rather than having to forecast them. 

Zara has used local production in Europe to have short replenishment lead times. How does this capability of quick response help the company improve profits in a highly volatile trendy apparel marketplace ... 

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