Thursday, May 29, 2008

Process Selection

Victoria’s Secret product flow is the Batch flow which produces medium variety and medium volume depending on the customers needs. The products are produced in batches according to their characteristics and sold in batches. Each batch of the product flows from one operation to another. A batch process executes different production runs for different products. The disadvantage is the setup time required to change from one product to the other, but the advantage is that some flexibility in product mix can be achieved. A batch process is similar to a job shop, except that the sequence of activities tends to be in a line and is less flexible. In a batch process, dominant flows can be identified. The activities, while in-line, are disconnected from one another. Products are produced in batches, for example, to fill specific customer orders.

Victoria’s Secret customer order process is Make to stock (MTS) which provides faster service to customers from available stock and lower costs than a make to order process. It has higher flexibility for product customization. Most of Victoria’s Secret products are customized in different colors, sizes, and designs. The MTS process has a standard product line specified by the producer, not by the customer. The products are carried in inventory to immediately fulfill customer demand. Before customer demands the product is all ready in stock. If the product is not available, a back order can be placed or the order can be lost. The MTS process is measured by service level and efficiency in replenishing inventory.

Victoria’s Secret fall into the process of low volume multiple products characteristics matrix were the product is produced in low volume with multiple variety. The life cycle of the product is medium it doesn’t last short and it doesn’t have a long life either. Firms utilizing batch processes provide similar items on a repeat basis, usually in larger volumes than that associated with job shops. Products are sometimes accumulated until a lot can be processed together. When the most effective manufacturing route has been determined, the higher volume and repetition of requirements can make more efficient use of capacity and result in significantly lower costs. Since the volume is higher than that of the job shop, many processes can be utilized in repetition, creating a much smoother flow of work-in-process throughout the shop. While the flow is smoother, the work-in-process still moves around to the various machine groupings throughout the shop in a somewhat jumbled fashion. This is described as a disconnected line flow or intermittent flow.

Victoria’s Secret process selection is influenced by various factors, labor supply and cost, customization, competition in the market, and state of technology. There is competition with other department stores that sell similar products. There’s mostly price competition between other stores and Victoria Secret, however everybody knows Victoria’s Secret brand and that is beneficial for Victoria’s Secret.

Victoria’s Secret cannot adopt a mass customization method because it does not have standardized products with few options. With Victoria’s Secret process selection they do not customize their products for their customers. However their beauty products have different scents to give customers a variety. With Victoria’s Secrets other lines such as its intimate wear it cannot be customized however it is distributed with different sizes and different colors to meet different customer’s wants. Mass customization has changed the dynamics of the product-process matrix.

Monday, May 26, 2008

Inventory Management






Victoria’s Secret has used an "average store" concept in its inventory management system. Today the company uses a joint data warehouse and intranet application system. The result is based on MicroStrategy's DSS Server, a relational On-Line Analytical Processing (OLAP) server optimized for very large database (VLDB) analysis. The data warehouse that drives the application contains detailed information about the sales and inventory levels for each item in each store. The application enables associates to make decisions to improve their in-stock position and create individualized color/size models for each store. MicroStrategy's DSS Web has an access to the database and helps communication between the data warehouse and the browser. About 20 million rows of data are loaded into the system weekly. Over 1,000 queries are run each week, with the most frequently-executed queries coming from intranet users.
Victoria’s Secret has about 20 percent growth rate per month in users. When a user queries the data warehouse and receives an answer, guided walk-throughs, tutorials, and customized help screens gives instructions for what actions to take based on the results of those analyses. New intranet application program lets associates access detailed information and take action based on the info they receive from the data. It makes easier to adjust to reorder products based on store's selling patterns and inventory.
Victoria’s Secret plans to use DSS Web and the data warehouse to use a point-of-sale decision support system and using Web terminal in every store. When a product is sold out, the employee can see the situation (is the product in transit and if nearby stores have that particular product in inventory).

Monday, May 19, 2008

Company Info


Victoria's Secret is a specialty retailer of women's intimate apparel. Not only are they a specialty of women's intimate apparel but they also specialize in women's wear, lingerie, and beauty products. Victoria's Secret is the largest brand of Limited Brands with sales surpassing $5 billion and an operating income of US$1 billion in 2006. Victoria's Secret is known for its fashion shows and catalogues, which features top supermodels. There are about 1,000 Victoria's Secret lingerie stores and 100 independent Victoria's Secret Beauty Stores in the US, mostly in shopping centers. These stores sell everything from brassieres, panties, hosiery, cosmetics, sleepwear, and much more.