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Uniqlo: A Supply Chain Going Global

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In less than 20 years, Uniqlo has become the leading fast-fashion retailer in Japan and a strong player in other Asian countries like China, Korea and Taiwan. Since 1998, the company has expanded sales at double-digit rates, thanks to an aggressive pricing policy combined with a high level of quality, a mix that proved hard to resist for Asian customers. Key to Uniqlo's strategy and success was an agile supply chain inspired by the “fast-fashion” model pioneered by Inditex and also utilized by H&M, the two largest fashion retailers in the world.

While Uniqlo demanded competitive prices from its suppliers, it also offered them continual technical assistance in developing and perfecting their manufacturing techniques, and supported them with a high flow of orders.

Nineteen ninety-eight was an important year for Uniqlo, as the opening of a flagship store in one of the hottest fashion districts of Tokyo projected the brand in Japan at a national level. At product level, a partnership with Toray, one of the world's leading producers of composite and synthetic fibers, resulted in garments that had performance and properties no natural material could match. Working with Toray forced Uniqlo to refine its supply chain further, that became “just-in-time,” mimicking that of other highly competitive Japanese companies.

With an efficient but regional supply chain, Uniqlo faced rising manufacturing costs in China and was experimenting with new supply chain models in low-cost locations like Bangladesh. Uniqlo's supply chain had proved effective in the Asia Pacific region, but could the same model be scaled worldwide? Was the low growth rate Uniqlo experienced in the US, and particularly Europe, also due to the limitations of its current supply chain?

Learning Objective:

• Responsive supply chains: alternative models of supply chain orchestration, such as the hybrid governance system, for improved responsiveness and flexibility
•“Born-global” firms: supply chain a strategic element of success, with other company functions subordinated to it

Year of Publication: 2016
Ref. No.: 15/562C
Discipline: Production & Operations Management, Strategy & General Management
Industry: Apparel Retail
Country: Japan
Company: Uniqlo
Languages: English
Pages of Text: 15