Brief background information of TAL
TAL Apparel Limited is a garment manufacturer headquartered in Hong Kong. It was founded nearly seventy years ago, since 1947, and has grown to become one of the world's largest apparel manufacturers in the production of clothing. The strength of TAL's product is its innovative designs that combine style, comfort and functionality at the same time. Nowadays, TAL produces over 55 million pieces of apparel annually and its target markets include America, Europe and Asia. It has become so popular that 1 out of 6 dress shirts sold in the US is made by TAL.
Video Showing
A video was shown to us with a very detailed introduction of the company's background and history, vision, customer profile and the way it fulfils its social responsibility. Although it is not a lengthy video, it succeed in telling the story of TAL in a clear and simple way, and enriching our understanding of this famous firm.
Presentation and sharing
After the appreciation of the video, we were glad to listen to the presentation given by the staff of TAL who talked more about their company, which gave us further information about the practical daily operation. The presentation certainly increased our cognition of the supply chain, and also the true meaning of a "value-added service".
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| (Some important slides from the presentation) |
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(Some important slides from the presentation)
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There was a remarkable part which impressed us very much - the demonstration of their product's functions. Different clothes with their unique functions were passed around the class, and three techniques that were used to produce these clothes were introduced.
1. SofTAL Process
- It is a wrinkle free technology, which means people don't need to iron it
- Colour will not be affected even after numerous washes.
2. DriXpert
- A moisture wicking system
- Keeps user cool and dry regardless of day's activities
- Moisture on skin is wicked through garment onto outer surface of fabric with quick evaporation
3. WOR
- A nano technology for exceptional stain resistant performance
- Sewing thread, pocketing and trims offer this performance
Q&A Section
After listening to the presentation, it was our turn to ask the related problems, and our questions were answered by their professional staff in a detailed manner.
Q.1 How does TAL get involved in corporate social responsibility?
TAL put forward two concepts of environment friendliness, Greenhouses (GHG) and Water Intensity. The core of Greenhouses is saving electric energy in the production and operation processes. And as for Water Intensity, it pays attention on reduce the use of water and recycles water. Besides, TAL built the two systems actively, to show its concern about nature. When we mentioned the increased costs accumulated by corresponding facilities, the staff told us that via the two systems, TAL could cut the non-value added steps and it prompted reasonable profits as well.
Q.2 Why doesn't TAL set up their own brand of apparel as a retailer?
The business of suppliers is quite different with the marketing of retailers. TAL is a giant in garment production and fosters many stable long-term corporations with many top retailers; however, the company does not practice marketing and does not plan to be a retailer.
Q.3 Does TAL prioritize corporate social responsibility?
TAL places a high priority on corporate social responsibility. For example, it is trying to use environmentally friendly solutions to deal with production issues in South East Asian factories, such as the waste water treatment and recycling for flushing and landscaping irrigation, water scrubbers for exhaust emission management, and heat exchangers that recover energy from steam to heat domestic water. The treatment of water is actually saving a huge amount of water, which helps the company to save the money in the long run and to bear the social responsibility for saving water at the same time.
Q.4 While the cost of manufacturing is increasing in mainland China which in turn affects the profits of TAL, will the company consider moving away from China?
As it is not an easy task for the company to shift the factories from one place to another due to the capital and equipment invested. It may be even costlier for it to move away from China to another place when taking into account the cost of previous investments. Thus, it is not really a feasible suggestion for TAL to move the factories to other places.
In fact, TAL is trying to deal with the increase in manufacturing costs (such as labour cost, material cost etc.) by recycling the left cloth/ material to produce new clothes. It is an environmentally friendly action which helps to reduce the pollution on environment and also the wastage and costs incurred as well. The reduction in this production cost can help TAL to balance the increase in manufacturing cost in mainland China.
Q.5 As online shopping is growing to become main stream, existence of many small shops is certainly affecting the business of branded companies. What will you do to cope with this situation?
According to the staff of TAL, TAL focuses on the high-end brands. And the consumers of TAL targets the top end market while online shops focuses more on the general market. Thus the target market of TAL’s consumers is not same as the online shopping market. Therefore they do not think the online shop will attract more consumers. What’s more, the employees said that they have confidence on their company and customers.
Q.6 Will you expand your business and apply your innovative techniques to other areas such as shoes or bags?
While TALs main products revolve around outerwear, shirts, polo shirts, blouses, pants (wool/ regular) they do also specialize in shoes, one of the specific brands they cooperate with happens to be Hush Puppies. An international brand selling casual footwear for men, women and children was founded in 1958. TAL’s association with Hush Puppies is prominent in some of their “technologies” as they like to call it, such as there ‘worry free suede’, ‘zero g’, ‘bounce’, ‘wave reflex’, ‘the body shoe’ ‘HPO2 flex’, and last but not least ‘waterproof’, which was one of the properties of their garments the TAL staff so generously demonstrated to us during the visit.
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However, they have not yet expanded to bags as per the knowledge imparted at the visit. |
Q.7 TAL's business is all over the world and in order to manage its supply chain efficiently and effectively, it uses several method like VMI, Point of Sale System, Cross docking etc.
Vendor-managed inventory (VMI) is a system to maximize the supply chain efficiency. The manufacturer will be in charge of supervising the inventory levels for their customers, and also help them to replenish when the customers are nearly out of stock. The vendor will make use of the past demand data at the store or warehouse level of their customers for predicting the purchase order, and with the help of VMI, the replenishment cycle can be shortened and also the capacity of warehouse can be increased.
The cross docking system for TAL largely shortens the lead-times from order to store by packing all the goods inside the factories before shipping. All products which are packed in the factories can be directly sent to customers' distribution centers and increase the capacity of the warehouses.
Besides, Point of Sale (POS) system can record the change in stock and store in no time, which facilitate the vendor to supervise the change for their customers and make good use of the information inside VMI. With the help of these three technologies, the lead-times and replenishment time can be largely shortened and hence the manufacturer can earn the customers' loyalty.
Also, in order to keep the quality for the supply chain globally acceptable, TAL has used the scorecard system to check the daily performance in different areas. Performance reports will be carried out occasionally in order to facilitate the continuous improvement of the vendors, and when they realize there is problem, recommendations will be given and also conference calls maybe made to achieve better communication.
Q.8 How can your company strike a balance between time spent on customers and costs acquired inn the supply chain?
In terms of working in close partnership with TAL’s customers, TAL applies collaborative planning, forecasting and replenishment system in the supply chain, in order to produce a comprehensive replenishment model using sales data, market trends and seasonal variations, TAL collaborates with their customers to reach a consensus of the actual quantity needed. TAL’s continuous replenishment model enables itself to streamline the production process.
As for saving supply chain cost, TAL’s X-Docking system allows their customers to simply scan and route straight to sales point in their distribution center, so as to eliminate costly warehousing of inventory. TAL also applies vendor managed inventory setting to save costs by using direct POS links with their customers, to achieve high service level and also inventory turnover.
With these value-added services, TAL succeeds in shortening lead-time, achieves quick response time, and reduces costs at the same time.
Q.9 Facing the shrinkage of the garment industry in HK, i.e. there are numerous foreign fashion retailers competing in HK (e.g. Uniqlo, H&M) and some of manufacturers introduce many new technologies into HK (e.g. heat-tech for Uniqlo, flyknit for Nike), how can TAL remain competitive in HK?
The TAL Research and Development Department invents different garment materials for their clients. The TAL produces non-ironing and easy-care garment material. They adopted the technique on shirts and pants. The cloth appearance is remarkably smooth an uncreased without any ironing after washing. This technique can attract outstanding brands to procure from TAL.
TAL produces garment material which would not change in size or color easily. Some shirts may become deformed and change shape or fade after a several washes. The garment material produced by TAL would not run into this problem. This technique is adopted to shirts mainly. The deformation and fading problems are sharply reduced. This is one of the main attractions to men’s fashion firms. TAL can hence remain competitive in this area.
Summary
Being such a large company that manages multi-stages of the supply chain, it is not easy for TAL to coordinate different parts in order to achieve efficiency. This visit doubtlessly widened our view of the sophisticated supply chain operation and informed us that anything is possible with determination and resilience, two qualities TAL doesn't seem to lack. This is a remarkable opportunity for us to acquire this information and see how the technology have affected the merchandise, and it will forever be in our memory.
Reflection
After this visit, I get to know more about the supply chain in a company, and the importance of it to the success for a business. TAL is such a well known company which provide garments for many world brands like Burberry and Brook Brothers, except the high quality for their products, the extra value-added customer services also contribute a lot to its success. A good and all-rounded supply chain is a fundamental element to run a success business, and TAL is a real life example to show that. It supply chain make it stands out in the market and become the unique one. Besides, TAL also told us innovative ideas are so important in nowadays society. To run a business, you cannot only rely on the existing techniques and materials that you have, for TAL, they always apply new technology on the garments they produce, which make their products to be a special and the only one in the industry.
References
TAL Group (2006)
http://www.talgroup.com/en/index.html
http://www.talgroup.com/en/popups/more_csr.html
http://www.talgroup.com/en/popups/tal_technology_popup_blue.html
Career Planning and Development Centre (2010) 'TAL APPAREL LIMITED - The Seamless Global Innofacturer' The Chinese University of Hong Kong
https://cpdc.osa.cuhk.edu.hk/file/event/824/profile.pdf
Gabriel Hahn (2003) 'Made to Measure: Invisible Supplier Has Penney's Shirts All Buttoned Up' The Wall Street Journal
http://www.wsj.com/articles/SB106323446110491600
Peter Koudal, Victor Wei-teh Long (2005) 'Power of Synchronization - The Case of TAL Apparel Group' Deloitte Research
http://wpc.32bf.edgecastcdn.net/0032BF/tc/docs/TALnewsPDF1.pdf
Denise Tsang (2007) 'TAL Apparel adds value to supply chain management' South China Morning Post
http://www.scmp.com/article/617153/tal-apparel-adds-value-supply-chain-management
Dr. Jean-Paul Rodrigue 'Characteristics of Producer-Driven and Buyer-Driven Global Commodity Chains' The Geography of Transportation System
http://people.hofstra.edu/geotrans/eng/ch5en/conc5en/table_commoditychains.html
Abhilash C., T Vamshi K., Gaurav G., Amar K., Paresh P. 'TAL Apparel Limited: Stepping up the value chain'
http://www.slideshare.net/amarkeshri/tal-apparel
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