Distribution & Logistics Management

Name Roll No

Aman Purohit A009

Monik Patel A010

Kanchan Bhanuvanshe A018

Nidhi Sharma A020

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 INDEX
S.NO Particular Pg. No

1 Chapter 1 3-14

2 Chapter 2 15-22

3 Chapter 3 23-37

4 Chapter 4 38-46

5 Chapter 5 47-56

6 Chapter 6 56-68
Benetton Group is a global fashion brand based in Ponzano Veneto; Italy founded in 1965.
Benetton Group is one of the best-known fashion companies in the world, present in the most
important markets in the world with a network of more than 4000 stores; a responsible group that
plans for the future and lives in the present, with a watchful eye to the environment, to human
dignity, and to a society in transformation.

How they create lean and agile value chain.

The Italian apparel brand Benetton adopted a unique strategy in addressing the lean vs. agile
confusion. It decided that it would not use colored fabric to make garments – rather it would make
all the garments in one natural color and then dye all of them in the color that was selling.

The innovation of the Benetton Supply chain was called “tinto in capo” i.e., dye upon the garment.
With this, it became possible for Benetton to produce large volumes of garments to exploit
economies of scale at the manufacturing level.

And yet respond quickly to the color that the customer wanted to wear by quickly dyeing the
garments in the preferred color (and thus in line with the agile concept). Benetton adopted the
combination of Lean and Agile supply chain- Leagile Supply chain.

In today’s glossary of the supply chain, it is called moving the “decoupling point” toward the point of
sale. Decoupling point is where product differentiation happens, or in other words where products
take their final shape. Beyond this decoupling point, no changes can be made to the product.

The garments were then dyed in various colors upon receiving information from the actual point of
sale as to what was selling. Because of this, forecasting error was reduced to a minimum.

The Leagile strategy positions the decoupling point in such a way that it best suits the need for
responding to a volatile demand of the marketplace.
In the fashion business, it is challenging to predict style and color. Benetton’s supply chain realized
that it could reduce inventories and become more responsive by reversing the dyeing-knitting
sequence in a single-color garment.

Hence, Benetton stocked un-dyed garments before the beginning of the selling season and dyed
them (with knitting- dyeing sequence) after more information on customer preference was available
after the start of the selling season.

The Transportation mix deployed with all objectives.

In Europe

Transportation mix used in Europe are majorly road and railways but to some location Benetton also
used ships to transport the goods. According to our research and analysing some cases and articles it
is seen that Benetton gives utmost priority to Railway and then to road because of environment
sustainability.

Outside Europe

Here the scenario changes completely because Benetton has to export to different continents and
the main objective is “Products should reach the retail outlets around the globe as soon as possible
because it is a fast fashion product”. Hence it has to be airfreighted.

Discuss 3PL.
Future Supply Chain Solutions Limited (BSE: 540798, NSE: FSC), formed a partnership with India's
leading third-party supply chain solutions specialist and logistics service provider, signed a multi-year
agreement with Benetton India Private Limited (Benetton India) to provide Contract and Express
Logistics services. As per the agreement, FSC will manage Benetton India's supply chain
requirements from a large built-to-suit, multi-customer distribution centre in North India. This will
cater to its pan India requirements, including reverse logistics. This is in addition to the Express
Logistics services that FSC has been offering to Benetton India for the past few years.

Commenting on the signing of Benetton India as a client, Mr. Mayur Toshniwal, Managing Director,
Future Supply Chain said "We are delighted to announce our multi-year partnership with such a
reputed global fashion brand as United Colors of Benetton. We have been entrusted to manage their
supply chain requirements in India and driven by our extensive experience in the fashion & lifestyle
category, we aim to bring several supply chain efficiencies leading to better inventory management
and optimum warehouse operations."

Benetton believes in calling it a partnership rather than third party logistics so like India they have
formed partnership in all countries with third party logistics companies.

Benetton operates using a blend of in-house expertise and outsourced resources throughout the
value chain. Benetton was involved in partnership arrangements (nothing more than a version of the
Italian extended family) long before the term strategic alliance became fashionable. Manufacturing,
for example, is carried out with the help of 450 subcontractors.

The third-party manufacturers receive production planning support, technical assistance and quality
control support. It is not unusual for Benetton to provide financial assistance to encourage
contractors to equip with specialized machinery for special effects and to have' Benetton help
financially when the equipment is no longer required.

Benetton relies on third party on following aspects -

 Garment assembly, finishing: no scale economies possible, large high-cost labour force
needed which could reduce flexibility: outsource to sub-contractors.
 International transportation: scale economies not possible with Benetton volumes:
outsource to international carriers.
 Global communications network: scale economies not possible with Benetton volumes:
outsource to GE Information Systems.
 Retail stores: high capital needed, potential labour cost and motivation problems, high
customer service levels needed: outsource to licensees.

Warehouse management

The $50 million distribution centre (DC), is more accurately described as a giant robot. The
storage area alone of the DC measures 170 metres long b 80 metres wide by 20 metres high; a
third of this height is below ground level to minimize the impact on the surrounding
landscape, in keeping with the Benetton concern for the environment. Twenty loading and
unloading bays service the building.

Inbound garments from the production areas arrive below ground level. The garments are
already packed in one of two standard boxes which are barcoded and pre-addressed to
customers. The barcoded cartons are delivered by high-speed conveyors from the receipt bays
to rail-guided transporters in the storage area. Each transporter can transfer up to 24 cartons at
a time to and from the racking. Simultaneous put-away and retrieval occurs to maximize
efficiency.

The storage zone has a capacity of 250,000 boxes sorted randomly. The DC handles 12,000
boxes a day. equivalent to 6,000 consignments a day, representing some 60 million garments
a year.

The high level of automation allows the DC to operate on three shifts with six operators to a
shift. Shipment is directly to one of 6,000 retail stores in 83 countries. Distributors,
wholesalers and regional centres are not used. To achieve high levels of response all exports
are airfreighted.

In India Benetton has following warehouse operation -

Future Supply Chain Solutions Limited (FSC) has announced the inauguration of the
National Distribution Centre of Benetton India Private Limited (Benetton India) at Koka,
Jhajjar, Haryana. FSC, with its proven experience, is now a preferred partner for Benetton
India in streamlining their domestic supply chain and expanding their business into new
markets.

The built-to-suit warehouse spans 1,12,000 sq. ft. and serves as the primary distribution
centre for Benetton India Pvt. Ltd. It has the capacity to handle an inventory volume of
over 4mn and more than 1,00,000 SKUs, as well as various value-added services like
product kitting, customized packaging and returns management. It is equipped with
shelving/racking storage, advanced material handling equipment, dock levellers,
packaging machines and a full back-up generator.

Furthermore, the facility represents FSC’s commitment to sustainability and features an

efficient 50kW Solar Power Plant, sky lighting, and two Sewage Treatment Plants for
enabling reuse of contaminated water.
Quality policies deployed in distribution/logistics.

 Intermodal transportation
In 2020, the Group confirmed its commitment to intermodal transportation and, in general,
to the use of the least environmentally impacting means of transportation, with a view to
reducing CO2 emissions linked to logistics and distribution activities. In particular, preference
was given to rail transportation (with a low polluting impact) over cargo flights.

 Methane
In 2020, Benetton Group made use of methane-fuelled vehicles in inbound flow of
merchandise from the ports of Genoa, La Spezia, Trieste and Venice to Castrette, reaching
10% of the total volume. This resulted in 10-15% fewer CO2 emissions compared to diesel-
powered vehicles.

 Saturation of transportation
Shipping at Benetton includes loading vehicles with loose packages and no use of pallets.
This method optimises the loading space and truck saturation. The result is that one truck in
five is eliminated from the road.
 

 
 Zara always strive to keep sustainability as a guiding star. For this reason, in the last year
they have, where possible, replaced air transport with rail and road transport, with a low
polluting impact. In addition, they have eliminated one out of five trucks from the
road needed to transport our goods to Italy and Europe.