Levi Strauss Case Study
Conceptually, four types of customization — collaborative, adaptive, cosmetic and transparent — are possible (Geekie, Section 4). Both Levi Strauss and Dell Computers’ mass customization offerings are based on the collaborative model of customization, where customers and manufacturers collaborate on product specifications prior to production. However, Dell’s delivery lead times are much shorter owing to the fact that Dell restricts its computers to several key modules, within which it allows a wide choice of customer specifications. Thus, Dell is able to put together a PC in 4 minutes, with an additional 90 minutes needed to load the software, which is where most of the customization comes in (The Economist, 2001, para 11). Levi’s, on the other hand, has a longer lead time owing to its offer of customization on several hundreds of patterns and combinations thereof. In addition, ordering a pair of customized jeans still requires the customer to get their measurements taken at a Levi store, whereas a Dell customer can specify his or her requirements over the phone or Internet. Finally, and perhaps most important, the Dell model has proven effective because of its ability to keep component inventories to a minimum, develop supplier proximity and agility, and develop a customized supply chain (Christopher & Towill, p. 6). As against this, Levi Strauss has been compelled to recently suspend its “Original Spin” operations since it has been unable to compete with lower priced brands manufactured offshore and has yet to develop a model where it can offer customization successfully through an offshore contractor (Bacheldor & Whiting, 2004, para 6). It can be inferred from this that Levi Strauss, unlike Dell, was unable to successfully develop a cost effective, customized manufacturing and supply chain.
2. Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network. These processes include production, customer, and internal or management focused business processes (Mesenbourg, Section 2). It is evident from this definition that Levi Strauss’s manufacturing and customer focused business processes are conducted electronically. For instance, the company’s mass customization depends on an electronic data base to match and suggest a pair of fitting jeans for customers to try on. Similarly, a customer’s measurements and style specifications are transmitted from a retailer to a manufacturing point through Levi’s “Original Spin” Web server. Finally, the company relies on a computerized data base to store customer measurements and style preferences, to be later identified with the help of a bar code sewed on to the waistband of jeans already purchased. Thus, Levi Strauss is clearly in e-business, especially where its customized offerings are concerned.
3. The fashion business depends on the popularity of its designs for success. However, within this basic parameter, individual comfort with design and fit are of paramount importance. Indeed, this is where touch, look-and-feel, personalized service, and customization have an important role to play. As such, it is unlikely that e-commerce will ever be able to fully substitute the offline shopping experience though it will definitely cannibalize, if not replace, catalogue sales. However, e-commerce aside, e-business will continue to grow in significance as players in the fashion industry learn to harness the power of Information Technology to mass customize their products and build ongoing customer relationships. E-business will also have an increasingly important role in production, supply chain, distribution and retail management processes where it will be seen as key to reducing production and inventory costs.
Bacheldor, B., & Whiting, R. (2004, September 6). Closer Connections. Information Week. Retrieved March 15, 2005: http://www.informationweek.com/showArticle.jhtml?articleID=46800222
Christopher, M., & Towill, D.R. Supply chain migration from lean and functional to agile and customized. Retrieved March 15, 2005: http://www.me.berkeley.edu/ME101/HW%20Solutions/HW1Articles.pdf.
Geekie, Dr. G. Electronic Commerce and Inter-Business Relationships. Retrieved March 15, 2005: http://www.hlss.mmu.ac.uk/infocomms/people/gg/jasis98.doc
Mesenbourg, T.L. Measuring Electronic Business: Definitions, Underlying Concepts, and Measurement Plans. U.S. Census Bureau. Retrieved March 15, 2005: http://www.census.gov/epcd/www/ebusines.htm#definitions
The Economist. (2001, July 12). Mass customisation: A long march. Economist.com Retrieved March 15, 2005: http://www.economist.com/research/backgrounders/displaystory.cfm?story_id=691227
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