ICT_Kapaln (1).docx

SECURITY CLASSIFICATION

Table of Content Task 1 Part 2 Abstract 1. Introduction 2. Epistemology possession view vs practice View. 3. How has the company managed innovation? 4. Relationship Management References

Task 2 Part 2 Abstract 1. Introduction 2. How data is used in i n Uniqlo Exploitation/ Exploration innovation 3. What information Communication Technology used in the company? 4. Factors influencing Supply chain relationship. References

1 SECURITY CLASSIFICATION

SECURITY CLASSIFICATION Task 1 Part 2 Abstract

The main purpose of this study is to analyse the remarkable context within the evolution of the paradigm innovation in fashion product development, in the case of UNIQLO which was created by Fast Retailing Corp in 1998. The key theme hereby concerns the comparison of knowledge as possession perspective with practice perspective adopted in Uniqlo. Furthermore, how Uniqlo had manage their innovation within the organization in providing values in to the company. Relationship management is also greatly discuss in the following report on how they build the relationship with the external as well as internal parties. This should impart a few promising research perspectives regarding their innovative model of unchallenged value creation, strong market competitiveness, and sustainable

1. Introduction

Uniqlo was founded in 1949 by Tadashi Yanai. The initial humble clothing shop had now turn into a designer and worldwide chain of fashion retailer. It has since become a prominent brand in the global market. (Fast Retailing, 2013)

Being one of the most dominant fashion retailers, Uniqlo had been the lead in reshaping the Japanese market. Amongst its innovations, the most prominent strategy

was its

transformation of fashion apparel goods that entailed a whole re-categorisation of market, and new business practice in distribution, new product development.


SECURITY CLASSIFICATION 2. Epistemology possession view vs practice View.

Knowledge has been widely debated by scholars for decades. Since then, it has been studied more prominently in our current age. Some researchers argue that knowledge is both explicit and tacit, which is imparted to individuals or groups depending on how they make use of it. However, it is not implied that the individual would know what to do with the knowledge he possesses. Scholars have argued that knowledge will only become useful when individuals and groups communicate and act on it. Accordingly, knowledge is classified as a set of data and information which have been stored and transferred between people and organization. Cook & Brown, 1999, subsequently, argued that the application of tacit and explicit knowledge is the comparison of knowledge as an epistemology of possession view and an epistemology of practice view.

Epistemology of possession view refers to knowledge as taci t information which an individual possesses based on their personal experience. Sometimes, it is highly context specific and has a personal quality which is hard to formalize. (Nonaka, 1994) It further treats knowledge as explicit knowledge; information can be “codified” or penned down and is highly transmittable in formal, systematic languages that may include facts, axiomatic propositions, and symbol. (Kogut & Zander, 1992) It is passed on to the cognitive system that processes information that is essential for learning the task (Lauchman, Lauchman & Battlefield, 2015). In the case of Uniqlo Co., the knowledge of ‘know how’ is imparted into every employee. Employees gain knowledge through their working experience. It then translates into sets of theory known by the individuals. These forms of tacit theories are sometimes taught to the employees in Uniqlo through their training programme. Uniqlo has a set of training requirements for the newly employed (Cite). After the knowledge is taught, individuals in the company will know the requirements to manage the warehouse properly; however they have difficulties explaining how this could be accomplished. This conflict in “knowwhat” and “know-how” have been proven in Cook and Brown ’s arguments, which further explains the acquisition of knowledge taking place largely independently of conscious attempts to learn and is in the absence of explicit knowledge about what was acquired (Cook & Brown, 1999; Reber, 1993; Spender, 1996, 1994). The explicit knowledge is identified in the company where the individuals are required to pen down their learning during the training workshop and share it with others. Individuals are also


SECURITY CLASSIFICATION encouraged to give feedback through their internal system to higher management on how to improve their work processes and to make the product more effective and efficient.

In contrast, Epistemology of Practice view refers to the context in which the practising of knowledge takes place. Scholars have defined the practice of knowledge is form during social interactions. Cook and Brown explain that knowledge only comes into use when the individual socializes with the world. Knowledge would be accessed through reason and intellect, not through day-to-day experiences and emotions (Dewey, 1938; Damasio, 1994). It was also thought to be fixed rather than fluid and ever evolving through practice (Styhre, 2003) Uniqlo practices knowledge management during sharing sessions conducted daily in their retail outlets. It creates the organisation culture of learning in the wider communities. Uniqlo also encourages their employees to apply practice of knowledge with external parties. On a weekly basis, the individual will be assigned to work with their clients. It is especially important for them to discuss projects that align with their knowledge in providing values back to the organization. Topics like the latest technologies which could be brought back to the company for improvement on the current system are largely discussed during the session.

In conclusion, the differences between Epistemology Possession of knowledge and Practice view views knowledge as a tangible theory or as tools used to be put into action. Uniqlo has provided a space for individuals to gain knowledge and a platform to transmit the information with one another. They have also promoted the practice of knowledge in their daily work.


SECURITY CLASSIFICATION 3. How has the company managed innovation?

Innovation is often combine with strategy. Strategy, after all is a guide and substantiated logic for making choices, while innovation is a massive business which creates novel solutions to important problems. (Priem,Li & Carr, 2012). Uniqlo is an innovative-driven company – it values innovation greatly in their organization culture. The ideology of innovation is greatly promoted by the founder repeatedly; he states his company is not just a fashion company, but instead a technology company.(FastRetailing, 2013) He vows to bring innovation into all aspects of processes within the supply chain of the company. In order to manage innovation, the company has implemented a Specialty store retailer of the Private label Apparel (SPA) model. The SPA model(Cha & Newspaper, 2013) helps to incorporate the entire clothes-making process from product planning, development and manufacturing, distribution and retail, procurement process to inventory management. This business model has adopted the theory from Rothwell’s five generation of innovation (Rothwell et al., 1977); coupling model. It emphasises on the integration of system process and the creation of a network to promote flexibility with speed of development. (Souder, 1991)

Firstly, innovation takes place in the research and design process. The group of employees from the department will conduct research on the latest consumer trend throughout the world and conduct meetings with marketing, purchasing, material development and production teams to identify the designs and materials. Thereafter, the new products will be launched, a


SECURITY CLASSIFICATION year after the creation of design. This long lead time allows Uniqlo to gain competitive advantage in sourcing the correct material and manufacture their product more efficiently.

Secondly, since the designs are planned in advance, Uniqlo is able to negotiate for lowered price unit cost by placing large orders to vendors. This strategy has empowered Uniqlo’s buying power while providing the vendors with benefits. It also ensure the quality is in place at a lower cost since its product line are limited.

Thirdly, Uniqlo has also practice the Nonaka Theory of creating ‘ba’ for the employee to share ideas and to manage innovation within the organization. It has formed a team of expert engineers also known as “Takumi team” (Teresa, 2014) who possess technical skills to support Uniqlo’s 70 contract manufacturing companies. They are tasked to pass on quality practices of efficient processes and productions to the vendors. They are also required to push for faster responsiveness to operational problems, and to make sure their counterparts follow a set of quality standards in its technological clothing lines. (FastRetailing. 2015)

Lastly, Uniqlo’s marketing team will collaborate with the inventory supply team to gain cost effective in inventory storage and maximise the usage of the warehouse. This team will track sales from their system to adjust the production of a specific clothing line tailored to customer’s needs. In return, this helps in minimizing storage costs.


SECURITY CLASSIFICATION In conclusion, Uniqlo has achieve a “technology push” and “demand pull” (Kolodny, 1980, Rothwell et al., 1976) in its SPA models. They have inculcated innovation within their organization well and continue to improve its strategies to keep up with the latest technology.

4. Relationship Management

Business relationship management is the study of the knowledge, skills and competencies that foster a good relationship between an organization and their business partners. ( Ryssel,Ritter & Georg, 2004).

Uniqlo has business relationships with their customers, suppliers and

business partners, like TORAY Co. The company has also widened their global reach by forming business relationships with partnered factories in China, Vietnam, Bangladesh and Indonesia. The building of relationship with partners is very important as they have a direct or indirect impact on the focal company. Uncertainty occurs for Uniqlo in managing the relationship with their partners and is caused by all possible types of interacting factors (Kacabasoglu, Pranhinski and Rober, 2007). In Uniqlo’s context, capacity uncertainty has been identified in the upper supply chain. The supplier is located far away from the company and the uncertainty over the amount the supplier is likely to be able to sell in the future can causes certain risks for Uniqlo (Feng, 2010). Therefore, to overcome these issues, Uniqlo has formed strong partnerships with world-class factories, which share the same philosophy and vision. To overcome the capacity uncertainty, the company has divided their long-term production plan into monthly production volumes. Yoshihiro also said that the company will resolve any issues that surfaces during the production process swiftly and firmly. The wellmaintained relationship will help the partnered factories to grow and they would be able to perfect their techniques and continue to improve their business procedures. Furthermore, through manufacturing and retailing, the controlling of the entire supply chain process helps the material procurement (Fast retailing, 2013). In the process, Uniqlo has built trust and form strategic partnerships with their suppliers. They collaborate with their partners companies to maintain product safety, quality and workplace environment and set a standard of practices between the production partner.



In conclusion, Uniqlo, took several measures to ensure their relationship with the supplier and partners are well manage, Building trust and the ability to resolve conflict are the key success in to maintain all relationship throughout Uniqlo’s Supply chain.


SECURITY CLASSIFICATION Task 2 Part 1 Abstract

The main purpose of this study is to analyze the relationship of to the data exploitation and exploration by Uniqlo. Uniqlo also introduces technology in their business, and enhances customer value. The impact of the system used in enhancing the supply chain performance is also discussed below, relating to how they aligned with corporate strategies. This would shed some light on research perspectives relating to their innovative business model of value creation, market competitiveness and sustainability.

1. Introduction

UNIQLO is an innovation driven company, it aims to enhance customer experience in their retail stores. With the continual exploration of new technology and the well-managed internal data, Uniqlo achieves this in having competitive advantage against their competitors. With strategies and various technologies in place, Uniqlo has improved their supply chain performance aiding employee excellence in daily activities.

2. How data is used in Uniqlo Exploitation/ Exploration innovation

Data exploitation refers to using the master data to gain insight to various methodologies and innovations to enhance business productivity. A company needs to be constantly evolving through analysing data trends. Uniqlo identifies data from customer feedback, individual stores, and geological feed of customers. Data includes the data metrics such as response time, intranet and memory usage. Data exploitation can also be achieve through 3 rd parties such as social media, weather feeds, and other data analytics companies.

All information is equally integral to Uniqlo as it provides different and an overall holistic view of organizational data. The traditional way of managing data is through extraction, transformation and loading processes. Uniqlo needs to understand how to manage these various streams of information, through the usage of data analytics platforms to enhance efficiency.

One platform that can be used is Hadoop, which assists their distribution computing of the data. Another is PostrfreSQL, which assists in maintaining and analysis on their customer


SECURITY CLASSIFICATION database. To continuously evolve and improve their business intelligene, they have to make changes to their current system by automatizing processes. One way is for the various departments in Uniqlo to manage data and Realtime streaming, this increases productivity and improves employee time management.

Data exploratory refers to firm behaviour charact erized by search, discovery, experimentation, risk taking and innovation. (Cheng and Van de Ven 1996, March 1991). Uniqlo exploratory nature focuses on understanding the needs of their customers. Therefore, data is being heavily used in the research & design department. The R&D centre continuously researches on the latest fashions and lifestyles across the globe, constantly looking out for new material. Uniqlo has introduced a concept meeting, held one year in advance before launching a new product. During such occasions, R&D meets with representatives from the various department to acquire their professional inputs and finalize concepts for upcoming seasons. Uniqlo uses data to address needs to detect mistakes, assumption analysis, primary selection of appropriate models and assessing the direction and relationship between data exploration and outcome variables.

To conclude, Uniqlo understands the importance of innovation in data manipulation for their daily operations. Be it exploitation or exploration of the data, Uniqlo involves all employees to learn and technology implementation to aid in their decision making which gives a competitive advantage to the company.



3. What information Communication Technology used in the company?

Uniqlo emphasize the need for innovation to bring about customer value. This can be seen through various efforts in introducing technology into their business model, providing the optimal customer experience.

One of the implementations which Uniqlo has made, is the use of is the mobile technology in their retail outlets. The company worked alongside Casio(Valero,2014) to design a device which runs on the Microsoft Windows embedded handheld operating system. This device allows sales employees to access data from Microsoft SQL server. Casio IT-300 is just like a smartphone but redesigned to include a barcode scanner and a large LCD screen with the purpose of allowing all employee to think like managers. With this device they could gain a managerial perspective by having access to information such as product description and daily stock sales data assisting in their own decisions. In return, employees worldwide can make use of this handheld device to get a real time infor for stocked merchandise and provide customers with the most current inventory and price information. With this launch, employee also benefit from improved workflow, instead of the traditional PC terminal. As quoted from OKADA “Before, line world form as employee awaited to clock in and out at the stores, but we were able to solve this problem with a small, multi-functional terminal that employee carry in their pockets”.( Barillari, 2015)


SECURITY CLASSIFICATION Another introduction of technological enhancement is introduction of mobile apps. In 2012, Uniqlo took initiative to build national awareness of the brand as well as broadcasting their new line of Dry Mesh T-shirts. However, they faced challenges in funding for traditional paid media advertisement. Therefore, at the first campaign, Uniqlo had used Pinterest Mobile application (Firedman, 2008) to gain publicity. One of the main advantages in using Pinterest is usage of application free advertising. Furthermore, to give the customer a better experience of its products, Uniqlo agency created colourful images blocks created with HTML5, Chrome, adobe after effect and Photoshop. They have eliminated hassle for users to repetitively search the application for their ideal products. The Research and development team ensures the series of images, each one over eight thousand pixels tall, would appear in one group. These strategies had proven the effective use of technology and exploitation of mobile applications to gain a marketing advantage over competitors. As quoted by OKADA, “Marketing with digital media has the potential to be innovative just by thinking creatively”. (Indvik, 2012).

To conclude, Uniqlo continually explores using ICT and through innovation, create customer value. Having handheld device in retails store and marketing campaign through Pininterest mobile app enhanced the customer experience.



4. Factors influencing Supply chain relationship.

The impact of system used by Uniqlo greatly affects its supply chain performance. For instance, Uniqlo realized for it to grow and expand domestically, they need to take innovative measures such as partnering with Toray (Belal, SHirahada, Kosake,2012), one of the larger textile producers. However, a potential threat exists in tying both supply chains together. Primarily Toray Factories operates all year round, but traditionally a fashion retail supply chain does not work in the same model. Uniqlo has a seasonal commitment rather than annual. If their range of clothing lacks popularity with consumers, they would simply eliminate production leaving zero excess stock. This process causes waste in their supply chain. To solve this problem, Uniqlo had adopted Toyota “Just In time” procurement methodology by reducing inventory (William, 2015). This works hand in hand with technology collaboration with Toray Company. For example, Uniqlo uses leading edge forecasting system to predict trends, and with the adoption of JIT it allows analysis and reduction of forecasting errors. The information is routed to Toray company instantly through their automated system in both supply chains. Uniqlo’s innovation challenges the old paradigm in managing their supply chain with their partners.

Internally, innovation took place where SPA model (Huang, Kobayashi and Isomura,2014) was introduced to their supply chain. Its enables the company to scale up all processes and is under control of the company management. With help from SPA, Uniqlo is able to control all stages, including pre- and post-production. This ensures cost savings and creates flexibility in production structure since all decisions relating to product planning, design, manufacturing


SECURITY CLASSIFICATION and distribution is centralized at management level. Furthermore, Uniqlo has created R&D centres to reduce lead time. With that, Uniqlo’s supply chain performance is at an all-time high with the aid of both JIT and SPA strategies in place to ensuring linkages of their suppliers and customers, even their own internal employee are well -taken care of.

In conclusion, Uniqlo enhance innovation not just relying on technological advancement but also incorporates strategies such as JIT and SPA models to create values in supply chain management.


ICT_Kapaln (1).docx

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