THE STUDY OF INTER-ORGANIZATIONAL BUSINESS PROCESS REENGINEERING IN THE APPAREL INDUSTRY

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1 THE STUDY OF INTER-ORGANIZATIONAL BUSINESS PROCESS REENGINEERING IN THE APPAREL INDUSTRY -- Development Strategy of Small Medium Sized Trading Company By TANG Qin Submitted in Fulfillment of the Requirements for the Degree of Doctor of Business Administration November 2006

Trading Company By TANG Qin Submitted in Fulfillment of the

2 Abstract Since Michael Hammer and James Champ s Reengineering The Corporation - A Manifesto for Business Revolution was published in 1993, Business Process Reengineering (BPR) has become a widely discussed topic not only among the academics but also among the industrial world where many enterprises have started putting through such concept into practice. However, during the last few years, most of the BPR studies focused only on the cases that took place internally within organizations, while this research will concentrate on the BPR practice at an industrial level, i.e. Business Process Reengineering between the cooperating organizations within the same industry. This research has taken China s Small Medium Sized apparel trading companies as its study subject, conducted a real diagnosis research on the Sino-Japan apparel enterprise network under the general setting of Chinese apparel industry, pointed out the necessities of BPR in this industry and suggested the ideal business model for reengineering process. Finally, it will give recommendations on the strategic development of China s Small Medium Sized apparel trading companies, and also provide suggestions on related management improvement issues. Keywords: Inter-organizational Business Process Reengineering, Industrial cluster, Apparel industry

However, during the last few years, most of the BPR studies focused only on the cases that took place internally within organizations, while this research will concentrate on the BPR practice at an

3 TABLE OF CONTENTS CHAPTER 1 INTRODUCTION 1.1 RATIONALE OF BPR AND INTER-ORGANIZATIONAL BPR 1.2 RESEARCH OBJECTIVES AND TOPICS Research subject small & medium sized apparel trading companies Aim and objectives of the research 1.3 SCOPE AND OUTLINE OF THE STUDY CHAPTER 2 LITERATUR E REVIEW 2.1. BUSINESS PROCESS Definitions of Business Process Different categories of Business Process 2.2 IMPACTS OF E-BUSINESS TO BUSINESS PROCESS Supply chain management Procurement Distribution channels and logistics 2.3 BUSINESS PROCESS REENGINEERING Background The definition of BPR Connotation and Essential of BPR The classification of BPR Supply Chain based BPR Method of BPR Limits of internal BPR 2.4 INTER-ORGANIZATIONAL BPR Developments in Inter-organizational BPR theories Connotation and competitive cooperation model of Inter-organization BPR 2.5 INDUSTRIAL CLUSTER Concept and classification of Industry Cluster Characteristics of Industrial Cluster Industrial Cluster Entrepreneur network Evolution of industrial cluster theory Industrial cluster and the Value Chain Industrial Cluster and Supply chain Management External linkages of industrial cluster 2.6 LIMITATION OF THE LITERATURES CHAPTER 3 RESEARCH DESIGN AND METHODOLOGY 3.1 INTRODUCTION 3.2 THE CHOICE OF CASE STUDY 3.3 METHODOLOGY FRAMEWORK Data collection and sources

2 IMPACTS OF E-BUSINESS TO BUSINESS PROCESS 2.2.1 Supply chain management 2.2.2 Procurement 2.2.3 Distribution channels and logistics 2.3 BUSINESS PROCESS REENGINEERING 2.3.1 Background 2.3.2 The definition of BPR 2.

4 3.3.2 DATA ANALYSIS 3.4 LIMITATIONS OF THE METHODOLOGY CHAPTER 4 BACKGROUND STUDY 4.1 CHINESE TEXTILE AND APPAREL INDUSTRY Development of Chinese textile and apparel industry Challenges to Chinese textile and apparel industry Chinese textile and apparel industry cluster Recent developments in Chinese apparel and textile industry cluster 4.2 SINO-JAPAN APPAREL TRADING MODEL Overview of apparel export industry The development of Sino-Japan apparel trading Sino-Japan Apparel trading model 4.4 EVOLUTION OF CHINESE APPAREL TRADING SMES Development of China s trading SMEs Trading SMEs business management 4.5 CHALLENGES OF NEW BUSINESS ENVIRONMENT Unstable product resources Loosing existing customers Lack of market development capability High deficit and lack of capitals CHAPTER 5 CASE ANALY SIS 5.1 INTRODUCTION 5.2 UNIQLO INTERNAL BPR UNIQLO Fast Retailing company background UNIQLO and SPA model UNIQLO BPR 5.3 SME INTER-ORGANIZATIONAL BPR Shanghai Eswell Enterprise (SEE) Shanghai Hengyu Clothing Co., Ltd SEE initiated the BPR practice CHAPTER 6 FINDINGS AND IMPLICATIONS 6.1 INTRODUCTION 6.2 IMPORTANT ISSUES IN SUPPLY CHAIN BASED BPR 6.3 MULTINATIONAL PRODUCTION SYSTEM AND INDUSTRIAL CLUSTERS Multinational production system The interaction between multinational production system and industrial cluster The relations between multinational supply chain and industrial clusters 6.4 ANALYSIS OF INTER-ORGANIZATIONAL BPR DRIVERS AND ENABLERS Inter-organizational BPR Drivers

2.2 The development of Sino-Japan apparel trading 4.2.3 Sino-Japan Apparel trading model 4.4 EVOLUTION OF CHINESE APPAREL TRADING SMES 4.4.1 Development of China s trading SMEs 4.4.2 Trading SMEs business management 4.

5 6.4.2 Inter-organizational BPR Enablers CHAPTER 7 RECOMMENDATIONS AND CONCLUSION 7.1 IMPLICATIONS FOR MANAGERIAL PRACTICE 7.2 RECOMMENDATIONS TO SMES Supply chain cooperation Trading SMEs strategy 7.3 LIMITATIONS OF THE STUDY 7.4 IMPLICATIONS FOR FUTURE RESEARCH 7.5 CONCLUSION REFERENCES

2 RECOMMENDATIONS TO SMES 7.2.1 Supply chain cooperation 7.2.2 Trading SMEs strategy 7.

6 List of Figures Page Figure 1.1 Focus of study 6 Figure 1.2 Frame work of study 6 Figure 2.1 Classification of Business Process 9 Figure 2.2 Business Process types and productions system 10 Figure 2.3 BPR transformation 15 Figure 2.4 SCM sharing model 19 Figure 2.5 Supply Chain Sharing model 2 20 Figure 2.6 Supply Chain competitions cooperation model 25 Figure 2.7 Influences of external environment to regulating structure 32 Figure 2.8 The value chain 38 Figure 2.9 Networks or clusters? 40 Figure Export to Japan 52 Figure 5.1 UNIQLO traditional model 60 Figure 5.2 UNIQLO internal BPR 61 Figure 5.3 UNIQLO Profitability Figure 5.4 Export and profit value since company establishment 63 Figure 5.5 Traditional Business Model of SEE 63 Figure 5.6 SEE model 64 Figure 5.7 Hengyu in the Sino-Japan apparel supply chain 65 Figure 5.8 SME supply chain model 66 Figure 5.9 E-business based model 67 Figure 5.10 See Export profit 69 Figure 5.11 Optimized Supply chain and communication model 70 Figure. 6.1 A comparison between market and network economy model 74 Figure 6.2 Industrial clusters local information flow and external 78 Figure 6.3 The five forces model of competition 80 Figure 6.4 Risks of lag behind fashion and Increased inventory 83 Figure 6.5 Traditional production process 84 Figure 6.6 New process 85 Figure 6.7 Acer Fast Food Model 86 Figure 7.1 Information Hub on supply chain 89

7 Influences of external environment to regulating structure 32 Figure 2.8 The value chain 38 Figure 2.9 Networks or clusters? 40 Figure 4.1 1981-2001 Export to Japan 52 Figure 5.

FOUNDATION DIPLOMA IN Purchasing & Merchandising Operations

FOUNDATION DIPLOMA IN Purchasing & Merchandising Operations THE HONG KONG MANAGEMENT ASSOCIATION part-time 8 14 2 1 (HKMA) Spoon Feed, (Responsibility) (Discipline) (Initiative) (World Vision) Value - Added Learning Opportunity 2 (fashion) (apparel) (electronics)