How should croc's plan its production and inventory?

Answer 1

Snyder made some key moves that led Crocs to the big success:

* The purchase of Finproject and renaming it 'Foam design' which meant owning the formula for proprietary resin 'croslite' that gave the shoes their unique properties of extreme comfort and odor resistance.

* The encouragement of the company to think big.

* Launching the product worldwide, he wanted a sustainable brand with a funky strange look and his objective was to launch the world pretty much at once.

* The sales efforts: participating in trade shows in every industry that could benefit from the product (garden shows, boat shows...), as the presence in a wide range of events (concerts, festivals...). These efforts intended to increase awareness of the potential users about the product uniqueness and benefits.

* The development of a non-traditional supply chain that provided a competitive advantage. The company could fill new orders within the season, quickly manufacturing and shipping new products to the retail stores.

* Bringing the global supply chain in-house, because contractors outside of Asia weren't ready to adopt the company's new supply chain model, Snyder developed co-owned manufacturing operations in all of Mexico, Italy, Brazil and India and only kept the contract manufacturers that could meet Crocs needs for flexibility and responsiveness.

* Having the compounding done in Italy led to the supply chain inefficiency so he moved the compounding in-house so he can have more control over the production and time as he will protect the IP for Croslite compound.

* Crocs changed the warehousing model from contract manufacturers in Colorado to company own warehousing which allows in specific cases direct shipments.

Crocs was planning to control all of the Asian order activities he wanted to be sure the whole activities concerning warehousing were done in the best possible way and knowing that no one will do it perfectly as Crocs by itself, they've decided to adopt this mission.

And after Crocs growth they replaced the home grown database system with a more suitable ERP system which was bought online. This allowed a global view of the inventory and all the required information for the planning system which eliminates the possibility of excess inventory.

To decide on the amount of products to be manufactured concerning each model, Crocs had to analyze the retailers pre-books and the model expected sales. In fact Crocs kept total manufacturing capacity at about 1 million pairs per month beyond the actual production plan.

All the moves done by Snyder were to increase Crocs profit margin. In order to achieve this objective, he has adopted a strategy that boosts sales (he launched worldwide, he diversified to many product lines, he created the replenishment system) and minimizes costs ( acquisition of the proprietary Croslite, bringing the compounding in-house, adding warehousing operations to each factory, new ERP system).