Coats: Supply Chain Challenges

By: Willy Shih and Adina Wong

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Synopsis: Coats, the largest thread maker in the world, transformed its business to digital colour measurement so that it could respond better to customer demand in the garment industry for rapid product cycles and more fragmented colour choices. Its embrace of digital colour measurement technologies enabled customers to drive ever shorter fulfilment cycles. But the company faced a monumental challenge in forecasting demand for the wide spectrum of colours and thread types, and it had shifted to an ABC inventory classification model for make-to-stock versus make-to-order products. The question at hand was whether it should now consolidate some of its high volume make-to-stock manufacturing in an ultra-low-cost location while leaving the make-to-order products close to the customer.