Benetton's 'Dual Supply Chain' System

In 2004, Italy based clothing company Benetton SpA (Benetton) formally adopted the 'Dual Supply Chain' system.

The new system was a top down, pull driven supply chain, which enabled the company to bring in more products on to the store shelves more often, in accordance with the growing demands of the customers and changing fashion trends.

Through this system, Benetton was able to delocalize some of the production to countries, where the production costs were low compared to the European countries, where Benetton had earlier produced all its products.

The company's success was attributed to techniques like postponement, where the dyeing of the final product was postponed as long as possible to dye it in the colors that were in vogue during the season. By the early 2000s, Benetton had to face tough times; its new collections were limited to just two a year - not enough to sustain the interest of the consumers, who were getting used to fast fashion - fashion that changed every week - provided by the likes of Zara¹, H&M² and Gap³. Benetton recorded losses in 2002, mainly due to limited collections, and growing competition. Under the 'Dual Supply Chain' system, the main tasks like design, planning and coordination were carried out in Italy, while production was carried out in locations in Europe and Asia.