Louis Vuitton
Louis Vuitton was founded in 1854 and opened its first workshop in 1860 in the Paris suburb of Aspires. Work at Aspires is still done by hand, and many current models are closely based on the original designs that made Vuitton a fashion icon. Workers specialize in making certain types of bags, and 20 to 30 craftsmen can take up to 8 days to complete one tote! That level of precision and care has been encouraged to maintain the traditional appeal of the brand.
Maintaining that cach involves creating high demand, frequent use of limited-edition products, and suppressing supply levels on their standard product lines. Vuitton sells its luggage at prices from roughly $2,000 to $4,000 per piece and has never put its products on sale. In the 1970s, the single factory in Aspires could not meet the increased demands of globalization, so Vuitton began adding new factories every other year. As a result of major pushes in marketing, store-opening, and expansion into the U.S. and Japan, Vuitton experienced annual sales increases from $760 million in 1990 to $3.7 billion in 2000.
Vuitton’s current production system, however, is slow and makes it difficult to adjust to increased demand when certain items become hot. In spite of new factories and production schedules, the production process itself still needed to change to keep up with demand. In 2005, Vuitton introduced its new Pegase plan, which was based on teamwork and production line models used by Japanese automakers. Previously under Vuitton’s production process, each task involved in making an item was done by a single craftsman, who would pass the item along to the next station after he had completed his task.
Under Pegase, workers are divided into teams of 6 to 12 craftsmen, with each worker trained in several specific tasks. Tasks are divided so that each set takes about the same amount of time. Each team is given a single batch of items to work on, and their work stations are arranged in U-shaped clusters, eliminating the time it took to move items between workstations. Previously, it took 8 days to complete a single bag, like the Reade tote, but now it takes only one.
Furthermore, Vuitton can now get new batches into its boutiques in six weeks, half the time it used to take. Worker versatility makes it much easier to switch teams to new projects if an item becomes hot, and additional training has improved product troubleshooting as well. Customer returns at Vuitton’s Issoudun and Conde? plants have dropped by two thirds since the new production system has been in place.
What would ready-to-wear clothing lines be an example of?
a. batch production
b. make-to-stock operations
c. make-to-order operations
d. job shops
e. just-in-time inventory