The Groundhog's New Clothes

Beauti phils customers have been willing to pay more

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Unformatted text preview: awney itself. Beauti-Phil’s customers have been willing to pay more for their products than they would for foreign competitors presumably because they feel like they are supporting their friends by purchasing from the Franklins. BeautiPhil has also been able to thrive due to its high quality products and short lead times for orders, which give the firm additional competitive advantages over its foreign counterparts. Beauti-Phil’s production process is like that of a mass-customized job shop in the spirit of Benetton’s postponement strategy. In advance of orders, they produce neutral (colorless) t-shirts and golf shirts in sizes proportional to the size breakdown of an average order1. Once an order is received, the shirts are dyed the appropriate color, and the logo and text are silkscreened or 1 Andel, Tom. 2003. Custom-made supply chains. Supply Chain Technology News. December / January. http://www.newview.com/newsevents/articles/2003/2003_01.pdf Drake et al. 2004 Georgia Institute of Technology 2 The Groundhog’s New Clothes embroidered as desired. This postponement strategy allows Beauti-Phil to deliver its orders within short lead times without requiring a massive amount of work-in-process inventory for each garment color. Beauti-Phil uses a quantity discount pricing policy for its products as shown in Table 1. In order to encourage its customers to order larger quantities of goods, they offer a lower per unit price for larger orders. Table 1: Beauti-Phil Apparel Pricing Policy T-Shirts Golf Shirts Less than 24 $14.00 each $22.00 each 24—50 $13.50 each $21.00 each 50—100 $12.50 each $20.00 each 100—1,000 $11.00 each $18.00 each More than 1,000 $10.00 each $16.00 each The Franklins openly acknowledge the importance of their workforce in Beauti-Phil’s success in the past. They have actively sought suggestions and innovative ideas from the production workers about ways to improve the production process and their overall job satisfaction. Many of these suggestions have been implemented to everyone’s mutual benefit. Steve and Eileen consider many of the workers to be part of their extended family. They have shared many lunches and dinners with their employees, getting to know them through honest, authentic conversations about everything from kids to local politi...
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