Benetton

Founded by the Benetton family in the 1960s, Benetton is one of the largest garment retailers, with stores which bear its name located in almost all parts of the world.. It could be interesting to analyse the technical development of such an important company going through the different theories of technology.

Concerning the technological approach to the activity that Benetton carries on inside its group, the Company adopted a not fully integrated system: not all the activities, namely the technologies, are held "in-house".

First of all Benetton purchase the principal raw materials (wool, raw cotton, yarn, cloth and denim fabrics) from its supply chain. Even if the Company doesn't seek formal, long-term contracts with its suppliers, it has not experienced interruptions in supply that have had material impact on its activity.

From 2005 the textile segment has been made up of 2 companies, transforming raw materials into fabrics, from spinning to finishing and ennobling. Handicraft product quality and technological research development characterize this business segment which works with internationally recognized names of the apparel and fashion industry.

Benetton does manufacture much of its production itself, producing in its own factory, but on its supply side the Company also relies heavily on 'contractors'. Contractors are owned or part-owned companies that provide services to the Benetton factories by knitting and assembling Benetton's garments. These contractors, in turn, use the services of sub-contractors to perform some of the manufacturing tasks. At the moment Benetton has 22 factories operating, 15 of which are located in Italy and one each in Spain, Croatia, India, Portugal, Tunisia, Slovakia and Hungary. The Company utilizes almost 900 subcontractors in Italy to perform one or more steps in the production process.

The Company's manufacturing processes utilize modern technology and automatization to reduce costs and accelerate its execution. In addition the "contractor system" allows Benetton to keep its production costs significantly below some of its competitors because the small supply companies have lower costs themselves. Secondly, Benetton is able to allay the effects of the demand fluctuations: in fact the Company can adjust its supply chain, absorbing so all the changes without feeling the full effect.

Before the production processes, Benetton performs an exceptional product design through a staff of 300 designers from all over the world, that creates the collections for the casual brands United Colors of Benetton, Undercolors, Sisley and for Playlife leisure wear and Killer Loop streetwear brands. Benetton aims to offer products characterized by their creative use of exclusive designs.

The Group produces two main collections (spring/summer and fall/winter) each year for all its labels. The design team is also engaged in researching new materials and creating new lines for different targets (children, men, women, expectant mothers), offering them not only practical and modern styles but also maximum comfort. The result is the latest trends in design and a rich output of many models a year which are realised with computer assisted design systems fully integrated with the rest of the company's production phases.

On the demand side of the chain, Benetton operates through a number of agents, each of whom is responsible for their own geographical area. Indeed, many of the agents actually own some stores in their area. Products are shipped from Italy to the individual stores where they are often put directly onto the shelves.

Benetton has a retail network of 5,000 contemporary stores around the world. The Benetton stores carry complete collections, as well as a wide selection of accessories, offering a full range of Benetton style and quality.

Benetton also has a direct control of the logistics phase investing heavily in automating logistics processes in order to achieve total integration within the production cycle, from customer orders to packing and delivery.

The company has a particular way to have relationship between customers and suppliers. Part of the reason for its success has been the way it has organized both the supply side and the demand side of its supply chain.

The Benetton Group designs, manufactures and markets distinctive apparel for men, women and children with a global image and analysis the offer of his business and send this information for all its factories. This action allow more flexibility for Benetton with the complex system of technologies from its suppliers and a better purchasing for its customers, because they could find a more range of options about the models, kind and colours of clothes they prefer.

Let's turn to technology decisions of the Benetton. We will view three major tasks that are faced by company concerning technology, which are to acquire the technologies that the company needs for its operations and its offerings, to fully exploit these expensively acquired technologies in the company's own offerings or by other means and to manage these two processes effectively in a complex organization.

Firstly we'll take up acquire technology of Benetton. On our opinion Benetton keeps a 'making technology' approach. Indeed, Benetton 'makes' its own