Week 3 Question 1: TAL & the Value Chain

1. In your opinion, what is TAL's most strategically important innovation with respect to the value chain? (why?)

I personally thought vendor-managed inventory (VMI) was one of TAL's most strategically important innovations with respect to the value chain because inventory management is crucial for any company because poor inventory control may lead to loss in sales/revenue. In the TAL's case, they take the customers' (retailers) point of sales to learn about the sales pattern and to plan for production. Also, when garments were purchased from the retailer, TAL backtracks the sale and produces another garment to replace the one being sold so that retailers can hold less inventory on hand (reducing costs) and TAL can see which products are more profitable than others (because the industry is customer-driven).