JIT INVENTORY MANAGEMENT
MAJOR COMMITMENT
Implement Just-In-Time inventory management to produce goods as they are needed, relying on supply chain efficiency to respond quickly to demand shortages.
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STRATEGIC RECOMMENDATIONS
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Leverage D&G's established network of suppliers and electronic information network to accurately forecast demand and shorten production times.
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Through these newfound efficiencies, mitigate upstream and downstream waste, including the reduction of excess inventory at the end of each product cycle, and the prevention of unnecessary materials waste in the production process.
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A sustainable method of protecting D&G's exclusive brand image as a luxury retailer without wasting and burning excess supply.
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PROJECTED IMPACT
People
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Engagement with existing suppliers and producers allows for the continuation of strong relationships.
Planet
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Environmental benefits through waste reduction, energy efficiency and supply chain optimisation.
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Profit
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Cost savings identified through responsible inventory management.
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Limiting excess supply available for resale at lower price points.
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Timeline
Q3 2022: Sustainability Committee begin implementation
Q1 2025: JIT inventory management fully implemented (14 months = time of a standard concept to consumer cycle)
ONLINE TRANSITION
MAJOR COMMITMENT
Scaling back brick-and-mortar and only maintaining flagship stores in target markets. Target new markets with dedicated regional presence.
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STRATEGIC RECOMMENDATION
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D&G can reduce costs and emissions by joining the "digital sprint" and closing down smaller brick-and-mortar stores which are demonstrating reduced profitability and maintaining only large flagship stores.
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Targeting new markets and revamp digital presence with customised digital offerings: New markets of interest include growing-income South East Asian countries such as Indonesia and the Philippines, which currently have no physical locations – making them prime opportunities for digital targeting.
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PROJECTED IMPACT
People
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Increase the number of knowledge-based jobs within the company, sharpening human capital.
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Allow retail employees access to the Sustainability Academy and provide adequate compensation packages.​
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Planet
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Decrease projected resources usage and carbon footprint by choosing digital expansion vs physical.
Profit
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Significant cost savings from closing physical stores while still maintaining luxury price points.
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Risk management: the ongoing COVID-19 pandemic is forcing consumers to increasingly rely on online retail offerings, and the trend is projected to outlive the pandemic.
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Increase resilience to economic shocks in emerging markets as online infrastructure requires less CAPEX and poses fewer risks than physical expansion.
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Timeline
Q1 2022: Begin online transition with profitability analysis of existing physical stores.
Q4 2025: Digital expansion to a new market.
ENERGY EFFICIENCY
MAJOR COMMITMENT
D&G should strive for energy efficiency across all stakeholders in their supply chain; including reduced water, electricity, and gas usage.
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STRATEGIC RECOMMENDATIONS
In owned or rented buildings, D&G should adhere to an energy-efficient framework which aims to reduce the overall energy consumption in each location.
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This includes small but effective adjustments such as green lightbulbs, water management, and proper heating management.
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With the adoption of JIT inventory management, less stock will need to be stored in D&G locations, providing further savings.
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Advocate that all suppliers adopt similar methods of reducing their overall footprint, highlighting the potential benefits that can arise through this strategy.
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Move the production of non-core components (e.g. primary packing) to the region where the items will be sold to squeeze transportation costs out of the financial product
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A holistic review of supply keychains by D&G to reveal shipping breakpoints and optimize the design of their production process, location footprint, transportation, and inventory.
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PROJECTED IMPACT
People
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Favour local workforces due to close proximity within the supply chain
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Allow for greater production specialisation within each retail market, with the added benefit of improved efficiencies
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Greater adherence to international labour standards, which can improve brand image and local standing
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Planet
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Inherent environmental benefits from improving energy efficiency
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Potential to mitigate the majority of the industry's emissions with improvements of upstream energy efficiency standards.
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Internal advocacy has the potential to reduce a firm’s footprint by 20%. Further, as an influential retailer within the luxury segment, D&G has the potential to extend this advocacy to its suppliers and producers and should do so to maximise beneficial environmental impact.
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Profit
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Cost savings. Alongside other adjustments made to D&Gs supply chain, the majority of earnings benefits will come in the form of cost savings, using a leaner and more efficient approach to operations.
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Both simple short-term and more complex long-term adjustments have the potential to significantly improve profitability for D&G
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Shortening distances between stops in the supply chain in particular has potential to reduce costs and improve efficiencies
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Timeline
Q3 2021: Energy efficiency assessment starts
Q1 2022: Sustainabiltlity Committee assumes responsibility for progressing the energy efficiency strategy
Q3 2025: Energy efficiency practices in all offices and company buildings
