As we dive further into operations planning and scheduling, I thought it would be interesting to research companies that are facing back orders, and what the causes maybe. I surprisingly had difficulty finding companies as such, but eventually I fell upon a small denim company named Hiut Denim, based in England. As you can see from the title of the article, Hiut has a back order waiting list for three months after Meghan Markle, who will soon become a member of the British royal family upon marriage to Prince Harry, was seen wearing the brand’s jeans for an official visit to Cardiff with Prince Harry in January of 2018.
Markle has created what is known as the “Meghan Effect”, quite similar to the “Kate Effect” or the “Amazon Effect”, by disrupting the fashion industry. Hiut Denim is located in Cardigan, Wales and due to its low local population of 4,000 inhabitants and little exposure, they are able to operate under a job process with low volume, low standardization, complexity, and detail. Because of their past experience and understanding of the operations, the owners of Hiut Denim know how to create their sales and operations plans. They understand how to achieve their outputs from their inputs, they have created the master schedule, including their master production schedule which details the number of end items to be produced in a specified period of time. But they could have never planned for the surprise they received in January. Unable to handle this unexpected increase in demand, Hiut has fallen behind and must now move into a larger facility and hire more workers to produce more jeans in a shorter period of time.
The “Meghan Effect” demonstrates how important it is for businesses to understand their sales and operations plans. Because of the job process structure, Hiut has a smaller safety stock than other stores with standardized processes would. Each jean is made with great detail given not only to the waist, but also the length of the leg, the pockets, and the overall fit and flexibility. This specialized process, where jeans are made to order, makes it difficult for a company to prepare themselves for the future. However, going forward I believe that Hiut should continue to increase its production and inventory on-hand, but also take the time to figure out forecasted demand. By doing so, they can estimate whether or not their revenue will outweigh the costs they are accruing to increase their operations. The “Meghan Effect” will soon move onto another store and completely leave Hiut in the dust, if Hiut Denim allows it to. It is important that businesses recognize how to use this exposure and continue to run with it. Hiut Denim needs to keep the momentum of high sales by continuing to work with high profile celebrities now that they have the spotlight. This is a new strategy they will need to adopt in order to maintain its recent success.
Now I would like to ask you, what other ways do you think Hiut Denim could remain successful? Have you seen this happen elsewhere in the world?