Tal Case Study

TAL case – Exemplar (2012)

Question One Chapter 2 of the text outlines two sets of information resources that can create value for organizations: (1) IT assets – (i) IS infrastructure (data, technology, people & processes) and (ii) Information repository; and (2) IT capabilities – (i) technical skills, (ii) IT management skills and (iii) relationship skills (internal spanning/ externally focused). With reference to these categories, explain how TAL’s introduction of Vendor-Managed Inventory (VMI) and Made-to-Measure (MTM) changed the value of its information resources. The introduction of Vendor-Managed Inventory (VMI) has added significant value to TAL’s IT assets. A key benefit this infrastructure enables is a positive influence on their information repository. With access to the retailer’s point-of-sales figures TAL is able to analyse the sales patterns and base their production on this information. It allows extensive planning in regards to their operations, inbound and outbound logistics, allowing TAL to be far better prepared. As a result vendors can reduce their inventory and it allows for shorter replenishment cycles, thus ensuring TAL is an attractive supplier. The IS infrastructure of the VMI also allows for integrated and synchronous processes. The remarkable increase in information allows TAL to work in many areas of the value chain at the same time. They no longer rely on order fed back from the retailers, which forces sequential processes due to lack of preparation time. The use of VMI has also strengthened their IT capabilities, particularly their externally focused company’s relationship skills. These relationships are strengthened through TAL’s ability to be a more efficient supplier. By allowing leaner inventory their retailers’ investment and consequential risk is reduced, thus adding more value to this relationship. This is clearly shown through their partnership with J.C. Penney. This system has even given them the leverage necessary to become...