TAL Apparel Limited Company Visit

Company Background
TAL Apparel Limited is a Hong Kong-based apparel manufacturer. It is one of the world leaders in the production of innovative clothes that combine style, comfort and functionality. TAL specializes in the manufacture of quality men’s and women’s garments for the world’s leading brands. Its partners include Burberry, Callaway, Giordano, JCPenney, etc. TAL is also well-known as a high-tech garment manufacturer since 1980s. It has adapted famous IT systems such as Electronic Data Interchange (EDI), Enterprise Resource Planning (ERP) very early.

Visit Agenda
Visiting TAL is the first out-going activity of our class. Although we have done a case study in the class, it is still a wonderful learning experience as the talk were given by the managers and even the CEO of TAL in Hong Kong. After we arrived TAL, we first were given a lecture-like sharing from a staff of TAL. It’s quite informative as the staff presented with a PowerPoint. The presentation was about some general information about the supply chain and some recent facts and working process of TAL. After the presentation, several staffs started to answer the questions from us. This is actually the best part of the day as our questions were well designed and all of them are something we want to know but may not be easily searchable by us alone. Later on, the CEO of TAL also came to our room and answer our questions. 

After the sharing section, TAL also gave us some sample of their cloths to help us understand what is the difference between products made by other companies and products made by TAL.    
Q & A
1. Since fashion trend changes day by day, how do TAL maintain the efficiency of supply chain management? 

A: The core objective of supply chain management is to add value to the whole supply chain. It is essential to make every partner in the supply chain to achieve the lowest cost possible to obtain higher efficiency. Tal has provided a famous service to its clients called VMI (Vendor-managed inventory). This service effectively helps the clients to cut costs and control inventory, and a shorter replenishment cycles can also be achieved. As long as the partners along a supply chain can cooperate, the efficiency can be guaranteed. 

2. Will TAL further develop an online platform for direct sales to customers? 

A: Actually TAL is trying to avoid to compete directly with their clients so that an online platform for direct sales to customers may not be possible. However, TAL do provides an online platform for their clients so that the clients and reach to TAL in a more convenient way. The online platform provides service such as real time data interchange.  

3. Asides of IT system like ERP, are there any new IT system TAL are using to create competitive advantages to differentiate your services to others? 

A: There are some IT programs that are in-house developed by TAL itself. As its private so that other companies cannot have this technology so that TAL can have a comparative advantage. Those IT systems can help TAL to share the data between its clients.

4. We all know that TAL has been using IT to gain a big success. However, most companies are likely to follow the strategy to succeed by using the similar IT systems. How could you continuously keep the company in business in terms of market share? 

A: It’s common that when one IT system generates remarkable profit for a company, other companies would like to have that system too. However, the main IT system adopted my TAL is self-developed and thus other companies cannot imitate it from TAL’s success.

5. Due to the low profit margin of MTM, why do you still offer this service? Will MTM have any further development to become the main elements of the business? 

A: Actually MTM has a high profit margin as it’s a tailor made program for the clients, so that it requires a higher charge. About the further development, forming partnership is important for MTM as TAL can have a better understanding of the requirement of the clients and thus the MTM program can be even more fit and useful.
  
7. How does TAL show their Corporate Social Responsibility in the sense of being environmentally friendly? 

A: As a socially responsible corporation, TAL is working constantly to help 
achieve a better quality of life for everyone, now and for the next generations.

TAL has introduced several environmental friendly solutions in its South East Asian factories. For example, waste water treatment and recycling for flushing and landscaping irrigation, water scrubbers for exhaust emission management, and heat exchangers that recover energy from steam to heat domestic water. TAL also recycle paper, cardboard, plastics, cans, textile cones and used chemical drums. Besides, emissions from kitchen of the canteens are also in high control, and this is actually a voluntary measure that not much companies are doing.

8. How does TAL strike a balance between the high R&D costs and the benefits generated? 

A: TAL has put a lot of focus in R&D as they want to provide better quality products to their clients. This is actually not contradict with the benefit. It is because when TAL can add more value to the product because of the R&D, the clients will love to pay for it too because the clients also want a better product. So this is actually a win-win situation.

9. Why has TAL not gone into retailing its own products under its own brand? 

A: There is no own brand of TAL in Hong Kong. However, TAL does has its own brand in US, but it’s only for wholesales and online sales. The reason that TAL don’t develop its own brand in Hong Kong is that TAL don’t want to compete with its clients as it would cause contradiction to the policy of TAL.

10. What is the future plan of TAL? Are you going to further expand? Is manufacturing still profitable?

A: It’s possible that TAL will close the factories in China as RMB is appreciating. The cost of hiring workers in mainland china is much higher than before. However, manufacturing is still profitable because TAL will set up new factories in other low cost countries from the Asia-Pacific region such as Vietnam.