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Table of Content
Task 1 Part 2
Abstract
1. Introduction
2. Epistemology possession view vs practice View.
3. How has the company managed innovation?
4. Relationship Management
References

Task 2 Part 2
Abstract
1. Introduction
2. How data is used in Uniqlo Exploitation/ Exploration innovation
3. What information Communication Technology used in the company?
4. Factors influencing Supply chain relationship.
References

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Task 1 Part 2
Abstract

The main purpose of this study is to analyse the remarkable context within the evolution of
the paradigm innovation in fashion product development, in the case of UNIQLO which was
created by Fast Retailing Corp in 1998. The key theme hereby concerns the comparison of
knowledge as possession perspective with practice perspective adopted in Uniqlo.
Furthermore, how Uniqlo had manage their innovation within the organization in providing
values in to the company. Relationship management is also greatly discuss in the following
report on how they build the relationship with the external as well as internal parties. This
should impart a few promising research perspectives regarding their innovative model of
unchallenged value creation, strong market competitiveness, and sustainable

1. Introduction

Uniqlo was founded in 1949 by Tadashi Yanai. The initial humble clothing shop had now turn
into a designer and worldwide chain of fashion retailer. It has since become a prominent
brand in the global market. (Fast Retailing, 2013)

Being one of the most dominant fashion retailers, Uniqlo had been the lead in reshaping the
Japanese market. Amongst its innovations, the most prominent strategy was its
transformation of fashion apparel goods that entailed a whole re-categorisation of market, and
new business practice in distribution, new product development.

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2. Epistemology possession view vs practice View.

Knowledge has been widely debated by scholars for decades. Since then, it has been studied
more prominently in our current age. Some researchers argue that knowledge is both explicit
and tacit, which is imparted to individuals or groups depending on how they make use of it.
However, it is not implied that the individual would know what to do with the knowledge he
possesses. Scholars have argued that knowledge will only become useful when individuals
and groups communicate and act on it. Accordingly, knowledge is classified as a set of data
and information which have been stored and transferred between people and organization.
Cook & Brown, 1999, subsequently, argued that the application of tacit and explicit
knowledge is the comparison of knowledge as an epistemology of possession view and an
epistemology of practice view.

Epistemology of possession view refers to knowledge as tacit information which an individual

possesses based on their personal experience. Sometimes, it is highly context specific and has
a personal quality which is hard to formalize. (Nonaka, 1994) It further treats knowledge as
explicit knowledge; information can be “codified” or penned down and is highly transmittable
in formal, systematic languages that may include facts, axiomatic propositions, and symbol.
(Kogut & Zander, 1992) It is passed on to the cognitive system that processes
information that is essential for learning the task ( Lauchman, Lauchman &
Battlefield, 2015). In the case of Uniqlo Co., the knowledge of ‘know how’ is
imparted into every employee. Employees gain knowledge through their working
experience. It then translates into sets of theory known by the individuals. These
forms of tacit theories are sometimes taught to the employees in Uniqlo through
their training programme. Uniqlo has a set of training requirements for the newly
employed (Cite). After the knowledge is taught, individuals in the company will
know the requirements to manage the warehouse properly; however they have
difficulties explaining how this could be accomplished. This conflict in “know-
what” and “know-how” have been proven in Cook and Brown’s arguments, which
further explains the acquisition of knowledge taking place largely independently of
conscious attempts to learn and is in the absence of explicit knowledge about what
was acquired (Cook & Brown, 1999; Reber, 1993; Spender, 1996, 1994). The explicit
knowledge is identified in the company where the individuals are required to pen down their
learning during the training workshop and share it with others. Individuals are also

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encouraged to give feedback through their internal system to higher management on how to
improve their work processes and to make the product more effective and efficient.

In contrast, Epistemology of Practice view refers to the context in which the practising of
knowledge takes place. Scholars have defined the practice of knowledge is form during social
interactions. Cook and Brown explain that knowledge only comes into use when the
individual socializes with the world. Knowledge would be accessed through reason and
intellect, not through day-to-day experiences and emotions (Dewey, 1938; Damasio, 1994). It
was also thought to be fixed rather than fluid and ever evolving through practice (Styhre,
2003) Uniqlo practices knowledge management during sharing sessions conducted daily in
their retail outlets. It creates the organisation culture of learning in the wider communities.
Uniqlo also encourages their employees to apply practice of knowledge with external parties.
On a weekly basis, the individual will be assigned to work with their clients. It is especially
important for them to discuss projects that align with their knowledge in providing values
back to the organization. Topics like the latest technologies which could be brought back to
the company for improvement on the current system are largely discussed during the session.

In conclusion, the differences between Epistemology Possession of knowledge and Practice

view views knowledge as a tangible theory or as tools used to be put into action. Uniqlo has
provided a space for individuals to gain knowledge and a platform to transmit the information
with one another. They have also promoted the practice of knowledge in their daily work.

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3. How has the company managed innovation?

Innovation is often combine with strategy. Strategy, after all is a guide and substantiated
logic for making choices, while innovation is a massive business which creates novel
solutions to important problems. (Priem,Li & Carr, 2012). Uniqlo is an innovative-driven
company – it values innovation greatly in their organization culture. The ideology of
innovation is greatly promoted by the founder repeatedly; he states his company is not just a
fashion company, but instead a technology company.(FastRetailing, 2013) He vows to bring
innovation into all aspects of processes within the supply chain of the company. In order to
manage innovation, the company has implemented a Specialty store retailer of the Private
label Apparel (SPA) model. The SPA model(Cha & Newspaper, 2013) helps to incorporate
the entire clothes-making process from product planning, development and manufacturing,
distribution and retail, procurement process to inventory management. This business model
has adopted the theory from Rothwell’s five generation of innovation (Rothwell et al., 1977);
coupling model. It emphasises on the integration of system process and the creation of a
network to promote flexibility with speed of development. (Souder, 1991)

Firstly, innovation takes place in the research and design process. The group of employees
from the department will conduct research on the latest consumer trend throughout the world
and conduct meetings with marketing, purchasing, material development and production
teams to identify the designs and materials. Thereafter, the new products will be launched, a

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year after the creation of design. This long lead time allows Uniqlo to gain competitive
advantage in sourcing the correct material and manufacture their product more efficiently.

Secondly, since the designs are planned in advance, Uniqlo is able to negotiate for lowered
price unit cost by placing large orders to vendors. This strategy has empowered Uniqlo’s
buying power while providing the vendors with benefits. It also ensure the quality is in place
at a lower cost since its product line are limited.

Thirdly, Uniqlo has also practice the Nonaka Theory of creating ‘ba’ for the employee to
share ideas and to manage innovation within the organization. It has formed a team of expert
engineers also known as “Takumi team” (Teresa, 2014) who possess technical skills to
support Uniqlo’s 70 contract manufacturing companies. They are tasked to pass on quality
practices of efficient processes and productions to the vendors. They are also required to push
for faster responsiveness to operational problems, and to make sure their counterparts follow a
set of quality standards in its technological clothing lines. (FastRetailing. 2015)

Lastly, Uniqlo’s marketing team will collaborate with the inventory supply team to gain cost
effective in inventory storage and maximise the usage of the warehouse. This team will track
sales from their system to adjust the production of a specific clothing line tailored to
customer’s needs. In return, this helps in minimizing storage costs.

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In conclusion, Uniqlo has achieve a “technology push” and “demand pull” (Kolodny, 1980,
Rothwell et al., 1976) in its SPA models. They have inculcated innovation within their
organization well and continue to improve its strategies to keep up with the latest technology.

4. Relationship Management

Business relationship management is the study of the knowledge, skills and competencies that
foster a good relationship between an organization and their business partners. (Ryssel,Ritter
& Georg, 2004). Uniqlo has business relationships with their customers, suppliers and
business partners, like TORAY Co. The company has also widened their global reach by
forming business relationships with partnered factories in China, Vietnam, Bangladesh and
Indonesia. The building of relationship with partners is very important as they have a direct or
indirect impact on the focal company. Uncertainty occurs for Uniqlo in managing the
relationship with their partners and is caused by all possible types of interacting factors
(Kacabasoglu, Pranhinski and Rober, 2007). In Uniqlo’s context, capacity uncertainty has
been identified in the upper supply chain. The supplier is located far away from the company
and the uncertainty over the amount the supplier is likely to be able to sell in the future can
causes certain risks for Uniqlo (Feng, 2010). Therefore, to overcome these issues, Uniqlo has
formed strong partnerships with world-class factories, which share the same philosophy and
vision. To overcome the capacity uncertainty, the company has divided their long-term
production plan into monthly production volumes. Yoshihiro also said that the company will
resolve any issues that surfaces during the production process swiftly and firmly. The well-
maintained relationship will help the partnered factories to grow and they would be able to
perfect their techniques and continue to improve their business procedures. Furthermore,
through manufacturing and retailing, the controlling of the entire supply chain process helps
the material procurement (Fast retailing, 2013). In the process, Uniqlo has built trust and form
strategic partnerships with their suppliers. They collaborate with their partners companies to
maintain product safety, quality and workplace environment and set a standard of practices
between the production partner.

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In conclusion, Uniqlo, took several measures to ensure their relationship with the supplier and
partners are well manage, Building trust and the ability to resolve conflict are the key success
in to maintain all relationship throughout Uniqlo’s Supply chain.

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Task 2 Part 1
Abstract
The main purpose of this study is to analyze the relationship of to the data exploitation and
exploration by Uniqlo. Uniqlo also introduces technology in their business, and enhances
customer value. The impact of the system used in enhancing the supply chain performance is
also discussed below, relating to how they aligned with corporate strategies. This would shed
some light on research perspectives relating to their innovative business model of value
creation, market competitiveness and sustainability.

1. Introduction

UNIQLO is an innovation driven company, it aims to enhance customer experience in their

retail stores. With the continual exploration of new technology and the well-managed internal
data, Uniqlo achieves this in having competitive advantage against their competitors. With
strategies and various technologies in place, Uniqlo has improved their supply chain
performance aiding employee excellence in daily activities.

2. How data is used in Uniqlo Exploitation/ Exploration innovation

Data exploitation refers to using the master data to gain insight to various methodologies and
innovations to enhance business productivity. A company needs to be constantly evolving
through analysing data trends. Uniqlo identifies data from customer feedback, individual
stores, and geological feed of customers. Data includes the data metrics such as response
time, intranet and memory usage. Data exploitation can also be achieve through 3rd parties
such as social media, weather feeds, and other data analytics companies.

All information is equally integral to Uniqlo as it provides different and an overall holistic
view of organizational data. The traditional way of managing data is through extraction,
transformation and loading processes. Uniqlo needs to understand how to manage these
various streams of information, through the usage of data analytics platforms to enhance
efficiency.

One platform that can be used is Hadoop, which assists their distribution computing of the
data. Another is PostrfreSQL, which assists in maintaining and analysis on their customer

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database. To continuously evolve and improve their business intelligene, they have to make
changes to their current system by automatizing processes. One way is for the various
departments in Uniqlo to manage data and Realtime streaming, this increases productivity and
improves employee time management.

Data exploratory refers to firm behaviour characterized by search, discovery, experimentation,

risk taking and innovation. (Cheng and Van de Ven 1996, March 1991). Uniqlo exploratory
nature focuses on understanding the needs of their customers. Therefore, data is being heavily
used in the research & design department. The R&D centre continuously researches on the
latest fashions and lifestyles across the globe, constantly looking out for new material. Uniqlo
has introduced a concept meeting, held one year in advance before launching a new product.
During such occasions, R&D meets with representatives from the various department to
acquire their professional inputs and finalize concepts for upcoming seasons. Uniqlo uses data
to address needs to detect mistakes, assumption analysis, primary selection of appropriate
models and assessing the direction and relationship between data exploration and outcome
variables.

To conclude, Uniqlo understands the importance of innovation in data manipulation for their
daily operations. Be it exploitation or exploration of the data, Uniqlo involves all employees
to learn and technology implementation to aid in their decision making which gives a
competitive advantage to the company.

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3. What information Communication Technology used in the company?

Uniqlo emphasize the need for innovation to bring about customer value. This can be seen
through various efforts in introducing technology into their business model, providing the
optimal customer experience.

One of the implementations which Uniqlo has made, is the use of is the mobile technology in
their retail outlets. The company worked alongside Casio(Valero,2014) to design a device
which runs on the Microsoft Windows embedded handheld operating system. This device
allows sales employees to access data from Microsoft SQL server. Casio IT-300 is just like a
smartphone but redesigned to include a barcode scanner and a large LCD screen with the
purpose of allowing all employee to think like managers. With this device they could gain a
managerial perspective by having access to information such as product description and daily
stock sales data assisting in their own decisions. In return, employees worldwide can make
use of this handheld device to get a real time infor for stocked merchandise and provide
customers with the most current inventory and price information. With this launch, employee
also benefit from improved workflow, instead of the traditional PC terminal. As quoted from
OKADA “Before, line world form as employee awaited to clock in and out at the stores, but
we were able to solve this problem with a small, multi-functional terminal that employee
carry in their pockets”.( Barillari, 2015)

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Another introduction of technological enhancement is introduction of mobile apps. In 2012,

Uniqlo took initiative to build national awareness of the brand as well as broadcasting their
new line of Dry Mesh T-shirts. However, they faced challenges in funding for traditional paid
media advertisement. Therefore, at the first campaign, Uniqlo had used Pinterest Mobile
application (Firedman, 2008) to gain publicity. One of the main advantages in using Pinterest
is usage of application free advertising. Furthermore, to give the customer a better experience
of its products, Uniqlo agency created colourful images blocks created with HTML5,
Chrome, adobe after effect and Photoshop. They have eliminated hassle for users to
repetitively search the application for their ideal products. The Research and development
team ensures the series of images, each one over eight thousand pixels tall, would appear in
one group. These strategies had proven the effective use of technology and exploitation of
mobile applications to gain a marketing advantage over competitors. As quoted by OKADA,
“Marketing with digital media has the potential to be innovative just by thinking creatively”.
(Indvik, 2012).

To conclude, Uniqlo continually explores using ICT and through innovation, create customer
value. Having handheld device in retails store and marketing campaign through Pininterest
mobile app enhanced the customer experience.

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4. Factors influencing Supply chain relationship.

The impact of system used by Uniqlo greatly affects its supply chain performance. For
instance, Uniqlo realized for it to grow and expand domestically, they need to take innovative
measures such as partnering with Toray (Belal, SHirahada, Kosake,2012), one of the larger
textile producers. However, a potential threat exists in tying both supply chains together.
Primarily Toray Factories operates all year round, but traditionally a fashion retail supply
chain does not work in the same model. Uniqlo has a seasonal commitment rather than
annual. If their range of clothing lacks popularity with consumers, they would simply
eliminate production leaving zero excess stock. This process causes waste in their supply
chain. To solve this problem, Uniqlo had adopted Toyota “Just In time” procurement
methodology by reducing inventory (William, 2015). This works hand in hand with
technology collaboration with Toray Company. For example, Uniqlo uses leading edge
forecasting system to predict trends, and with the adoption of JIT it allows analysis and
reduction of forecasting errors. The information is routed to Toray company instantly through
their automated system in both supply chains. Uniqlo’s innovation challenges the old
paradigm in managing their supply chain with their partners.

Internally, innovation took place where SPA model (Huang, Kobayashi and Isomura,2014)
was introduced to their supply chain. Its enables the company to scale up all processes and is
under control of the company management. With help from SPA, Uniqlo is able to control all
stages, including pre- and post-production. This ensures cost savings and creates flexibility in
production structure since all decisions relating to product planning, design, manufacturing

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and distribution is centralized at management level. Furthermore, Uniqlo has created R&D
centres to reduce lead time. With that, Uniqlo’s supply chain performance is at an all-time
high with the aid of both JIT and SPA strategies in place to ensuring linkages of their
suppliers and customers, even their own internal employee are well-taken care of.

In conclusion, Uniqlo enhance innovation not just relying on technological advancement but
also incorporates strategies such as JIT and SPA models to create values in supply chain
management.

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