Alligator, Inc.
Alligator, Inc. is a shoe designer, manufacturer, anddistributor that launched its business in 2012. Although thecompany operates globally, its headquarters location is in Arteixo,Galicia, Spain, which coincidentally is the central location forZara, the flagship chain store of the Inditex group, the world’slargest apparel retailer. The best-selling brand of Alligator, Inc.is its Gators™ model, which is a market leader in the funky,brightly-colored, lightweight shoe market that has enjoyedunexpectedly high demand in recent years. Made of ahighly-resilient, space-age plastics material, Gators™ success isrelated also to the fact that each pair includes “one-size fitsall” orthotics to meet the needs of individual consumers.Alligator, Inc. has patented the processes relating to themanufacture of the orthotics, and the overall value of this productinnovation is similar to the way in which the super-secret formulafor Coke is valuable to Coca-Cola, Inc.
The Alligator supply chain begins with retail consumers who arelocated in regions throughout the world. The Gators™ product isavailable for consumers at a wide variety of department stores,airport kiosks, Internet, and a select number of Alligator storeslocated primarily in developed countries. In addition toproprietary manufacturing facilities in Spain, Gators™ are producedby contract manufacturers in the Shenzhen area of China and inBrasilia, Brazil. Generally, the manufacturing costs per unit werelower in Shenzhen and Brasilia, and somewhat higher in Spain.Conversely, the quality of Gators™ manufactured in Spain wasconsiderably better than that of the other locations. The marketsserved by the respective manufacturing facilities were those thatwere in greatest proximity.
The supply side of the Gators™ supply chain was a little morecomplicated, as most inputs to the finished product were availablefrom suppliers in the regional markets, but the custom-fitorthotics were all produced in University Park, PA in the UnitedStates. This is because the developers of the orthotics technologywere professors in the supply chain and information systems andfootwear technology departments at Penn State University. Overall,Alligator’s relationships with its suppliers could have benefitedfrom better coordination, and more timely and complete exchanges ofinformation. At the time that this case study was published,Alligator was in the process of designing an IT capability thatwould capture point-of-sale information, for further use instreamlining and aligning supply chain operations. Also, the salesof Gators™ exhibited seasonal variation, but to some extentseasonal sales in the southern hemisphere complemented sales in thenorthern hemisphere.
To help address some of the supply chain issues facingAlligator, Bryson Wilde has recently been hired as the new SVPSupply Chain, and Molly Walters has been selected as the firstchief information officer for Alligator. Collectively, and with thehelp of consultant Anna Walters, this group has taken time so farto visit the company’s global facilities and to become aware of thesituation, problems, and concerns that are faced by Alligator, Inc.with regard to the Gators™ product. The following are some of thequestions that will need to be addressed by this group.
2. What are the impacts of less-than-perfect demand forecastsfor Alligator products, including Gators™, and of volatility in thelength and cost the supply chain services needed to move componentsfrom suppliers to manufacturing sites, and the subsequent movementof finished products to market? What should be done to mitigatethese problem areas?
