1.0           Introduction

DK Active is an Australian based wholesaler that strives to supply environmentally responsible women active wear throughout Australia (DK Active, 2021). With its headquarters in North Brisbane, it manufactures all of its products and accessories using solar power for accomplishing its mission of ethical business practice. Its manufacturing premises are in New South Wales at KJ Manufacturing House (DK Active, 2021). It is a full-service support group, running everything from concepts, processing, and marketing. The chosen product is “maternity active wear leggings” that will be supplied to Rebel Sports. DK Active will be helping in distribution of the Pregnancy Sportswear Leggings to Rebel Sport with help of suppliers and manufacturers. The company will be expanding to the manufacturing of designs, samples, purchasing, shaping, marking, archiving, and label creation. It’s based in West Pennant Hills, New South Wales. The product has the following characteristics;

Specifications
Sizing	Maternity
Material	50% Tencel 30% Spandex 20% Econyl
Garment Length	Capri
Closure Style	Pull On
Inseam Length	22 Inches
Rise	High Rise
Care & Cleaning	Tumble Dry
Available Sizes	XS, S, M, L, XL, XXL
Colour	Black

 

2.0    Background

Rebel Sport Limited is franchise active clothing and products related equipment based in the New Zealand and Australia retail markets. Their primary target group is catering for adults and children: of both genders (Rebel, 2019). They explicitly aim to market the health industry; they think for their health and body appearance. It holds 21% market share in Men’s Sportswear, 12% in Women’s Sportswear, 10% in Men’s Footwear and 6% Women’s Footwear (see figure 1 below). Currently it has 161 stores spread in Australia with 94% brand awareness, 2.57 M active club members, 61% members of sales, 91% in stores sales, 2% click & collect sales and 7% home deliveries percentage of total sales. Its financial highlights for 2019 are;

 

Source:  (Rebel, 2019)

Figure 1: Share of the Sporting Goods Held by Rebel Sports

Source: Statista (2021)

Majority of the stores are located in New South Wales followed by Queensland, Victoria and Western Australia (see figure 2).

Figure 2: Stores in States

Source: Super Retail Group (2019)

As per AIHW (2021), there is a rising movement for Australian citizens to take care of their fitness and well-being; demonstrating the existence of consumer demand for Rebel goods. Rebel is active on social media as well, running an e-commerce store for all Australian citizens through Australia’s Journal’s distribution system. Also, they have a footprint on social media sites, including YouTube, Facebook, and Instagram, helping them to communicate with several different business sectors as they wish to do (Rebel, 2019). They’re still there with 160+ physical outlets across the nation.

The goal of the Rebel Sports industry is to supplement other companies within the supply chains of the Rebel Group, as BCF’s, Amart’s and Ultra cheap Auto are all part of this group (Super Retail Group, 2019). To optimize the productivity of the supply chain, all of the separate category stores are situated close together to improve the benefit of economies of scale in terms of distribution and shipping costs. This also provides the community to exchange market data knowledge with each other as they work in related markets; to reduce the expense of competing market analysis. It also helps the group to enter new markets by differentiating their item ranges across different sales and sales sources, without the possibility of tainting the demand curve for a single product (Yoo, 2018).

In the same way, there is a rise in the female customer base for sports apparel, as well as a rise in the acceptance of fitness clothing and casual clothing, thereby improving overall demand growth (Hajkowicz, et al., 2017). Pregnancy clothing and athletic footwear have become more affordable thanks to an increase in discretionary earnings and an increase in health issues, while this market is extremely competitive due to expensive raw material prices and inflated production planning expenses (Gimunová, et al., 2020). Consequently, it hinders purchases by cost-sensitive customers.

In consideration of the fact that this model was the first in its type at Rebel, the pregnancy item was considered to have created its collection of maternity apparel. As a result of this being a revolutionary product on the market, if the early sales of Rebel are good, this item may create more lines of apparel for healthy expectant mothers, thereby developing its collection within the Rebel brand (Rebel Sports, 2021). As has already been stated, the consumer section is for expectant mothers, but more precisely, it will be designed to cater to expectant mothers later than fifteen weeks, where maternal apparel is better tailored to functional changes in the human body at this period.

3.0    Demand Prediction

Predicting is when companies try to forecast patterns in fashion and goods changes and to increase revenue and income based on experiences, such as revenue from previous month and the previous year (Tanaka, et al., 2019). At Rebel Sport, there are groups of retail planning managers whose job is to acquire goods from Under Armour, Adidas, Nike, etc. and to get enough supply for all outlets to be able to keep a good supply stream to satisfy demand. The two forms of demand that consumers need to remember are Dependent and Independent Demands (Weatherford & Ratliff., 2010). When the demand for a product is known, it is called the independent demand. For instance, selling the celebrity endorsed t-shirts after looking at the demand for other celebrities’ t-shirts will be an independent demand. The dependent demand is the one that gets influenced by the item  (Weatherford & Ratliff., 2010). An example will be marking of some products to be sold online exclusively or at particular stores for creating the hype in demand for certain line of products.  

With the recommended maternity leggings for mothers, they will be accessible throughout the year but with little to no replacement during the warm period due to Australian weather. With 50.7% of the Australian female population, there is a demand for this product (Statista, 2019). Sports leggings and athletic wear from fitness brands such as Adidas, Sports Bear, or Nike are accessible throughout the year exclusively from Rebel and the suppliers (O’Sullivan, et al., 2018). Rebel’s most common leggings are Lydia Strings from Voo & Ell, Nike Pro, and Under Armour’s Capri,  which is accessible from the top store in Sydney’s Bondi nation all of the way to small shops like Richmond in Melbourne (Rebel, 2019). If the item is suddenly unavailable in the shop, it can still be purchased online or moved from the shop. It is essential to have products like this accessible at most because they satisfy the need for tights during pregnancy (Rebel, 2019). All outlets carry various variants of the Nike Pro line, but initially add one or two variants of multi-size tights to bring market exposure to the brand and, as interest is desired, broaden to different shapes and colours. Although the current tight set of women can be worn by different women of age, they can be seen in several forms, such as fitness clothing or just about the home.

A similar justification for keeping them in inventory with an occasional replacement is to equate them to the soccer boot collection. The sales of football boots during the last week of February throughout March are substantial-high, hence customers purchase new shoes for the upcoming season  (Statista, 2018). Although this sales peak is diminishing across the year and is slipping into September, Nike and Adidas are also offering boot-fill outlets with an odd new shoe to stay active at global level during off seasons like in spring (Statista, 2018).

With the off-season in, most athletes use solid or multi-purpose footwear, some groups run training camps through October and some clubs run the camps in December and January (Skyrunners World Series, 2020). While there were fewer purchases made over the summer season for soccer footwear, there is still enough interest for the sports products of Adidas and Nike to raise retail stock prices. In light of this, the demand for leggings would be justified to be slow during summers. However, as the tights will be made from light materials, there will still be enough demand during warmer days as well as cold days.

Increasing number of pregnant women is the major factor responsible for growing demand for maternity wear. Also, the rise in purchasing power of women is fuelling up the demand for maternity sportswear. Currently, in Australia the birth rate was 12.561 per 1000 people in 2020 as compared to 11.221% per 1000 people in 2019 (Macro Trends, 2021). Approximately 315,147 babies were born in 2020 in Australia that rose from 309,142 in 2018  (Macro Trends, 2021). In Australia, the demand for maternity athletic wear makes up 0.5% of the active wear market with 171% increase in maternity leggings and 45% increase in nursing sports bra (Roy Morgan, 2019). In order to predict the demand for maternity leggings, the Rockwear maternity leggings sales growth rate is used as predictor. According to Rockwear (2020) the sales for maternity active wear in 2019 was 2.3% of total sales that rose to 3.9% in 2020. It was around AUD 519 mn in 2019 that rose to AUD 820 mn in 2020. If these sales are used as predictors, the following sales are expected for maternity leggings pre, post and during pregnancy in April (Rockwear, 2020).

Predictors	DK Active through Rebel
Annual Sales	AUD 820 mn
Per month Sales (820/12) (assuming similar sales all over the seasons due to light material used)	AUD 68.33 mn
Per Day Sales (April 21 and 22 Sales)	AUD 2.27 mn

4.0    Sourcing Suppliers

4.1     Bill of Materials

Bill of materials (BOM) is the major ingredient of the business to produce a product. It is the gross requirement of product that specifies the number of inputs required to manufacture a product (Rimawan, et al., 2019). In order to manufacture the active wear, the required materials must be stretchy so that the consumers can wear them easily. Also, the leggings should be made from material that is non-allergic, sustainable and breathable. Mostly, the leggings are made up of Elstane, Spandex, Nylon, Polyester Modal, Polymide and Cotton (see the figure below).

Figure 3: Material Mix of Different Brands

Source: (Textile Exchange, 2019)

The material that needs to be considered should be expandable with consumers’ bellies. In order to keep it simple, only stretchable and adjustable leggings will be supplied so that these can be used pre, post and during pregnancy by women. Upon research, the following materials are found to be used by DK Active for manufacturing the maternity leggings.

 

Figure 4: Current Material Mix for Black Leggings

Figure 5: New Material Mix for Black Leggings

As DK Active will be starting up the maternity leggings section at Rebel, the hope is to develop different products including tank tops, nursing bras, shoes and accessories for maternity women in future. Hence, it is expected to use Tencel (made from sustainably sourced wood pulp that is breathable), Spandex (stretchable upto 6 times to its normal length) and Econyl (sustainable recycled nylon. These materials will be used for manufacturing the DK Active maternity workout leggings so that the output is sustainable, environmental friendly and comfortable in wearing. The BOM for the chosen raw material for manufacturing one maternity legging is given below;

 

Product	Maternity Legging
Buyer	DK Active
Style	#21931
PO#	JK222
No.	Item Description	Consumption Per Unit	Supplier	Rate/Unit	Unit of Price	Amount	Finish
1	Sewing Thread	0.1	Levine Groups	$0.18	1% of whole roll	$0.18	Black
2	Size Labels	1	Plant Fabric	$0.80	Per label	$0.80	Black washable
3	Polybag	1	Boutique 66	$0.21	per bag	$0.21	Transparent
4	Tencel	50%	Gimatex Industries	$3.50	per meter	1.75	Black washable
5	Spandex	30%	Spotlight	$4	per meter	$1.20	Black washable
6	Econyl	20%	Arket	$12	per meter	$2.40	Black washable
	Total Cost					$6.54

 

The characteristics of Tencel, Spandex and Econyl are given below

Material	Characteristic
Spandex	It can stretch up to six times the normal length. It wicks moisture, dries quickly and has unrestricted range of motion. It is breathable material and gives bottoms stretch. It keeps the pants from begging baggy over time. It is best known for HIIT workouts and pregnancy apparels.
Tencel	Made from sustainably sourced wood pulp. Breathable and biodegradable. Contains tiny fibrils that enhance sweat wicking properties. Has a luxurious matte texture. Super durable and has polyester vibes. It has anti-microbial benefits with smooth finish.
Econyl	Innovative recycled nylon made from recycled fishing nets, scraps, carpet flooring and plastic. Recyclable at end life. It is stretchy when woven, relatively tough and can be used for weaving tightly knitted garments and industrial products. It has low breathability and medium bubbling. Best raw material to be used in tights, yoga pants, sportswear, carpet, stockings and sweat pants.

Source: (Bruning & Falk, 2020)

The suppliers chosen for these raw materials are Gimatex Industries, Spotlight and Arket. The reason to choose these suppliers is that they offer the raw material at low cost and allow payment leases.

4.2     Supply Chain

The supply chain for the DK Active maternity athletic wear leggings will initiate from suppliers i.e. Gimatex Industries, Spotlight and Arket (Spotlight, 2021; Aquafil, 2021; Arket, 2021). These raw materials will flow to the manufacturing site at KJ Manufacturing House in New South Wales, Australia. After reaching there, the production process will initiate and the final product will be packaged and sent to the warehouses of DK Active. After receiving and sorting the tights, DK Active will send the leggings to various Rebel Retail Outlets nationwide. The reason to choose the KJ Manufacturing House in NSW is because most of the retail outlets of Rebel are situated in NSW. Hence, this will reduce the transportation cost and allow DK Active to fulfil the demand of products at urgent basis whenever required. The whole supply chain of the product is shown below;

 

Figure 6: Supply Chain Network

KJ Manufacturing House is considered to be tier 1 company that will produce the product and then send to DK Active. The Tier 1 companies are the ones that send the manufactured products for finishing touches to the Tier 2 companies (Lambert, et al., 2000). After sending to DK Active, the downstream activity including the distribution of product to the Rebel Outlets will be conducted by DK Active. Firstly, the leggings will be passed by KJ Manufacturing to warehouses of DK Active where the product will be labelled and packed into sealed packets. Then the product will be distributed to the Rebel Retail centres to be sold to final consumers. The product will be firstly advertised on Rebel’s online store to assess the demand for the black maternity leggings. After few days, the products will be displayed at the Rebel outlets for selling directly to walking in clients. At first cycle, all the retail stores of Rebel in NSW will be stocked with the leggings and then slowly it will be expanded to other states.