This is one of the ways they keep their costs down and keep to their core competencies. But as a manufacturer for these large organizations, they have few problems to face, especially if they are looking to apply lean manufacturing. Lean manufacturing is very much dependent on the response of the buyer or the customer to manufacture. The pull manufacturing strategy is completely dependent on this response. So to manufacturer to be lean, they have to get good support from their buyers. But there is a problem.
End customers are too far away in the supply chain. So it will take fair amount of time to get the real end customer feedback in the process of manufacturing. So the manufacturer will have to work on predictions to fulfill the requirements. This means that they can not be truly become lean.
So what is the solution for this problem? Answer is simple. It is to get read of all the intermediates from the information flow. Is it possible? Yes this is possible. In fact many large organizations are doing this. Simply they allow their manufacturers to see their sales statistics and manufacturers are empowered to manufacture according to the requirements generated by sales. This is the information age without any doubt. It will take only few seconds to transmit this information form the retail shop to the manufacturer. So any manufacturing system can become a lean manufacturing system.
Any brand owner will love just to sit back and think how to improve their sales without thinking about manufacturing process.