Email
sinha.rk.dr@gmail.com
Current practices in the apparel industry supply chain lead to stockouts and discounts.
Our work with companies in the apparel industry indicates the need to question many prevailing practices. One such practice by manufacturers is to bundle supplies of a specific design in pre-determined proportions of various sizes. The proportions are normally based on estimated sales and are generally kept the same across all the stores.
The reality in terms of actual demand of various sizes is quite different from the assumption and varies across the stores. If a store runs out of a particular size, say Small, it would like to replenish only that size. However, manufacturers insist on supplying in pre-packaged bundles only.
Such inflexibility in supplies is the primary cause of both stockouts of fast movers as well as excess of slow moving sizes in a design. Discounting this excess inventory in ‘End of Season Sale’ is a common practice.
A simple change in terms of flexible supplies from the manufacturers will surely lead to higher profits for all the partners.
Questioning a single assumption can lead to so much extra profits!