The past two years, the global economic downturn, the decline in garment exports, the domestic consumer market cold, resulting in sluggish sales terminals, clothing inventory backlog continued to rise. In this context, garment enterprises have to find a way - discounts, increased e-commerce channels running, switch to second and third tier cities and other commercial means of tricks.
Said a variety of means are all in stock occurred after the "inventory digestion", "to deal with inventory," to fundamentally solve the inventory problem garment industry, but also the root causes of inventory produced from - supply chain working to maximize the "prevention" inventory produced.
one. "Customer Order Decoupling Point" and garment production organization
1.1 Understanding "Customer Order Decoupling Point"
An important objective of supply chain management is to meet customer requirements while maintaining reasonable inventory levels, in other words between the "stock levels" and "customer service" to make trade-offs.
How to balance inventory levels and service level, there is an important concept of "customer order decoupling point" in the supply chain management (Customer Order De-coupling Point, referred CODP, Figure 1), which refers to how to determine the stock position so running certain operations or entities in the supply chain can be open to independent. For example, a piece of clothing is stored in the retailer, the customer himself scored from the shelves, bought payment, and agents, see the brands under a single process. Here, the retailer's inventory is a buffer between the customer and the manufacturer, the point is this stock Customer Order Decoupling Point. The closer the customer point of separation, the more and faster customer service. The position of the point on the trade-offs related to the rapid response to customer inventory and greater investment between.
Understand the business strategy and market environment of the "Customer Order Decoupling Point" is important. With finished goods inventory to customer service-oriented enterprise called Stock Production (Make-To-Stock) Enterprise; according to the specific requirements of customers pre-assembled modules called business-oriented ATO (Assemble-to-Order) enterprise; for customers from raw materials to production of parts and then to member companies called for the orders (Make-to-Order) enterprises; to-order design (Engineer-to-Order) with a customer-oriented enterprises is corporate design together, and then from Part of raw materials to production and then parts.
1.2 garment production organization
The custom of clothing similar to Assemble to Order, MTO, to-order design patterns, there are many domestic garment enterprises are already doing this attempt now to see good results. This attempt to conform to the trend apparel industry from manufacturing to service transformation, people adapt clothing individual requirements. Clothing customization mode, the position of "customer order decoupling point" closer to manufacturing, is an innovative business model and garment industry, garment industry belongs to the category of strategic decisions have a significant impact (Figure 2) to inventory investment.
We are talking about apparel stock, concentrated in-stock production-oriented enterprises, a large number of garment enterprises belong to this mass production mode. In mass production mode, only the sales activity is driven by the customer orders, the enterprise through the "customer order decoupling point" after (CODP) position shift is reduced finished goods inventory of existing products.
two. Reflections apparel inventory problem from the perspective of supply chain management
Innovation is the continuing operations of the garment industry innovations include continuously improve product design capability, the use of advanced management methods to reduce costs, warehousing, transportation and logistics outsourced to a third party, optimize marketing strategies, etc. But these innovative approaches seem confined to a single point in the supply chain optimization to improve, more cost-conscious management, mainly focused on how to effectively reduce costs, and not from the global supply chain for corporate strategy, product operations conducted comprehensive analysis and optimization , thereby improving the overall efficiency of enterprises.
The following from the overall supply chain management point of view, from sales forecasting, information systems, logistics and distribution, flexible production four aspects to talk about apparel stock.
2.1 Sales Forecasting and the "bullwhip effect"
For a long time, China's garment industry has been intentionally or unintentionally embarked order to win the road to excess production to meet the needs of the downstream part of the supply chain.
On the distribution model "Manufacturer - brands - Agent - Retailers" model in the garment industry the most common sales channels, sales forecasting information in this mode is by a year (spring and summer, autumn and winter) twice in order various aspects of the flow of sales channels. Distributor orders through local retailers to estimate the amount of the order brands, brands to agents based on the order quantity is under orders to manufacturers.
Prediction information generated along the channel doped game all stakeholders, not necessarily truly reflect the consumers to buy the logic that there is not a small difference with the actual needs of consumers. Agents often a tendency to order more goods to prepare stock; brands to meet the needs of agents and store more goods to prepare for replenishment; manufacturer brands in response to the needs of the many risks and production processes, and then expand production the amount. Along the supply chain from retailers to manufacturers progressively larger production, eventually leading to pressure on stocks in all sectors.
Supply chain management to a phenomenon called the "bullwhip effect", "bullwhip effect" is similar to the Volkswagen brand clothing manufacturers inventory for this natural defect, so the structure is not only the finished product inventory, raw materials and semi-finished products and contain. In the rapid growth phase of the market, this effect is overwhelmed by market growth, but once the market a little trouble, stock links on the supply chain immediately apparent.
The brand's marketing department if they can advance the research, then a keen eye on the market with reference to the designer to grasp the market demand, and guide buyers to buy, so to maximize prevention information from market sources distortion.
2.2 terminal information "accurate", "time" is transmitted to the brands
"Bullwhip effect" is due to a large extent, the garment industry from end customers to the brand through retailers, manufacturers transfer process can not be accurate, and timely sharing of information so that demand forecasting progressively enlarged and distorted shape.
Network technology enables real-time information sharing becomes, reliable and inexpensive. Through sale systems (POS), radio frequency identification tag, bar code scanner and automatic identification applications, information can be obtained directly from the source. Internet technology-based management information system model points the operating system, software, and operating systems of three parts.
Many foreign brands have used Internet-based management information system. In ZARA example: throughout the ZARA each store sales information summary sent to the headquarters every day, at the same time based on the current inventory and store sales for the week twice weekly replenishment orders issued to the headquarters. Headquarters based on the store replenishment orders and sales information, you can analyze and judge whether the various products sold. Once the analysis showed sluggish sales, the first time to cancel the original production plan; if the product is sold, is scheduled redundant capacity reserved for additional production quickly, rapid replenishment, to maximize sales to seize the opportunity. So fast real-time response, there is no efficient and reliable information system is unthinkable.
From the domestic apparel industry business model point of view, brands are not responsible for the basic production process and sales terminals, for information on the industry chain partners control more difficult, but the application of information technology, the establishment of effective communication of information sharing is the general trend.
Fortunately, information technology has gradually expanded in the domestic garment enterprises, such as EPR systems, the retailer managed inventory (RMI) and vendor-managed inventory (VMI) systems have been applied to a large extent can help integrate enterprise information system , to achieve effective management of the entire supply chain, so that the operators can pay more attention to the connotation of information, and use information to make better decisions.
2.3 Distribution System
Customer Order Decoupling Point after the shift in favor of the customer understand the real information, such as agents or brands hold stock, but this mode of distribution system put forward higher requirements.
Clothing enterprise inventory management model that is most in use RMI retailers managed inventory model, but VMI VMI model, which is an advanced supply chain management approach, which derived from the "zero inventory full return" is a more advantage marketing policy, simply put, means retailers can inventory, and 100% can be returned, and distributors through the establishment of VMI logistics and distribution system to achieve inventory optimization and redistribution of resources through the integration of upstream production, leveraging the distribution center, support terminal information management and logistics systems, sales terminals under the "zero inventory" situation "selling compensation" mode.
Of course, VMI logistics center is not only a model but also distribution model, its commercial value is that this model has attracted a large-scale retail shop, closed shop rate dropped significantly, it is a good brand development model.
ZARA is a way to meet the logistics and distribution center scattered around the retailer. Except in the first area of the headquarters building in La Coruna more than 50,000 square meters of distribution centers, in October 2001, ZARA has spent one hundred million euros in the northeast of the Spanish capital Madrid, Zaragoza set up a Logistics Center. Not only that, ZARA also established the two air bases, one at La Coruna, another Santiago in Chile. ZARA marketing expenses almost entirely invested expanded and improved logistics system to expand the scope of delivery, improve delivery speed, the store fast delivery needs.
These distribution centers support, ZARA can guarantee all European chains receipt of the goods within one day, two days to reach the United States, China a little further, Japanese-controlled delivery within three days.
Manufacturer finished apparel products, shipped to the distribution center via underground conveyor network. To ensure that every order on time and accurately reach their destinations, ZARA can choose to take more than 80,000 hourly and sorted clothes and the error rate is less than 0.5% of the laser barcode reader tool sorting of finished garments. According to all stores delivery orders placed after the order is usually received within eight hours of goods can be transported away to the store picking twice a week. In Europe, the store shipped directly from the logistics center by truck; the two air bases after delivery of the goods to reach the United States and Asia, then shipped to the store third-party logistics; if necessary, also use ships to transport, combined with third-party logistics service stores.
2.4 Adaptation of small quantities of many varieties of lean production model
ZARA Kester, CEO of Serrano once said, "In the fashion industry, inventory is like food, will soon degenerate. Everything we do is to reduce the response time."
Lean production model to adapt to small quantities of many varieties of the market environment, by pulling kanban achieve JIT, so that products from raw material sourcing to finished product significantly reduced the time; the use of U-shaped production line, Cell mode of production guarantee flexible manufacturing system to achieve different products collinear production, balanced flow, so that the production system in the product is reduced to a minimum. Lean Production from Japan namely Toyota Production System TPS, TPS Kiichiro Toyoda as the founder, started the original intention is to establish a mode of production, a lot of efficiency in the production of small quantities of many varieties to meet market requirements, the How similar intention and today's market environment facing the garment industry.
Unfortunately, the author's observation, most of the domestic garment enterprises is not well focused on building its own lean production system, relying solely on outsourcing of production to solve manufacturing problems, gave up the chance manufacturing mining gold mine.
Manufacturing systems between different manufacturing processes study how to organize, how to set up the production capacity of each processing step operation time per unit of product, how to process quality control, and how to coordinate the program and other issues. Successful manufacturing system makes the process all the steps are coordinated, and to maintain a low cost and minimal waste.
three. Collaborative Supply Chain Mode
3.1 helpless "game"
Garment industry supply chain participants, in the "Manufacturer - brands - - Retailer Agent" distribution model system that is commonly used futures brands to sell to agents or retailers successfully passed inventory risk, no brands with retailers or closely aligned with risk-sharing mechanism is formed. Brands in order to increase market share, often require agents (retailers) excess inventory, causing retailers stock overburdened. In order to prevent brands know the true sales and inventory, retailers selectively system data errors, the system data in their favor; brands can not determine the authenticity of the data, in order to complete its sales growth target, take purchase rebates and other inducements to be policy. Brands, resellers, retailers of this game, in the same premise of total market demand, fueled by the increase in all aspects of inventory, so that the participants respective operating conditions deteriorate further.
Break this game, you need to build brands as the core of supply chain collaborative mode of operation, all the participants tied boat.
3.2 to brands as the core of supply chain collaborative mode of operation
"Game" causing the entire garment industry lost all the parties, we can do is how to improve the existing business model, more effective refined management reduce inventory, keeping manufacturers, brands, agencies, and retailers inventory balance, the establishment of mechanisms for allocation within the region and even quick and easy inter-regional, and ultimately the manufacturers, brands, agents and retailers in low availability achieve increased performance. Next to brands as the core of supply chain collaborative mode of operation, the introduction of brands through product design organizational system; manufacturers through lean manufacturing systems, concurrent engineering, reducing production volume, low-cost flexible manufacturing, procurement and production to reduce the total cross delivery; brands (or agents) through efficient logistics and distribution tacit accelerate the process of access to distribution channels; brands timely and accurate sales information feedback to adjust quickly through retailers to drive fast throughout the supply chain collaborative operation, thus relieved the "bullwhip effect" on the entire supply chain, alleviate high inventory problem facing the garment industry.
In a brand business as the core of supply chain collaborative mode of operation, all the participants around the brand's target customers in the supply chain, running at full collaborative supply chain planning system. Sales and feedback module is divided into pre-market sales forecasts, plan orders, promotional programs; organizational design into product design program, product promotion plan, collaborative supply chain planning; purchasing procurement of materials into the production plan, production plan outsourcing, production plans; logistics into inventory planning, distribution planning, replenishment meter, etc. (shown in figure VI).
The main objective of supply chain collaborative mode of operation to the core brands is around the consumer, through the seamless flow of information feedback mechanism, shorten lead times, eliminate all waste including time, including through the supply chain, reduce or cancel those who can not bring value-added component to co-operation to meet the market requirements of small quantities of many varieties.
In the co-operation of all aspects of the supply chain, in terms of theory and practical point of view, there is nothing special, the key lies in effective implementation, in order to integrate the entire apparel supply chain, shorten the design, production to the distance between the retail end, for the brand's business strategy services to enhance the brand value and competitiveness.
- Conclusion -
Inventory problem is not limited to apparel industry inventory itself, it is largely caused by poor supply chain operations. Any business in the current market slowdown in the real environment, relying alone, immune to address efficiency issues at this stage is unlikely. Possible way out is to explore changing the traditional garment division organization ,, relationship business processes, the use of supply chain management techniques, the full release of the effectiveness of the stock of resources and improve resource allocation efficiency, efforts to develop, explore adapt apparel market more variety, small batch, short delivery requirements of the new format.
At the forefront of the brands should explore the use of operations and supply chain management, as closely as possible to and expeditious manner so that balance the supply chain to address the industry's high inventory problems for enterprises to open up more room for development.
