The Way To Solve The Backlog Of Clothing Inventory: Improving Cash Flow Turnover

Related reports show that the Beijing Olympic sponsor Adidas is currently worth 1 billion yuan, 250 million ~3 billion yuan for Heng Yuanxiang and 120 million ~1.6 yuan for AOKANG. It is also reported that the new brand "ME&CITY" launched by the United States in the first quarter of 2009 has dropped to 30%, and the inventory is serious. So we have to readjust our strategy to trigger a series of measures such as layoffs and channel adjustment. In fact, the inventory problem has been in the clothing industry for a long time, but it is especially prominent in this year's market environment. The stock is ruthlessly engulfing the profits of enterprises, making a batch of garment enterprises fall down, and also makes the overall operation cost of the apparel industry remain high, and it will perplex the industry for a long time. Today, as cash is king, how to improve cash flow turnover and solve inventory pressure is the most urgent problem for domestic apparel enterprises.

　　服裝企業的供應鏈管理

The inventory problem of clothing enterprises is concentrated on the management of supply chain. For the inventory problem of clothing industry, promotion can only dispel evil measures, while the optimization management of supply chain can consolidate the right and cure the root. Supply chain management is a management idea and method of logistics, information flow and capital flow integration. Its starting point is to pay close attention to the actual needs of customers, and the relevant departments in the supply chain nodes give full play to their core competencies, forming complementary advantages and sharing information.

External problems of enterprise supply chain

Because of the particularity of the garment industry, except for a few large enterprises such as YOUNGOR, most of the garment accessories and accessories resources must be obtained from the upstream suppliers, which results in two aspects of the external supply chain of the Chinese garment enterprises.

1. the apparel supply chain management of China's apparel industry has not studied the supply chain problems, nor has information sharing, nor has there been any standardized mechanism to constrain the supply chain, according to which criteria, it should provide information for the supply chain according to its criteria, and assist the upstream and downstream enterprises to complete the efficient and smooth connection, resulting in an increase in the inventory level of the entire supply chain.

2., the supply chain members of the garment industry are extruding each other, including the downstream upstream and the strong side squeezing the weak side. This kind of extrusion is not only manifested in inventory, but also in terms of price, cost and risk, resulting in the squeeze of profit and living space.

Internal problems of enterprise supply chain

1., there is a lack of knowledge about supply chain inventory control. The idea of internal supply chain inventory depends on the top decision-makers of enterprises. The top decision-makers of Chinese garment enterprises, though concerned about inventory, fail to increase the supply chain management to a strategic level. Nowadays, the competition in China's clothing market is fierce. The competitors that the garment enterprises are facing may be not only a business unit, but a group army. It is impossible to participate in the competition fully and effectively only by the resources of the enterprises themselves. It is also necessary to integrate the suppliers, manufacturers, distribution networks and customers in the operation process into a close supply chain, so as to effectively operate the business behavior of the enterprise.

2. the internal organization and management system of clothing enterprises impede the operation and control of supply chain. There is such a phenomenon in China's clothing enterprises: when a certain type of clothing products produce inventories, the departments of design, production and marketing are buck passing each other, and their responsibilities are unclear.

There are three types of internal supply chain organization and management in China's clothing enterprises.

　　第一類：大型服裝企業

The clothing enterprises have their own core supply chain management departments, and their internal inventory control conditions are relatively advanced. For example, the second generation MBSRP supply chain information integration system made by the United States, which has already covered suppliers, third party logistics enterprises, franchisees and direct store terminals, as well as various departments of the company headquarters, has functionally included the usual functions of enterprise resource management, supply chain management, procurement resource management, distribution resource management, customer relationship management, shop resource management and POS system management. The average stock turnover time of the system is 71 days, while the average daily turnover of Chinese clothing is 185 days, ZARA and HM are about 30~50 days.

　　第二類：大中型服裝企業

This clothing enterprise has the sense of supply chain management, and has its own supply chain management department (enterprise, also known as logistics department, commodity management department), but does not have unified and coordinated management capability of logistics, information flow and capital flow of the entire enterprise. The inventory management of such clothing enterprises usually relies on reasonable distribution of goods (goods structure, style and quantity of goods), cross section of goods between regions and regions, spanshipment of goods between shops and shops, timely replenishment (shops replenish goods to the company, suppliers unable to replenish goods), and channel promotion and other means to control inventory.

The third category: small and medium-sized garment enterprises.

The clothing enterprises do not have independent supply chain management departments. Usually, the design department is responsible for R & D, procurement department responsible for the purchase of accessories and garments, warehouses for shipment, marketing departments responsible for sales, various departments of enterprises do their own affairs, do not contact each other, and the internal information of enterprises is seriously disconnected. Such clothing enterprises often increase their inventory with the increasing number of enterprises.

Solutions to supply chain optimization

In the era of information economy, the fundamental way to realize supply chain optimization is to realize information spanparency and break the malpractice caused by information asymmetry. In addition to strengthening the planning and design of goods and raising the accuracy of rolling prediction as much as possible, inventory problems should also accelerate the response speed of the entire supply chain to adapt to market changes, and reduce clothing inventory in fact equivalent to producing less marketable products. The proportion of domestic clothing brands is estimated to be 45%? 60%, while the number of outstanding companies is around 35%, while the industry benchmark ZARA is 15%? 20%. Based on supply chain optimization, clothing inventory problem solving is mainly considered from two aspects.

　　模型優化

Among the supply chain optimization models that have been put forward in the clothing industry, the typical "drinking model" proposed by Professor Han Yongsheng is typical. The model considers that the following points need to be achieved if we want to achieve high customer satisfaction and low inventory simultaneously.

First, the products produced by enterprises should adopt different strategies according to different location, total sales volume, season, location of network and traffic volume. Second, enterprises should set up a distribution and retail management system or data warehouse, accurately, timely and completely understand the sales and inventory situation across the country, so that the sales data is spanparent, and then the computer system gives advice on replenishment, goods spanfer and return, and then determines the delivery volume by HCI. Third, because many enterprises only examine sales and profits and do not check the stock index, resulting in the ordering of stores and branches, because they are worried that the best sellers can not fill the goods, ordering more can be ordered or refunded, which directly leads to the gradual amplification of demand information in the supply chain and the "bullwhip effect". The solution is that the distribution center should be unified distribution according to the sales and inventory of each outlets, and the vendor managed inventory VMI (VendorManagedInventory) should be implemented. Fourth, the distribution center will adjust in time according to the sales and stock situation of each outlets, so that some outlets will be sold out, while some outlets will have high inventory. In addition, in order to reduce spanportation costs and time, central stores are used to buffer the distribution of satellite stores around. Fifth, the product sold to the end of the season, a small number of broken, broken code products focused on discount sales, in order to achieve zero inventory.

There are some limitations in adopting VMI inventory management mode. For example, a high degree of dependence on suppliers, high requirements, and requires a high degree of trust. In the decision-making process, the lack of adequate upstream and downstream consultations will increase supplier risk. VMI mode is more suitable for enterprises such as YOUNGOR, which have a high degree of centralized system and a higher proportion of direct channel. In the aspect of current inventory management mode, it is tending to develop the joint inventory management mode of upstream and downstream power liability balance and risk sharing, as well as the direction of collaborative planning CPFR inventory management mode.

Joint inventory management emphasizes the simultaneous participation of all nodes in the supply chain, and jointly formulates the inventory plan, so that each inventory manager in the supply chain process considers from the coordination of each other, and maintains the inventory managers' expectations of demand among the nodes in the supply chain, thus eliminating the phenomenon of demand variation amplification. The determination of the demand of any adjacent nodes is the result of the coordination between supply and demand sides. Inventory management is no longer a separate operation process, but a link and Coordination Center for supply and demand connection. CPFR is facing the cooperation of the entire supply chain. It can improve the relationship between suppliers and buyers by improving the accuracy of the business, and improving efficiency and reducing inventory by CO managing the business process and sharing information.

In addition, in order to optimize the overall function of the supply chain, we need the coordinated development and integrated management of the functions of the subsystems in the supply chain, from the collection and use of information, from the formulation of the strategy to the implementation, from the organizational culture change to the organizational structure adjustment.

For example, the US VF company, which owns Riders, Rustler and Lee brands, has a spot supply rate of 90%, while its competitors only have 50%? 70%. This is attributed to the integrated logistics system established by VF. For example, in WAL-MART store, VF computer tracks every pair of jeans on the rack. When a pair of jeans passes through WAL-MART's cash register, its UPC tags are scanned, and the computer logistics system of VF immediately sends out information. After a few hours, the same jeans will be sent from the factory. Meanwhile, the order sheet determined according to the sales status is sent to the supplier of the VF through satellite communication every day. These suppliers immediately begin to prepare materials and arrange supply, so that the whole logistics system can run continuously and meet customer's needs without interruption.

Technology optimization

In order to realize the full spanparency and convenience of information in the supply chain process, the application of IT technology is a necessary guarantee.

Take the application of RFID (RadioFrequencyIdentification RFID) technology as an example. RFID is a non-contact automatic identification technology, which can automatically extract and identify information carried by the identified objects, and is widely used in different business environments and scenes. Because of the large number of inventory management units and complex logistics management, the apparel industry is currently one of the most suitable industries to apply RFID technology. Data show that RFID's latest practice in garment industry has achieved a series of results.

In the use of clothing terminal stores, there are "smart fitting mirror" and "smart fitting room" developed by the textile and clothing department of Hong Kong Polytech University, and RFID inventory management system of Martha, UK. The "smart fitting mirror" uses the RFID technology to hang the special tag on each garment, and provides personal dress matching guidance while the customer tries out. As long as the clothing goes to the mirror, the customer will immediately feel the clothes. The screen set up on the side will show the collocation suggestions, matching types, colors and prices. The "smart fitting room" is equipped with a screen to provide guidance for customers. Customers can call the reception desk when they pick the right matching clothing. The waiter will take the relevant clothing according to the synchronization screen and the guide on the counter screen. This avoids the cumbersome process that customers enter and exchange clothes in the fitting room, and avoids the customers' resentment because the waiter is too active. The "smart fitting mirror" also helps retailers to get the latest sales and customer preferences and obtain valuable, systematic and original first-hand market information.

The tags used by Martha each have a unique code, plus the UPC number of the tag, to form a linked database. Then the data of the database are sent to Martha department store and the tag is handed to the manufacturer. When the goods are delivered to the warehouse with RFID readers, all the product data can be connected to the database. Martha's employees hold the RFID intelligent reader (reading distance of 70 cm) to read each tag and the unique code. The database of the system matches each ID number with the color, type and size of the marked commodity. In this way, employees can calculate the inventory in the store through the RFID reader. When the inventory in the store is less than the expected level, they can instantly know the kinds of clothes that are missing and replenish the supply immediately, so as to improve the efficiency and facilitate the rational allocation of the goods between the same brand stores. As a result, the sales situation is rising, and the trouble of ordering customers due to shortage is reduced.

RFID's application in clothing logistics, Austria's third party logistics company JbstlWarehousing&Fashion uses RFID system to track the process of clothing goods spanported to retail stores, and has achieved remarkable results. There are about 35 freight boxes shipped from Jbstl logistics company every day, and there is an active RFID tag on each cargo box. Jbstl installed 3 access points on the building of the company's distribution center to receive signals from RFID tags. After receiving the signals, the system spanmitted the unique code on each label to the company's system. The application of RFID technology has realized the full visualization of Vgele closed loop supply chain, optimized the operation process between freight boxes in European retail stores, improved garment throughput, reduced inventory, improved customer service quality and shortened turnover time of orders and cash.

In addition, the RFID system also has many functions, such as reducing shop theft, anti-counterfeiting products, preventing goods exchange, quick settlement of stores, VIP member management and multimedia clothing display.

With the increasingly fierce competition in the industry and the increasing demand of consumers for clothing fashion, higher requirements for the fast response ability of garment enterprises have been put forward. Clothing enterprises should carefully conceive and organize the supply chain, and focus on the warehousing, logistics and information management system, because supply chain management capability has become one of the core competitiveness of garment enterprises.