Inventory Disruption Operation &Nbsp; Shoe Enterprise Inventory Management Needs Both Root Cause And Treatment.

On March 10th, the overstock of inventory was like a heavy burden, which made shoe companies unable to breathe.

The so-called "move" and move the whole body.

At the end of the year when the stock market of China's shoe market is in Wenzhou, the development of the enterprise can be seen intuitively through inventory.

A medium-sized domestic shoe manufacturer has 2 cold sticky lines. In 2010, about seven hundred thousand pairs of shoes were produced in November, while the stock was backlog nearly 70 thousand pairs, plus backlog and inventory nearly 100 thousand pairs.

The person in charge of the company said: "by the end of October, the customer response is still normal, but who knows, in a short time, the market sales have changed. We have no time to adjust the production plan, and we are dragged down by inventory."

In sharp contrast, Wenzhou has done a good job in shoe sales this year.

What is the gap in inventory backlog?

Under the pressure of inflation, the tail cargo market is very hot. How about these shoes or tail goods? Qi Yaochang, the vice president of leather shoes Association of Dongguan, said: first, the shoe factories in Dongguan are mainly exported. After receiving orders, the factory's production volume is more than that of the order. Two, some shoe factories have gone bankrupt, and the shoes have been dealt with by the town and the village for auction. They have become stock shoes. Three, because some factories are short of orders, stock materials and workers are idle, so they start to produce shoes and sell them themselves. Four, after the financial crisis, many customers ordered goods but no money to pick up the goods.

In depth, the main reasons for the backlog of shoe enterprises are the following:

Excessive sales of enterprises are expected to expand.

In the 1-10 month of 2010, China's leather shoes enterprises above Designated Size had 3 billion 490 million pairs of leather shoes, an increase of 23.3% over the same period last year, and the overall development of footwear industry is optimistic.

Some shoe companies fail to see the situation clearly, blindly and optimistically, and make every effort to produce enough.

From the Olympic Games to the Expo and then to the Asian Games, people's desire for sports goods has been strengthened, supplemented by marketing tactics, and the market is indeed optimistic. Some companies even took the opportunity to use the inventory a few years ago to cope with the growing market demand.

But too much inflation has made many enterprises know what is "too bad". After the grand event, sales growth has not kept pace with the production line, so the shoes have not been put on the feet of consumers but accumulated in the warehouse of enterprises.

Sales link information feedback is not timely.

In recent years, the expansion of some shoe companies has been speeding up, and all kinds of franchised stores have been flooded everywhere. However, because of the large quantity, distance and low informatization, the disadvantages of wide range marketing are also revealed. When sales information is lagged behind, the shoes produced by factories are not well known.

Economic downturn leads to declining orders

During 11th Five-Year, one of the main problems in the development of China's leather shoes industry is "high dependence on foreign trade and frequent external trade frictions".

While foreign trade is declining, domestic sales agents are also cautious, preferring to increase the number of orders, rather than ordering large quantities.

In order to maintain normal operation, shoe manufacturers are afraid to reduce production easily and stick to it.

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Lack of reasonable marketing methods

Take Quanzhou children's shoes as an example, its brand business expansion is mainly based on agent franchised stores, and the manufacturers have a certain rate of return for franchisees.

Compared with the distribution system and order system, if the replacement rate is not reasonable, it will also easily increase the stock of shoe enterprises.

The distribution system refers to all or most of the styles designed by the manufacturer to the franchisee, and the franchisee has no option. The franchisee has a 20% replacement rate.

The order system is a shoe product that the franchisee needs to order according to the manufacturer's shoes, with a turnover rate of more than 10%.

And by the end of the season or the end of the year, the shoes that come back will become the manufacturer's stock.

"However, Quanzhou children's shoes enterprises have entered the stage of tackling terminal resources. Therefore, agents and franchisees are often given more preferential support. It is not possible to move products from the manufacturer's warehouse to the terminal of agents."

Chad yuan, director of marketing in China, is helpless.

The stock pressure is too heavy for enterprises to breathe.

The overstock of inventory is like a heavy burden, which makes shoe companies unable to breathe.

The whole body is like a malignant tumor, which can infect the normal operation of the whole enterprise.

The capital chain problem caused by the poor operation of the enterprise's capital chain is serious enough to cause the enterprises to tighten their money supply and reduce the proper support strategy for the market. Once the stock accounts for more than a certain percentage, it will be out of control, and perhaps 50% of the enterprise's annual sales will be unable to fill the inventory deficit.

A shoe business person in charge sighs this way.

At the time when the head office was in a mess due to the pressure of inventory pressure, it would be hard enough to support the following policies and practical guidance. At the same time, on the whole, the inventory pressure was too high, the debts were hard to collect, the funds were stuck in the goods, and there was no money to introduce new funds.

After the outbreak of a series of financial problems, many of the two or three lines were cut off by funds, suspended cooperation or closed down or sold out.

China is Adidas's second largest market in the world, but it is also the only area in the first half of this year, with sales revenue falling by 16% compared to the same period last year, dragging down global performance.

Adidas's explanation is: the main reason is the need to deal with inventory.

The impact of product placement and market share on inventory pressure has made the company suffer from serious injury, not only losing the normal supply and sale of upstream and downstream, but also reducing the combat effectiveness in the future. If we want to revitalized the market, we need to invest more in marketing, expanding and maintaining funds.

Because inventory is often the backlog of all kinds of commodities, each has a certain proportion, which will cause great interference and misguidance for the enterprises to make the judgment and analysis of the business plan and product mix in the coming year.

If we can not confirm the series of commodities and high-end goods suitable for enterprises, we can only choose the large and complete development mode in the coming year.

"The cost of product research and development has brought about an increase of 2-5 yuan in production costs, resulting in an upward trend in the chain of factory, wholesale and retail prices, thereby losing the popularity of the wage earners in the main consumer groups, and turning to other brand names that are more cost-effective than those of other brands. Thus, the pace of quantitative change to qualitative change needed by enterprises to build brands will be significantly slower than that of other brands that are well controlled by inventory."

Lv Fuqiang, deputy chief of the original Haixi children's shoes, said.

"We must give you the maximum policy support." your top priority is to do some promotional activities to reduce inventory.

A mobile phone marketing director of a shoe company has been almost destroyed by dealers all over the country.

Raw materials and accounts can not be repaid, enterprises need product development and production to stabilize the listing cycle to appease the total agents. The pressure of funds makes manufacturers and the total generation of tension.

The marketing director of a shoe and clothing company told reporters: "for us, the brand of small and medium sized enterprises with long history and insufficient capital reserves is just like the last straw that has crushed the giant wheel."

At the end of the year, it is necessary to find out the discount on inventory to reduce the losses. But the company is unable to cash in. The cooperation and loyalty of the manufacturers and the total generation are overshadowed. The total loss of the manufacturers' desire to comply with the investment enthusiasm of the enterprise strategy market is lost. The weakening of centripetal force between the company, the total generation and the alliance will affect the development of the whole industry in the future.

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Inventory management must be tackled simultaneously.

Strengthen market research and achieve targeted development

We should eliminate the cause of inventory backlog from the source.

Why is the product not sold? The main reason is that it has not been recognized by consumers. Therefore, enterprises should make early market research in production, and then make adjustments based on research and research in product R & D and production, and maximize the production of footwear that caters to consumers according to market characteristics.

Lei speed casual shoes carry out the idea of "changing from channel oriented to customer-oriented". Li Guomin, general manager of the brand, for example, says that the East and West span of Shandong is relatively large, and the consumption habits of Qingdao and Ji'nan are often different. The provincial generation is sometimes more willing than the others. We set up a city agent in Qingdao, on the one hand, it can meet the needs of market expansion, and on the other hand, it can avoid blind spots that are developed across the board.

Strengthening information construction

At present, China's leather industry has weak information foundation and low application level, especially in software applications.

Enterprise informatization mainly concentrates on a relatively elementary level, and does not integrate information, and does not maximize the potential of informatization.

Prior to the adoption of the ERP system in Wenzhou's Tamar footwear industry in 2007, the material inventory occupied more than about 3700000 yuan. From warehouses to the chairman, they said they had no idea what materials they had in the warehouse, when and when the materials were purchased.

After the inventory, the chairman was scared - the skin in 2003 was still in the warehouse but no one knew it.

The enterprise launched the ERP system for lean management, and the chairman can check all the material details.

Zheng Guochao, director of the CIO alliance of Wenzhou enterprises, said: "ERP plays an important role in improving the efficiency of production processes and reducing the utilization rate of funds."

A lot of inventory is caused by adding orders, most of which are caused by information and market forecasts.

Modern logistics can enable enterprises to plan and cooperate in all aspects of logistics, carry out logistics planning, warehousing management, cargo tracking and settlement management, and strengthen the market analysis ability of enterprises.

Su Longde, director of the Taiwan global operations research and Development Association, believes that public information exchange platform can well connect the needs of customers, so that enterprises can make logistics plans more accurately, and meet the needs of different customers for the first time, and constantly update their products.

Expand sales channels

The above three points of "therapy" make shoes enterprises avoid and reduce the backlog of inventory, which is used to "cure the root causes", while expanding sales channels is a "temporary solution".

To prevent further deterioration of inventory problems and reduce expenditure, Adidas has closed about 100 stores in China since last year, ending some agency cooperation, including Daphne.

At the same time, Adidas hopes to achieve "open source" through new sales channels, the official flagship store on Taobao online is officially launched.

Du Bairui, President of Greater China, said he hoped to take this opportunity to understand and meet the consumer demand of Chinese consumers.

The net pin is light and flexible, and the price is low, which is favored by consumers. It plays a great role in the inventory of goods in the shoe enterprises.

It is also a more direct way to carry out brand sale in shopping malls and exclusive stores.

Dealers can deal with poor products in time according to local sales situation, reduce inventory management fees and speed up product updates.

In addition, some people have started the inventory sale business directly, and the dual advantages of the brand low price have attracted countless consumers, and the profits are considerable.

In Dongguan, many mainland merchants come directly to stock shoe market to sweep goods.

If conditions permit, shoe manufacturers can make products as gifts for branding campaigns, or as welfare payments, to mobilize the enthusiasm of their employees.