How Can The Purchase And Sale Management Be Rapidly Promoted In Clothing Business?

Spain's garment brand Zara has been opened in Shanghai and Beijing. Exclusive shop Then, in April 2007, the Swedish clothing brand H&M opened its first regional store in Shanghai. According to reports, the Zara store has the highest daily sales volume of 800 thousand yuan, and since its opening, H&M has the highest daily sales volume of 2 million yuan, while the domestic clothing brand stores only have about 10 thousand yuan daily sales. The sales performance of Zara and H&M has made the domestic colleagues feel ashamed. What is their successful experience? Is it because they have more accurate designers who are able to accurately grasp the market trend, proper product positioning and pricing, and strong channel development capabilities? These are not all answers.

Since the 90s of last century, Zara has spent a lot of money in Spain to build a huge logistics distribution system and advanced information transmission system, copying the TOYOTA production system. At the production base, Zara has set up 20 highly automated dyeing and cutting centers. Through the information system and the 400 thousand square feet distribution warehouse located at the production base, the flow of incoming and exported products is centrally managed, and the finished products are delivered to a well maintained storefront at a frequency of two times a week, which reduces the number of warehouses and stocks.

Zara can provide about 11100 different styles of clothing, and clothing companies usually only provide 2000-4000 styles. Zara the shortest delivery lead time (from design to the time of selling clothes on the counter) is two weeks, while traditional enterprises need 3-6 months. Zara's net profit reached 10%, and maintained its two digit annual growth rate. In the garment industry with an average profit margin of only 2%, it can not be said that it is a myth of rapid development. The Economist magazine also named it the fastest growing retailer in the world.

A recent study on the relationship between invoicing and corporate financial performance shows that the core of successful enterprise's competitive strategy is to provide enterprises with competitive advantage. Because of the economic globalization and the intensification of competition among enterprises, it is difficult for any enterprise to survive single handedly in the purchase and sale storage network. The competition among enterprises is more manifested in the competition between purchase and sale. To build a quick response capability of lean sales and storage is one of the favorable means for enterprises to enhance their competitiveness.

What is a lean sale and inventory in the lean sales inventory Editor section is to integrate product design to customer's product, the necessary steps of the whole process and partners to respond quickly to the changing needs of customers. The core is to use the least resources to maximize customer satisfaction. A statistical data shows that in 2001, the related cost of logistics in the United States amounted to 970 billion US dollars, accounting for 9.5% of the gross domestic product of the United States. Saving 10% of the logistics related cost is equivalent to saving nearly US $100 billion.

In China, the logistics cost is also gradually concerned by enterprises. For example, with the increasingly fierce competition in the mobile phone market, the profit margins are getting smaller and smaller. NOKIA realized that after completing the channel, appearance and price, attention should be shifted to the logistics cost that has a certain drop in space. NOKIA's production of a mobile phone requires more than 300 spare parts, and these spare parts suppliers come from all parts of the world, including Japan, Korea and Germany.

So in 2000, NOKIA launched the star net Industrial Park project in Beijing economic and Technological Development Zone. At present, it has attracted nearly 30 partners to enter the park, including Taiwan's Foxconn, the United States's prestige semiconductor, SANYO energy, the world's largest printed circuit board business, Yifei electric, and one of the world's largest logistics companies, such as Ying Yun company. Through the star network mode, the purchase and sale process is greatly simplified, and the logistics cost and product inventory are also reduced to the minimum.

Of course, logistics costs are only part of the cost of invoicing. The cost of invoicing includes order processing, material purchase, purchase and sale plan and information management. Simply shortening the space distance of partners is not all about lean sales. In fact, there are at least two important ideas for building a lean inventory strategy: lean thinking and Theory of Constraints, which originated from just in time production (JIT).

The JIT system, which originated from TOYOTA production system, directly led to the rise of the Japanese automobile industry in the 70s of last century, and was later applied to the automobile enterprises in the United States. In 90s, American scholars Mike and Womack developed the idea of JIT. They believed that the core of lean thinking is to eliminate all kinds of waste in the process, including inventory, transportation distance, waiting time, and so on. In 90s, Jones This idea is also an important guiding principle for enterprises to implement business process reengineering (BPR). The direct benefit of eliminating waste is that the organization can be streamlined and the process optimized, thus reducing the lead time and improving the response speed to the market. The resources released can be used in other businesses, thus supporting the long-term growth of enterprises.

The goal of Gadola Te's Goldratt expounds the theory of constraint theory. He believes that the goal of an enterprise is to make money, and the ability to make money is determined by the bottleneck resources ability of the enterprise. The idle resources of the bottleneck means the waste of the entire resources of the enterprise. Therefore, all activities of enterprises must be arranged around the bottleneck resources. Most of the other theories focus on every link, step, or improvement of every procedure. It is believed that as long as all the links are made the best, the overall improvement of the company will be the biggest.

Gadola Te thinks that every link of the enterprise is interrelated. The local optimum does not mean the whole is the best. The improvement of single link may affect the overall efficiency of the enterprise. For example, if an American company can only outsource the production of some products to overseas factories only considering the cost of production, it will affect the response speed of enterprises to the local market. Therefore, the essence of the theory of constraint is to emphasize systematic thinking and make the best use of the limited resources of enterprises to create the greatest value stream.

The challenge of lean sale and inventory is that the lean strategy of the editor is easier to implement in the enterprises where the demand for products is relatively easy to predict, and the varieties with large volume and large volume are easier to implement. In today's customer centered consumer era, the demand for customers is becoming more and more critical, and the competition between enterprises is becoming more and more intense. This brings two challenges to the implementation of lean purchase and sale: how to coordinate the enterprises at all levels in the purchase and sale of inventory to make the global optimal decision? How to face the changing customer needs and market environment?

Traditionally, Purchase and sale Due to the lack of coordination and information sharing, enterprises at all levels of the reserve make decisions only from their own interests, resulting in the drop in efficiency of sales and inventory and information distortion, that is, bullwhip effect, which has a negative impact on inventory management. Just imagine, if the customer orders are reduced a little bit one day, under the influence of bullwhip effect, the manufacturers will probably greatly reduce production, and who should bear the losses caused by the shortage? In this highly informationalized society, the accuracy of information seriously affects the quality of decision-making. To build lean sales and inventory, we should strengthen collaboration and information sharing among enterprises, and eliminate the negative impact of bullwhip effect on purchase and sale to the maximum extent.

In order to improve the efficiency of invoicing, some enterprises tend to construct large centralized invoicing. Due to the lack of responsiveness to market changes, the entry and exit of this model tends to have no competitive advantage under globalization. Lucent's electronic switching system department set up a low-cost quick response inventory in the late 80s of last century. The system concentrated all parts procurement, production, assembly, testing and delivery of Lucent company to Oklahoma city in Oklahoma.

At that time, most of the customers of Lucent company came from the United States, and almost all the raw material suppliers were located in the United States. But in the 90s of last century, Lucent's response to customer orders was significantly prolonged as the Asian market rose rapidly, because they did not have factories in the Far East. In addition, due to the huge investment in processing orders across the ocean, Lucent is not doing well in customization of products.

Later, as Lucent's suppliers of materials moved to Asia to reduce labor costs, the problems faced by enterprises became more serious. They had to transport raw materials from Asia to the United States, and then transported the completed orders back to Asia, resulting in a lot of waste. In response to this situation, Lucent decided in 1996 to set up processing plants in mainland China and Taiwan to solve the problems encountered in its purchase and sale.

In this section, Peter Shengji said in "fifth disciplines" that "different people are in the same structure and tend to produce similar results". That is to say, the upstream and downstream hierarchical structure of invoicing, resulting in the information distortion and inconsistency of goals. Is this obstacle insurmountable? Shengji also points out that effective ideas often come from new ways of thinking. The innovative practices of some advanced enterprises give us good inspiration, and we can conclude some operational strategies.

Modularization of products and processes. The final product can be decomposed into modules that can be manufactured and stored separately, and different products can be manufactured by the same process. This is a widely adopted strategy in the automotive and electronics industries. For example, different types of cars can assemble the same type of batteries, thereby reducing the safety stock of batteries. After receiving orders from customers, Dell directly gets parts from suppliers or warehouses and assembles computers with different configurations on the same assembly line. This improves the speed of assembly and reduces the demand for resources. Modularization is also conducive to the implementation of Concurrent Engineering (Concurrent Engineering). Some processes can be processed in parallel, thus shortening the lead time and improving the response speed. Another advantage of modularization is to increase the substitutability of products, for example, when some low-end chips are out of stock, high-end chips can be used instead of them to maintain a good reputation.

Delay differentiation strategy. Due to the existence of manufacturing lead time and transportation time, production plans are usually scheduled before obtaining accurate demand information. In the traditional garment manufacturing industry, the lead time is even six months to one year. The postponement strategy is to postpone the production of different parts of the same product as far as possible so as to get more information about the difference part.

For example, traditional knitted sweater manufacturing consists of three main steps: dyeing, sewing and distributing. The usual practice is that the manufacturer first color the white fabric in different colors according to the prediction of a different color demand, then cut and sewn the dyed fabrics, and after examination and packaging, the garments are sent to the sales channel. Benetton, a garment manufacturer in Italy, took the lead in changing the process and delayed the dyeing process to sewing. After that, we could get more accurate color requirement information and then dye the garment, reducing the risk brought by the uncertainty of demand and reducing the safety stock.

In the electronics industry, there are also many practitioners who delay strategies. For example, HP's laser printers were first made in Japan and then distributed around the world. However, due to the inconsistent voltage across the country, different power devices and operation manuals are needed. Because the delivery lead time is long, the demand is often hard to predict. HP then redesigned the power system and sent the bare machine without installation of power devices to all parts of the country. Then, local power supply systems and manuals were installed locally. By delaying strategy, enterprises can reduce inventory level without lowering the service level, thus saving the cost of goods holding.

Use capacity instead of stock. According to the lean principle, redundant inventory is a waste, so we should deal with demand uncertainty through ability. The logic behind this is that capacity can be converted into inventory, whereas vice versa. For example, in order to build quick response Invoicing, Zara maintains about 30% redundant capacity instead of maximizing its capacity so that it can quickly complete the production of emergency orders. Zara always produces new clothing in a small batch way, and quickly distribute garments to stores around the world with its efficient logistics system. Zara is pursuing a high inventory turnover rate. It has an unwritten rule: it keeps shipping goods that have not been sold for two or three weeks in the retail store.

For a general enterprise, if we adopt this strategy, Logistics cost It will surely increase and the risk will be great. For Zara, this is not the case at all. In Zara, the backlog only accounts for 10% of the total inventory, and the risk is relatively small relative to the average 17%-20% level of the fashion industry. The limited quantity and short sale time of each product greatly stimulate people's desire to buy and increase the speed of commodity circulation. A survey conducted in London showed that for average retail stores, the average customer went to 4 times a year, while Zara customers went to Zara 17 times a year on average.

Another strategy for expanding capacity is to coordinate external resources for our own use. For example, H&M does not own its own factory and logistics system. Instead, it has constructed two Invoicing strategies with the help of outsourcing strategy and information system: coordinating the efficient purchase and sale of Asian production and coordinating the quick reaction inventory of European production.

H&M thinks that short arrival time is not always the most advantageous, because the proper arrival time is to find the best balance between price, time and quality. For large quantities of basic fashion and children's clothing, it is obviously advantageous to place orders as early as possible, so the production of this part of products is usually put in Asia to get the advantage of cost. Smaller and more popular clothing requires a shorter delivery date, usually to European suppliers.

Another American Clothing brand Gap has also adopted a similar strategy. Gap owns three garment brands --Old Navy, Gap, Banana Republic, facing different customer groups respectively: Old Navy faces the public with low price advantages; Gap faces fashionable young customers; Banana Republic faces high-end customers pursuing quality. The Gap group uses three separate and interconnected Invoicing systems to ensure the respective characteristics of the three brands. --Old Navy raw material supply and manufacturing are mainly in Asia to reduce costs and sales channels; Gap's purchase and sale is concentrated in the central part of the United States to ensure speed and flexibility; the purchase and sale of Banana Republic is centralized in Italy to ensure quality and design. The system is so effective that many customers do not realize that the three brands come from the same group. In some emergency situations, these three channels can complement each other.

Establish flexible production capacity. The concept of flexibility comes from Flexible Manufacturing System, for example, an automobile assembly line can assemble different types of cars. The purpose of establishing flexible production capacity is to enhance the ability of enterprises to resist risks through Capacity Pooling. As shown in the two flexible systems shown in Fig. 1, each production line (digital representation) can produce two different products (expressed in letters) and has a certain degree of flexibility. For example, the product A is mainly produced by the production line 1. When the demand of A is large and the production capacity of production line 1 is insufficient, if the demand of other products is not large, then the ability of other production lines can be used to avoid the loss of demand.

What is the difference between the two systems? It can be seen that the system on the left can string the connected production lines and products into a chain (A-1-B-2 -C-3-D-4-A), while the system on the right needs two independent chains to string up. In fact, the single chain system is better than the single chain system. Multi Chain System 。 For example, when the demand for product A is very large, the two systems can complement the production line 1 by using the capacity of the production line 4 and the production line 2, respectively. If the demand for product B is also very large, the Multi Chain System on the right side will lose some of the demand. In the single chain system, the production line 3 can help the production line 4 produce part D, thus releasing part of the production line 4 ability. Therefore, the capacity of any two production lines in a single chain system can be replaced by each other, which has greater flexibility and risk tolerance than the multi chain system.

There is a common logic behind all the above strategies, that is, forecasting the overall demand is more accurate than forecasting individual needs, and if we can postpone the decision time, we can get more accurate demand information. Create a balanced art of lean sales and inventory - achieve the balance of time and efficiency.