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    Three Factors Of Garment Inventory Formation

    2012/11/2 11:21:00 32

    Clothing InventoryClothing IndustryClothing Brand

    Recently, China

    clothing

    The "inventory door" incident triggered a new round of discussion.

    Discuss how to avoid and solve inventory problems from how to form and quantity.

    I would like to share with you my views on this issue.


    Past,

    Clothing inventory

    Just like grain in the barn, there is enough safety.

    As a matter of fact, a good harvest should be joyful, but when the grain reaches a certain level, the new rice will become a rice, which is the food of human beings and will become the food of lower animals.

    Similarly, clothing inventory is also the case, the new money has not yet sold, it has become a season, it can earn money, the result is not necessarily sold at a loss.

    On one hand, the inventory problem reflects the trajectory of people's mind, from one extreme to another.


    Failure of tracking and prediction mechanisms


    What is the extent of inventory? What is the extent to which a common type of clothing store is 3~5 times the volume of sales. This ensures that more sizes and styles are available for consumers' choice and matching, and also ensures the fullness of stores.

    Now, there are more than 7 times the store terminal stock, and more than 10 times as many.

    This is only terminal inventory, terminal plugging, upstream manufacturers of goods can not go out, the goods backlog to a certain extent, like floods, become flood.

    Therefore, if we do not open the flood discharge, the consequences will be serious.

    This section does not extend the discussion.


    Why do stocks become so near to losing control? This stems from the failure of tracking and monitoring mechanisms.

    How does this mechanism fail? In most cases, clothing enterprises have a supply chain tracking system from top to bottom.

    This system can see how much the terminal inventory is and how much it sells, thus forming a prediction mechanism to arrange production and supply, and constantly revising and adjusting it in the process, so as to achieve the balance between inventory and sales.

    Most garment enterprises have this system of tracking and forecasting mechanism, which has laid a solid foundation for the healthy operation and rapid development of enterprises.


    However, when the external environment changed dramatically, the accuracy of the original prediction mechanism was broken. When the enterprises did not rush to revise the system, a large number of stocks had been formed.


      

    market

    Environmental changes


    The external environment changes from the past.

    Over the past ten years, the brand consumption capacity of Chinese clothing has been increasing, the number of brands has increased, competition has intensified, and the market has entered a relatively mature period from the rising stage.

    China

    Spin

    It is an indisputable fact that garment manufacturing and overcapacity are at the top. Exports of textile and clothing categories account for 20% of the total output in the peak period.

    In 2009, the outbreak of the financial crisis, the overall high fever of domestic economic environment, severe inflation, and the competitiveness of domestic manufacturing costs continued to decline. Under the background of overproduction, the volume of foreign trade declined, and the surplus of foreign trade was pferred to the domestic demand market, resulting in a more ruthless competition in the domestic demand market.

    In addition, sustained inflation is accompanied by a phenomenon of consumer contraction. When the market is mature (tends to be saturated), the price of goods rises, the increase of consumer income is limited, and the purchasing power declines.

    At the same time, international brands attacked the Chinese market aggressively, robbed many consumers of domestic clothing brands, and also brought a severe challenge to the future growth of the domestic clothing brands which had serious homogenization of products.

    In addition, the bubble of commercial real estate has led to heavy burden on the apparel retailing industry and the decline in profitability. Many retailers' flight to the outside world has aggravated the price dogfight.

    In addition, online clothing category sales accounted for more than 25~30% of the total online retail market share, and online clothing sales system had a direct impact on the physical clothing retail system.


    Vendor gaming accelerates deterioration


    From 2011 to 2012

    Clothing enterprise

    According to the earnings data, although the sales volume is growing, the risk of inventory burden and receivables is also worrying.

    Many business problems are exposed after the order meeting.

    That is to say, after the order meeting, the order growth is weak. After investigation, we find that the market competition is intense, the terminal inventory is huge, the original supply chain system has lost its due accuracy and timeliness, and the decision-making has become passive and slow.


    Most garment enterprises, especially listed companies, have a ERP system, known as X, to solve the contradiction between supply and marketing.

    However, the accuracy of the system is not very high, and 100% of the system is almost saturated with the terminal.

    Why? The question is not whether the system is easy to use or not, nor is it the management consciousness of the enterprise, but rather from the contradiction between the manufacturer (the manufacturer and the retailer).

    Mainstream clothing enterprises adopt futures system. As long as Brand Company sells commodities to channel merchants or retailers, risks are successfully pferred, and brand dealers do not form risks or advance together with retailers.

    Moreover, in order to improve the market share, retailers often ask retailers (retailers) to overstock, and retailers can not afford to go forward, so they will fight the idea of information system.

    In order not to let Brand Company know its true sales and inventory, retailers selectively make errors in system data, thus forming egoistic evidence.

    The game of manufacturers is staged.

    When a brand can not judge the data, it is a reason for the retailers to persuade themselves to grow in order to complete the established growth data and induce them to take stock rebate assessment.

    The total demand of the market does not increase because of this, and the price change becomes a helpless choice, and the market deteriorates further.

    It is not ruled out that enterprises can get rid of difficulties through this trick, but the surplus of the clothing industry's overall surplus can not be changed in the short term.


    The rapid changes in the market environment, the lagging supply chain management and decision-making mechanism, and the lack of scientific and rigorous retailer assessment system have become the common drivers of inventory events.

    The inventory door will become a thing of the past, and the wheels of the years will run through those enterprises that are not brave enough to explore and innovate in the face of danger.

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