Clothing Business: Don'T Cling To Your Stock!

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It is generally considered that the 20% is reasonable. However, the standards of reasonable inventory are different in all stages of the development of clothing manufacturers at all stages.

We should not artificially increase the fear of inventory. We should rationally treat stocks, understand inventories and avoid high inventories, which may be the right choice to deal with high inventory.

To a certain extent, the stock will always be digested, and Chinese clothing should have a strong claim in addition to taking fewer detours.

The main culprit of today's high inventories is that enterprises pursue the speed blindly, seize the important position of main business circles, speed up shop opening, speed of design shipment, and speed of sales growth.

We do not yet have the international led by ZARA, UNIQLO and H&M.

The ability of the brand to integrate the world's textile and clothing resources, therefore, the accumulated inventory in 2012 is the labor pains that must be experienced in the rapid growth of Chinese clothing brands.

Inventory digestion takes time and patience.

Inventory, inventory or inventory.

Recently, clothing enterprises "high storage theory" swept through the world.

Is inventory really scary? What is the current inventory status of enterprises? How much is the stock? How can enterprises reduce inventory and shorten the cycle?

Reasons for "high storage theory"

Where does the "high inventory theory" come from? It may be hidden in the annual reports of listed companies, and some relevant information that can be found, and then it can be drawn from well-informed people according to the interpretation of the current situation of enterprises.

In 2011, the total inventory of 84 listed companies in textile, clothing and fur industry reached 70 billion 832 million yuan, an increase of 25% over the 56 billion 742 million yuan in 2010.

Not only listed companies need to cope with high inventory status, but some applications.

Enterprises also exist, and there is a more serious trend.

In March 8th, the Limited by Share Ltd's first public offering prospectus (Draft), which was previously disclosed by the SFC website, was listed at the end of 2009, the end of 2010 and the end of 2011. The book value of Hai Lan's inventory was 1 billion 305 million yuan, 1 billion 693 million yuan and 3 billion 863 million yuan, respectively, accounting for 50.21%, 44.41%, 56.82% of the total assets of that year.

Coincidentally, the listed documents submitted by Van Clive also show that customers expect to lose 1 billion yuan from last July to June this year, and have a stock of up to 1 billion 445 million yuan.

Such cases are common in China's so-called fast fashion brands and mainstream sports brands, which seem to be the most favorable evidence for "high inventory theory".

But on

For enterprises, these seasonal commodities are also declining.

1 billion 500 million yuan per day in a warehouse means depreciation.

In the spring and summer of 2012, the new stock of MaBang clothing was about 250 million yuan, and the inventory in autumn and winter in 2011 was 700 million yuan. In 2011, the stock in spring and summer was 800 million to 900 million yuan, and the inventory in autumn and winter in 2010 was 500 million ~6 billion yuan, and the rest was earlier.

According to the industry's rules, the new spring and summer 2012 and the autumn and winter 2011 are the normal operating stocks, but the rest of the goods over 1 billion 500 million yuan are all over season goods.

The data on inventory are almost frightening, but it is not easy to talk about.

Because having a reasonable stock is conducive to shortening the lead time, sharing the order cost and adjusting the preparation cost, preventing the shortage of goods and preventing the interruption of supply.

For inventory, we should understand it and solve it.

Bullwhip effect of stock traps

To describe the principle of stock generation, there is a professional term called "

"

In short, it means that in general enterprise inventory management, there is high inventory and the variability of demand in the entire supply chain.

Specifically, in the supply chain of clothing, each dealer will order to the superior supplier. Under normal circumstances, the seller will not order an order to the higher level supplier, but on the basis of considering the stock and pportation cost, the supplier will place an order with the supplier after a cycle or aggregated to a certain quantity.

In order to reduce order frequency, reduce costs and avoid risk of loss, sellers often place orders according to the best economic scale.

At the same time, frequent orders will also increase the workload and cost of suppliers. Suppliers often ask sellers to place orders in a certain quantity or a certain period. At this point, retailers will often increase the order quantity in order to get the goods as early as possible, or to get the goods in full or for rainy days.

In this way, the volume of orders is magnified, which may lead to the order requirement of the final garment manufacturers, which is several times or even tens of times of the actual demand of the consumers.

This has brought great negative effects on inventory management and production.

Clothing enterprises are more likely to enter the trap of inventory.

The reasons lie in the following points:

everything

Inaccurate.

Consumer preferences are variable, and many factors can lead to irregular buying tendencies, which leads to great uncertainty in general consumer and dealer needs.

In addition, information communication with consumers is not smooth, which has increased the difficulty of sales forecasting.

Two, the failure of ordering strategy and the ability to control in time are poor.

This uncertainty comes from the ordering department itself.

Whether there is a reasonable ordering strategy, whether the supply and demand information of upstream fabric enterprises and consumers is accurate and timely.

Three is

Instability.

This is mainly determined by whether the supply channel is single and whether the supplier's performance level is satisfactory.

Four, there is no effective communication with all departments to make basic information such as inventory, dealer and consumer demand deviate.

Regarding inventory, Zhang Xiaofeng, vice president and Secretary General of the Ningbo clothing association, has made such a conclusion: "unlike other industries, clothing is easy to go through the season, and it is difficult to achieve zero inventory in other industries". But from a deeper perspective, the reason for the sharp increase in inventory is due to the uncertainty of consumer demand, and the lack of fashionable sense in the decision-making level of enterprises, the lack of efficient internal resources integration and the ability to cooperate with external resources, resulting in enterprises unable to respond quickly to the market.

This seems to reflect the industry's mainstream view of stock formation.

Paying attention to inventory management and using modern means to avoid inventory risk is the best solution.

With the Internet, ERP,

With the application of information technology in enterprises, the competition mode of enterprises has changed fundamentally. In twenty-first Century, the market competition has evolved from the competition among individual enterprises to the competition among supply chains.

Enterprises in all aspects of supply chain can achieve information and resources sharing and mutual penetration through information technology, and achieve the purpose of complementary advantages, so that they can more effectively provide products and services to the market and enhance their market competitiveness.

For a manufacturing enterprise such as garment enterprises, how to set up and maintain a reasonable inventory level to balance the shortage risk and loss caused by insufficient inventory, and increase the storage cost and capital cost by excessive inventory becomes a problem that must be solved by an enterprise.

In order to quickly digest the inventory, the practice of the domestic mass merchandiser brand is to take the new product discount, mix the new products with the off-season products together to make sales promotion, especially those down garments and seasonal weak commodities that are not fast changing in style. It is easier to be dumped. In addition, the Internet has become a platform for many enterprises to dump off the season goods. Some of the established electric businesses such as vip.com and Qiao Qiao language have become one of the channels for dumping domestic and foreign brands, and the general discount is below 50 percent off.

Over the past few years, the United States has gradually increased the proportion of Direct stores, and has invested heavily in the establishment of Direct stores. Today, all the first tier cities have already withdrawn their franchise and achieved direct control, thus strengthening the control over channels.

When the business is better, the sub company system will show its advantages, but in the face of inventory crisis, the risk of the enterprise is relatively high.

While Semir adopts the agent system, 96% of the stores are franchised stores, and most of the inventory products are backlog in the channel, mainly in the hands of agents, while the buyout + ordering system makes Semir's inventory pressure relatively small.

However, agents must find ways to dispose of the goods. This part of the risk is concentrated on the agent level. If it can not be dealt with and the capital chain breaks, Semir will be able to find other people.

Lining, chief executive and chief executive of Zhang Zhiyong, has publicly stated that in 2012, the retail discount rate will reach 24% to 25%, and the discount rate of factory stores and discount stores will be 50% to 53%.

This is almost a nightmare for franchisees.

Once the stock crisis is spreading, everything is possible.

If there is no way to get rid of its own channels and e-commerce channels, some enterprises will package the whole inventory to the dealers and traders who have relatively strong financial strength, and sell them to some remote areas or overseas markets by means of regional shipment. After all, cheap goods are always wanted to eat, and some of them will be sold to the tail market and sell the inventory as a whole.

Purchasing company flows into the tail cargo channel.

Opinions from all sides:

Old

Don't make a fuss.

The inventory problem of everyone is not serious, which is a common problem in the clothing industry.

The problem of inventory is related to the rapid growth of customers.

If customers slow down the pace of development, there will be no inventory problem, but that's not the way anyone wants to go.

Traditional clothing enterprises are goods shop to the channel.

It takes two seasons in spring, summer and autumn, and only 6 months later to know the channel data.

For the inventory problem, the Internet's fast fashion mode can break the restriction of the two quarter of a year, but everyone in essence is still a clothing Brand Company. This determines that customers can hardly evade the inventory problem.

All customers do not have any inventory of digestion, or they are going to discount sales before the Spring Festival, or sell them next year.

Most of the clothes are not classic, except for collar, there are no LOGO in other places, and they can be sold in second years.

Intensify efforts to clear inventory

The employment cost of sporting goods retailers increased, and the rent of urban commercial areas rose sharply.

Overall, enterprises have reached the ceiling by expanding the number of stores to increase their performance. It is a necessary measure to enhance the output benefit of existing stores.

The problem of de stocking is the situation faced by the whole industry. The Li Ning Co advanced the measures of channel reform earlier, including the improvement of operational efficiency at the retail end, and the construction of clearance channels.

Inventory problem is the main task of the company in the second half of the year. It is expected that stocks will drop sharply in the three or four quarter, but it is emphasized that the amount of repurchase stock will not be higher than that of last year.

He continued that the retail discount this year will remain at the 24% off level last year, and the market competition factor has been taken into account.

International brands have penetrated into the domestic market in recent years, so Li Ningxu is actively researching and innovating, and expects R & D expenditure to account for 2.5% of the revenue this year.

Slow is fast.

After encountering the economic crisis, a relatively flexible management strategy was formulated immediately, which did not exert excessive pressure on dealers everywhere, and showed a certain degree of flexibility in discount sales promotion.

Dealers in relatively relaxed conditions, according to the different conditions of the province's promotional discounts are not the same, in line with the economic situation of the situation, not only reduced the pressure on the stock, but also in a recession, broke through the sales bottleneck.

At the end of 2011, the seven wolves launched the national distribution system, requiring the national agents and franchisees to use the system uniformly, and solved the problem of poor accuracy and timeliness of the original sales information in one fell swoop.

At the same time, the data analysis platform (BI), which is open to agents, stores and upstream strategic partners, enables retailers to improve their store sales data analysis and inventory analysis capabilities. It not only improves the management level of terminal distributors, but also allows accurate sales data to be pmitted quickly in the system. This will greatly improve the management level and speed of supply chain reaction.

Correct understanding of fast fashion

Now the problem of Chinese clothing brand in fast fashion is that people who know the design product do not know how to design the system, and the people who know the design system do not know how to design the product.

To integrate these together requires an organization to create such a chain, which is like an advanced assembly line, where all links are orderly connected, thus forming a virtuous circle.

If the fast fashion is done well, it will actually sell the product, so that there will not be a lot of stock.

Now our so-called fast fashion produces a lot of stock, which shows that there is a problem with our understanding of fast fashion.

Implementing "buffet mode"

If clothing companies earn money in inventory, they are not earning. Clothing is the most valuable commodity.

A large backlog of products not only takes up the company's operating capital, but also costs manpower and material resources, and also increases the management cost and profit cost of the company, lengthen the turnover period of the product and reduce the overall profit of the company.

If selling at a low price simply hurts the brand, it will also hurt the confidence of the channel players.

Our company's supply chain management idea is from "ordering mode" to "buffet mode".

Through the early stage of small batch production, and then do a lot of late production preparation, but not to produce it.

In this way, it can replenish goods quickly, and at the same time, it can not cause a lot of stock. This needs to be re designed from product design to the management of the whole supply chain.

Wang Xiangsheng, executive vice president of Hongkong Brand Chain Planning Management Association

The essential skills of fast fashion mode

Fashion is the first priority, so "fast" is what clothing companies must pursue.

But the biggest problem brought by "fast" is inventory, which is the biggest problem faced by garment enterprises.

This has become a group of contradictions, and it is also the biggest risk for garment enterprises to take the "fast fashion" road.

If you want to try the "fast fashion" mode, it is best to do the following: first, from design to sales, completely self-control, to meet the requirements of rapid response; second, the supply of popular commodities that are preemptive to the list of famous brands will be listed on the market with high quality and a small number of products; third, continuous supply of "fresh goods" (usually for 3 weeks), if there is no need to discount the sale, fourth, innovative.

It includes unique brand culture connotation.