What Is Effective Stock?

Since 2012, China's apparel industry has continued to be in a downturn, and inventory levels are generally too high. In order to reduce inventory levels, apparel companies are actively seeking effective ways. The industry believes that the model of sales and production cannot achieve the purpose of eliminating inventory, and optimizing the supply chain is the effective method of eliminating inventory.

Eliminate inventory

Right!

Since 2012, our country

Since 2012, China's clothing industry has continued to slump, and there are generally excessive stocks. In order to reduce

The clothing industry is more seasonal. If the seasonality is not well grasped, it will cause a large amount of stock ^[1]

Selling production is not a good policy

I have learned that some textile and apparel companies have adopted the strategy of sales and production to deal with high inventory. According to the convention, the inventory of a product is about 30% of the shop's volume, so it will not bring more cost pressure, and there will be no shortage of supplies when the product is sold well.

However, in actual operation, due to the asymmetry of information between the supplier and the franchisee and the difference in the distribution of benefits, difficulties in inventory control often occur. If the supplier brand is well-known, the inventory pressure will be transferred to the franchisee, and the franchisee will have to digest the inventory by itself. If the supplier is more dependent on the franchisee, then the supplier must digest the inventory on its own. But sometimes the information between the two parties is asymmetric, and the inventory and sales ratios cannot be properly controlled.

Optimizing the supply chain becomes an effective means of solving high inventory

Establish supply chain collaboration, and inventory costs can drop 40% in the supply chain. Kaka is a good example of supply chain management.

The market's supply chain includes three links: product design and production, supporting product research and development, sales and service. Through vertical integration and configuration of the entire supply chain, each link is compact and smooth, and product circulation is maximized. speed. Don't ignore the most important design link in the industry chain. De-homogenization of products is a way to arouse consumers' purchasing desires and to completely solve the inventory problem.

People in the industry said that it is not only necessary to control the inventory in the production process, but also to solve the inventory problem from the perspective of retail, such as cooperation with e-commerce, increased sales efforts, etc., to create a "three-in-one" sales model to digest the increasing Increased inventory.