Inventory is a significant cost in the majority of enterprises, and fashion industry which I am involved with is no exception. My company is finally at a point where it has a feel for how much stock to keep in a specific amount of areas, as well as a good level to maintain with regards to reordering. My company uses the variety of types of inventory and holding stock, with the exception of raw materials. Working stock is primarily used in my company as well as in the fashion industry in general. Some other companies keep a moderate stock of raw material in the form of textiles, however this is not a primary concern in the logistics agenda of the company.
My company has always understood that have excessive amounts of stock stored across many locations carries the high probability of incurring a high cost (IBC, 2007). While the products carried have a high life-cycle and are not subject to expiration, storage is performed efficiently while the goods may be subject to go “out of style,” as my company is concerned with active fashion and is not a producer of basic clothing. My company does commonly make use of the law of square roots to see some savings in inventory. While my company is aware of the Pareto analysis, it only loosely considered the actual activity while trying to see if this rule is evident in the company or even the industry or if it is only relevant to other areas. The economic order quantity principle plays a key role in inventory actions and processes, while my company uses both fixed point and periodic reviews in these actions and processes as well (Donovan, 2009; IBC, 2007).
Loss and damage are the common issues that are not countered often enough in the fashion industry, particularly when there are no changing rooms, security cameras, or adequate organization of inventory procedure and paperwork. My company does experience higher losses in times of higher stocks, which suggests employees are often to blame in addition to shoppers. Damage is also of particular concern to my company as well as the industry in general because storing clothing for long periods of time has the tendency to make clothing wear, fade, or require washing if possible (IBC, 2007).
Planning for material requirements in fact plays a role in ordering additional products. Optimization systems are not in effect to any real efficient level as of yet, however this is one of the areas currently being developed and improved within the company. Our companies relies mainly on physical inventory control (Donovan, 2009).
Overall, our company is best described as developing in the areas of refined and organized processes, particularly with middle management. Managers, generally, lack organised strategy and a uniform logistics procedure. The fashion industry’s main concerns are trends and the tastes of consumers, and most expenses go to these areas of design and materials (Boak and Coolican, 2001). While the cost of missing inventory is not as high with my company as it is in other areas, due to the high cost of fashion-type clothing being related to style, brand, and other factors not associated directly with production, the products are still subject to loss in the overall business model, which must be confronted through in all the areas of logistics related to inventory (Chandra and Kumar, 2000). Logistics are still being developed with better technology systems and organised paperwork and procedures, and one of the areas which will first see improvement is inventory control.
References
Boak, G. and Coolican, D. (2001). Competencies for retail leadership: accurate, acceptable, affordable. Leadership and organisation.
Chandra, C. and Kumar, S. (2000). An application of a system analysis methodology to manage logistics in a textile supply chain. Supply Chain Management: An International Journal. V5 pp 234-245.
Donovan, R. (2009). Inventory Control: Improving the Bottom Line. R. Micheal Donovan and Co.: Management Consultants. Web.
IBC (2007). The Shocking Cost of Holding Stock. Manufacturing & Logistics IT.