Assortment Plan, Inventory Management
Assortment planning is about making the right product picks and ordering the right quantities to match market demand. These decisions affect both retailers and manufacturers supplying them. In the apparel and fashion sector, these challenges are also more complicated, because of limited time windows. Once a fashion season has gone, the market changes. At this point, the remaining stock often only sells at heavily discounted prices.
Picking Apparel Products to Meet Demand
The first step in assortment planning is understanding the basics. Retailers define the range of products to be sold by width and depth:
- The widthis the number or variety of different product categories.
- The depthis the amount of product and brand variation within an individual category.
- Using Assortment Planning to Drive the Supply Chain
A supply chain should work end-to-end to plan the required supply, stocks, sales, and margins. This includes manufacturing, logistics, wholesaling, and retailing. Market trend data and retailer requirements can be used by manufacturers to adjust their production schedules. Traditionally, these adjustments have often been ad hoc or carried out by reconciling plans from different sources. Ad hoc adjustments allow a manufacturer to react rapidly to changes in demand. However, they may unbalance the supply chain in unexpected ways. They also become increasingly difficult to manage as environments become more complex. On the other hand, reconciliation of plans may work for stable environments but is soon outstripped by rapidly changing marketplaces.
- A Product Lifecycle Management system manages information through the life cycle of a product, from the initial concept to production. To do this, it integrates data, processes, and business systems. By using a PLM system, an enterprise can work as one team to make information-driven decisions at each life cycle stage, leveraging best practices and improving customer experience. A suitable PLM system for fashion and apparel brands supports design, product development, purchasing, sample approval, sales, service, and workflow tracking. It increases the visibility of all production costs while creating and managing compliance and factory audit documentation. Overall, the PLM system is used to support brand merchandising, design, development, sourcing, and production.
- An Enterprise Resource Planning system facilitates the flow of information between departments and functions. There is no need to use separate and sometimes incompatible software applications for accounting, purchasing, logistics, and related functions. Instead, the ERP system integrates all this information, accelerating processes, easing reporting and tracking, and preventing errors. Overall, an ERP system supports sourcing and production, supply chain management, logistics, and wholesaling.
- Demand and supply management.This system optimizes the replenishment of products, enabling inventory planning for possibly thousands of product references. It helps the enterprise to balance supply and demand to meet financial and service goals. Specifically, it supports the sales and operations planning (S&OP) part of the supply chain, together with logistics and wholesaling.
- Retail planning.Merchandise planning, forecasting, brand management, and inventory control are typical functions of a retail planning system. Historical and point of sale (POS) data may be used for this. Cluster planning for groups of stores, style-by-style, and product or storekeeping unit (SKU) level retail management are all possibilities. As its name suggests, a retail planning system supports the final part of the supply chain, the retailing operation.
Accurate Assortment Planning, Profitability, and More
With an integrated, information-driven planning approach like the one above, apparel and fashion enterprises reap several benefits. They reduce costs and increase productivity. Gains come from stopping repetitive data entry, closing gaps in communication, and avoiding human error. With the right PLM system, for instance, apparel designers can enter designs into the system straight from their design applications, such as Adobe® Illustrator. Manufacturers, wholesalers and retailers get enhanced visibility across the supply chain. Seasonal and fashion items sell within their window of sales opportunity, without having to cut prices. Buffer stocks and bullwhip effects go down. Sell-through, customer service, and inventory turns go up. Accurate assortment planning can turn reliably into profitability for the different actors in the supply chain.
Inventory management is the management of inventory and stock. As an element of supply chain management, inventory management includes aspects such as controlling and overseeing ordering inventory, storage of inventory, and controlling the amount of product for sale.
Procurement process starts with gathering requirements and ends with procuring goods from vendors. Once goods are procured from vendor they need to be placed in company’s premises in correct place so that they can be consumed when required. This introduces the term known as inventory management. Inventory management deals with placing and handling stock received from vendors in correct place within company’s premises. The key points about inventory management are as follows:
- Inventory management deals with management of stock either on value or quantity basis.
- Planning, entry and keeping records of all goods movement comes under inventory management.
- Goods movement will create a document that will update all stock quantity and value in inventory that is known as material document.
- Material document will be referred by a document number and document year.
Inventory management deal with the following terms which are as follows:
- Movement Type
- Goods Receipt
- Goods Issue