To 'brake' in this explosion of manufacturing lots, an A-B-C analysis could be carried out to rationalize the product-base after critically looking into the contribution of each variable (color, count, design etc.) to the final product basket.
By taking out A-B-C analysis of sales across product items, significant insights can be gained over the product-mixes having maximum impact on firms top line. In composite mills set up, it is often found that less than 20 percent product-items contribute over 80 percent of revenue. Balance 80 percent of the product mix can be rationalized keeping cost-benefit trade off in mind.
Similar A-B-C analysis can be undertaken at different stages of textile supply chain, to determine number of lots contributing to final product varieties. For instance, in spinning A-B-C analysis might reveal that only 30 percent of lots (count-blend combination) contribute to 80 percent of final product basket. So there is enough scope to trim down the balance 70 percent of 'spinning lots' without having much impact on product diversity. Similarly it can be found minority of lots in dyeing (fibre) or in weaving contribute to majority items in the final product basket. Hence, it is judicious to whittle down some of the lots in these stages to maximise operational effectiveness without taking a beating on final profitability on account of lost diversity.
Tailoring Product-Mix Holds The Key:
Already a high degree of variability presents in retail due to volatile fashion and ever-shortening season. Product lines get proliferated with creation of new segments. For e.g., in sports wear the already established lines- golf wear, tennis wears or swim wear are common, now 'Yoga' wear is in hip. Moreover, product-lines, sizes and overall fits vary with globalisation of market. All these tend to amplify S.K.U variability at retail level to an unprecedented level.
Retailer and buying houses need to manage this diversified product lines right through different stages- product development, sample approval, bulk sourcing of components, production or outsourcing apparel, distributing finished product across retail outlets and merchandising. And all these activities need to be coordinated across vast geographical distance. This complexity of operation is magnified many times by the increasing product mixes in the basic textile fabric.
Most of the times the adverse impacts of product proliferation go unnoticed by the frontline organizations (retailer or buying houses), as organizations in textile-apparel-retail chain are seldom inter-connected, and very little coordination exists among different players up to the initial textile manufacturers.
Retailers have to realize that they should not focus only on purchasing and selling, but on the entire supply chain. Because, should a manufacturer not be in a position to deliver the goods at an agreed point of time, delays run through the entire supply chain up to the end customer. Based on the given configuration of apparel supply chain, the retailer has little possibility to exercise control in this process.
Even relatively simple garments depend on the combination of a fabric from one factory, buttons & zipper from another, and snaps from yet another, all of which must come together in time for the finished apparel to be stacked on store shelves.
Moreover, as product development consists of developing & selecting fabric swatches, figuring out garment style and merchandise flow, proliferation of product-mix results in high product development cost, long design-to-market cycle time. Typically design-to-market time for a fashion-apparel item is 6 to 9 months. Generally it is found that 70 percent of this time comprises non-value added activities such as communication delay, waiting time for assortments, and non-approval of merchandise at various stages etc.
The paper shows that a judicious product mix in basic textile material will make the entire apparel supply chain more manageable without sacrificing the end diversity in terms of apparel fit, size and style that attract the consumer's imagination.
About the Author:
The Author is a supply chain professional. Having graduated from Indian Institute of technology, Delhi, he has experience in leading textile and apparel organizations. He is currently with KDS group, Bangladesh as Chief Operating Officer.
This article was first published on: http://www.fibre2fashion.com/industry-article/13/1244/smart-product-mix6.asp
Posts
No comments:
Post a Comment