Friday, 26 July 2013

Reducing Your Time to Serve

In the past the fashion industry has needed to place orders with their supplier’s months ahead of the season.  The lead time was around nine months in total but this is not ideal when it comes to fashion. Demand changes which mean retailers can be left with stock that is no longer relevant in the current market. Stock outs are high, the cost of carrying inventory can be high and the lead time results in a long pipeline that isn’t suitable.

One of the main problems with pipelines is the time it takes to serve. This is the point where the order has been placed and the documents relating to the order have been created. The documents and the orders are worked into the supplier’s processes and these in their own right can be long winded. Manufacturing times can be long and if it takes place on distant shores, the times are lengthened even more. More documents are required and the full container loads must be consolidated and clear through customs often after long times on the road.

Costs in manufacturing and shipping need to be reduced yet if you don’t pay enough, the time it takes to receive the order is lengthened even further which can be self-defeating. Striking the right balance between cost and time to serve is critical unless you want to face forced mark downs and inventory carrying costs or obsolete stock.

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