Saturday, 28 February 2015

Chit Chat: Top eCommerce Trends in 2015

The eCommerce world is fast paced and ever changing. If you want to remain relevant in 2015, here are the trends to be aware of.
  1. Shopping malls in the palm of your hand. Mobile users are using their gadgets to shop online. Smartphones are here to stay and the mobile shopping experience is being expanded. Mobile friendly stores are expected to increase, offering shoppers a hybrid experience combining physical stores with modern mobile shopping.
  2. Expect to see wearable technology increase, even with the demise of Google Glass. Wearables such as Apple’s iWatch are going to be big news and highly sought after. Expect the wearables to offer businesses new ways of keeping customer’s updates, sharing promotions and sending other marketing signals.
  3. Customisation. Products and services are expected to become more customisable, to keep up with the demands of the consumer.
  4. eCommerce will need to work very hard to ensure their web pages are fast and super responsive as internet speeds and expectations continue to rise.
  5. Same day shipping is big news and seen as a huge positive by customers. Amazon and Google already offer same day shipping and businesses will need to follow this trend quickly.


Friday, 27 February 2015

How to implement a demand driven supply chain

A demand chain is beneficial as it works to improve the visibility of the demands made by the customer. Integrating the demand chain with the supply chain helps to reduce high costs and improves the efficiency of the delivery of products while improving responsiveness.

When implementing the demand driven supply chain the main focus becomes the satisfaction of the customer. This becomes and main goal and information needs to be gathered throughout the supply chain to ensure the goal is met.

There are management tools available that make the process easier for firms to cope with the volatility of the market. Sales and operations planning process is also suggested as being an excellent method of achieving a high level of customer satisfaction using on time full deliveries and reducing the size of the inventory to a minimum.

The sales and operation planning process are as follows:
  • Generate the aggregate demand
  • Modify the forecast using the demand intelligence gathered
  • Create the consensus forecast
  • Create the rough cut capacity plan
  • Execute at SKU against the demand
  • Measure the performance

Thursday, 26 February 2015

What are the stages of inspection for garments?

Today we’re concluding our look at the different stages of inspection in the apparel industry.

In Side Inspection
The inside inspection is the fourth step in the inspection process. This is when the garment is checked on the reverse side. Inspectors must look for any defects in the fabric along with staining or poor workmanship.

Outside Inspection
After the reverse of the garment has been inspected the right side needs to be checked too. Inspectors need to look for any defects in the fabric, printing, dyeing and weaving. They must also examine for holes and poor stitching, colour variations, unwanted smells, and stains.

Final Inspection
The final inspection is the most important part of the process. The garment is checked over once more and ensures that no steps have been missed or that no defects have been overlooked.

Packing

Some goods will need to be packed up and sent for repairs or as rejections during the packing process. All goods that are considered to be A grade will be put into the original packaging and then forwarded for needle inspection.

Wednesday, 25 February 2015

What are the stages of inspection for garments?

Garment inspection is when the quality of the garments is checked without the use of any instruments. The garments have to be inspected to ensure they meet the specification and the standard set out by the buyer. The inspection procedure includes many different steps and we’ll be looking at these steps over the next two days.

·         Confirming Quantity
Begin the inspection process by confirming the quality with the retailers or vendors. Count the pieces in the boxes and ensure they match the packing list and inform the buyers if discrepancies are found.

·         Confirming Accessories
Confirm the accessories, such as the wash care labels, price tags, woven labels, and any other accessories that the buyer has requested.

·         Size Specification Inspection
When the quantity and the confirmation of the accessories have been completed the next job is to check all the pieces are correct according to the size specification on the instruction sheet. When problems with the measurements are detected it’s necessary to check the original sample and give the information to the buyer.

Tuesday, 24 February 2015

Tips on making garment inspection reports

There are steps that need to be completed when making the garment inspection report:
  • The format of the design quality inspection
  • The recording of data during the inspection of the goods
  • Analysis of the data and writing the summary
We have a collected a few tips to help you write up the garment inspection report: 

  1. Measure the percentage of defects of the garments by employing a quality checker to inspect at the end of the line. They will record the amount of pieces they check during the day and record the number of defective garments. At the end of the day calculate the percentage of defective garments in the production lot.
  2. Check the measurements by designing a format with the measuring points and measurements. Record the actual measurements of the garments and verify the measurements with the buyer.  The findings need to be included on the report.
  3. To discover the major defects that you will need to design a format to collect data including the different defect categories, the total number of defects and the number of pieces that have been accepted. Check the garments and make a record of the defects under the categories and the number of defective pieces found. Add the numbers in each category and calculate the total number of defects. Calculate the DHU and the Percentage Defective of the garment lot. Finally, write the defects in descending order and make a bar chart.


Monday, 23 February 2015

What to consider on Quality Control in exporting garments?

The satisfaction of the customer depends on the quality of the products. Greater customer satisfaction results in increased sales, establish the name of the brand and helps create a good reputation. 

There are many aspects that determine the quality of a garment and so it is essential that exporters complete the various quality control measures to ensure customers are happy. Garment exports need to consider the following:
  • The fabrics must take precautions when sourcing fabrics to reduce the risk of problems.
  • The exporter has the responsibility of ensuring quality.
  • Pricing, packaging and delivery all play their part in quality and customer satisfaction.
  • Promises made to buyers need to be met.
  • The correct documentation is required.
  • Quality isn’t the only important factor; deliveries need to be made on time.
  • Compete in the market by improving quality of garments being offered at the same price-range.
  • Know the quality standards required by the international markets and follow them.
  • The samples and the final products must match.
  • After quality assurance is completed the exporter should be able to negotiate the premium price.
The quality control needs to look out for problems with the sewing, colours, sizing defects and garment defects.

Saturday, 21 February 2015

Chit Chat: Top Retail Trends in 2015

Self-Service
Self-service helps the company to save money but it is hard to get right. Customers are getting used to seeing self-Check-in kiosks, self-scanning machines and check out services in hotels. This is a trend expected to continue and intelligent vending machines are soon going to be making their way onto the high street too.

Cost Polarisation
Mid-priced retailers are expected to disappear in 2015 so expect to see more economic and premium brands. This is because the middle class section of society is also expected to vanish. Customers are left with buying low cost or high cost goods and many will shop at both.

Merging Sectors
2015 will see more brands mixing up their product ranges and options. More bookshops will begin to explore selling coffee; supermarkets will venture deeper into loans and finance; utility suppliers will sell multiple utilities rather than focusing on one.

Radio Frequency Identification Devices (RFIDs)
Barcodes are evolving into RFIDs. They are microchips on antenna that the retailers can use remotely. They are being used to manage the inventory and also as a theft deterrent.

Fast Retail
People don’t want to wait, and they’re sleeping less than ever before. Brands want to make the most of these selling opportunities, but providing different services around the clock, such as drive-in dining and mobile banking. Consumers also like change and pop-up stores are going to be popular this year.

Crossovers
The population is getting older, yet many businesses only focus on the teen market or baby boomers. Brands will need to focus on serving this aging market.

Brand Experience
Consumers don’t only want products, but also an experience when they shop. Brands need to look at ways of offering these experiences to their customers if they want to exploit it.

Customisation
Bespoke and tailored made products are in high demand, but this level of customisation isn’t accessible to everyone. Brands need to continue to look at ways of bringing customisation to the masses, and globalisation is pushing this trend along in the right direction.


Friday, 20 February 2015

What are the different department's functions in the apparel industry? - Part 3

Today is our final look at the different departments and functions in the apparel industry. Don’t forget to check out parts one and two if you’ve missed them this week.

IED Department
The IED department works out the production time that is needed to complete the product and work out the capacity of the factory.  It calculates the productivity based on the costing and gives the details for the merchandising department. The IED department is also able to give merchants, ideas on how to reduce costs.

Embroidery Department
This is where the embroidery details provided by the merchant are sent for the garment in hard copy format. The files will be maintained and samples of the embroidered garment will be received. The embroidery section begins to work once the garments have been sent from the cutting room or sewing floor.

Washing Department
When the garments are finished, they are sent for washing or finishing. They check over the garment to determine:
  • The material type and texture
  • The appearance
  • Labels used on the garments
  • Dyes that are used in garments and labels
  • Threads being used
  • Different chemicals used
  • Wet and dry processes
  • Temperature the garments need to be treated
  • After effects of the chemicals
  • Sensitivity of the fabric
Quality Assurance Department
There are different groups within the quality assurance department that are used to ensure quality is maintained:
  • Pre-Production Audit
  • Cutting Audit
  • Sewing audit
  • Inline Audit
  • End-line Audit
Finishing Department
When all the departments have completed their role the garments arrive at the finishing department. The finishing department, then needs to check the garment and complete the following tasks:
  • Trim
  • Inspect
  • Semi- Press
  • Press
  • Pack


Thursday, 19 February 2015

What are the different department's functions in the apparel industry? - Part 2


Today we’re continuing our look at the different departments and functions in the apparel industry.

·         Laboratory Department
The testing of fabrics and accessories take place in the factory. If the factory doesn’t have the required equipment to perform tests as requested from the buyer the laboratory will send the items for external testing. These external laboratories have to be approved by the buyers and the merchants.

·         Machine Maintenance Department
Machines that are not maintained to a suitable standard often result in garments that are of an unacceptable quality. The machines need to be maintained to ensure the quality of the products is up to standard and so that injuries and accidents can be avoided on the factory floor. The functions are varied, but include:
·         Changing oil
·         Setting adjustments
·         Fitting care
·         Needle reports
·         Needle logs
·         History card

·         CAD Department
The functions of the CAD department are:
·         Establishing the cutting average for costing purposes
·         Creating the efficient marker
·         Creating and altering patterns
·         Setting sizing for patterns
·         Making the pattern digital
·         Making embroidery graphics

·         Merchandising Department
Products are planned, developed, executed and presented by the merchandising department. They oversee the entire development of the product line, from the start to the end. The main functions are the development of the product, costs and ordering.

·         Production Department
The production department receives details regarding the product, such as the style, how many operators are needed and the daily targets. When they have the details they will request the parts from the cutting room and the accessory stores. The products will then be produced, with various inspections taking place at different stages.

Wednesday, 18 February 2015

Royale International Wishes You A Happy Chinese New Year!

Gong Hey Fat Choy! Royale International wishes you a Prosperous Chinese New Year! 
偌亞奧國際仝仁祝各界 萬事亨通 心想事成 生意興隆 貨如輪轉


What are the different department's functions in the apparel industry? - Part 1

There are several departments in the apparel industry, each playing an important role ensuring the process flow is completed.

Sampling Department
The sampling department is where samples are created to see what a product will look like once it’s produced in bulk, and to spot any problems in the pattern that have been created based on the specification of the buyer. During this development stage, the sampling department work closely with the merchandising and production departments. The functions include:
  • Planning
  • Cutting
  • Production
  • Quality control
Fabric Sourcing Department
The fabric sourcing department is where the different fabrics are sourced. It works with merchandising and will monitor the delivery of the fabric and the costs and ensure they will be delivered on time.

Purchasing Department
The main difference between the fabric sourcing department and the purchasing department is the fabric department is solely devoted to sourcing fabrics while the purchasing department is in charge of everything else, such as the deliveries and costs of all the different accessories and trims used.  The functions of the purchasing department include:
  • Price negotiations, delivery times and quality
  • Supplier selection
  • Proposal preparations
  • Coordination with the merchandiser, supplier, store and finance.
Fabric Audit Department
There are several objectives of the fabric audit department:
  • Fabric analysis
  • Fabric selection based on the AQL
Inspections take place in order to determine the segregation of the shade and width and to look for defects, shrinkage and the quantity.

Accessory Stores Department
This is where the date of the arrival of the different materials is made to the database, known as PRE GRE. When the material arrives the materials are verified against the invoice and the packing list to be confirmed as correct. A quality inspection, then takes place.

Planning Department
The planning department aids the merchants in their bid to determine the costs of a style, if the company is able to create the garments in a time span as determined by the merchant and play a very important role in the approval of the order.

Tuesday, 17 February 2015

Happy Year of the Yáng 2015

On 19th February 2015 comes the biggest festival celebrate among the Asian community with various traditions and rituals happening around - Chinese New Year. 

Despite the family dinners & relatives greeting, Red pockets aka “Lee Si”, remained to be the most welcomed and popular among all Asian where people bestow good wishes to those around them. Recently, someone had asked why there were different representation of the Chinese zodiac image for “羊年” (Year of the Yáng). We had decided to try to unravel the mystery behind this by visiting various online sources.

So is it the Year of the Goat, Sheep or Ram?
Each of the 12 years in the Chinese zodiac cycle is represented by an animal. Some may be confused with the symbolic reference to this year’s zodiac sign due to the many references in name. Some refer to it as the 'Year of the Goat' while another refers it as the 'Year of the Sheep' and in some case, they refer it as the “Year of the Ram”. 

These are all equally correct because “yáng” covers these types of animal. There is no exact equivalent in English for yángnián 羊年 (Year of the Yáng ) especially when translating from one language to another.  Different culture also has a different translation and reference such as the Japanese (“未年”- Year of the Sheep), Koreans (Year of the Ram), Taiwanese (Year of the Sheep), Vietnamese (“năm mùi”-Year of the Goat) and Mongolian (“未年”- Year of the Sheep).

Through various online sources, we had uncovered the word used in Chinese-English dictionary for '羊yáng' is 'Sheep' but it gets complicated since the same word can also be used to describe other horned animals such as a goat (山羊shānyáng ('mountain yáng')) or a ram (羚羊língyáng) as the Chinese language uses the same form, with a modifier, for 'goat', and also for 'ram', 'ewe', 'lamb', etc

 "The Chinese character yang can be translated as all of these animals – even the gazelle is called yáng in Chinese," CNN quoted Isaac Yue, who teaches Chinese mythology at the University of Hong Kong. Hence, as long as it is 'Yáng', whether you call it goat, sheep or ram would be the similar.That’s why the Year of the Yáng is also known as the Year of the Goat, Sheep or Ram. 

In the spirit of the upcoming new year, we have consolidated a few general interesting astrology information from various online sources below:
  • In Chinese culture, people believe there is always a brand new start in the upcoming year, 2015 is a “Ben Ming Nian” (本命年), the name of the according zodiac year. 
  • According to Feng Shui master, Clarice Chang “people born under the this sign are easy-going, persuasive and sociable, with refined tastes. They also tend to prefer the privacy and solitary moments. With their gentle and nurturing personality, people with this sign are often found in the hospitality, teaching and care-giving professions.”
  • The lucky colours for people born in the Year of the Sheep are: red, green and purple.(chinesenewyearin.com)
  • The lucky numbers for this year are: 3, 4, 5, 12, 34, 45, and 54 (gotohoroscope.com)
  • The lucky feng shui directions are: east, southeast and south (travelguide.com)
  • Paul Ng, Feng Shui practitioner believes that the following businesses are favourable this year: real estate, electronics, food, automobile, mining, show business, and banking, among others, while unfavourable businesses include: business involving water, travel, clothing, and imports and exports.  
Reference


What are the various apparel inspection methods? - Part 2

We are continuing our look at the different methods of inspection in the apparel industry. Yesterday we touched upon Pre-production checks and initial production checks; please take a moment to read back if you missed the post. Today we will look at production check, random inspection and the AQL random sample inspection.

·         Production Check
After the initial production check, a follow-up check is completed during actual production to ensure that any problems that were picked up in the initial inspection have been resolved. The 'during production' check usually takes two to three days after the initial inspection checks.

·         Final Random Inspection
A sample is taken once the total quantity of the order has been made or when the partial delivery has been completed. There are multiple samples taken from the batch, usually a percentage that has been specified by customers.  They may have their own inspection system or use the AQL Random Sample Inspection. The AQL random inspection takes a percentage of the goods and the outcome of the inspection will determine if the whole batch will be accepted or rejects. This method is usually used on the expensive items.

Monday, 16 February 2015

What are the various apparel inspection methods? - Part 1

Retailers wish to have quality garments from manufacturers in order to sell them to customers. There are lots of different ways to determine the quality, which can vary and depend on the price. The inspection techniques are used to determine the quality of the garment, the first two are as follows.

Pre-Production Check
The pre-production check is completed before the production line begins. This is where final decisions are made concerning the material, the style and cut along with the workmanship. Customer requirements are used to determine these factors and once decided the production can begin.

Initial Sample Check
When production starts usually a sample is checked over within the first batch to uncover any variations or discrepancies so that adjustments can be made to correct any mistakes that would affect the bulk production. 

These include inspection on the following:
  • Appearance
  • Colour
  • Components
  • Fabric quality
  • Measurements
  • Printing
  • Style
  • Weight
  • Workmanship
Return tomorrow for the final three methods of inspection for apparels.

Saturday, 14 February 2015

Chit Chat 2015 HR Trends – Part Two

Today we’re continuing our look at the HR trends we expect to see during 2015.
  1. Chief human resources officers will be focused on making the global diversity and inclusion functions more strategic in 2015. Inclusion is expected to become more popular and human resources leaders will be looking to increase the amount of inclusiveness there is for the employees that have different points of view and perspectives. Expect to see a move towards modernisation.
  2. The Employee Value Proposition will be thinking about building a stronger workforce to help build solid foundations for the future.
  3. Efficiency is still going to be important in 2015. Models will be tweaked in order to cope with the pressures and speed experienced in the global business world and their economies.
  4. Using technology and better HR analytics to enable better succession management process

Friday, 13 February 2015

Tips on Demand Planning

Understanding the Opportunities
The company will need to collect information and then analyse it to determine the impact it has on the demand management. Internally the company must look at the different practices, processes, policies and bookmarks to establish where savings can be made within each of the spending categories.

Prioritising Categories
Many companies will be limited when it comes to adding more categories at the same time due to the available limited resources. So the first categories used in demand management should be the ones that are more likely to produce strong results that will be successful. Always work to avoid the issues by deciding the areas that are going to be most affected by the demand management and be careful to balance out the implications of the decisions being made with the needs of the employees.

Demand Drivers
Establish the most attractive cost saving opportunities for the company and develop these areas first. To do this you must work out what is pushing the consumption in the company. For example, looking at the cost of express deliveries verses the use of regular mail. Work out if there is a good reason for using the express services and find out why it’s required or if it’s being used because the employees are using the service out of habit.

Use Benchmarking
Benchmarking is a very effective tool that can be used in demand management. Benchmark the performance of the company against others, and use this information to establish the different types of purchasing and control policies that can be introduced.

Thursday, 12 February 2015

What are the Concepts of Demand Management?

There are several concepts of demand management, which are as follows:

Demand Sensing – Demand sensing aims to find ways of reducing the time to sense of the true market data in order to understand the shifts in the market concerning the demand response.

Demand Shaping – Techniques are used in a bid to increase the demand in the marketplace, including the creation and innovation of new products, price management, increasing assortment, merchandising, marketing, sales incentives and placement.

Demand Translation – Each role within the company needs to have the demand translated from the market. By doing so, the different requirements for the manufacturing, procurement and distribution are recognised. The forecast is based upon the selling unit and put into the ship to modelling channel and then translated to the ship from based on each of the specific roles.

Demand Orchestration – Making trade-off decisions that are balanced with the demand risks and opportunities in the market. Analytics are used to shape and sense the demand at the same time and the findings support the trade-off decisions, such as advance shipments or increasing the amount of products to the supply chain.

Wednesday, 11 February 2015

What is Demand Management?

Demand management is concentrated on managing the external purchases of the company. Demand management helps companies to understand the reasoning of the purchases they make. It isn’t only focused on the price of the products, but also on the quantity of the products, a move away from the more traditional methods of sourcing that have been used in the past.

Demand management includes the consumption, which is a cost equation and it also helps the company to reduce their spending as it is centred on the quantity of purchases. It is a more in-depth method than strategic sourcing that is mainly focused on the costs of the services and goods that are purchased. The demand management often follows directly on from where the strategic sourcing leaves off.

Tuesday, 10 February 2015

2015 HR Trends – Part One

Today we’re looking at some of the global trends expected to increase in HR during 2015 according to HR experts.
  1. 2015 will be the year that sees a lot more focus on obtaining in-house talent rather than outsourcing. This change has been increasing for the past couple of years and it will continue to become an expense that has a roll on effect on recruiting firms. The searches that are external to the company will be focused on: senior leadership roles, specialized roles in mid to senior level and low level high volume recruitment.
  2. An increased demand for specialists will be a trend worth keeping an eye on, especially within human resources.
  3. Employee engagement is no longer a one size fit all; there will be more innovation in the retention of talents due to the shift in the workforce. Companies need to re-evaluate the ways in which they motivate employees, revisit health care programs and shift to models that analyse productivity to stay competitive and attract new talent.
  4. The growing change of mobile usage in the workforce has allowed many companies to connect with their employees by incorporating benefits and reward programs into their everyday life.  Mobile optimized HR software allows employees to access accrued vacation time, hospital benefits and reward packages anywhere. 
Return on Saturday to the concluding part of our 2015 HR Trends to watch.

Monday, 9 February 2015

What are Quality Inspections in the Supply Chain?

Quality inspections play a vital role within the manufacturing process. They are used in many different links in the supply chain including:

·         Warehousing
·         Receipt of goods
·         Production
·         Goods issue

When the company buys items they may perform the quality inspection. The company will check to see if the agreement with the vendor is upheld and established if it can be used. If the item isn’t what was promised by the vendor the company will then be able to return the item and be refunded.

The vendor’s may also undertake the quality inspection before distributing the items. These inspections often include activities such as the inspection of the equipment used and the production facilities along with the other areas. These inspections can be a useful way for negotiating purchase agreements.

Manufacturers will also use quality inspections on the production line in order to correct issues as they arise to avoid problems down the line. Finished goods will also be inspected to check that they meet with the quality standards within that industry. The packaging used for shipments and labelling will also be checked.

Finally warehouse checks take place, where the products are stored before they are sold. Some of the products may become defective or the characteristics of the products may change during the storing time,  so the quality inspections are important to ensure that the goods are fit for purpose and able to be delivered to the customers.

Friday, 6 February 2015

How to Evaluate on the SCM Practices of Toy Industry?

Supply Chain Practical Gaps
The supply chain used in the toy industry is still lacking when it comes to embracing technological advancements. Shared information is low across the supply chain, especially in Europe. By using bar coded merchandising, cross docking, POS, sharing date and making use of the technology available, the toy industry would perhaps be able to catch up with other industries such as groceries or clothing.
Toy Retailers Practical Gaps
The most efficient practice for toy retailers is the JIT model that uses continuous replenishment (as opposed to the mixed model and the one off model). Despite this there are only a limited number of retailers that use this method. This is because many of the retailers are still not responsive enough for the market and because of the unpredictability of the toy industry. Retailers are also failing to see the benefits and the values of the JIT model because of the lack of transparency, explaining cost savings that are found when reducing the inventory levels and carrying costs.
Response Times between Manufacturers and Retailers Practical Gaps
Toy manufacturers use a sense making business model when discussing the choices faced by the manufacturers in the volatile toy industry. The strategic choices are generated from knowledge and the supply chain management theory.
·         Low cost mass production
·         Coordinated market responsive
·         High cost mass production
·         Quick response manufacturers

Thursday, 5 February 2015

Challenges in Toy Retailers Supply Chain Management – Part Two

Toy retailers have many problems that they have to overcome.  Volatile markets, changing consumers, small selling windows and the competitive nature of the industry mean that the supply chain management has to adapt quickly in order to survive. Here’s a final look at some of the characteristics of the supply chain and challenges that are being faced.
Supply and demand volatility. The uncertainty of the consumer demand is caused by several factors: impulse purchases, seasonality, price competition, changing preferences.
Vertical competition has increased due to the high level of retailers and the buying power of the discounters. Many toy retailers are now taking on the manufacturers too, producing their own toys and sub contacting manufacturers and adding to the price competition.  China is able to produce toys at low costs and retailers use these prices and concentrate on building their brand to benefit. The consumers buy from the retail brands rather than looking for toys with famous brand names attached.
Toys are not as profitable as they once were because of the volatility of the market. The toy retailers have to deal with high risk and work around the ever changing demands using excellent supply chain management.  The manufacturers sometimes offer discounts for quantity orders or early orders from the retailers to remove the high inventory risk over to the retailers.  Larger retailers use their buying power to ensure that the risk remains with the manufacturers.  Practices such as these have resulted in inventory obsolescence and manufacturers have a capacity that is unresponsive.

Wednesday, 4 February 2015

Challenges in Toy Retailers Supply Chain Management – Part One

Yesterday we looked at some of the challenges that are faced by the toy industry:
  • Volatile market
  • Children maturing at younger ages
  • The tween market demands
  • Discounters and large supermarkets
These challenges are shaping the characteristics of the industry:
  • Toys sold in cyclic methods with the sales concentrated in short selling windows. This means that the manufacturers need to have a large capacity available to produce enough to meet the demands of the consumers.
  • Toys have a short life cycle and the toys that have been introduced in the year will have a contribution to the current year’s sales.  Consumers’ preferences are changing due to the tweens and the fact children get older much sooner. Crazes and characters also drive sales and movie related toys often have a sales window of only two months or less, reduced from the previous four to six months.
  • Competition and pricing. The toy industry has to be innovative and the designers need to cope with the falling prices, Manufacturers are often moving towards retro toys as they have brand awareness already built, reducing the cost of marketing.
Return tomorrow when we’ll be taking a quick look at the remaining challenges and characteristics of the toy supply chain.

Tuesday, 3 February 2015

Unique Challenges Faced by Toy Supply Chains

The toy industry has been in operation for centuries, it’s a creative industry that is heavily seasonal. The unpredictable demands, short life cycles of products and the specific sales windows mean the industry is extremely volatile. As a result, there are often issues caused by obsolete inventory, markdowns and loss of sales. The supply chain needs to be flexible and supply the market with price competitive toys at the right times and in the right quantities to the correct retailers in order to survive.
The supply chain is also facing new trends that are posing challenges. Children are growing up earlier compared with older generations and many ten year olds believe they are too old to play with toys. The Tween market has emerged, consisting of children aged between 8 and 10 that are fashion conscious and driven by fads.  They want more sophisticated toys to be available to them. The other trend is the rise of discounters and supermarkets focused solely on toys.

Monday, 2 February 2015

Characteristics of Toy Supply Chains

A typical supply chain in the toy industry is made up of:
  • Raw/component suppliers
  • Manufacturers
  • Distributors/wholesalers
  • Toy sellers
  • Consumers
There are many different retailers in the toy supply chains, everything from independent specialists to hypermarkets and discount stores. Toy sales do continue to grow even if it’s a slow grower online and the largest sales are found in North American and European markets.

The retailers buy the toys from the wholesalers or direct from the manufacturers. The toy distributors and wholesalers are vital in the chain, especially when the manufacturers are located far away from the markets or where markets are small. The toy manufacturers are often branded, such as LEGO, Barbie and Hot Wheels, and they make the toys from the raw materials or component parts.