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STOCK MANAGEMENT

STOCK MANAGEMENT. ‘Effective inventory planning in the textile and clothing supply chain’. LEARNING OUTCOMES. …to identify different types of inventory in the textile and clothing pipeline …to understand the value of efficient inventory procedures to the textile and clothing operation.

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STOCK MANAGEMENT

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  1. STOCK MANAGEMENT ‘Effective inventory planning in thetextile and clothing supply chain’

  2. LEARNING OUTCOMES …to identify different types of inventory in the textile and clothing pipeline …to understand the value of efficient inventory procedures to the textile and clothing operation

  3. INVENTORY • Inventory objectives • Types of inventory • Efficient inventory procedures • Inventory records

  4. INVENTORY OBJECTIVES TRIANGLE • Customer Service • Efficiency • Purchasing • Production • Investment

  5. CONSEQUENCES OF POOR STOCK CONTROL • Late (or no) delivery • Supply shortages • Excesses inventory • Recovery costs • Consequential loss

  6. TYPES OF INVENTORY • Raw Materials (RM) • Work in Progress (WIP) • Finished Goods (FG) • Maintenance, Repair and Operating Supplies (MROS)

  7. COST OF INVENTORY • Capital costs • Service costs • Storage costs • Risk costs E.g. Fashion retailer Zara invests in fabric stock to reduce their cost of inventory yet maintain a high level of responsiveness

  8. THE FASHION CHALLENGE • Long lead-times • Inaccurate forecasts • Store level execution cannot be assumed (Fisher, 2002)

  9. EFFICIENT INVENTORY PROCEDURES • Just-in-Time (JIT) • Mixed Supply Base • Postponement • Vendor Managed Inventory (VMI)

  10. JUST IN TIME • Driven by customer demand • Eliminates inventory • Inclusive production system • Flexible operation • Focus on reducing waste

  11. THE MIXED SUPPLY BASE Fashion trends info. Fabrics Yarns UK manufacturers Consumer Regional Distribution Centre Retailer Fabrics Overseas manufacturers Yarns (Bruce et al., 2004)

  12. POSTPONEMENTOF FINISHED GOODS • Hold part finished sub assembly in stock • Customize as close to use as possible • Manage risk and fashion trends

  13. VENDOR MANAGED INVENTORY • Supplier takes full responsibility for maintaining agreed inventory levels • Shared risk • Information based

  14. AGGREGATE INVENTORY CONSIDERATIONS • Inventory as an asset • Cost of goods sold • Return on investment • Inventory turnover • Inventory as strategy

  15. Accuracy of inventory data Competent personnel Tight control of shipments Effective control of all goods leaving the facility Stock Keeping Units (SKUs) Analytical tools required Planned vs. Actual Electronic Data Interchange (EDI) Barcodes Pont of Sales (POS) Data INVENTORY RECORDS

  16. …to the CUSTOMER Quick and easy to find Good quality Wide selection …to the EMPLOYEES Easy to find Reduced returns Increased knowledge Multiple sales …to the MANAGEMENT Increase profits Reduced damaged merchandise Speed of stock turn Customer goodwill Develop image THE VALUE OF EFFICIENT STOCK KEEPTING

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