RETAIL LOGISTICS

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IT SYSTEMS IN THE FASHION INDUSTRY


Computer systems are vital to modern retailing. Without them, we would be back in the Dickensian era of large numbers of clerks sitting at high desks laboriously compiling ledger books. Even today, some smaller retailers’ only source of management information is sales and stock data manually keyed into a financial ledger system such as Sage.

 

But how does a retailer decide

• How much it is worth spending on a computer system

• What the cost/benefit trade off calculation is?

• Which system to choose?

• How to manage the implementation?

The choice of any retail computer system should be based around answering the question

 

• What is it going to do to improve the business
   competitiveness and profitability?

NOT

• what does the system software vendor say are its
   features and benefits?

 

The starting point is to answer the process question; which is

 

• what parts of my retail business will benefit from
   computerisation?

• what functionality is required?




LOGISTICS + WAREHOUSING


Today, we are more enlightened, because the science of supply chain logistics has shown that the warehouse is a key element in the chain. As 'tail-end Charlie', they cannot be expected to sort out the problems created earlier in the supply chain. Logistics and warehousing today are too important to be left to a warehouse manager.

Elements of the warehouse part of the logistics chain include

• Sophisticated and accurate intake time slot bookings

• Allocation in advance of receipt from supplier export
   documentation

 

• Cross docking of merchandise intended for immediate
   allocation

• Physical picking list routing systems

• Bulk picking for subsequent store allocation routines

 

Speak to MALCOLM NEWBERY CONSULTING Ltd. about conducting process and systems reviews of your warehousing effectiveness




FASHION RETAIL LOGISTICS

explained

Controlling costs and delivering service..

Up to the last decade, retail logistics was the Cinderella of retailing. Now that the importance of supply chain management has been recognised, the role of the warehouse and distribution functions has been accepted for

• controlling costs
• delivering service to the stores and customers


The more sophisticated retailers attempt to measure costs and service levels all the way down the supply chain. Last minute attempts by the warehouse to process and deliver stock fast are often the efforts of 'tail-end Charlie' to remedy problems created earlier.

But all retailers need to manage the costs of the logistics funtion against the level of service expected by its customers, the retail branches.
 

Rules, Replenishment and Service levels..

Within the warehouse, space and staff are the overwhelming components of cost.

 

Profligate use of space, whether in square or cubic metres, drives up costs. Poor utilisation of the cube [the bays and rails] may make picking slightly easier but is rarely cost effective. Measures are available, or can be constructed, of how much space you should have, and how it should be configured.

 

The number of staff you have and the shift pattern you choose will also affect your costs. These decisions must be taken in conjunction with the

 

• IT systems rules that drive picking
• the distribution frequency of replenishing your stores
• the service level demanded by consumers

 

The last of these will vary from product to product. The absence of a fashion bag in blue may not lose a sale, an alternative may be chosen. The absence of a shoe in Euro size 37 will lose sales..

Benefit from having Key Performance Indicators in place..

KPIs are key performance indicators, measurements of the most important activities in the warehouse. They usually include

 

• receiving and checking
• processing [barcoding, labelling, ticketing and pricing]
• put away
• pick
• pack

 

KPIs however can only be used

• in the context of procedures set down by the
   management
• against a 'standard' set either by agreement or more
   usually through work study

 

They provide two benefits

• an overall measure that the warehouse is
   performing satisfactorarily
• a check on, or a threat to underperforming staff

 

The latter is important. In a large warehouse it is very easy to hide within the racking whilst picking.

Procedures must be set in the context of the business. For instance, whereas most retailers process on entry, those with off-price outlets or regular promotion may wish to price on exit.

 

Pros and cons..

The pros and cons of this subject are legion. Debate often centres around

• product knowledge
• skills and experience developed
• loyalty [and honesty]
• avoidance of capital spend or own facilities

 

However, the key decisions to make are

• is my retail operation seasonal and volatile in the
   short term?
• is it seasonally flat and short term stable?

 

If the former is the case, then there is an argument for a 3rd party managed operation, particularly in a multi-user warehouse. There the staff can be moved from user to user to cope with the peaks and troughs. This does, of course, leave open the prospect of losing product knowledge and skills.

 

The answer is [and this is not a cop-out, but a reflection of the many different approaches in retailing] that there is no easy answer. The decision must be taken based on the retailers' business circumstances.




TEACHING

Malcolm teaches Supply Chain Logistics at
• London College of Fashion (under-/postgraduate level)
• London College of Fashion (holiday short course level)

Supply Chain Logistics

Logistics courses covered a specialist sub-part of Supply Chain Management. Logistics has two difficult meanings in the fashion industry. In its narrow sense, it is physical transportation of garments, by road, rail, sea or air. This approach also involves understanding of the skills required for export documentation, conforming to packaging and outer packaging customer requirements.

In its wider sense, it includes the above, but extends the responsibility of a logistics department to choosing specific suppliers within a geographic area who can satisfy the requirements of the buying regarding

• quantity
• quality
• timing
• price
• reliability
• branding

London College of Fashion

+ Current retail climate

+ Retail industry structure

+ B & M rules / responsibilities

+ The buying cycle / calender

+ Competition analysis

+ Range planning / forecasting

+ Buying and costing

+ Sourcing and supply chain

+ Stock management

+ Retail allocation 

 

Email Malcolm Newbery for tuition




IT SYSTEMS PROJECTS


Board, UK

Retail Merchandise Planning advice for a supplier of IT software to the fashion industry (2016]

 

Fashionizer Ltd., UK

Implementation of a wholesale clothing system customised for the hotel uniform business [2004]

Creation of a business plan for a new ex-stock hotel uniform offer [2003]

 

Greenwich Group, UK

Merchandise Planning Manager; Implemented new integrated computer systems [1998]

 

House of Shanghai, China

Integration of website marketing front end with ERP transactions back end [2008]

 

Liberty PLC, UK

Commercial Director responsible for merchandising and logistics

IT systems Implemented new integrated computer systems store wide [2001 - 2002]

Merchandise Planning Restructured multi-channel planning system [2001]

Supply Chain Decreased warehoue and distribution costs [2001]

Improved own brand supply planning [2000]

 

 

Li & Fung, Europe

Advice to the world’s largest sourcing intermediary on how to improve their understanding of the priorities and issues facing their retail customers [2012]

 

Pelmark, UK

IT Systems: Selection of a system to fit the needs of a B2B wholesaler of promotional clothing [2004]

 

Prologic PLC, UK

Review of consultancy selling skills for software vendor [2000]

 

TM Lewin, UK

Supply Chain Review of warehouse replenishment procedures [2004]

IT Systems Epos and head office systems search for this shirt retailer

Merchandise Planning Principles of systems to plan both new and replenishment styles and fabrics for own label retailing [2003]

 

Wale Adeyemi, UK

Search, selection and Implementataion of wholesale clothing sales, supply and delivery computer system [2002-2003]

 

Woods Yard, UK

IT selection & implementation [2005]


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