4 Solutions For Supply Chain Obstacles

Fashion trends can change in a matter of minutes. Supply chain executives must meet these sudden changes by focusing on what possible trends are set to hit. When a change does occur, they need to get the new products in stores before the trend cools. For the fashion industry, some best practices must be followed.

Streamline Process:

The first is giving everyone a clear overview of what is happening from the time the customer places an order, to the time it is shipped. The online ordering process should be streamlined so the latest products are moving. Otherwise, you are faced with an overstock you might struggle to offload later on.

As part of this process, make sure you pay close attention to the key factors causing delays in orders. This includes the length of time it is taking stock pickers to locate items, how long it takes staff to box up and ship items. You should also verify shipments are being contained to the fewest number of boxes possible. After all, each box will increase the costs you have with the order. The goal is to streamline the shipping process so your customers receive the items they order quickly, while the fashion trend is still hot.

Protect Gross Margins:

Getting the product to the customers quickly is only part of the equation. You also need to focus on protecting the gross margins of the company. The number of employees handling a transaction and the shipping costs increase the transaction costs. With the rising cost of staff and shipping costs, it might initially seem wise to downsize your staff or to outsource elements to foreign countries. This poses two problems in the fashion industry.

The most obvious is the delays and fuel surcharges associated with shipping from a foreign location. In turn, a reduction of staff does offer a new concern. While it is true you have fewer employees to pay to do the work, shipments aren’t being released as quickly. This delay slows down the receipt time for customers and employees are often forced to work overtime to get the daily shipments out in a reasonable amount of time.  The result is it costing the same if not more, to maintain the speed the company needs.

Drop Shipment:

Although, there is a logistics solution in cases where you don’t have the customer to warrant a full fledge shipping department. In this case, drop shipping is a great choice. It allows your customers to receive their items quickly, without incurring a considerable cost. Many drop shipping providers also have warehouses in key areas of the country and they can ship from one closest to the customer who placed the order. This allows them to get their item sooner and while the fashion is still at its peak.

Supply Chain Financing:

Supply chain financing is also on the rise and important as part of your global supply chain management. This process allows you to work in a manner that allows for discount programs, inventory financing and boosting internal cash flow.  In this case, you reduce external costs by handling the transactions with an in-house payment system. Customers then pay off their accounts through you and you are generating interest off the accounts, while seeing a significant reduction in the transaction fees. While there is still some associated risk, you do have the potential of seeing a significant reduction in fees when customers aren’t using major credit cards to finalize their transactions.

These best practices and solutions are a great way to help you make an impact in your career and the industry.


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Photo: Computer World