Don’t blame the weather, fix your supply chain!
It’s notoriously difficult to get demand planning right in the fast-moving fashion retailing. Customers’ tastes change and so does the weather!
So, I imagine that even rivals to Swedish giant H&M must have some sympathy when it admitted that its unsold inventory had grown 7% in the past year to reach $4bn.
Weak sales in the fall meant H&M had too much inventory going into the new year, which it has been trying to clear throughout the first quarter. In addition, the cold winter weather in February had a negative impact on the sales of new garments.
But bad weather is not the only reason for H&M’s inventory chain problems. According to a report published last year by Goldman Sachs, the Swedish retailer’s supply chain lead times are around double those of Inditex, its Spanish rival best known for the Zara chain of brick-and-mortar stores.
H&M is not the only retailer struggling with a slow-moving supply chain in a fast-moving industry.
That is why a lot of the functional enhancements we have made to Openbravo Commerce Cloud in the past couple of years have focused on helping retailers increase supply chain operational efficiency.
This was a response to many requests from our retail customers who recognize the strategic importance of supply chain management to their business.
Irrespective of the sector in which they operate, most retailers today face the same challenges: fast-changing assortments, seasonable demand patterns with different seasons for different types of product, and omnichannel sales and returns. These dynamics create so much complexity and variability that it’s impossible to plan stock levels manually.
This is why Openbravo introduced its Advanced Planning module to help retailers better plan for demand and optimize inventory levels. To optimize the flow of goods inside the distribution centers and to improve the usage of available space and staff, Openbravo introduced new warehousing and inventory management capabilities in its Advanced Warehouse Operations module.
Moreover, the next releases will have several new advanced functionalities like Fair Share and Operator Load Balancing.
Read more about the supply chain management capabilities of Openbravo Commerce Cloud here.