How the textile manufacturer Anita delivers all products within 24 hours without the finished goods warehouse exploding:
Anyone who positions a wide range of products in the retail trade because it requires a lot of advice must be 100% ready for delivery and be able to deliver within 24 hours. The danger, however, is that stocks will explode. Fully automated scheduling management systems such as DISKOVER help companies to keep stocks in check.
Anita – a manufacturer of underwear and swimwear with a perfect fit and function as well as charming aesthetics – has set itself the goal of being able to deliver its corsetry within 24 hours at any time, regardless of size, so that both specialist lingerie retailers and larger retail chains can transfer their stock to the manufacturer. The aim is to keep the complex product range as retail-ready as possible, minimize the capital tied up at the retailer and make the product portfolio in the stores highly adaptable. If an order comes in in the morning, it is guaranteed to be on the retailer’s counter the next day for such never-out-of-stock items. This service is immensely important for lingerie items such as bras, as specialist retailers with their high level of advisory expertise are the leading channel for Anita’s sales. They need the perfect services for the perfect fit if they are not currently in stock in the store. After all, it is almost impossible for individual retailers – regardless of size – to stock every variant, as there are up to 80 different cuts for a single bra model due to different sizes and cups. For example, if this model has 5 colors, retailers would have to stock 400 SKUs (Stock Keeping Units) of a single model.
Stock keeping in retail impossible
A specialist retail store simply cannot stock so many variants. Also, a single retailer can never plan them so precisely if, for example, he procures bras on a quarterly/seasonal basis and wants to have sold all stocks of any size at the end of the period. Even outerwear items such as T-shirts, blouses or sweaters with hardly any variations cannot achieve a 100% fit – and here we are talking about just 8 variations for sizes such as S, M, X, L and XL to 3XL. Even here, certain sizes are always guaranteed to be out of stock at the end of the period. However, retailers of Anita goods would have to plan more accurately by a factor of 10! And please note: only one model is considered in the 400 SKUs. Anita has over 25,000 SKUs across its entire corsetry portfolio. Retailers can therefore only offer the highly differentiated model variants due to the demand for a perfect fit if Anita offers a correspondingly high level of delivery readiness and delivers SKUs that are not in stock quickly, because the customer does not want to wait forever for ‘her’ perfectly fitting product. For Anita, this inevitably means having to pursue a never-out-of-stock strategy for its SKUs so that retailers can also offer corresponding services.
Challenging scheduling task
This in turn poses a major challenge for Anita’s materials planning team, as Anita also needs to plan its goods in such a way that stock levels do not become too high. Anita has added a total of 17,000 products to its never-out-of-stock list, as its outstanding USP is the perfect fit. Almost the entire corsetry product portfolio is affected. Decisions are made on a weekly basis as to which products are due for production to ensure that there are always enough finished goods of each SKU in stock, which is no easy task. Anita is therefore supported by a replenishment management system that was created specifically for handling such large article volumes and can group products according to numerous characteristics such as colors, bra sizes and cups. Every week, it proposes the new corsetry products to be produced as planned requirements. This is done on the basis of historical order data, which is supplemented by current incoming orders taken from the ERP system, as well as sales planning data from seasonal sales.
At Anita, these are still developed in the ERP system for new models, even though the disposition management system used also offers modules for sales planning for the sales department. However, the company had an extension programmed specifically for this purpose before the dispatch management system was introduced. It is not currently considered necessary to change this, as Anita does not have agile sales processes where special promotions have to be planned from time to time. Instead, fixed deadlines are set for each season, with a sales season lasting around 5 months: the representative presents the samples of new products that will be on sale from June to retailers in January, for example. Anyone who orders these by the deadline at the end of April will receive a delivery guarantee at the start of the season, including a 24-hour subsequent delivery guarantee from the first batch delivery. If the customer places an order later, it will not be considered until the next large production batch, which will be available from August. This makes planning new products and importing data into the replenishment management system comparatively easy and at the same time promotes early ordering by retailers.
90% of SKUs are automatically scheduled
However, when introducing new products, which account for around 10% of all SKUs, Anita does not achieve the same level of planning accuracy and therefore readiness for delivery at the start of the season as with the products introduced, which are planned via the MRP management system. It would have to be proven whether the fully automated requirements planning management system could also plan the new products better than the extension functions of the ERP system. However, it demonstrably offers a significantly higher range of functions and this ensures that Anita’s never-out-of-stock strategy is fulfilled with the least possible planning effort and maximum precision. Maximum precision here means that stocks are kept very low despite fluctuating demand. Anita achieves 95% delivery readiness across all SKUs – even for the exotic items that are rarely in demand. That’s 16,150 items that can be delivered the next day at any time. Anita achieves even more for the most common core sizes in the population – namely almost 100%. This high level of scheduling accuracy is immensely important for Anita, which is why the corsetry manufacturer has also opted for one of the most powerful scheduling management tools on the market: DISKOVER from SCT.
For Anita, however, what is produced is not just a question of the suggestions from the MRP management system, because production costs also play a not insignificant role for Anita. It is not possible to run batch size 1, even if this would produce the lowest finished goods inventories. Rather, Anita decides on production batches based on the fabrics that have to be laid out for cutting, so that ultimately the color palette of the models clocks the production. Once this has been defined, the cutting of the materials is planned on the basis of the planned independent requirements of the MRP management system, which then results in the cross-SKU replenishment requirements for materials, belts and other components of a BH. After all, it makes a difference whether you have to produce products of a smaller or larger cup size in the current week. The limiting factors for production in batch size 1 are therefore the material handling and production processes as well as the high material efficiency that must be maintained, which always requires a certain amount of overproduction or underproduction if the material is to be fully utilized during cutting with minimal material recycling.
Safe is safe
In order to be able to guarantee never-out-of-stock, Anita also plans the core and star articles with a safety stock factor that is set 20 to 50% higher than for standard articles so that these fast-moving items are always ready for delivery. Anita is therefore also investing in stock to be able to absorb any outliers in demand. However, these items are also safe benches, so this is also worthwhile. This shows that a scheduling management system can take a lot of work off your hands. Without operationally efficient embedding in the production processes and an overarching delivery readiness strategy, they cannot deliver the right results for the company. If these key data and interfaces are designed to fit perfectly and all scheduling parameters are optimized, the desired goals are achieved almost 100% with the highest possible degree of automation of the scheduling process. Optimizing scheduling parameters is extremely important when introducing scheduling management systems in order to achieve the goal of maximum delivery readiness with minimum stock levels. A tool cannot do this automatically. However, if it is fine-tuned to the objectives to be achieved as part of an implementation project, the high degree of automation that is then possible contributes to a further increase in efficiency. Anita has not yet reached her full potential here. However, it is more important to Anita to multiply the successes achieved so far at the Asian cutting plant in Thailand by planning to introduce DISKOVER here too in the near future. Here, stock turnover is still around 50 percent lower and delivery readiness could also be improved.
How does Anita’s experience benefit other manufacturers? Anita is a prime example of how you can achieve extremely high delivery readiness with extremely short delivery times to the customer, even if the portfolio is extremely broad, material procurement and production take a long time and the real demand of the individual channel is actually unpredictable. Any manufacturer that has longer delivery times than “right now” can take a leaf out of Anita’s book – whether B2B or B2C or whether in stationary or online retail!
Corona effect 1: Channel extension
Due to the coronavirus, Anita has also been working in the B2C sector for around a year. However, ‘retail-first’ is still the strategy. However, it was recognized that demand for the sports and maternity collections was comparatively higher online than in traditional retail stores. Young women and expectant mothers are increasingly finding their way to the new Anita store via search engines. One consideration could therefore also be to position these divisions even more precisely in the retail sector.
Corona effect 2: Change in demand
Anita generally has the advantage that the distribution of demand from model to model hardly shifts within the respective SKUs of a model, as the physique of the clientele does not change radically overnight – not even due to Corona. However, the corona effect has led to a shift in demand from cut and sewn bras to more comfortable leisure underwear with seamless circular knits, meaning that demand in this segment could no longer be fully met in some cases, partly due to supply bottlenecks.
