PENTAGONApparel Intelligence & Consulting

Overview

1. Systematic Core Business

2. Systematic Cleanup Mechanism

3. Case Study – Levi’s v/s Zara

4. Importance In Modern Business

Automatic Replenishment

Systematic Core Business

Automatic Cleanup

Classification Of Core

ClassicalClassicalSells Throughout The Year With Comparatively Same Pace. “Staple”

SeasonalSeasonalSells With The Same Pace Through The Season But Dips With The Season Change. “Winter Jackets”

DeemedDeemedIs not core but to give better service to the consumer it is classified as core. “Advertised Articles”

Influencing Factors

FabricFabric

DesignDesign

FITFIT

COLORCOLOR

These variables also needs to be captured in reporting system

Model Stocking At 3 Points

3 Weeks Cover3 Weeks Cover 2 to 3 Weeks Cover2 to 3 Weeks Cover 7 to 10 Weeks Cover7 to 10 Weeks Cover

FactoryBase Stock

Customer DC

Retail Base Stock

We need to continuously monitor stocks at 3 points

How Weekly Replenishment Works

On the floor for Weekend Sale

Pack and Dispatch

Monitor Sales, Generate PO, Collect Tags

FRIDAY

WEDNESDAYObtain Dispatch Instructions

TUESDAY

MONDAY

2 Days Transit

24 Hours

1 Working Day

Start

Special cases like Kolkata or Long weekend needs to be planned in advance

SCB Season Cycle

Run For A Season

Set Core ListReplace with new articles

Clean The Non Performer

Monitor Performance

SCB

In India fortunately we have 2 seasons

Core Merchandize % On Floor

Re

gu

lar

Core 30%

Fashion 70%

EO

SS

Core 30%

Fashion 70%

Pro

mo

Core 30%

Fashion 70%

Festive

Core 40%

Fashion 60%

Its recommended to have higher stock of core during festive season

Major Reason Of Core Non Performance

4 Major Reason Of Core Non Performance

Untimely Replenishment

Poor Sales Staff

Poor Counter Location & Display

Inappropriate Assortments

Their Can be other reasons of failure but these 4 will occur more often.

7 Steps Systematic Cleanup Mechanism

CleanupMechanism

Remove Damage & Defectives

Size Consolidation

DisplayArrangement

Special offers

Refinishing

Discounting

Return & Resale

If you miss a single your DISCOUNTING will be higher and will eat profit .REDS must be the LAST option.

Interaction Points

Sales ManagerBuyer/Merchandiser

Product Manager

Factory Manager

CustomerDecision Maker

Reporting Authority

AICPENTAGON

AIC – PENTAGON works as The HUB of business wheel

Levi’s v/s Zara Case Study

Levi’sDecision

ZaraDecision

Levi’sImpact

ZaraImpact

Focus On CORE- Hired people from computers and mobile back ground to run the business as FMCG.

Focus On FASHION- Known for delivering fashion every week

Net Loss Rs. 150 Cr. In FY 2011-12, and continues to be in RED.

Net ProfitRs. 38.3 Cr.In FY2011-12.Has made Profits in 3 of 4 yearsin India

Economic Times Report 05 Feb 2013

Moral Of The StoryZara & Levi’s Case Study

1

Apparel Company’s prime responsibility is to create and bring FASHION to the market.

2

Core business is extremely important but should NOT eat into valuable TIME of your team.

3

Hence can be managed by an external agency with pre-decided protocols.

SCB Implementation Process

•Bring on the floor•Replace with the old set•Put the old set in SCM mode•Put the new set on SCB mode

•Bring on the floor•Replace with the old set•Put the old set in SCM mode•Put the new set on SCB mode

•Create codes•Lock with client system•Generate Pos•Start production•Obtain dispatch instructions

•Create codes•Lock with client system•Generate Pos•Start production•Obtain dispatch instructions

•Conduct study•Identify the need•Evaluate performance•Discussions •Prepare fresh list•Take approval form client and the company

•Conduct study•Identify the need•Evaluate performance•Discussions •Prepare fresh list•Take approval form client and the company

Identification & Approval

Identification & Approval

Set Codes & Obtain POs

Set Codes & Obtain POs

Replacement & Cleanup

Replacement & Cleanup

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Importance Of SCB and SCM in Modern Business

SCB

SCM

Advantages

•Reduces Cost

•Increases Concentration On “Fashion”

•Helps To Sell At “FULL PRICE”

Advantages(Indirect)

•Increased Number Of

Doors

•Higher Margin/ Sq.

Ft.

•Better Deals

Higher Sales

Sustainable Profit

AIC - PENTAGON