The Russell Corporation, an international apparel company specialising in the sourcing and selling of activewear and athletic uniforms, has gone live with an IT project aimed at significantly cutting down on supply chain lead times and alleviating the need to carry so much surplus stock.
The company, which last year had annual sales of over $1 billion, has turned to demand forecasting software through TXT e-Solutions. The project has started with the European headquarters of one of Russells key brands, Jerzees, whose distribution centre is in Livingston, Scotland.
With the task of sourcing textiles mainly from Asia, lead times can typically be four to five months, so we need a good deal of foresight when ordering, said Richard Oliver, managing director for Russell Europe. Demand forecasting software gives us greater visibility and allows us to be more responsive to local market needs.
The software uses various different statistical algorithms, examining issues such as the sales history of a type of product, or the profile of previous customers, to calculate the optimum inventory to carry, bearing in mind the volatility of demand in fashion.
Oliver said that reducing stock levels was fundamental in the increasingly competitive global textile industry, and that its planners would previously spend eighty per cent of their time number crunching to allocate up to 140 different styles across Europe.
Rather than carrying eight or nine months reserve stock year round, the idea is to analyse seasonal demand so that you have the right amount of stock, at the right time, said Oliver. The TXT Demand Planning software does all the analysis for us and takes all the fuss out of inventory planning, as well as saving us a great deal of time.
According to Stewart Wilson, IT director at Russell Europe, the successful implementation of the software and rapid deployment in the UK has meant that other parts of the Russell Corporation will follow suit: a TXT production planning module is being implemented in the US this month, followed by a demand planning module for Russell Athletic in the US during Spring 2006.
Fashion retailers are notorious for either over-forecasting, and having to discount or sell through channels at zero margin, or under-forecasting, and losing out on sales. So a lot of money can be saved by using software to get the balance right, concluded Richard Nicholas, sales director at TXT e-Solutions.