30 Jan Apparel Industry: Inventory Management Guide
Depending on the industry you’re in, you may have an inventory of products that includes many of the same items from year to year, or you may have an inventory of goods that changes often. If you’re in the apparel industry, you are probably tasked with replacing outdated fashion pieces with new ones and adding new clothing options to your inventory at least as often as the end of every season, this can mean you have to change your inventory’s product mix on a regular basis.
If you’re not using a modern inventory management system, making changes to your product mix can be challenging. From manually tracking the movement of a new item, to creating space for it on your warehouse floor, to preparing purchase orders, an outdated inventory management system often makes things more difficult and time-consuming than they have to be.
Why a need for an inventory management system
In addition to making things easier and faster, many warehouse managers want an automated inventory management system because of these systems:
- Reduce Incorrect Inventory Counts: An automated inventory management system is one of the popular solutions for apparel inventory issues because it keeps track of your inventory electronically from the moment you receive products until the time they’re delivered to your clients. This means you don’t need to rely on your employees to manually count how much of a certain item you have on hand because your inventory management system will store records of your inventory levels in multiple bin locations for a single sku including primary and multiple bulk locations.
- Improve Warehouse Efficiency: You can use an automated inventory management system such as enterprise resource planning software that’s integrated with a warehouse management system to improve your employees’ efficiency. FDM4 allows multiple pickers to pick a single order, full case and piece picks can be processed separately, and FDM4 also recommends which carton is best suited for the order and what items should be placed in the particular box. This will enable your employees to fulfill their orders faster. This technology does more than help your pickers work more efficiently. It can also help all of your departments to coordinate their activities better because it provides useful information to each of your business’ departments.
- Increased Bottom Line: Since a modern inventory management system can help you reduce your labor costs by making your employees more efficient, it can also help increase your bottom line. Even if you improve your employees’ efficiency while maintaining your current payroll, your employees will be able to complete more orders per shift. This means you have the chance to add to your bottom line as the result of greater revenue instead of cutting your labor costs.
- Better Product Rotation: One of the dangers that many people in the apparel industry have to contend with is having too much outdated or soon to be stale inventory on hand. Because ERP technology combined with a WMS system can provide an up to the minute count of every single item you have in your inventory, your system can help you avoid having too many outdated products in your warehouse. It can also help you avoid running out of the products you need to stay current with your clients changing tastes because your system can alert you when your inventory of a certain product drops below a designated level.
Why ERP Integrated with a WMS System Is the Right Choice in the Apparel Industry
While both ERP technology and a WMS are tools you can use to increase employee engagement, production and efficiency, the differences between these two systems often make it apparent why having an integrated ERP and WMS is the optimal solutionfor inventory management for the apparel industry. Here is an overview of WMS and ERP software, which will explain why ERP integrated to a WMS system is normally the better choice when you’re trying to figure out how to handle apparel inventory:
- Warehouse Management Systems: A WMS is used to manage your inventory. It tracks the products that move through your warehouse, from receiving to shipping. If you use a WMS, you’ll be able to tell where each item in your inventory is as it’s stored, picked, packed and shipped in real-time. A typical WMS is a standalone system that requires support systems for other inventory essentials, such as accounting and customer service. If you already have a WMS in place, but want to benefit from the advantages that ERP software can provide, it may be possible to integrate your current WMS with more comprehensive ERP technology. Request WMS Demo
- Enterprise Resource Planning Software: ERP software is similar to a WMS in that it also has the ability to track the whereabouts of the products in your inventory from receiving to shipping. ERP technology differs from a WMS in terms of scope, however, which is why having an integrated ERP and WMS is ideal for managing clothing inventory. Instead of monitoring one aspect of your warehouse, ERP software integrates all of the activities that occur in each of your departments, including accounting, purchasing, sales, customer service, as well as shipping and inventory management in your warehouses. Whereas a WMS is usually sufficient to manage the inventory in your warehouse, ERP software is the tool you need to run your entire operation at peak efficiency, because it automates activities across all of your departments including the warehouse. Request ERP Demo
How to Reduce Inventory Errors
It doesn’t matter if your warehouse moves high-dollar clothing for fashionistas, occupational gear for hazmat workplaces, footwear or another type of sewn product. If you don’t have ERP software that can automate your warehouse across departments, tracking your inventory can be a labor-intensive, time-consuming process, susceptible to human error at multiple points along the supply chain. One of the best solutions for apparel inventory issues, ERP technology with an integrated WMS can greatly reduce how vulnerable your inventory management is to human error and mismanagement.
An ERP system with an integrated WMS is designed to optimize your workflows and business processes, which includes eliminating as many errors as possible. ERP & WMS technology can help you reduce errors in the following ways:
- Improved Organization: Based on the data your WMS system provides, you’ll be able to tell which products are moving the fastest. As a general rule, your fastest moving goods should be front and center in your warehouse. You should group them with items that are often purchased at the same time. By organizing your warehouse so that your most popular items are in an easily accessed area, your employees will have quick access to the product they’ll need to fulfill common orders.
Having an organized warehouse provides additional money-saving benefits. You can use your WMS technology to plan the order in which your employees pick products as well as the routes they should follow to fulfill each of their orders. By organizing your warehouse, you can reduce the amount of time it takes for your employees to get the goods they need as well as the distance they need to cover to complete orders. This can save you money on labor as well as reduce the wear and tear your equipment experiences on a daily basis.
- Minimized Manual Data Entry: From recording the individual items your warehouse receives in a shipment to manually entering the number of items you shipped in a given day, and almost every point in between, an antiquated inventory management system is prone to human error. Given how quickly the product mix can change in your apparel inventory, it’s necessary to reduce the number of times a worker must enter information manually into your inventory management system.
With WMS software, your employees will be able to use barcode scanners to identify the products they receive, pick and ship without having to manually enter the number or exact identity of the items they’re working with. Their barcode scanners will capture this information automatically. This information will then be shared across all of your warehouse’s departments in real-time, which can help to prevent errors in purchasing, sales and billing.
An integrated ERP & WMS system gives you full visibility of your inventory at all times. Having a complete view of your inventory gives you the chance to avoid not having enough of a product on hand to satisfy demand. It can also prevent you from having too much stock in your warehouse, which can help keep your carrying costs to a minimum.
- Reduced Paperwork: If your employees use paper pick tickets to pull orders, it can greatly increase the likelihood that an error will occur with an order. That’s because an order’s ticket will have to pass through multiple sets of hands before an order can actually be shipped. Between a picker, checker, stager and loader, there’s also a chance that a ticket will be lost and a given order rendered unidentifiable, which means your clients may not receive the order in time for client deadlines and may cancel the order. It also means your employees will have wasted time putting the order together in the first place and the order may ultimately be late.
An integrated ERP & WMS system tracks orders as your employees work to complete them. This means that everyone who handles an order knows its status and location in real-time, without exchanging paper pick tickets, reducing the chance for errors to occur.
- Reduced False Promises: With the technology that’s available today, tech-savvy customers expect faster shipping as well as quicker processing of returns. An integrated ERP & WMS system can prevent your sales and marketing personnel from making promises about delivery dates and return processing times because they’ll know the realistic time frames that are needed for orders to be fulfilled and for returns to be processed.
This technology can also eliminate errors when your customer service representatives are providing estimated delivery times to your customers. They’ll know when packages will actually be delivered to the consumers who ordered them, and can relay that information accurately. These benefits can enhance the level of satisfaction shoppers have with your business, and increase the likelihood that they’ll order from you again in the future, because they’ll know they can rely on the information you provide.
How to Reduce Out of Stock Inventory and Improve Demand Planning for Apparel
One of the biggest factors to consider when you’re figuring out how to handle apparel inventory is the speed with which fashion can move year-round. In the fall, you’ll already know what the hot items will be in the following spring and summer, and some of your customers will order them in the fall to ensure they have a sufficient supply of the must-have products when warmer weather rolls around. The same is true in the spring when the hottest fall and winter fashion trends are unveiled. This means you’re going to have to maintain a balance of new items that will move off your shelves quickly and products that will sell over a longer period as the next change of season approaches.
An ERP system can help you avoid missing sales due to a lack of inventory, and it can also help you improve your demand planning. Because ERP technology tracks the amount of every item you have on hand, you’ll be able to monitor the amount of every product in your inventory in real-time. You can prevent a backlog of backorders from accruing by ordering more of your most popular, in-demand products when their inventories reach a designated level. A typical ERP system can generate purchase orders based on your sales figures and the suppliers you use to obtain certain products, minimizing the chance that you’ll run out of a given item when you need it the most. By avoiding backorders for out of stock products, you will increase the level of satisfaction your clients have with your business and improve your client retention rate as well.
As you know, demand planning is a vital part of forecasting your stock procurement. Effective demand planning involves tracking sales histories, product movement during certain times of the year and your inventory management, among other things. An ERP software solution can help you optimize your demand planning as well as your physical inventory of goods because it provides the information you need to anticipate the demand for particular products and when that demand will arise.
How to Handle Custom or Decorated Inventory
Even if your ERP software tracks your inventory, monitors sales and supplier trends and creates purchase orders for you, it can still be difficult for you to manage custom or decorated orders, unless your ERP system is designed to accommodate them. Luckily, some ERP systems can handle custom orders easily, including the ERP platform offered by FDM4 International, Inc.
For more than 38 years, FDM4 has been creating and implementing integrated software solutions for apparel inventory issues. Based on our decades of experience, we recognized the need for an ERP system to be able to handle custom inventory, which is why our apparel-based ERP solution includes an integrated Decoration Module. Our Decoration Module enables you to outline the custom embellishments that your clients want on the same page that you enter additional product information such as the particular style a consumer wants to buy.
It doesn’t matter if you perform custom work in-house or you send your goods to a third party to have them embellished to meet your clients’ standards. Our Decoration Module is capable of streamlining how you manage your decoration inventory by tracking your custom goods and monitoring your decoration work orders from start to finish.
Our Decoration Module enables you to manage your art records and proof approvals from within your ERP system. You can store different versions of your art records as they update, which makes it easy for you to use a previous version of your art whenever necessary. Our Decoration Module’s maintenance procedure makes it possible for digital files related to one custom order to be kept with that particular decoration order, giving you one point of reference instead of multiple ones. This facilitates communication between you and your decorator ensuring your decoration work order has all the custom embellishments your clients want.
How to Increase Supply Chain Accuracy
Reducing your in-house errors, enabling you to avoid product shortages and improve your demand planning and giving you the tools you need to manage your inventory of custom goods, are all benefits of using ERP software with an integrated WMS solution. While these benefits may already be enough to provide you with an advantage over your competitors, an ERP system offers additional benefits that have the potential to increase your bottom line. In addition to improving your client retention rate and your customers’ satisfaction with your business, an ERP system can also improve the accuracy of your supply chain fulfillment.
Depending on the ERP technology you decide to use in your operations, it may enable you to use your supply chain partners to manage your inventory and product shipments. This can help to ensure you have the right amount and the appropriate mix of products available at all times and increase the accuracy along the full length of your supply chain.
In general, you can integrate your ERP system with the systems your suppliers and third-party logistics partners use. By tracking the changing levels of their products that are in your inventory, your suppliers can make sure they have the right products and the correct number of items available to replenish your inventory and prevent you from losing sales. By integrating your ERP technology with your suppliers’ systems, you increase the probability that you’ll receive the correct products in the appropriate quantities at the right times because your suppliers are able to see the exact items you need in real-time for themselves. By automating your system with your suppliers’ software, you eliminate the need for a person to manually prepare product orders, which reduces the possibility that a mistake will be made during the procurement process.
FDM4, Providing Inventory Management for the Apparel Industry
For nearly 40 years, FDM4 has provided inventory management solutions for the apparel industry. Our managers have been with us for an average of more than 15 years and they use their industry expertise to lead a talented team of support staff, programmer analysts, research and development professionals and hardware technicians to provide the inventory management solutions you need.
Our state-of-the-art inventory management solutions include the following:
Our ERP technology can accommodate your needs regardless of whether your business consists of a single warehouse or if you’re in charge of multiple companies and warehouses and trade in more than one currency. From freight calculations, to product procurement, to inventory management, to billing and more, our ERP software truly integrates every aspect of your business so your entire team is on the same page at all times no matter how big or small your operation is. Our scalable inventory management systems are available as licensed models or subscription-based, hosted SaaS solutions.
FDM4 is proud to work with companies that offer apparel that appeal to a wide breadth of consumers. Our current list of clients includes companies you’re sure to recognize, including the following:
- Heritage Sportswear
- River’s End Trading
- Alstyle Apparel & Activewear
- Bermuda Sands
- Model Apparel
- Shark Ninja
If you want to know why so many apparel companies use our inventory management solutions, give us a call. If you’re wondering how to handle your apparel inventory more efficiently, we have the solution that’s right for your business.