The markets in apparel retail are getting wider day by day, and with the advent of e-commerce, the competition has become even fiercer. Garment retailers need to manage their operations efficiently by coordinating the backend supply chain and providing better products to enhance customer satisfaction. Hence, brick-and-mortar apparel stores need an effective way to survive in the changing times of e-tailing.

The pioneering concept of lean manufacturing, which focuses on dealing with bottlenecks in inventory, has been adapted to develop a tool that translates well into the apparel retail industry. Lean retailing aims to fulfill what the customer wants, when the customer wants it, where the customer wants it, and in the quantity the customer wants. This ideology was adopted by Wal-Mart and subsequently used by large retailers like J.C. Penny, Bloomingdale's, Macy's, The Gap, and Zara. These apparel companies use technologies such as RFID (Radio Frequency Identification) and barcodes to determine the appropriate movement of inventory and manage merchandise inside the store according to customer requirements.

The philosophy of lean retailing focuses on identifying and minimizing wastages to simplify and streamline operations. In lean retailing, waste is measured in terms of the consumption of time and capital, not just physical material. Therefore, over-production, inefficient transportation, unnecessary motions, inappropriate processing, rejects and defects, time wasted in waiting, and overstocking are some of the wastages in a typical apparel retail setup that need to be addressed.

The ever-changing demands and desires of customers, the abundance of options, and competitive prices are key considerations for every garment retailer. In the case of apparels, fashion and styles change rapidly, so manufacturers need to keep pace with the changing trends. Due to these challenges, apparel retailers require a system like lean retailing to streamline their operations and design an uninterrupted workflow every time.

Lean retailing follows certain principles as described by James Womack and Daniel Jones in their book titled "Lean Thinking," which include:

  • If your customers expect products to be delivered on-trend, then eliminate obstacles such as extra handling and improve processes inhibited by poor workflow design.
  • Plot the value stream. Identify and map all the steps involved in moving goods through the system, all the way to the customer. Activities that add no value must be eliminated.
  • Make the process flow. Redesign processes that prevent the free flow of products to the customer.
  • Pull from the customer. Lean execution requires a clear understanding of demand and current inventory, pulling merchandise to stores and to the shelf based on what customers want.
  • Pursue perfection. Root out any remaining waste. Then do it again. And again, and again.

Using RFID at item-level considering the value of case and pallet tagging helps in identifying a particular carton or item in automated walk-through checkout processes, preventing loss of items, in item visibility, and item location in a store inventory. Many apparel retailers like Marks & Spencer's, American Apparel, and Jones Apparel Group have shifted from the use of outdated and manual processes to more real-time, up to date, and reliable RFID enabled processes.


With the help of a RFID facilitated process, a retailer can control the supply chain from the source to the customer Point of Sale. This ensures smooth implementations, quicker business evaluations, better ways to compare and execute. The RFID technology uses a well architected application software system. This helps in sharing data in real time with the suppliers.


Another important aspect of lean retailing is getting rid of all the bottlenecks in the supply chain. It helps in designing a workflow plan in which work can be processed freely. With the continuous improvement concept of lean retailing, apparel retailers can prevent wasted effort, time, materials, and motion. Along with that, it also brings in a lot of innovations in the processes.


Lean retailing involves everyone from the bottom to the top level employees involved in supply chain operations. Applying the lean principles can improve the responsiveness of the retailers towards their customer's needs, can deliver products quickly, and meet their needs as per the changing trends. The tool provides better visibility across the supply chain and ultimately leads to reduction in inventory control costs and reducing shrinkages at the back-end. In the front or store-end by re-designing the work flow provides consistency and results in higher customer satisfaction.


Moreover, by connecting the complete workforce and providing adequate training, lean retail principles enhance the employee satisfaction without any kind of increase in the labor cost, which reflects in the profit of the organization. Retailers who have incorporated the lean retail system have witnessed a decrease in the labor cost of 10 to 20 percent, in the inventory cost by 10 to 30 percent, and in the cost related to stocks by 20 to 75 percent. Hence with less investment, lean retail is a tried and tested formula to improve in-store and back-end operations of brick and mortar stores.

 

References:


1.      Apparel.edgl.com

2.      Thirdeyesight.in

3.      Slideshare.net