Abstract:

Aiming at the serious problem of deep inventory of China’s fashion companies nowadays, this paper proposes an approach of applying S&OP process and buyer’s index to control the risk by managing the inventory at separate stages. S&OP can help company to be process-oriented, while the buyer system can help to supervise the inventory risk by set up inventory control indexes. When the approach is applied, company will firstly set the KPI indexes according to the qualification of the company inventory, combining them with company’s marketing segmentation and then control the inventory level separately. Basing on different types of the product, this method can help to quantify the indexes, optimize the inventory structure, chase the balance of inventory investment and gross margin, make the departments work cooperatively and different processes match each other, run the company in the virtuous cycle.