Optimizing an Apparel Company's Supply Chain
Learn how BCG partnered with a large European apparel company to improve its supply chain and cut costs.
"Apparel Company" is a large European producer of fashion apparel. The company sources globally, distributes through mono-brand stores, and has five different apparel brands.
Over the last ten years the company's sales had become stagnant. It had lost its position as the industry sales leader, and its profitability lagged that of its peers.
BCG was brought in to reduce supply chain costs and strengthen the company's brand by making the stores more uniform.
We analyzed the company's operations and identified four problem areas:
Collections were too large, so each store ordered just a fraction of the total items.
There was no consistency in what stores ordered, so the collection was fragmented among the stores and there was no brand consistency.
Orders were delivered too far in advance of the season, so stores were too cluttered and setup plans were derailed.
Store appearance was not standardized, which further hurt the company's brand.
After diagnosing these problems, we developed action plans for addressing them and also set savings targets.
The supply chain initiative delivered savings of €36 million by reducing the collection size and timing store deliveries to better coincide with the start of the collection season. The project also strengthened the brand and enhanced the customer experience by improving store appearance.
Following our work, the client conducted a pilot to test BCG's recommendations. The company achieved the sales target that was established for the pilot.
The success of the pilot persuaded the client to implement the recommendations. As a result, online profitability increased more than two times faster than that of print media.