Inbound Logistics | May 2022


by Mark Balte EVP Supply Chain Innovation, Logility | 404-261-9777

Designing a Soft Goods Supply Chain

Forecasting demand for soft goods can be difficult because demand changes due to fashion trends, weather patterns, and other factors. But artificial intelligence (AI) and machine learning (ML) technologies are changing the way soft goods manufacturers and retailers manage their supply chains.

mark with consumers. This also allows you to cut down on items that fail to meet consumers’ expectations before stock-outs and markdowns are required. 3. Use customer segmentation to your advantage. The best soft goods supply chain plans are built with cus- tomer segments top of mind. Companies that segment customers and localize assortments are well-equipped to deliver the right products to the right consumers at the right time. They can accommodate customer requests as well. Set up your customer segments based on preferred apparel and accessories and fine-tune your supply chain based on these segments. Over time, this will optimize your supply chain planning, sourcing, and replenishment strategies. 4. Streamline S&OP. Sales and operations planning (S&OP) helps soft goods companies determine how much merchandise is required to achieve their goals. Effective S&OP requires a busi- ness to account for its people, processes, and technologies. It is crucial to use S&OP technologies that support integrated business planning and help develop processes that simplify supply chain operations. They also pro- vide supply chain transparency to the point where different departments can work together to analyze data, generate insights, and find ways to help your busi- ness achieve its goals.  n

disruption, maximize productivity, and minimize operating costs. In addition to using AI and ML-based modeling, soft goods companies can launch and maintain a successful supply chain by taking these steps: 1. Establish a “one-number” plan. One-number forecasting involves creating a plan based on a single operating num- ber. The plan is demand-driven and gives a business the opportunity to make mod- ifications if market conditions change. A one-number forecast can be beneficial for soft goods companies, since many factors can suddenly alter demand. Use historical data to establish a one-number plan across your supply chain. Create plan goals and maintain flexibility. Assess the plan regularly and make changes as needed. 2. Monitor in-season performance. Soft goods companies commonly use complex spreadsheets for supply chain planning, but these lead to inaccuracies. Track in-season performance of your supply chain to ensure you maintain a steady stock of in-season items that hit the

To understand why, let’s look at the technologies in detail. AI solutions help parse massive vol- umes of data from a wide range of sources that companies can then use to under- stand customer behaviors, supply chain fluctuations, and other business insights. ML goes hand in hand with AI. It uses self-optimizing algorithms to imitate the way human beings learn. When used in combination with AI, ML empowers busi- nesses of all sizes and across all industries to transform data into insights. AI and ML enable demand forecasting models that track and analyze histori- cal data to predict upcoming consumer demand cycles. Soft goods companies can use this insight to find ways to keep pace with customer requests year-round. AI- and ML-based modeling enables soft goods businesses to identify and resolve supply chain roadblocks as well. Since these companies continuously cap- ture data and insights, they can assess the state of their supply chain at any time and constantly explore ways to improve operations. This helps avoid supply chain

38 Inbound Logistics • May 2022

Powered by