How to Solve Inventory Management Problems in the Apparel Industry

Author: Emily Newton

Here’s how the apparel industry can solve its inventory management problems.

Technology can transform clothing inventory management, resolving many of today’s most pressing apparel industry challenges. Many apparel companies struggle with inventory management, demand forecasting, deadstock, and logistics efficiency. Adopting a few key technologies can provide clothing businesses with the tools they need to optimize their inventory all year around.

1. Smart Clothing Inventory Management

Several of the most common clothing inventory management challenges stem from poor inventory visibility and monitoring. For instance, many apparel industry businesses struggle with stockouts and deadstock, two opposite challenges with related root causes. Companies can use technology to improve their inventory management practices so they can resolve restocking and waste challenges.

Inventory Management Software

Inventory management software can be a big help in resolving many common causes of stocking issues. For example, businesses can set up their inventory management system to automatically alert personnel when key inventory items are low in stock. It is even possible to set up automatic restock orders.

Additionally, organizations can use an inventory management platform to improve deadstock visibility. When a particular product has been sitting on shelves for longer than expected, it is easy to forget about it. During this time, the clothing takes up valuable warehouse space and may even go out of style, reducing its value.

Apparel inventory management software can monitor inventory aging so personnel can be notified if an item is underselling or selling slowly.

IoT and RFID Smart Tags

IoT devices and RFID tags can also help improve clothing inventory visibility. Both technologies can be used in smart tags, which can monitor data like shelf capacity and warehouse climate conditions.

Some fabrics are sensitive to specific environmental conditions, such as high humidity. The United Nations estimates 85% of textiles end up in landfills every year, indicating that millions of valuable clothing items are going to waste.

Smart tags and sensors can prevent clothes from accidentally being ruined by monitoring the physical conditions inventory is stored in. Plus, smart tag data can integrate into inventory management software to assist with stock monitoring.

2. Optimize and Streamline Operations

Improving apparel inventory management is all about optimization and streamlining. Many clothing businesses face challenges like warehouse organization, demand forecasting and operations bottlenecks. Automation and logistics tools can resolve these stressors and help optimize clothing inventory management.

Warehouse Layout Optimization

For example, optimizing warehouse layout can improve efficiency and maximize storage space, allowing warehouses to carry more inventory. The layout optimization process is fairly simple, consisting of 10 steps. The most important part of this process is understanding the flow of the warehouse.

Spend time tracking daily movement throughout the warehouse and talking with employees and team leaders. Identify the routes and aisles they use most frequently both on foot and by equipment. Do certain types of inventory need to be accessed more frequently than others? 

In the new warehouse layout, give these high-traffic areas more space while compressing shelving that does not need to be accessed often.

Logistics Modeling

Logistics plays a significant role in clothing inventory management. This includes internal logistics as well as relationships with 3PLs. Modeling and simulations are a great way to optimize logistics without interrupting day-to-day operations.

Logistics modeling often utilizes digital twins — a virtual copy of the real warehouse operations and layout. AI can be used to analyze this digital twin and identify bottlenecks and inefficiencies. Then, facility managers can use this data to create new possible warehouse configurations. They can test out every model in the simulation first until they develop one that is as streamlined and optimized as possible.

Once the new warehouse configuration is tested in the simulation, facility managers can implement it in real life worry free. This reduces employee stress and ensures a higher chance of success than testing out new ideas in real life first.

Optimizing in-house logistics improves apparel inventory management by maximizing efficiency and visibility. It ensures inventory can move through facilities as efficiently as possible by eliminating bottlenecks. Plus, logistics modeling can even streamline the packing process, reducing wasted cardboard, plastic and other packing materials.

3. AI Demand Forecasting

Meeting demand in the apparel industry can be frustrating due to the speed at which trends and styles change. Luckily, AI can transform demand forecasting, improving accuracy and trend monitoring. The investment in AI forecasting tools can have a great ROI, too. Studies show AI forecasting can result in a 65% reduction in lost sales and unavailable products.

AI can automate the highly complex process of tracking consumer trend metrics to estimate what styles will rise and fall in demand. While AI is not ideal for every task, it is perfect for demand forecasting. AI excels at identifying patterns and trends in data, often to a level of detail most humans would miss.

The element of automation with AI demand forecasting can be advantageous in itself. It is no secret that the apparel industry moves fast. The time it takes to calculate demand estimates and track consumer trends manually can delay inventory updates so much that businesses may miss out on potential peak sales for a trending style. AI makes demand forecasting much more efficient, giving companies an edge over competitors by getting ahead of emerging trends.

4. Improving Apparel Inventory Management

Clothing inventory management can be challenging due to rapid changes in demand and difficulty tracking inventory levels. Luckily, emerging technologies can help.

Businesses can use inventory management software and smart tags to improve visibility and stocking. AI demand forecasting automates a previously time-consuming yet critical task. Warehouse and logistics optimization can be greatly simplified with the help of analysis and logistics modeling. With these tools, any company can streamline its apparel inventory management.

Inventory management

About the Author:
Emily Newton is the Editor-in-Chief of Revolutionized, an online magazine that explores innovations in science and technology. She loves seeing the impact technology can have on every industry.

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