Critical analysis of inventory management with reference to garments in retailing
The Major focus of this empirical research is to find out the relationships between various factors of inventory management in medium format garment retail shops that affect the sales. Samples of 100 retail shops were surveyed and the data collected was analyzed. Garment retailing is broadly classified under Men??s garment, women??s garments and Kids garments. The garment retail segment has seen good growth in recent years, thanks to the good economic environment in the country. This study is concentrated on medium format garment retailers who are facing lot of problems. Some of the problems are tremendous competitive pressure from large format stores & international brands, increasing overheads and high rentals. To counter these pressures, the medium format retailers must try to consolidate their operations, reduce their overheads like high inventory, faster inventory turnover The empirical results shows that the medium format garment retailers are having a positive outlook even though they are having tough competition. This may be because of the good economy and surge in disposable incomes of the urban population. The study also shows that by managing inventory in a tight manner and using latest technology to manage the store will ensure minimal losses and maximize customer satisfaction leading to higher sales realization. Majority of the retailers placed extra orders to take care of demand uncertainties and errors in forecasting. The average number of customers lost due to non availability of right garment was three customers per day. The study found that there is a mismatch between order frequency and supply frequency leading to higher safety stocks. This must be bridged and suppliers must increase their response time to match retailers order cycles. Shrinkage data was not available with majority of retailers. Medium format retailers are not tracking shrinkage with frequent audits and analysis. Some branded retailers who had some data attributed shrinkage on employee theft and shoplifting as the major cause of shrinkage. Most of the sourcing was done locally since Bangalore is a big manufacturing hub for garments. The mode of transport used was by road using LCVs because of traffic restrictions within the city for HCVs. Almost all retailers had bar code and scanner with offline point of sale software for billing and tracking sales. Latest technologies like radio frequency identification, online software with features like online ordering & tracking were not being used by retailers. The average turnover of medium format retailers was good and their main overhead was the high rentals. Rents in prime locations were exorbitant but unavoidable because these locations were the main shopping areas. Garment retailers must use technology to keep track of their customers, their needs and match tem with right inventory to succeed in this competitive era.