Arvind Fashions Ltd.

Arvind Fashions | Upgrading the supply chain for better shareholder value and ROCE

Arvind Fashions

Arvind Fashions Ltd. is home to 5 distinguished brands, including iconic brands like Arrow, US Polo, Flying Machine, Tommy Hilfiger, and Calvin Klein, catering to a wide range of consumer preferences. With a network of nearly 1300 standalone stores, 5000 departmental and multi-brand stores operated by them and a strategic mix of online partnerships, Arvind Fashions Ltd. has a robust presence across the Indian retail landscape.However, Arvind Fashions, like most major fashion retailers, faced challenges in effectively managing its inventory. The primary issue was the dichotomy between well-performing styles experiencing stockout leading to sales loss on one side, and slow-moving garments having excess inventory at the store, leading to increasing working capital requirements on the other side.To address this problem, with the help of Vector, Arvind implemented a solution which categorised their offerings into distinct streams based on the product life cycle. In contrast to fashion styles with lower life cycles, the styles that were perennial in nature were classified as core styles, and their supply chain was redesigned to Never Out Of Stock in the stores (NOOS). It is worthwhile to note that many fashion retailers call some of their products 'core'; however, they run the supply chain process for the 'core' portfolio similarly to what they do for fashion styles, leading to the dichotomy explained above in the paragraph. Arvind Fashions team, along with Vector Consulting, executed a paradigm change in the business process to enable continuous availability of the 'core' styles.The change involved alignment of all the internal and external pillars of their value chain, right from fabric mills to garment vendors to their internal warehouse, on the new business processes and an integrated view of the inventory profile using VectorFLOW software. The system algorithm and necessary IT handshakes enabled frequent replenishment to the stores, ensuring high daily availability at all the stores while reducing the inventory holding significantly.Through diligent implementation to ensure high daily availability in a short span of time, the team almost doubled the sales while reducing the inventory by more than half, thus gaining upwards of 4 times ROI on core styles.<figure class="image"><img style="aspect-ratio:863/635;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//image-1720243625_1776863645.png" width="863" height="635"></figure>

Arvind Fashions Ltd. is home to 5 distinguished brands, including iconic brands like Arrow, US Polo, Flying Machine, Tommy Hilfiger, and Calvin Klein, catering to a wide range of consumer preferences. With a network of nearly 1300 standalone stores, 5000 departmental and multi-brand stores operated by them and a strategic mix of online partnerships, Arvind Fashions Ltd. has a robust presence across the Indian retail landscape.However, Arvind Fashions, like most major fashion retailers, faced challenges in effectively managing its inventory. The primary issue was the dichotomy between well-performing styles experiencing stockout leading to sales loss on one side, and slow-moving garments having excess inventory at the store, leading to increasing working capital requirements on the other side.To address this problem, with the help of Vector, Arvind implemented a solution which categorised their offerings into distinct streams based on the product life cycle. In contrast to fashion styles with lower life cycles, the styles that were perennial in nature were classified as core styles, and their supply chain was redesigned to Never Out Of Stock in the stores (NOOS). It is worthwhile to note that many fashion retailers call some of their products 'core'; however, they run the supply chain process for the 'core' portfolio similarly to what they do for fashion styles, leading to the dichotomy explained above in the paragraph. Arvind Fashions team, along with Vector Consulting, executed a paradigm change in the business process to enable continuous availability of the 'core' styles.The change involved alignment of all the internal and external pillars of their value chain, right from fabric mills to garment vendors to their internal warehouse, on the new business processes and an integrated view of the inventory profile using VectorFLOW software. The system algorithm and necessary IT handshakes enabled frequent replenishment to the stores, ensuring high daily availability at all the stores while reducing the inventory holding significantly.Through diligent implementation to ensure high daily availability in a short span of time, the team almost doubled the sales while reducing the inventory by more than half, thus gaining upwards of 4 times ROI on core styles.<figure class="image"><img style="aspect-ratio:863/635;" src="https://web-assets.vectorconsulting.in/storage/editor_uploads//image-1720243625_1776863616.png" width="863" height="635"></figure>

Learn how Vector Consulting helped Arvind Fashions double sales and reduce inventory by over half with an innovative inventory management solution for CORE styles.