Seven wolf CIO unimodal interpretation: "Wolf Totem" balance

Shan Feng believes that companies should use IT to improve their internal management skills in order to support the company's further expansion

The seven wolves flagship store at No. 189, Linyue Road, Xiamen, often appears as Zhou Shaoxiong, Chairman of Seven Worms Industry Co., Ltd. Every day he handles a busy business, he always walks to the store on the ground floor of the headquarters building. Sometimes he will advise the clerk to adjust the store furnishings according to different costumes. Each adjustment will be spread through more than 3,000 stores in the north and south of the river through the online and offline systems of seven wolves.

Thanks to powerful channel development and marketing, Seven Plus Wolf has achieved high growth for several consecutive years. In 2007, its main business income was 876 million yuan and net profit was 88.7 million yuan, which was 79.6% and 77.2% higher than 2006 respectively. During the economic downturn of 2008, seven wolves also achieved a strong converse trend. In 2008, the total operating revenue was 1.65 billion yuan, and the net profit was 140 million yuan, an increase of 59.8% from 2007. At the end of 2007, seven wolves had more than 1,900 stores (counters) and now have exceeded 3,000.

As the seven wolves marched all the way, Zhou Shaoxiong made an unexpected decision to slow down his expansion. "In the period of high-speed development, if the management system and information system can not keep up, the weaknesses of the operation will be revealed. Therefore, we need to build the system to practice internal strength." Said seven wolf CIO unimodal. Not long ago, the seven-wolf supply chain management system completed the implementation of the first phase, and the efficiency of sales and ordering was greatly improved. At the same time, dealer management was also included in the visual track.

In Fujian, as the leader of the clothing cluster, Septwolves is the first company to emerge through brand operations and distributor channels. After experiencing rapid expansion in previous years, Zhou Shaoxiong believes that only by strengthening back-office management and constantly exerting the marginal effect of management, can the costs and risks of expansion be reduced. H&M's supply chain system is appreciated by Zhou Shaoxiong. The European retail giant believes in the business philosophy of “time, quality and price” and strives to find a balance between efficiency and cost. Compared to ZARA, another European apparel industry giant, H&M has been able to attract more customers because of its cost control. The price of goods is 1/3 cheaper than ZARA.

However, do not forget that H&M and ZARA's management model is based on direct-operated stores, which can strengthen the control of channel terminals. As seven wolves, which are still based on wholesale and franchise operations, how can they emulate H&M?

Change mode

Like all apparel companies in the Jinjiang area of ​​Quanzhou, Fujian, the seven wolves started by developing regional dealers and through their understanding and influence of the local market, they jointly expanded the market. With the development of the company, Septwolves gradually developed into wholesale and franchise businesses, supplemented by direct-operated stores, and the proportion of direct-operated stores was less than 10%. Currently, there are less than 300, but seven wolves are still increasing. The number of outlets.

For the retail industry, regardless of the mode of development, the control of the terminal is very important. In the dealership model, when the clothing wholesales to the dealership, the ownership is transferred to the dealership. The store management, merchandise display, and even discount promotion are recommended by the seven wolves, but they are still dominated by dealers. Channel terminals have influence.

However, the success of the seven wolves in the year was due to the brand operation. Through a series of television commercials and movies, the brand image of Seven Wolves gradually became popular and the terminal sales volume continued to increase. This also brought huge profits to dealers. . The continuous strength of the brand makes seven wolves more and more important in the dealership. The seven wolves have more and more powerful voice in the channel.

In order to strengthen the management of channel terminals, Septwolves hopes to integrate the concept of direct retail into the wholesale mode and franchise mode, and transform the original wholesale-oriented management mode into a direct-sale retail management mode. The wholesale model focuses on inventory management, while the retail direct model focuses on the planning and management of stores and commodities. In comparison, the direct model can achieve more refined management and faster response.

In the previous wholesale model, the replenishment of the seven wolf stores always needed to check the daily report after each night, and assisted in regular store inspections to know the replenishment quantity. The replenishment was relatively passive and slow. The most important thing is that if the sales data cannot be known in time, it is difficult for the company's back office to respond quickly to the market.

After being transformed into a retail direct model, seven wolf head quarters immediately recommended replenishment suggestions, promotion time, and price for each store. For example, when the replenishment, when discount promotions, promotional discount rate, shop decoration and other details, all through the headquarters of seven wolves in Xiamen passed to the dealers, franchisees and outlets. From a management perspective, the retail direct model is more active.

However, just changing from the wholesale model to the retail direct model does not improve the efficiency of the supply chain. In order to respond quickly and flexibly to the market, each link in the supply chain needs to be finely controlled, including the re-combination and process optimization of each link from production to manufacturing to sales. Zhou Shaoxiong chose to slow down growth before he realized the optimization of the full value chain.

Extended supply chain

Attentive franchisees found that after the summer of 2008, the receipt of goods was greatly reduced. They do not have to return the wrong goods back and forth. Prior to this, the seven wolves used manual loading. The cartons were always hand-written with paragraph numbers, number of pieces, and customer numbers. However, mixed-color mixed-code delivery often occurred; or the delivery quantity was abnormal, which was mainly reflected in the shortage of quantity. The label outside the box is not standardized, and there is no packing list when it arrives, let alone automatic data analysis and decision making.

The chaos of these goods is erroneous, starting with the outsourcing factories upstream of the supply chain. Over the years, seven wolves gradually stripped production as an independent accounting unit and outsourced manufacturing to outsourcing factories. At present, seven wolves have more than 100 outsourcing factories. Except for the factory in Jinjiang, where the birth of seven wolves originated, only one factory of more than 2,000 people has been retained. All the other productions are done by the factory of the foreign association. The delivery of more than 100 outsourcing factories was not standardized, but if the outsourcing factories were not well coordinated, errors could affect delivery efficiency and customer satisfaction. From June 2007 to April 2008, there were 82 complaints due to more serious receipt errors.

See how H&M does it. H&M does not have a self-built factory and is manufactured by more than 200 suppliers worldwide. By implementing a global IT operation platform, H&M can quickly respond to fashion at a low cost. This is H&M's global resources. Flexible configuration. H&M's advantage in the product field is the organization and control of the product forecasting phase. More than 100 designers focus on global trends and features, absorb popular elements, and quickly communicate consumer purchasing characteristics through the store terminal system to organize production. Under a tight system, H&M guarantees a low-cost, rapid response from the popular prediction—design—production—feedback—sales phase.

In the summer of 2008, seven wolves implemented the GSP (Generic Scan Pack System) system for improving the factory scanning packaging process. The original manual packaging was changed to a computer scan packaging, and the order data importing function was used to quickly and easily obtain order data. Splitting and merging of orders enables flexible order management. "After the packing process was changed from manual to computerized scanning and packing, the accuracy can reach 100%, the time is greatly shortened, and the cooperation between external factories is better."

The layout of the headquarters of the Septwolves will be transmitted to more than 3,000 stores across the country through online and offline systems

At present, the core 30 outsourcing factories have applied the system. After completing the production orders for the seven wolves, each one needs to be scanned when packing from the assembly line. If the wrong product is scanned, the system will automatically prompt On the one hand, it will reduce the error rate of packing outside the factory. On the other hand, seven wolves can quickly obtain the packing data of the factory. At the same time, the headquarters of the seven wolves can reserve the warehouse according to the quantity of goods. Based on the GSP system, Septwolves can obtain data on production and sales management and warehouse inventory management in a timely manner so that production plans can be arranged more rationally and production resources can be scheduled and outsourced. After the GSP system has achieved good control of the external co-factory, no complaints have ever occurred.

It is not just the coordination of the upstream factories. Danfeng pursues the overall efficiency of the supply chain that integrates production, channels, and end consumers. In the channel terminal, there are seven wolves with more than 3,000 stores (cabinets), and a gradually improving supply chain system is playing a role in corporate operations.

At the spring ordering meeting for the seven wolves costumes that just concluded in March 2009, the just-introduced category planning module made Zhou Shaoxiong more clearly see the seven wolves' very subdivided ordering data, which is crucial for the garment industry.

“We look forward to finding a viable way to implement the OTB (Open to buy) mechanism in the retail industry by dynamically allocating limited budget funds to the procurement of goods that can generate the greatest profits or the largest market share.” Dan Feng said that the category plan is one of the foundations for creating an OTB. OTB refers to the procurement plan for various commodities based on the forecasted turnover, capital, and commodity turnover rate.

In the category plan, various historical data such as various styles, colors, styles, pricing, and sales of the merchandise are presented, enabling the headquarters of the Septwolves to be in the initial stage of new product development, and to have a complete picture of the layout of the market and the sales targets of various channels. The plan is to guide the development team and buyers of Seven Wolf to develop according to this model, and help each channel to establish order planning.

Before the category plan was applied, various kinds of data of the products were scattered in different systems in different departments. Seven wolves were unable to analyze the indexes of commodities in a standardized manner. Distributors often ordered by feeling, and marketing and commodity teams were also difficult to be consistent. Based on the review of order data. In this way, on the one hand, dealers can't know the more accurate analysis of trends and choose the goods on the road, and on the other hand, they can't embody the products developed by the guidance of the company. After the category plan has been implemented, the flow of various types of data has been opened up and can be analyzed and shared at any time. With the development of time, the historical data of commodity indicators and marketing indicators will gradually improve, and headquarters and distributors will have more basis for ordering, laying the foundation for smooth planning, development and ordering processes.

Seven wolves also consider the extension of informationization of upstream and downstream partners. For the downstream distributors, Septwolves have a dedicated team responsible for each dealer's shop or counter, helping them install POS systems and even helping franchisees to plan and check their systems. As for the upstream factory, seven wolves will not only copy the system to more than 100 outsourcing factories, they will even include the upstream fabric manufacturers in the deployment system to understand fabric production and inventory.

In the unimodal plan, the next step will focus on the mining of business data. “This is one of the key points for improving the efficiency of the supply chain. Only when the data is accurately mastered and analyzed can refined management be improved.”