Three Key Foundational Capabilities
to Accelerate Supply Chain Transformation

We will focus on building the three foundational capabilities
that are needed to accelerate supply chain transformation:
algorithms for planning, automation wherever possible
and management cockpits enabled by data tracking and integration.

1 Algorithms Advanced demand forecasting
and integrated planning process
using statistical analysis
and machine learning algorithms

Using statistical models to enable accurate sales planning

During the sales planning process before a product goes on the market, the weekly number of units sold will be projected based on the past sales using statistical analysis and machine learning algorithms. After we take the product to the market, the actual number of units sold will be automatically collected in real time and the projections will be updated frequently to make them more accurate. In addition to the past results, information from all directions—from external factors, such as the latest fashion trends, implications of discounts, temperatures, promotional events, and TV commercials, to the in-store qualitative data, including feedback from customers and sales representatives—will be constantly analyzed to calculate the most optimal values instantaneously. This will enable more accurate, up-to-date sales planning.

A sales plan as the cornerstone for planning
in the production and distribution functions

Based on the accurate and granular sales plan, we will keep planning across the supply chain functions consistent, using mathematical optimization algorithms that deliver the best possible plan that meets the complex requirements. The best possible production and distribution plans that are fully aligned with the sales plan will be automatically generated within rules and constraints that exist in the supply chain, such as factory production capacity, the inbound and outbound logistics and storage capacities of the warehouse, shipping lead times, and in-store stock levels. With algorithms, we will be able to quickly revise plans for each function in response to weather shipping delays, a surge in sales and other unexpected events. In this way, we will ensure that the global supply chain is always optimized to its rapidly changing landscape.

2 Automation The relentless pursuit of
automation enables a shift away
from labor-intensive to sustainable supply chain

Launching the world’s best automated clothing distribution warehouse around the world

It is said automation is difficult for a warehouse that handles soft goods like clothing as compared to a warehouse that handles relatively hard, solid goods. In partnership with high-tech companies, we will develop new solutions to this and use them to automate our warehouse around the world. In addition, a WMS (Warehouse Management System) and WCS (Warehouse Control System) tailored to the specific needs of our business will be developed and implemented to our warehouse around the world. We will be able to strive for globally integrated and advanced warehouse operations while reducing the costs and time required for system development.

Automation will also allow us to ensure the same high level of service without being influenced by the quality of tasks performed by warehouse employees and to deliver products to the stores and customers fast.

Increased production flexibility at factories

Similarly, we will automate as many as possible tasks that are currently done manually at production factories to add flexibility in responding to the need to increase or decrease production while maintaining and improving the high-quality and low-cost production processes.

3 Management Cockpits Keeping track of and integrating
all relevant supply chain information
for effective management decisions

Keeping track of supply chain information

By attaching an RFID (radio frequency identification) tag to about 1.3 billion items we offer a year, we will be able to know exactly the origin of materials, factory information, shipping route, and delivery schedule for each of these items, as well as the current status and whereabouts of the items our customers want. The RFID tag technology will also be applied to increase efficiency of our internal processes, such as stock-taking, and improve the product traceability system.

Integrating supply chain information

We will update and integrate the databases that were best suited for the respective functions to ensure they are optimized for use across the supply chain. This will allow all employees to look at all relevant supply chain information from the same perspectives and scales and know how much impact decisions made by each function will have on the supply chain. Also, with the latest supply chain data always available at our fingertips, we will be able to dramatically reduce the time required for validation using algorithms, find the best solutions from more options in a short span of time and improve the accuracy of algorithms.

Leveraging supply chain information
for management’s decision-making process

While constantly monitoring all the integrated supply chain information, we will deliver ‘quick assessments, quick decisions and quick action’ for important management decisions to create management cockpits with both speed and accuracy.

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