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Improving operational processes

Operational strength is the foundation of commercial success

The fundamental principle observed by the Group is to keep control over all business-critical processes. Robust operational processes allow the Company to develop, source, produce and deliver high-quality products in large numbers efficiently, fast and on an industrial scale. This affords HUGO BOSS the opportunity to gain a competitive edge by swift reaction to market changes, an advantageous value-for-money proposition and high supply reliability. The Group still focuses on optimizing operational processes in line with the requirements of its own retail operations.

Vertically integrated organizational structure secures design and product excellence

HUGO BOSS has closely integrated the product design and development process with industrial manufacturing and sourcing. The organizational structure is aligned to the categories clothing, sportswear, womenswear as well as shoes and accessories in order to maximize the respective product competencies. Intensive cooperation of all those responsible for product development increases product quality, accelerates development times and captures synergy effects in development and sourcing.

Own production activities secure critical know-how

HUGO BOSS still produces a substantial share of its classical clothing range in-house. By using its own production facilities, the Company can secure critical know-how, while enabling development activities to be closely geared to subsequent industrial manufacturing. In addition, the insights won from maintaining its own production activities can be drawn upon to profitably manage an external supplier network that guarantees reliably high product quality on the basis of partnerships that have grown over many years of collaboration. Sourcing and Production

High performance IT-structure affords key competitive advantage

A high-performance SAP-based IT infrastructure uniformly deployed worldwide effectively supports the operational processes of all functions and creates the transparency needed for making entrepreneurial decisions. In particular, this provides direct control over the development of the Group's own retail business, enabling quick response times with respect to the distribution of goods and discount management. The Group is currently working on implementing an IT solution that provides a fully integrated view of stock flows in its own retail business thus enabling planning that is directly driven by end consumer demand. Another focal point is the IT-side integration of production, transportation and distribution processes in order to capture efficiency and speed benefits. Sourcing and Production

Logistics infrastructure is aligned to requirements of the Group's own retail business

A powerful logistics infrastructure ensures timely and accurate delivery to sales partners and the Group's own points of sale. In the past few years, the Group has redoubled its efforts to optimize its logistics processes with respect to the requirements of its own retail business in line with the transformation of its business model. The single most important measure in this context is the construction of a new flat-packed goods distribution center near the Group's headquarters. Once it goes into operation in the first half of 2014, it will speed up the merchandise supply process and significantly improve the efficiency of critical handling processes compared to the past.

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