Reducing complexity raises sourcing efficiency

In order to effectively counter cost increases in the sourcing processes, especially due to increased labor costs, continuous efficiency improvements are needed along the entire supply chain. A key lever to this end is ensuring a seasonally balanced utilization of supplier capacity and ordering large volumes where possible. In this context, the core range and the associated reduction of a collection's complexity play an important role. Indeed, the complexity of collections has been reduced by almost a third over the past few years. A 10% year-on-year reduction was possible in fiscal year 2013. In addition, the Group continually reassesses the regional optimization of its sourcing activities in light of diverging labor cost trends and changing industrial structures and manufacturing competencies in individual markets.

System-side integration of suppliers boosts efficiency of supply chain

Furthermore, the Group continues to work on the system-side optimization of its planning, production and logistics processes. To this end, the uniform electronic integration of suppliers in the Company's organization was driven forward in the past few years, thereby improving the transparency of merchandise flows along the entire supply chain. For instance, an online supplier platform simplifies communication with suppliers. System-side exchange of information also enables bundling of orders based on requirements and by customer as well as the early and cost-effective reservation of the production capacity needed from suppliers. Real-time status reporting enables priority-driven control over orders and on-schedule delivery of goods. Moreover, closer integration with suppliers also allows the placement of follow-up orders at short notice and quick response times. This is especially relevant for the replenishment business, which ensures the supply of business partners at short notice, especially with the basic never-out-of-stock assortment.