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. An important 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 associated reduction of collection complexity play an important role. The complexity of collections has been reduced by one-third over the past few years. A 10% year-on-year reduction was achieved in fiscal year 2014. 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

HUGO BOSS is also continuing to work on optimizing its planning, production and logistics processes from an IT perspective. To this end, the uniform system-side integration of suppliers in the Group’s organization has been stepped up in the past few years, thereby improving the transparency of merchandise flows along the entire supply chain. For example, an SAP-linked, web-based supplier platform simplifies communications with production partners. The system-side exchange of information also enables orders to be bundled on the basis of needs and the required production capacity to be reserved with the supplier at an early stage and cost-effectively. Real-time status reporting means that orders can be prioritized according to urgency, so that goods can be delivered on schedule. Closer integration with suppliers also allows placement of follow-up orders at short notice and quick response times. This is especially relevant for the replenishment business, which ensures that business partners are supplied at short notice, especially with the basic non-seasonal assortment.

Quality assurance throughout the production process

HUGO BOSS sets highest requirements for the quality of its products. To meet them, quality assurance starts where the product originates – directly with the supplier. The production facilities are supplied with standardized quality and processing manuals which document the requirements. In addition, the most important processes that are relevant to quality are described in a process manual for the Group’s own production plants. In order to meet the high quality standards while minimizing manufacturing tolerance, the manufacturing process is automated to the extent that this is economically viable. Compliance with manufacturing standards is ensured using fixed, technology-enabled controls that are always performed at specific steps along the production line. In addition to the firmly established control levels, regular samples are taken to monitor the other steps of the process.