Lü Mouzhen: How does the clothing person "winter"?

After the baptism of the previous financial crisis, the Chinese apparel companies now become mature and confident. At the moment, the question we should sum up is: If we encounter similar situations again, how can a clothing person warm up and “winter”? Lu Xiaomou, a specialist in management consulting agencies, published his opinions.

Ms. Lu has worked in management consulting for many companies. He has obtained some of his own insights from years of practical experience. He believes that “wintering” does not necessarily mean that you have a hard time. “Winter” may also be a rare opportunity for the apparel industry to recuperate and gain momentum.

Lü Mouzhen proposes the following specific suggestions for “wintering” in conjunction with the actual situation of the domestic garment industry:

"Reserve food" - to ensure that the cash flow does not break. To ensure the liquidity of the company's cash, this is an indicator that the company must pay attention to when it comes to winter. What is most afraid of in the winter is “food shortages”, and most of the current apparel companies do not have “overdose”, and financial institutions will not easily “leverage food” when the current economic outlook is uncertain. Therefore, once the company's cash flow breaks down, it may not only ask for help, but it may also encounter a dangerous situation where “walls are pushed down by everyone”. Increase cash inflows, reduce cash outflows, and ensure that adequate cash should be the focus of management for all companies, especially for private enterprises that lack channel and financial support.

He said there are two ways to ensure cash flow: one is open source and the other is cost-saving. There are two ways to “open source”. One is to use ** channels, but this method is more costly; the second is to sell some assets to obtain cash inflows. This is the most cash-generating company for cash flow problems. Direct way. "Throttle" means reducing cash outflows. The more common practice to prevent cash flow from breaking is to reduce spending. In the operating expenses of enterprises, the reduction of administrative expenses and marketing expenses bear the brunt. The second is to lay off employees or pay cuts, but considering the specific circumstances of China, domestic enterprises should use layoffs and pay reductions as a last resort and use them cautiously to prevent unnecessary impact on the stability of the company.

"Keeping abreast of the ready-made" --- adjust the incremental adjustment to make inventory. In the current economic environment, the difficulty of doing incremental increases has increased dramatically, and the risk has also increased dramatically. The safest way for market development is to improve stocks and improve stocks in two ways: First, purchase stocks of others. If companies have sufficient cash on hand, they can acquire competitors’ market shares at this time and obtain an ideal market at a low price. Share. Another way to make inventory is to dig deeper into existing customer groups in order to obtain a stable return on profits or to avoid losing customers. It is precisely because of this that most companies provide services to their customers in times of economic downturn.

"Enhance physical fitness" --- improve business efficiency. The goal of improving operational efficiency can enhance the enterprise's physique, and companies with good physique have strong immunity, and the ability to resist risks is naturally superior. The operational efficiency of the economy is declining. It is generally concerned with process optimization and lean production. The core of operational efficiency improvement is process optimization. There are usually two points of focus for process optimization. One is the optimization of management processes and the other is the optimization of supply chain processes. Changes in management processes are the norm for wintering companies. Usually, supply chain optimization can make the company's efficiency 20%.

"Stretching exercises" --- do vertical and horizontal extensions in the industry chain. A product to the consumer's hands, generally through product design, raw material procurement, production and processing, warehousing and logistics, wholesale management and terminal retail six major links. In this industry chain, many domestic companies, especially OEMs, are often only involved in the production of processing, raw material procurement, and warehouse logistics, which have relatively low technological content. The competitiveness of enterprises is derived from low-cost labor expenditures. The average interest rate is only 2% to 3%. Therefore, in the face of the economic crisis, due to the lowest value creation and the lowest profitability rate, these companies are the first to stand up. Whether it is vertical or horizontal extension, it is the ability to make companies have a high level of profit and improve the economic crisis.

"Stand up to heights" --- from the "Made in China" to "Chinese brand" transformation. The good performance of domestic brand enterprises in the crisis has given us ample reason to transition to the construction of independent brands. Enterprises with their own brands are often the core enterprises in the supply chain. They not only have a greater right to speak in terms of pricing power, but also have more initiative for the upstream and downstream enterprises and consumers. Speed, processing methods, it seems to be more than adequate. According to relevant personnel of brand enterprises such as Luolai Home Textiles and Taiping Bird Women's Clothing, the impact on the enterprises in the crisis is limited, and the growth rate of about 30% can still be maintained.