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Taking Inventory Management to the Next Level

Yuri Hernández - Logisfashion
Director Mexico

STORY INLINE POST

Jan Hogewoning By Jan Hogewoning | Journalist and Industry Analyst - Wed, 04/22/2020 - 13:30

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Q: What makes Logisfashion the ideal partner for fashion companies operating in Mexico?

A: For over 20 years, we have specialized in the fashion, retail and e-commerce industries. We designed a system of our own called LogisXP that evolved as a second phase to our LogisCore platform, which provides us with agility to integrate accounts. Everything is controlled through LogisXP to avoid errors in shipments. Also, the system provides us with piece visibility, from the moment it arrives to the warehouse until it is delivered to the final client, be it a retailer or an e-commerce end user. Our system also allows us to integrate an omnichannel strategy. This means that the client has the freedom to sell a product digitally and have the final user pick it up at the store or have it sent to their house.

Our system also allows us to integrate our clients with leading e-commerce platforms like Lineo and Amazon. Products bought through these websites are then sent from our warehouse to the clients. We transform clients’ fixed costs into variable costs by having several clients in the same warehouse. We then deliver products following the delivery policy of each player.

Q: What are the main logistics challenges retailers face in Mexico and how does Logisfashion help its address these?

A: The main challenge is related to growth. For instance, companies wanting to ship to Mexico can easily run into problems at a very early stage when reaching customs. Mexican customs are very demanding. If the company is producing abroad and does not ship the product in the right way, the product can be stuck in customs for a very long time, resulting in excessive costs and missed delivery deadlines.

We can provide support in terms of quality of origin controls. While most products are made in China, there is also interesting production in Europe, so we build quality controls in these places. We help companies with international transportation and customs processes. This means that from the production stage, we make sure that the product complies with the quality requisites established by Mexican regulation.

Q: What are the most requested services from companies in Mexico?

A: We are specialized in the fashion area, which means we work directly with textiles, footwear and jewelry. However, for e-commerce we have opened our reach and we are participating in business verticals such as toys, jewelry and even the wine segment.

What differentiates us is specialization and our ability to adapt to our clients’ needs. Whenever we have a new client, we analyze their sales strategy and the channels they will target. Based on this, we design a communication strategy within our system so the client has control over its products and shipments. We design an appropriate layout based not on what they will sell in the short term but on their future growth according to the company’s commercial policy and forecasts.

We also offer specialized logistics functions. An example of this service is Tous. When the company was venturing out of Spain, it was looking for an e-commerce service. Tous approached large logistics companies that only take the product, put in a box and ship it. The company wanted to provide e-commerce clients with the same buying experience they would get in the store and eventually contracted us to design an e-commerce strategy where clients could choose the color of the box they want, ask for a gift message and other customization details. Interaction in our platforms allows us to receive all these requests from clients and then retrieve the desired product, clean it, package it with its warranty and address all other special requests.

Q: What strategies could be put in place to boost the adoption of e-commerce among Mexican consumers?

A: The most complicated process tends to be the last-mile delivery. Players from large packaging companies are working in this area, although we are also seeing smaller players participating in this niche.

Our job is to make sure that the product that is offered on the platform is in the warehouse. If stores do not have good product control, they might end up failing the consumer. When stores put the product on the platform and the client pays for the product, a purchase order is generated, which is sent to us. We receive it and then take the product, package it and ship it according to delivery specifications.

In 2017, only 7 percent of sales were through e-commerce. We ended 2019 with a share of 30 percent. The year 2019 registered exponential growth of e-commerce sales that was unexpected. Still, we are ready for this type of growth. However, we do not believe retail is bound to disappear. While it is true that anything you sell through e-commerce represents a lost sale for retail, at the end of the day, both play a part in the client’s strategy. You need to have the product exposed and brands need to find the right balance between retail and e-commerce. This is where the omnichannel strategy comes into play. The client needs to have the possibility of buying through one channel and obtaining the product through another.

Q: How do you pack your solutions in warehousing and logistics into a product that is available to businesses with limited financial resources?

A: A logistics company needs to look for productivity and for ways to grow within the same warehousing space. To do this, we need technology and organization. At our warehouse, we have over 10 million products and if a handkerchief is returned, our system knows exactly where to put it for the company to retrieve it. With an automated system, we achieve lower costs and more agility in our racking organization.

Part of our know-how that allow us to have KPIs at over 99.8 percent comes from our system and the way we work with it. With our clients, we work to integrate LogisXp into their ERP. As a result, the moment we receive a product we scan it to ensure that we received what was expected. If there is a difference between expectation and reality, the company knows right away which products were missing. In that moment, the company adjusts its system and we integrate all the information to have a mirror inventory. Once the exact stock is determined, the client can start generating purchase orders for retail or post products on e-commerce platforms to start selling.

Q: What are your primary objectives for 2020-2021?

A: We want to continue growing and entering new markets. We are considering Brazil and Peru, while we continue to make a significant investment in Mexico. We reorganized the company in 2019 but now we are opening new warehouses. In March 2020, we hope to open a new warehouse with a silver LEED certification. Our current warehouses will also be transformed to meet LEED certifications.

We forecast strong growth for e-commerce in Mexico. Logistics services in this segment are still lacking, so we want to target retailers to help them improve these services. Our goal is to reach double-digit growth over the next five years.

 

Logisfashion offers a wide range of services in the area of distribution and logistics, including warehouse construction, inventory management and advanced technology installation. The company works with different global brands, particularly in the area of fashion retail

Photo by:   MBP

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