Hugo Boss

Supply Chain Optimization at Hugo Boss

Hugo Boss is a German fashion and lifestyle house based in Metzingen, Germany that is known for its high-quality men’s and women’s fashion apparel, shoes and accessories. They started out focused on Men’s business wear but now cater to both genders. 44% of their total 2006 sales are from their business attire while 46% are from their casual attire and another remaining 10% are from shoes and accessories. Hugo Boss’s main market is the European market accounting for 69% of 2006’s total sales followed by America accounted for 18% of 2006’s total sales.

Europe is seen at Hugo Boss’s main market, with 69% of sales in that region followed by the Americas with only 18%. The company is available in more than 100 countries with more than 5500 retail points of sale. Product leadership, market intimacy and operational excellence were believed by Hugo Boss to be their competitive advantage.

In the introduction, Katha Ruth and Constantine Moros were sitting in an empty conference room. Ruth the director of the global body wear and hosiery division agreed with Moros the division’s head of operations and procurement that their supply chain optimization pilot had been a success with better product availability and lower inventory to sales ratios had been observed for the stock-keeping-units (SKUs) involved in it. However, they realized they should precisely quantify the pilot’s financial impact and also determine whether the initiative should be rolled out to other products.

Luxury fashion goods was a $60 billion global market populated by designers and brands such as Armani, Gucci, Hugo Boss and others. These companies sought to differentiate their brands through craftsmanship, quality, and design. Success of the company though often depends on external factors. Sales boosted by an expanding economy could erode quickly in an economic downturn. Sales also depend on the level of consumer’s confidence. Chains such...