Stock philosophy with Tags
Why does Tags produce to order and avoid large warehouses?
- Avoid overproduction: Production to order ensures that only what is actually needed is produced. This reduces storage costs, waste and unsold stock.
- Sustainability: Overproduction leads to waste of resources. Production based on demand protects the environment and materials.
- Flexibility in model selection: Since the range includes 130 models in many sizes, large stocks would be very expensive. Production to order makes it possible to offer a greater variety without space problems or capital tied up in unsold products.
- Cost efficiency: A large warehouse causes high fixed costs (rent, personnel, warehouse management). By limiting ourselves to bestsellers in Germany, we only store what is regularly in demand.
- Quick adaptation to trends: If new designs or colors become popular, the company can react more flexibly and adjust production accordingly instead of sitting on old stock.
Small example : Calculating the warehouse size with full storage
Given:
- 130 models
- 12 sizes for adults
- Additionally the same models in children's sizes (12 sizes)
1. Number of combinations:
- Adults: 130 models × 12 sizes = 1,560 article variants
- Children: 130 models × 12 sizes = 1,560 article variants
- Total: 1,560 + 1,560 = 3,120 article variants
2. Stock per variant
Assuming you only keep 10 pairs of each variant in stock:
- 3,120 × 10 = 31,200 pairs of shoes
3. Space requirements
For example, if a pair of shoes (without shoebox) requires 0.5 dm³ of space , this results in:
- 31,200 × 0.5 dm³ = 15,600 dm³ (15.6 m³) pure product volume.
- In addition, there are shelves, storage aisles and safety distances → the actual storage space would be several hundred square meters .
Conclusion
A warehouse with all variants would be huge and expensive. That's why the strategy of keeping bestsellers in Germany and producing the rest to order makes economic and sustainable sense.
