What to do when forecasting seems out of fashion? : A study on a fast growing fashion company

Abstract: Problem: The Fashion Company (TFC) is a Swedish fast growing Fashion Company with suppliers and customers all over the world. Until now, TFC has kept up a reputation of a reliable distribution process to customers in which delivery dates are continuously met. Tradition-ally, the company has relied upon an early forecast as a part of their planning process. In-accuracy in that forecast leads to implications for the ordering process towards suppliers, which so far luckily have been manageable. However, the forecast seems to follow a trend of more and more inaccuracy for each season. If this trend continues, TFC are reluctantly aware of that the problem will affect their ability to fulfill customer delivery promises and damage their reputation. Purpose: The purpose of the paper is to investigate the forecasting process and problems and also the underlying conditions affecting this process. Method: A qualitative method was chosen on the basis of the purpose. To get a deeper understand-ing of TFC and its supply chain and to identify the main problem area, a pilot study was used prior to the main study. Mainly personal semi-structured interviews have been con-ducted. Email conversations have been a complementary to the personal interviews. The respondents from TFC were four people from the logistic department and one from sales department. Conclusion: TFC’s current forecasting practice can be improved. However, as the nature of fashion products in themselves are very hard to predict TFC’s main problem will not be solved by continuously depending on accurate forecasting. Instead dependency on forecasting should be decreased by focusing on cutting lead times or reaching more flexible terms with suppliers. By both improving forecasting accuracy, in accordance with recommendations proposed in this study, and at the same time re-considering and upgrading the role of lead times and flexibility as factors in the supplier selection process, TFC can minimize their experienced problem.