How scrum can help improve dead inventory improving supply chain - apparel example

Problem Statement:

Decide on the product and sprint backlog and develop a Scrum framework that significantly reduces dead inventory. Clearly define the roles and responsibilities of the Scrum team. Clearly define the events and artefacts of Scrum. Explain how the Scrum framework helps reduce dead inventory and increase supply chain efficiency.

Product Decision:

Reposition the core offering as “Fast-Moving Modular Shirt Collections.” Instead of full-season bulk production, launch smaller capsule collections (20–25 designs per drop) refreshed every 8–10 weeks based on real-time sales data. Keep formal pure cotton shirts as the anchor category, with limited data-driven expansion into weekend wear. Adopt a 60:40 production model — 60% controlled initial batch, 40% reserved for rapid replenishment of fast sellers.

Product Backlog (High-Level):

1. Reduce design-to-store cycle from 12 months to 6 months.

2. Shift from forecast-driven to sell-through-driven production.

3. Implement smaller batch manufacturing and renegotiate MOQs.

4. Develop regional demand forecasting dashboard.

5. Pilot capsule collections in high-performing regions.

6. Create structured online clearance channel for slow movers.

7. Rationalize SKUs (eliminate bottom 20%).

8. Establish weekly store-level sales feedback loop.

Sprint Backlog (First 4-Week Sprint):

• Analyze last 3 seasons’ sell-through by SKU and region.

• Identify top 30% fast movers and bottom 20% dead stock.

• Finalize 25-design capsule collection.

• Negotiate reduced MOQs with key vendors.

• Develop basic real-time inventory dashboard.

• Define replenishment trigger (e.g., 70% sell-through).

Scrum Framework

Roles and Responsibilities:
Product Owner: Head of Merchandising. Owns product vision, prioritizes backlog, defines sell-through targets, approves collections.
Scrum Master: Supply Chain Transformation Lead. Removes process bottlenecks, ensures Scrum discipline, facilitates events.
Development Team: Cross-functional (design, sourcing, production, warehouse, analytics, sales). Self-managing and accountable for sprint deliverables.

Scrum Events:
Sprint (4 weeks): Deliver measurable output such as capsule launch.
Sprint Planning: Define sprint goal (e.g., reduce unsold inventory by X%).
Daily Scrum: 15-minute alignment on production, dispatch, and sales data.
Sprint Review: Demonstrate results (sell-through, inventory reduction).
Sprint Retrospective: Identify inefficiencies and corrective actions.

Scrum Artefacts:
Product Backlog: All initiatives related to inventory and supply chain optimization.
Sprint Backlog: Selected actionable tasks for the sprint.
Increment: Shippable capsule collection and updated inventory metrics dashboard.

Impact on Dead Inventory and Supply Chain Efficiency:
Shorter cycles reduce forecast error. Smaller batches limit overproduction risk. Frequent reviews detect slow movers early. Data-driven replenishment accelerates stock-to-cash conversion. Continuous inspection and adaptation improve vendor coordination, production flexibility, and distribution responsiveness.

Result: Reduced carryover stock, improved cash flow, higher full-price realization, and better per-square-foot productivity.