The Hidden Operational Problem Most Jewelry Brands Face: Managing High-SKU, Low-MOQ Manufacturing

The jewelry industry is changing quickly.

Those days are gone when brands relied on a few best sellers that were produced in big volumes.

Instead, now many brands have collections featuring hundreds or even thousands of designs, shapes of gemstones, metals, and new collections released all the time.

This new way of doing business brings about an operational issue that is almost invisible to the customers, but poses a significant challenge to jewelry brands.

The issue is not as simple as how to manufacture jewelry.

It is how to manufacture hundreds of different SKUs in small quantities while ensuring efficiency accuracy and quality.

For jewelry brands that operate in the high-SKU, low-MOQ environment, managing manufacturing becomes one of the biggest operational problems in the supply chain.

At DWS Jewellery, we have spent over 20 years developing different manufacturing systems and processes to manage this complexity.

Moving From Traditional Manufacturing To High-SKU Manufacturing

Traditional jewelry production systems are usually optimized in accordance with a simple manufacturing formula:

One design x big quantity = efficient production.

When a manufacturing plant gets the order for 100 or 500 items of the same design, production can be organized in a way so as to repeat the same steps over and over.

The same CAD file, the same casting process, the same requirements to the stones, settings, polishing, and the same quality assurance.

In other words, the manufacturing process becomes efficient.

However, modern jewelry brands operate differently. Some aspects that might be necessary:

• Hundreds of designs of jewelry
• Low quantities
• Several types and sizes of gemstones
• Different conditions and characteristics of gemstones
• New products frequently
• Fast process of replenishment
• Small batch of production
• Individual orders
• Fairly low inventory commitments

The requirement of producing 250 styles with two units of each style is different from manufacturing 250 pieces of one model.

Although the number is the same, the difference lies in the operations.

Why the production of high-SKU and low-MOQ goods is so difficult

In this case, we talk about launching 250 new designs of jewelry.

Instead of ordering 100 units of each design, the brand will only need one or two pieces of each SKU.

In this case, hundreds of required supplies will exist simultaneously.

Each SKU has its own:

• CAD specifications
• Weight of metal
• Shape of gemstone 
• Size of stone 
• Quantity of stones
• Quality of stones 
• Requirements to the setting
• Finishing specifications 
• Requirements to the package
• Checkpoints of quality control.

This means that manufacturing becomes as important as the capability to manufacture.

One manual mistake can influence the whole process.

For instance, wrong requirements of gemstone may lead to procurement or production of wrong stones. Delay of one part may cause delay in the whole piece. Misidentifying an SKU may cause problems in production, quality control, supply or dispatch. When production involves hundreds or thousands of SKUs, all of these minor problems can swell into larger operational challenges.

Gemstone challenges

Gemstone jewelry adds a new level of complexity.

Unlike mass-produced components that are uniform, gemstones can differ greatly in:

• Shape
• Size
• Color
• Clarity
• Quality
• Quantity
• Availability
• Matching requirements

So, jewelry manufacturers must know not only designs for jewelry but also specific gemstone requirements for every SKU.

As the number of SKUs increases, gemstone planning becomes necessary.

Just one collection may have thousands of requirements regarding gemstones for different designs.

In the absence of proper management, teams spend lots of time interpreting designs, developing requirements, coordinating stones, and consulting production.

This spikes the possibility of making mistakes and prolongs the production process.

Importance of SKU level manufacturing infrastructure

High SKU manufacturing implies the need for a different approach to operations.

Instead of thinking of production as a bunch of big batches, the manufacturing of each SKU must be organized and coordinated.

This means that information should be connected through many stages:

From design to SKU to gemstone requirement to stone manufacturing and jewelry production and end with quality assurance and dispatching.

When operations are synchronized well, manufacturers can handle thousands of small specifications faster.

That is when manufacturing infrastructure becomes competitive evidence.

The aim is not just to produce more jewelry but to cope with higher complexity

The Manufacturing Strategy Used by DWS Jewellery in Their High SKU Low MOQ Processes

For the past 20 years, DWS Jewellery has been establishing itself as a capable manufacturer responding to the unique demands of jewellery brands. 

The focus of DWS’ operations is the management of production processes at the SKU level and the coordination of gemstones manufacturing.

Our cutting-edge manufacturing system manages:

• More than 50,000 pieces of jewellery SKUs 
• More than 100,000 gemstones SKUs 
• Automation of gemstones requirement generation 
• Coordination of gemstone manufacturing processes 
• Management of multiple SKUs manufacturing 
• Reduction of the risk of errors in production system 
• Processes that were developed specifically for low MOQ high-SKU production

The above advantages are especially important for those organisations that need flexibility but don’t want to invest in a large number of pieces for every design.

Automation is Not About Speed

When people talk about automation in manufacturing, they usually mean faster production. 

However, in high-SKU jewellery manufacturing automation means something else.

It is about reducing the complexity of operations. 

The automation technologies are now able to automate the cycle from design to production. A jewelry company runs a higher risk of inventory issues by producing many versions of a design before validating the market’s interest. 

With the low-MOQ concept, businesses can experiment with more designs while keeping their initial production decisions small.

The advantages of low-MOQ include the ability to try different styles and see how the audience reacts in real time. Therefore, you will be able to identify successful designs that need to be reordered. 

Using that strategy enables companies to have a more flexible approach to the idea of creating products. 

Instead of thinking: "How many copies of this design should we make?", companies can ask: "How efficiently can we produce small quantities of many designs and bring back those that resonate with clients?" 

The latter way is possible only if the manufacturing partner is qualified enough to make this strategy work.

What is the distinction between manufacturing capabilities and manufacturing complexity? 

Machines in a plant can have enough production capacity. However, having sufficient capacity does not eliminate the problem of multi SKU production.

Making ten thousand units is a challenge of one sort. Making ten thousand units from thousands of unique SKUs is a challenge of a different nature.

The latter model necessitates the following features of production processes:

• proper planning of production
• proper tracking of SKU 
• determination of exact requirements of gemstones
• efficient information management
• good workflow management
• quality control
• effective scheduling
• effective replenishment system 

For this reason, it is clear that simply counting how many items the manufacturing facility can produce will not be an appropriate measure of the way the production process is organized.

The other crucial issue for modern jewelry producers is to figure out how complex the system of production is and how well it can manage this complexity.

Why This is Important for Jewelry Brands

Manufacturing problems for a jewelry brand do not stay within the manufacturing facility.

They can impact the whole business.

A delay in production can delay the launch of a product.

A mismatch in gemstones may ruin the quality of a product.

An error in the SKU can give rise to inventory problems.

A bottleneck in production can delay restocking.

A rigid process means the brand might be forced to purchase larger quantities than necessary.

In the end, the infrastructure of manufacturing can influence:

Product assortment + Product launch speed + Inventory risk + Restocking process + Customer satisfaction

For this reason, the best manufacturing partner should not only be evaluated by mastering the art of craftsmanship as well as production capacity, but also by its ability to operate with complicated tasks.

Creating Manufacturing Facilities for Future Jewelry Brands

However, manufacturing jewelry might not be the only thing that will define the future of jewelry production.

Brands of today want:

• Mores and mores designs.
• More customization.
• Less production.
• Quicker launches.
• Faster restocking.
• Less inventory risk.
• More variety of gems.
• More flexibility of production.

Changes in requirements create a need for a different manufacturing type.

At DWS Jewellery, the mission is to create the instruments, processes as well as facilities for making all these innovations possible.

More than 50000 models and 100000 gems have made it possible to come to understanding important fact.

The key factor is not to make a piece of jewelry but rather to be really capable of coordinating all the requirements.

The Unseen Benefit in Jewelry Manufacturing

So, lots of manufacturers can produce nice jewelry pieces.

But only few of them are really capable of working with such the operational difficulties that are connected with lots of SKUs, low minimum order quantities, miscibility of gems as well as a possibility of frequent launches of a new product line.

Operational complexities may not be reflected on the produced item.

The customers can only see design, skill, gems, and finish.

It should be noted though that the already finished product was made with help of an elaborate manufacturing mechanism enabling it to track design specifications, gem specifications, production schedule, quality control, SKU tracking, and so on.

The importance of all above-mentioned manufacturing systems is hard to underestimate.

Conclusion

The industry of jewelry is facing transformations in its manufacturing.

The traditional way of doing business which characterizes producing the same piece but in mass quantities is currently changing.

Nowadays, the industry faces the need for manufacturing systems capable of producing:

More models, in smaller quantities, and with a broader choice of options.

Our company believes that the future of jewelry production is in making the processes better instead of just increasing volume.