Who gets the last size M?

It's three weeks before the spring floor set. The floral midi is your strongest style, the vessel carrying most of the size M is six days late, and you have 4,600 units for 7,800 ordered. Those orders come from three places: your largest wholesale account, a department store, and your own stores and site. Someone has to decide who gets what by Thursday to make the floor set.

At most brands, that someone is a planner with a spreadsheet and an inbox and typically they'll make a good call on how to respond. The trouble is what happens next: the call has to travel to the systems of record, the warehouse, the carrier and the retailer, one handoff at a time. In fashion, where the dates don't move, that's where a good plan turns into a chargeback.

Why allocation decides the season in fashion and beauty

Running short is not an exception in this industry. It's the normal state. Size curves never land exactly as planned, a hit style sells through faster than the reorder can arrive, and a single delayed container can leave one size off the racks across an entire channel.

When that happens, a good allocation call has to weigh at least five things at once:

• Account priority. Which retailers are strategic, and what you've committed to each of them.
• Ship windows and cancel dates. Which orders can absorb a few days and which will be cancelled if they slip.
• Full-price sell-through by channel. Where the units will sell at full price, and where they'll sit until markdown.
• Chargeback exposure. Which retailers fine late or short deliveries, and how hard.
• What's still on the water. When the next units actually arrive, not when the PO said they would.

Those five answers rarely live in one system. That's why the decision ends up in a spreadsheet, and why it takes days instead of hours. Meanwhile, the size M sits in the warehouse, waiting on a call.

How a good allocation call still turns into a retailer chargeback

Follow the size M through a normal week. The allocation is decided Thursday afternoon. It's keyed into the systems of record Friday. The warehouse plans its waves Monday, without knowing which orders the allocation prioritized. On Tuesday the carrier moves the pickup up an hour. The truck leaves with part of the priority order still on the dock.

The allocation was right. The execution is what failed. Each person made the best call they could with what they could see. The planner couldn't see the warehouse's wave plan. The warehouse couldn't see which orders the allocation prioritized. Nobody upstream knew the carrier would move the pickup. Each step affects the next, but no one sees the entire picture. So the retailer ends up with a short shipment, and weeks later finance finds a deduction on a remittance with no clear line back to where it started.

The size M week is an illustration, but the pattern is real. In our ebook, Stories from the Dressing Room, we looked at seven execution breakdowns from fashion, footwear and beauty over the past year. Two of those cases, each from a different company, focus on allocation:

• A global footwear company saw more than $20M in wholesale shipments slip out of the quarter when a new logistics partner fell behind at peak.
• A global athletic brand gave up 2.6 points of gross margin after stock flowed into wholesale faster than it sold, while its own stores and site ran short.

Different companies, different causes, but each breakdown happened in the same place: between one team's decision and the next team's action. That's the handoff, and it's the part most fixes don't reach.

Why fixing workflows in separate tools moves the problem downstream

Fixes usually start where the problem showed up. In the size M week, that looks like allocation, so the instinct is to buy a better allocation tool. It helps, but then the warehouse still doesn't know which orders matter most. Fix that, and the retailer still finds out about the change from an email. Fix that, and the chargeback still lands with finance weeks later, with no one connecting it back to the shipment.

That's the problem with fixing each workflow in a separate tool: each one tends to see only its own piece. What's missing is something that carries the decision through every system it touches, in order, under the same rules and the same approvals.

What allocation and wave planning look like on Emerix

Here's the same week with the handoffs connected. On Emerix, each part of the response is handled by an agent, working on top of the systems you already have. The agents share the same signal and act in order, so the allocation decision reaches the warehouse, the carrier and the retailer without anyone having to pass it along:

• Signal. The shipping line's delay notice comes in. The PO's arrival date updates in the systems of record, and every open order that depends on that size M is flagged with its ship window and cancel date.
• Decision. The 4,600 units on hand are weighed against account priority, ship windows, sell-through and chargeback exposure. A recommendation comes back with its reasoning shown: which accounts get full quantity, which get a partial and which can wait for the vessel, plus what each choice puts at risk in chargebacks or markdowns.
• Approval. A planner reviews the recommendation and approves it, or adjusts it. Routine moves can run on their own. The calls that matter wait for a person.
• Action. Approved allocations are written back to the order and warehouse systems. Waves are re-planned around the ship windows and the latest pickup time, then released to the warehouse. Each affected retailer gets updated ship dates and quantities before they have to ask.
• Recovery. If a deduction still lands, it's matched to the order, the allocation decision and the shipment record, and disputed with that evidence attached. Every step, including who approved it, is logged.

Through all five steps, your systems of record stay where they are, your rules still set the priorities, and your team approves the calls that matter. What changes is the speed: from days of handoffs to a decision someone can approve the same day.

So who gets the last size M? Making that call was never the hard part. With the handoffs connected, it goes where it does the most good, and the warehouse and the retailer know about it before the truck is loaded. If your team is still answering that question with a spreadsheet and an inbox, it's worth asking how many of this season's chargebacks started at a handoff.

To learn more about the AI Execution Layer for Supply Chain in Fashion download Stories from the Dressing Room for seven execution breakdowns from fashion, footwear and beauty, and what to ask your own team before next season. If you'd rather see allocation, wave planning and recovery run together on your own orders, book a demo with Emerix.

Frequently asked questions

What is inventory allocation in fashion?
Inventory allocation is deciding how limited stock is split across retailers, wholesale accounts, stores and e-commerce. In fashion and beauty it usually happens by size and color, against fixed ship windows and floor set dates. When supply runs short, allocation decides which accounts are served in full and which are shorted.

Why do fashion brands get retailer chargebacks?
Retailers deduct for deliveries that arrive late, short, or outside their compliance rules. In fashion, many of these start upstream: an allocation decision that took too long, or a warehouse wave planned without knowing which orders the allocation prioritized. Matching each deduction to the shipment record is what makes disputing it possible.

What is wave planning, and how does it affect on-time delivery?
Wave planning groups orders into batches the warehouse picks, packs and ships together. If waves aren't planned around ship windows and carrier pickup times, priority orders can miss the truck even when the stock is in the building. Re-planning waves as soon as an allocation or a pickup changes keeps priority orders on time.

What is multi-agent orchestration in supply chain?
It's when several AI agents, each responsible for one part of a process, work together on the same event. One might catch a supplier delay, another rework the allocation and another re-plan warehouse waves, each passing the signal to the next. That lets one disruption be handled from start to finish instead of in separate tools.

What is an AI execution layer for supply chain?
An AI execution layer runs on top of a company's existing systems of record. It spots what needs attention, recommends what to do with the reasoning shown, and carries out the approved action in the systems already in use, with every step logged. Emerix is the AI Execution Layer for supply chain.

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Alison Crawford is Director of Product Marketing at Emerix, the AI Execution Layer for supply chain. She has spent her career in supply chain software, with prior roles at RELEX Solutions, Aera Technology, o9 Solutions, and Kinaxis, and was recognized in the 2023 Women in Supply Chain Awards. She writes about the distance between what supply chain software promises and what it actually executes.

Connect with Alison on LinkedIn.

About Emerix
Emerix is the AI Execution Layer for supply chain. It runs autonomous workflows on top of the systems you already have, detecting issues, deciding the best response, and executing it directly in your systems of record. Enterprises use Emerix to Protect Revenue, Optimize Profitability, and Accelerate Cycles. Emerix is backed by Lightspeed and is SOC 2 Type II certified.