Apparel Manufacturers Must Rethink Supply Chains

david

The runway, the red carpet and even the latest photo on Instagram. Three examples of pop culture that not only impact current fashion trends, but also hold huge implications for the apparel industry. The first two examples are planned events that retailers plan their business around, the latter, however, opens up new challenges and opportunities for the industry at large.

Gone are the days of planning the season’s apparel lines well in advance. Today’s reality is that apparel retailers must be nimble and adapt their plans to capitalize on the latest trends. This type of business agility is difficult enough on the designers and manufacturers, but it poses an exponential challenge when it comes to managing the supply chain. 

Making the Supply Chain “Good with Change”

Consumers are always demanding and markets have become more polarized between long-lasting classics and value alternatives. As a result predicting demand is as difficult and risky as ever. In an increasingly competitive, global economy businesses need to be able to be lean, agile and highly responsive. Companies aim to deliver greater organizational and process flexibility to cater for volatile market demand.

Any business will achieve a measure of competitive advantage if it is able to become more efficient in managing its supply chain by reducing inventory whilst maintaining responsiveness to market demand. Effective supply chain management cuts across functional silos and organizational boundaries.The apparel supply chains involves agents, importers, manufacturers, subcontractors, raw material and component suppliers and freight forwarders among others. There are many moving parts, but also lots of data involved with each. Effective management involves consolidating disparate sources allowing users to get one consolidated view so they can truly track their supply chain from start to finish.

But, It’s complicated…

There is inherent complexity in today’s supply chains with multiple systems often being used to manage interconnected processes. This can make getting a clear view of the end-to-end process quite challenging. It can be said that supply chain management is fundamentally about balancing priorities which can often compete. For example, how do you reconcile product availability with managing inventory levels, and production efficiency with maintaining quality? 

Supply chain practitioners will talk about volatility being one of the major issues; ultimately businesses need to make sure their products are available for customers to purchase. This means identifying and reducing risk in the supply chain and building resilience in the network. An effective and efficient supply chain will always be a real differentiator for a company, and many studies have shown the correlation between supply chain performance and financial results. Data and the ability to collaborate around it will always be central to a successful supply chain. The sources and complexity of data continue to grow exponentially, making the management of the KPI’s which underpin supply chain performance even more challenging, but also more important.

What’s next?

Apparel manufacturers and retailers face difficult decisions in a supply chain that is demanding and ultra-competitive. It is imperative they have the best visibility possible to leverage any competitive advantage they can, maximizing the potential of their decisions. Poor intelligence will inevitably result in adverse results, to the point where attempts to prioritize cost reduction and enhanced customer service can actually end up generating the opposite outcome.

Those who hope to lead the industry must find a way to harness their data and put it into use. The ability to achieve a single view across multiple sources and to query data freely is imperative. Those organizations that can navigate their data to explore theories, prove hypothesis, or discover new trends will be the ones with the most business agility and the likely the ones who are able change the trajectory of their business to capitalize on new and emerging opportunities.