SEVEN MUST-FOLLOW TRENDS IN THE FASHION SUPPLY CHAIN FOR 2017
product development, from sourcing to production to distribution and retail. With granular detail in hand about what goes into making each garment, it’s easier for apparel companies to discover ways to become more ethical in their supply chain operations and project a Millennial-friendly progressive brand image. What’s more, managing and reducing risk within the supply chain has become a major consideration in fashion as consumers demand an endless supply of new product. Only in recent years have apparel brands embraced the concept of buying in smaller volumes and replenishing from sources closer to market, says Paula Rosenblum, managing partner at research firm RSR. “When you buy in large slugs from far-off places, you’re placing very large bets. And if you’re wrong, there’s hardly anything you can do about it. “On the one hand, I’m not a fan of ‘failing fast,’ but you’re never going to bat 1,000 percent at fashion, so if you’ve got a dog, you’ve got to find out quickly, mark it down and make it go away,” she explains. “If you’ve got a winner, bring it in more quickly and gamble on the end date.” While it may not be the freshest advice — Rosenblum notes that she has been pushing this concept for years — many apparel companies are still chasing the lowest cost, which by definition, tends to be the farthest from the point of demand. However, some companies are looking at reducing risk in their supply chains by establishing production in the United States, including HanesBrands and its Clarksville, Ark., production facility, and Lucky Brand, which is manufacturing denim in Los Angeles and Tennessee with fabric from a North Carolina mill.
As apparel companies look to their IT departments to do more with less — indeed, Adrianna Papell’s six-person IT staff might be sufficient for the moment but not six months down the road as implementation projects advance, says Amin — cloud- based solutions reduce infrastructure investments while also giving some smaller firms many of the same features and technologies as larger enterprises. Improving collaboration via cloud with supplier partners can lead to lower costs of goods. With an improved workflow, fewer resources are devoted to time-intensive administrative tasks and instead shifted to value-creating opportunities. Cloud systems are also an important tool in preserving institutional knowledge, which is of increasing importance as the Baby Boomer generation will be ageing out of the workforce en masse in coming years. Instead of holding valuable specialized knowledge among a few key personnel, cloud solutions enable employees to document and share important information, staving off the effects of a “brain drain” on the enterprise. Going forward, procurement will play a greater role within the fashion supply chain, according to Amin. “Units are getting smaller, and there’s less and less lead time to manufacture products,” he explains. “Brands are not looking for elevated quality as much as consistent quality. The paradigm has changed, so procurement, and how we procure, becomes critical to the functioning of any brand.” A smart procurement operation can reap significant cost savings within the supply chain and also play a role in improving supplier collaboration. A well-integrated procurement practice unlocks the data and insights within enterprise networks to optimize supply-chain decision-making. From managing cash flow more efficiently with real-time access to invoice statuses, to coupling historical trends with current data to get ahead of profit- killing out-of-stocks, procurement will step up and flex its muscle as a significant force within the fashion supply chain. Above all, apparel companies are looking to leverage their supply chains to improve profitability. Says Amin, “We’re extremely profitable with a healthy margin but we’re challenging ourselves to make more money.” n PROCUREMENT WILL PLAY A BIGGER ROLE
COLLABORATION AND COMMUNICATION IN THE CLOUD
Cloud computing continues to be attractive for apparel companies aiming to create efficiencies in collaboration and communication throughout increasingly global businesses. For many successful supply chain cloud implementations, it’s important to have a solid ERP system in place, as it provides a company-wide system of record that’s invaluable to stakeholders both in headquarters and distributed offices and factories around the globe. Some aspects of the supply chain are best positioned for transition to the cloud, including transportation management, sales and operations planning, and store shelf optimization.
DECEMBER 2016 • www.apparelmag.com
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