In the dynamic world of fashion, the journey from concept to consumer is a complex and intricate process that involves numerous stages and stakeholders. From the initial design spark to the final product landing in the hands of fashion enthusiasts, the fashion supply chain plays a pivotal role in shaping the industry's landscape.
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This comprehensive guide delves into the intricacies of fashion supply chain management, exploring the key stages, emerging trends, and the transformative impact of technology. Whether you are a seasoned industry professional, an aspiring designer, or simply curious about the inner workings of the fashion world, this guide is your go-to resource for understanding how fashion products make their way from the drawing board to the runway and beyond.
Join us as we unravel the layers of the fashion supply chain, examining the challenges, innovations, and sustainable practices that are shaping the future of this dynamic and ever-evolving industry. From sourcing raw materials to leveraging cutting-edge technologies, we invite you on a journey through the heart of fashion's intricate web, where creativity meets logistics, and style meets substance. Let's embark on this exploration together and discover the fascinating world behind the garments we love. Welcome to the ultimate guide to the fashion supply chain!
The fashion supply chain refers to the entire process of creating and delivering fashion products, from the initial design and manufacturing of garments to their distribution and retailing. It involves a series of interconnected stages, including design, sourcing of raw materials, production, transportation, distribution, retail, and ultimately, consumption by end-users. Each stage of the supply chain contributes to the creation and delivery of fashion goods.
The fashion supply chain is important for several reasons:
In summary, the fashion supply chain is a complex network of processes that ensures the efficient and timely production and distribution of fashion products. Its proper management is critical for the success of fashion brands in a competitive and dynamic industry.
Fashion supply chain stages are interconnected, and the efficiency of each stage impacts the overall effectiveness of the fashion supply chain. Effective coordination and communication among stakeholders at each stage are crucial for the successful delivery of fashion products to the end consumer.
The key stages of the fashion supply chain are as follows:
In the fashion industry, different types of supply chains exist to accommodate various business models, production methods, and distribution strategies. The choice of a particular supply chain type depends on factors such as the brand's positioning, target market, production scale, and sustainability goals.
Here are some common types of supply chains in the fashion industry:
The fashion industry is dynamic, and companies may adopt a combination of these supply chain types based on their specific goals and market positioning. As sustainability and ethical considerations gain prominence, more fashion brands are exploring and implementing environmentally and socially responsible practices within their supply chains.
Fashion supply chain management faces several challenges, reflecting the complexity of the industry and the dynamic nature of consumer preferences. Some of the key challenges include:
Addressing these challenges requires a combination of strategic planning, technological innovation, collaboration among supply chain partners, and a proactive approach to sustainability and ethical considerations. As the industry continues to evolve, supply chain managers need to adapt and find solutions to these dynamic challenges.
Implementing supply chain management (SCM) is crucial for businesses looking to streamline operations, enhance efficiency, and improve overall performance.
Here are some key situations or circumstances when organizations should consider implementing supply chain management:
In summary, businesses should consider implementing supply chain management when they face challenges related to growth, globalization, increased complexity, market dynamics, cost pressures, customer expectations, compliance, technological advancements, e-commerce integration, supplier collaboration, continuous improvement, and sustainability goals. SCM is a strategic investment that can yield significant benefits in terms of efficiency, competitiveness, and customer satisfaction.
The future of fashion supply chain management is likely to be shaped by ongoing technological advancements, changing consumer behaviors, and an increased focus on sustainability. Here are some trends and potential developments that may influence the future of fashion supply chain management:
The future of fashion supply chain management will likely involve a combination of technology-driven solutions, sustainable practices, and a commitment to meet evolving consumer expectations. As the industry navigates challenges, there will be opportunities for innovation and improvement in the way fashion products are designed, produced, and delivered to consumers.
Techpacker is a cloud-based Product Lifecycle Management (PLM) platform designed to streamline the fashion product development process. It has been a valuable tool for optimizing supply chain management in the fashion industry.
Here's how you can use Techpacker PLM to enhance various aspects of supply chain management:
By incorporating Techpacker into the fashion supply chain management process, businesses can enhance collaboration, reduce lead times, and improve overall efficiency, contributing to a more streamlined and optimized supply chain.
Various technologies are employed in fashion supply chain management to enhance efficiency, visibility, and overall performance. These technologies help streamline processes, reduce costs, and adapt to the dynamic nature of the fashion industry. Here are some key technologies used for fashion supply chain management:
The integration of these technologies into fashion supply chain management helps businesses address challenges, improve agility, and stay competitive in an ever-evolving industry. Adopting a combination of these tools allows fashion companies to create more resilient, transparent, and efficient supply chains.
As we conclude our ultimate guide to the fashion supply chain, we hope this exploration has provided you with valuable insights into the intricate processes that shape the fashion industry.
In our journey together, we've uncovered the challenges faced by the industry, the transformative role of technology, and the rising tide of sustainability that is reshaping the landscape. The fashion supply chain is more than just a logistical process; it's a convergence of creativity, innovation, and responsible practices that define the very essence of the fashion world.
As the industry continues to adapt and innovate, we encourage you to stay informed, embrace the opportunities presented by technology, and champion sustainability. The future of fashion supply chain management is in the hands of those who recognize the power of collaboration, transparency, and a commitment to creating a fashion ecosystem that respects both the artistry of design and the well-being of our planet.
Product Developer ''' More posts by Oleksandra Baukh.Nearly three years after the first lockdowns, we're still seeing supply chain disruptions on the rise. The need to build more resilient and adaptable supply chains hasn't gone away.
As an ecommerce brand, you probably want to know how to best approach your supply chain strategy. Here are the top supply chain trends to implement to get ahead of the curve.
Preventing cybercrime
Focusing on greater shipper visibility
Integrating AI
Optimizing last mile delivery
Putting supply chain executives in the C-suite
Preparing for risk events
Securing flexible contracts
Creating supply chain agility
Investing in analytics
Focusing on sustainable procurement
Evolving inventory management
Cyberattacks are on the rise. Online attacks have become increasingly common in the United States, where many companies, individuals, and governments have been victimized.
According to KPMG's supply chain report, almost half of global organizations consider cybersecurity a significant operational challenge for their supply chains in the coming three years.
As brands increasingly digitally automate internal processes and access cloud services, it leaves them more vulnerable to cyber intrusions. A cyberattack on Clorox earlier in led S&P Global Ratings to lower its outlook for the company to negative. During the attack, Clorox's IT systems were disrupted, forcing the company to switch to manual ordering and processing, which slowed operations and affected product availability.
And that's just one major example. Cyberattacks can affect supply chains in various ways:
Ransomware can disrupt logistics and delay the flow of goods.
Data breaches can reveal sensitive customer details and trade secrets.
Responses to cyberattack can be costly to repair, plus there are regulatory fines and compensation to customers to consider.
Cybercriminals can manipulate supply chain data or systems to divert shipments.
It's no wonder cyber investments are on pace to reach $215 billion in , with security services expected to account for $90 billion alone. Companies looking to build and optimize cybersecurity programs are set to succeed in the upcoming year.
Blue Yonder found that some 87% of businesses experienced supply chain disruptions in the last year, with customer delays being a common outcome. Despite these challenges, 62% of respondents believe their supply chains are resilient.
To combat rising costs and supply chain disruptions, companies are investing heavily in technology. Fifty-six percent of investments are directed toward supply chain technologies like warehouse and order management systems, supply chain visibility tools, and transportation management.
Early adopters are seeing these investments pay off, with 54% reporting improved efficiencies, 42% experiencing fewer disruptions, and 39% seeing revenue growth.
AI has become ubiquitous in ecommerce. AI's abilities are becoming increasingly diverse and sophisticated, with the ability to do such tasks as sourcing suppliers and automating negotiations.
AI technology has the potential to process through many data sets, like enterprise systems, POS systems, and inventory levels. It can take in the data and return predictions based on what you're looking for. The recent Blue Yonder survey found that 78% of respondents are using AI and machine learning in their supply chains for various functions, like inventory optimization and risk management.
Some examples of ways to implement AI in include:
Demand forecasting: Algorithms can analyze past sales data, market trends, and public sentiment to predict future demand.
Supplier selection: Harvard Business Review found that brands are using AI to find alternative suppliers last minute. AI systems can find the best suppliers by evaluating factors like reliability, cost, and quality.
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Predictive maintenance: AI can also predict when equipment needs maintenance in your warehouse, reducing downtime and extending the life of your machinery.
Sustainability tracking and reporting: Generative-AI tools like ChatGPT can analyze sustainability data and insights, then create the base for a report.
In a McKinsey survey conducted early in , 73% of supply chain leaders said spreadsheets are their primary planning tool. But, 43% said they planned to use artificial intelligence for some planning activities. The integration of AI into the supply chain is rapidly evolving, offering new opportunities for brands to innovate and improve on their processes.
The 'last mile' is to supply chains what the fourth quarter is to a sporting event: the critical final stage. Last-mile costs represent between 40% and 55% of the total supply chain costs in shipping.
Grocery and retail brands are responding to these increasing last-mile costs by taking the last mile into their own hands.
According to Maggie M. Barnett, COO of Ship Hero, omnichannel retailers are curtailing the impact of global supply chain disruptions via 'micro-fulfillment,' handling fulfillment directly with supplies from a local warehouse. Then, retailers offer an option like buy online, deliver from store, or buy online, pickup in-store.
Micro-fulfillment is a newer trend, but it's picking up more steam as we move closer to peak season.
In , Modern Retail called the role of supply chain specialist 'the hottest job in retail.' Moving into , this sentiment still holds true.
In a recent episode of McKinsey Talks Operations, Knut Alicke and Radu Palamariu, authors of From Source to Sold: Stories of Leadership in Supply Chain, found that only 11% of Fortune 200 CEOs have a background in supply chain, despite its strategic importance.
But they are looking toward the future. The narrative shift in supply chain management is in the works. Supply chains are being perceived less as problem-focused entities and more as a source of competitive advantage.
Hiring C-level assets with a diverse background in supply chain management is both a current and a forward-looking move. The authors believe it is this diversity in perspectives that will lead to innovation in the field and help brands adapt to rapidly changing global dynamics.
An old axiom says that the best time to plant a tree was 20 years ago'and the next best time is now. That's the approach companies are taking with unexpected supply chain disruptions. It's already too late to deal with 'but it's not too late to put a new plan on paper.
For instance, more than 60% of organizations expect geopolitical instability to detrimentally impact their supply chains in the next three years'. In short, companies are prepping for the next big event, even if it never comes.
In recent years, companies with huge, static orders on the books are seeing the value of flexibility.
Flexible contracts split supply orders up into smaller blocks, giving the buyer the option to change orders as demand shifts. Making fewer static commitments in the form of fixed, long-term contracts with suppliers means more adaptability.
'Flexible contract manufacturing enables companies to replace more of their traditional fixed cost base with variable costs to adapt to changing demand,' says Jeff Langely of KPMG Australia.
Not all supply chain remedies are quite so surgical. A healthy supply chain sometimes requires organizational-level improvements to business agility: your company's ability to adapt and respond to rapid change.
According to KPMG, 67% of organizations view meeting customer expectations for speed of delivery as a critical factor affecting their supply chains over the next 12 to 18 months.
Business agility and a responsive supply chain are inextricably linked ideas. Investing in supply chain agility means adopting strategies like safety stock, buffer inventory, and inventory optimization to manage fluctuations supply and demand.
It also means building a network of suppliers, both local and international, to reduce dependency on one single source.
While data usability usually translates to improving sales and marketing processes, it can also provide more flexibility with supply chains. Predictive analytics, along with advances in big data and robotics, will have a significant impact on retailers.
'Another trend this year is focused on the need for better quality data, not necessarily more data,' says ShipHero's Maggie M. Barnett. 'It's becoming increasingly important to have quality data at your disposal, especially on the warehouse floor. With the widespread application of automation, AI, and other technologies, it's critical to have data that can help those technologies become even more efficient and intelligent.
'Are you leveraging data to help predict where inventory demand will be highest? Are you using your data to identify ways to optimize your warehouse space? Take a closer look at the data you have access to and then analyze how to best put it to work.'
B2B buyers have set their eyes on sustainable procurement, and organizations are meeting them there. A recent survey found that over half of them intend to increase their focus on sustainable sourcing in the coming year.
Buyers are investing in new technology like automated approval workflows, expense management controls, and guided buying capabilities to meet goals and improve operations.
While improving efficiency is a core focus, social responsibility was also reported as a top priority for procurement teams.
For retailers, digital procurement investments will continue to evolve during , allowing companies to easily search and buy from you and providing visibility into your products. Procurement officers are looking to buy from companies that align with their budget and core values.
Volatile shipping delays, increasing raw material costs, and dealing with overstock are causing retailers to look at inventory management differently.
In response, retailers are leveraging techniques like:
Cutting SKUs
Promotions
Price hikes
Women's intimates brand Lively has been 'laser-focused' on making sure top sellers are in stock, prioritizing its top 10 items, Modern Retail reports. Via customer feedback, it's also reduced inventory by cutting down on launches and designing products that will be in demand.
Other brands, like Weezie Towels, don't plan to cut SKUs, but will focus on bundling top-selling products. The core theme? Being in touch with what customers expect from your brand and producing those items, be it top sellers or new lines.
When Louis Vuitton built a 100,000-square-foot factory in Texas, it wasn't necessarily because it liked barbecue.
The leather-goods manufacturing shop trains and hires its own leather employees, creating leather goods with the Made in USA label attached. Given many of the brand's properties are in France, Louis Vuitton's stateside investment means there's one less ocean to travel every time a new product ships to the American market.
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In investing, experts say spreading your money around reduces risk. It's the same with supply chains: the more options you can turn to, the steadier your inventory will be.
Check on the health of your current suppliers. Who's supplying the suppliers, and what are their vulnerabilities?
Finally, look for viable alternative suppliers to add diversity to your supply chain, stabilizing your options when a crisis hits. And browse third-party fulfillment providers to select one that will make your agile supply chain more resilient.
Ultimately, customers have finite patience. They want their items to their door as quickly as possible, and when there's a delay, they're likely to cancel the order. That makes your supply chains a vital part of the customer experience.
Don't hide your supply chain issues from your customers. Instead, be proactive and reach out to customers in a way that lets them know when supply chain disruptions are out of your hands.
Sometimes you don't know your supply chain vulnerabilities until you can see your data right there in black and white. That requires an investment in the analytics that drive all of your numbers.
Take the Shopify data analytics course from the Shopify Academy to learn how to uncover insights into every aspect of your business'not just the supply chain.
The past few years have exposed the downfalls of the modern supply chain, forcing retailers and brands to hire experienced leaders for their logistics operations.
As your brand expands into multiple retailers that need managing, logistics become more difficult. Hiring supply-chain-focused roles can help better manage supply and manufacturer connections, problem-solve supply chain issues, and create excellent vendor relationships.
One way you can take proactive action during an era of disruption is through automation. Supply chain leaders are increasingly investing in new technologies to fill the gaps humans can't manage.
Supply Chain Brain reports on three ways supply chain leaders use artificial intelligence and automation:
Building a digital twin. Retailers are creating a digital supply chain replica, including all assets, warehouses, and materials, and acting out 'what if' scenarios to improve planning. For example, if there is political unrest or a factory closure overseas, the digital twin can predict how it will impact the supply chain.
Utilizing the Internet of Things (IoT). Retailers also use self-reliant, internet-connected devices to gather data, monitor supply chains, and reduce risk. With IoT, you can get real-time data on product locations, improve inventory tracking, build fully automated warehouses, and speed up the process of loading and unloading goods.
Harnessing machine learning. You can use machine learning for endless reasons. These systems quickly analyze swaths of data, recognizing patterns and trends so you can make adjustments as needed. For example, you could determine the most cost-effective transportation routes in a region, factoring in fuel costs, vehicle usage, and risk of theft or damage. It helps you keep products in stock during high demand.
Automation doesn't mean reducing your workforce, however. The goal is to help your supply chain flow more smoothly and enhance supply chain resilience.
There is no way to totally future-proof your entire supply chain. But given the industry's resilience and digital transformation over the past few years, you might not need one.
Building reliable relationships with a diverse list of supply chain partners and logistics providers'especially if they're local'can serve as an 'emergency valve' that gets you through the next supply crisis.
And you don't need a crisis to justify the investments you make. Today's supply chain managers find that enhancing resilience can help hedge against other challenges, like higher transportation costs.
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