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Technology adoption in the fashion industry value chain is certainly accelerating. The Covid pandemic made it very clear that brands, sourcing houses and manufacturers needed to rapidly adopt digital processes if they stood any chance of surviving an increasingly complex and uncertain future.
Alongside the impact of the pandemic, however, there has also been a massive shift in consumer behaviour in support of people, planet, and performance. Fueled by COP26 and a rise in media attention to global environmental activism, consumers are now asking questions about how their clothes and footwear are sourced, manufactured and delivered—and brands are progressively being asked to show and substantiate the provenance of their wares.
On top of this, fashion manufacturing and shipping have seen a rapid rise in costs, due to supply chain challenges, geopolitical issues and a consequent global energy crisis—so soon after the industry had just managed to dust itself off from the shock of the pandemic—has meant that profit margins have never been so tight.
New fashion supply chain solutions are evolving fast and existing technologies are being consistently enhanced to ensure brands and manufacturers can solve these business-critical challenges together. Nonetheless, the fact remains that many fashion industry players have found navigating the plethora of complex fashion-specific solutions available, a veritable minefield—unable to quickly ascertain exactly which areas of their business they need to digitise first. As a result, it is not surprising that many supply chain companies are experiencing different stages of their digitization journey in different ways.
It would greatly simplify things if there was one out-of-the-box, all-encompassing solution that would meet all key pain points in one swoop—but this is sadly not yet the case. Fashion players have consequently tried to identify which industry-specific solution would ultimately impact their speed to market, production performance, profitability and sustainability credentials—the fastest.
The truth is that there are many ways to optimize costs at every stage of the fashion production lifecycle. However, with 70-80 percent of total manufacturing outlay attributed to fabric costs, brand-manufacturing partners that digitize and optimize their fabric-related processes will undoubtedly be the biggest winners in the quest to remain profitable, competitive and sustainable.
A fashion manufacturer’s largest investment is at the fabric booking stage. From the initial order, they need to estimate and book the correct amount of fabric that is required by the brand customer to fulfill that order quantity. Because this is the stage that has the most significant impact on the overall cost, it is vital that fashion manufacturers estimate this accurately and quickly, so that profits can be maintained across the whole supply chain—especially in a time of unprecedented rising costs.
Being pinpoint accurate with fabric orders is not only important for profitability—it is also a key factor in ensuring that the industry can hit sustainability targets increasingly demanded by consumers and global regulators.
According to a recent study by the Ellen McArthur Foundation, the fashion industry is said to produce 92 million tons of solid waste each year which significantly contributes to global air, water and land pollution. This makes for stark reading and rams home just how important it is for the whole fashion supply chain to work together to find workable solutions that quickly address these awful statistics.
Simply by ordering the correct raw materials from the offset, fashion brands and their manufacturing partners could make a huge difference overnight. Traditionally, most apparel manufacturers often order extra fabric to cover any potential production losses and to avoid short shipments. In parallel, brands also tend to commission more yardage than is necessary to mitigate the same risks. This profligate scenario really needs to stop, since superfluous raw materials that cannot be recycled into other garment styles becomes unusable dead stock that either get incinerated or dumped in landfills. These outcomes are not at all aligned with increasing consumer sentiment or legislative pressure to reduce waste and pollution in the bid to save our planet.
Fashion brands and manufacturers must, therefore, actively collaborate to ensure that only the correct amount of fabric and other raw material is purchased from the very start—and that it is consequently cut and utilized accurately and efficiently on the production floor—if any meaningful reduction of unnecessary fabric wastage across the industry, is going to be achieved.
The old adage ‘measure twice and cut once’ is a powerful—yet potentially outdated message for an industry that needs to respond quickly to consumer demands for greater fashion style and size variations, smaller quantities and faster turnaround times.
Ultimately, brands and manufacturers will only be able to reduce waste, improve speed to market and ensure profits if they adopt robust technology solutions that accurately measure fabric at both the buy and cut stages of the production process, only once—the first time.
If brands and manufacturers can reduce fabric consumption by even one percent, then the results will not only help the planet—but will dramatically improve the profitability for both concerns.
The fashion industry must be ready and willing to finally cut its coat according to its cloth—and only effective digitization will achieve this.
Akash Shah was appointed by industrial thread manufacturer Coats Group in 2020 to spearhead Coats Digital, a multi-faceted technology business that optimizes and accelerates the digital transformation of the fashion supply chain. Coats Digital’s connected ecosystem of technologies power sustainable best-practice processes, enable data transparency and deliver high value data insights that significantly improve decision making and operational/financial performance across the end-to-end fashion supply chain. Prior to this, Shah spent 12 years at PepsiCo in various operating CFO positions in FP&A, Business Development, M&A and Strategy in Greater China, Southeast Asia and Australia & New Zealand. Shah has 25 years of experience building and leading teams and transforming businesses in multiple operating environments across Tech/B2B and FMCG/B2C, with an M&A, strategy and management consulting (A.T. Kearney) background. Singapore-based Shah holds a Bachelor of Commerce degree from Queen’s University (Canada) and an MBA from INSEAD (France, Singapore).
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