Ongoing digitisation of fashion supply chain processes: the only way to meet next-generation consumer demands

There remains little doubt that changing consumer behaviour enabled by technology and online retailing is driving massive change throughout the entire fashion supply chain.

To date, brands and manufacturers have responded with varying degrees of urgency to address ongoing supply chain challenges around speed, cost, customisation, order complexity, innovation and transparency.

Current strategies have included the pursuit of lower cost manufacturing regions (now with far fewer options); vertical integration or Joint Venture activity (JV) –  a partnership between two separate companies offering different capabilities;  and Vendor Managed Inventory (VMI) programmes  – where brands or retailers manage their stock and automatically replenish based on sales.

These strategies will certainly help – but digitisation is increasingly being acknowledged as a vital ingredient.

In terms of systems, most garment manufacturers face the challenge of disjointed systems and far too many ‘gaps’ in the process, that are currently filled by manual documents such as excel, e-mails etc., to cope with the demands. The only way to achieve true speed and efficiency is to eliminate these manual ‘disconnects’ from the business process and ensure proper planning procedures are in place that provide true visibility and greater collaboration across departments.

It would greatly simplify things if there was a ‘one box’ IT solution for all your system needs; but the reality is that there is no one application on your mobile phone that covers everything; there is no overarching software solution available that can fulfil the majority of your requirements.

Most companies starting out on their digital transformation path believe that an ERP system – or ERP upgrade – will provide a single, all-encompassing solution for businesses as it appears to offer so much of what is required – including a long list of available modules focused on:  finance, sales orders, production orders, purchase orders, inventory and human resources.

It should be remembered, however, that many ERP systems were originally developed to meet the needs of a wide range of businesses – from brand/retail and manufacturing, to automotive, food and consumer goods – and have only recently been adapted for use in the fashion supply chain.

It is not surprising, therefore, that they don’t often support the total requirements of a high-style-variation, volatile and fast changing apparel, footwear and textiles sector. The reality is that a modern apparel factory will require at least four or more ‘best of breed’ solutions to meet all its business requirements.

When selecting manufacturing equipment, it is quite normal to choose the right machine for the job from the best supplier of that product – whether it’s a lockstitch, multi-needle or chain stitch machine; a seam sealing machine or a laser cutter. All these machines require different engineering processes and the best machines usually have been developed over many years to make them the best in their class.

With this in mind, if a supplier comes to you and claims to be able to supply all of these capabilities in one machine, you would certainly laugh them quickly out of your office.

All the companies with only one ERP system have realised that they are still using a plethora of other manual tools, such as spreadsheets and e-mails to manage numerous critical business areas, such as capacity planning (sewing, cutting, embroidery, printing, washing etc,); aligning production schedules with material availability; managing pre-production processes; costings and WIP tracking.

It is these varied and numerous manual elements that provide a real barrier to digitisation, automation and speed, and continue to cause key challenges for fashion supply chain providers.

All factories have good days and bad days – and on those bad days, they often lose efficiency due to production stoppages or additional unplanned style changes.

Most businesses we meet for the first time will state that one of their biggest headaches is material availability. If we could ensure materials are supplied to better match the plan, apparel manufacturers could significantly improve productivity.

So, despite having an ERP that appears to provide materials control including BOM creation, purchase orders, logistics and inventory control; the warehouse still faces huge challenges to match material supply with production requirements, nonetheless.

After doing further root cause and process analysis, we can usually trace these problems back to slow or inaccurate planning, where materials are usually ordered before the planning process is complete. On top of this, the material request date is often inaccurate or unrealistic.

For a business with no digital systems onboard, or only a very simple order processing or finance package, the choice of where to start their digitisation journey can certainly be overwhelming  – especially since they are often being told what to invest in by different brands. They are consequently often left wrestling with a decision based on what they believe they should invest in.

Identifying your digitisation needs early on

It is, therefore, imperative that fashion supply chain businesses identify what business processes they need to address from the very start.

Ultimately, you need to ask what you want to achieve and what the desired outcomes are? What businesses processes are really causing you most of your headaches and problems? What business processes are stopping you from achieving your own or your customers’ KPIs? What are your priorities right now?

Are you wanting to immediately increase your OTDP/OTIF? Improve your plan vs. actual? Or your Ship-to-Cut percentage? Or is your priority reducing lead times by removing buffers?

Each business needs to look at their end-to-end processes, and their buyers’ needs, to identify where they have the greatest pain, and, thereby quickly ascertain where the potential for immediate improvement is greatest.

Fashion manufacturers also have to choose their solution partners wisely – ideally partnering with specialists in both fashion, as well as their area of expertise and discipline. You can do this through your own research or word-of-mouth recommendations, that can be researched further online by reviewing each company’s testimonials and case studies and checking how recent these are.

Digital Transformation is not the goal, but merely an approach – accompanied by specific tools – that enables faster, more efficient and flexible processes to be embedded in your organisation. Digital transformation is also a journey with a start, but no finish.

The truth is that each business needs to continually look at their end-to-end processes – as well as their buyers’ needs – to identify which technologies need to be brought in or adapted, to overcome the existing key challenges quickly. This process needs to be treated as a continuous improvement cycle – and assessed season after season, year after year.

We will all have to accept that supply chain digitisation is an ongoing process. Even those that attain some sort of closed loop ecosystem will still need to add, remove, tweak and re-assess continuously, to ensure they can adequately meet the fast-changing demands of the future consumer.

A good digital transformation programme is ultimately a constantly evolving entity that is never put to bed.

(This feature has been contributed by David Lush, Director, Digital Solutions, Coats Digital)

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