Q&A with WhichPLM: Transforming the Fashion IndustryOctober 10, 2017
Recently, NGC’s Mark Burstein sat down with WhichPLM to discuss the need for retailers and fashion brands to transform their business. In the Q&A, Burstein highlights why the old model of PLM is no longer effective and how, in order to be successful, companies must integrate data from all corporate departments and third-party providers of goods and services into one source of information, from merchandise planning through sale to the final consumer.
The Q&A starts off by addressing why companies like Zara and Xcel Brands have been successful during a time when other retailers are closing their doors:
The fashion and retail industries are going through an era of tremendous change. What’s behind this?
Retail is in an unprecedented period of intense disruption. Credit Suisse expects more than 8,600 stores to close before the end of the year, according to a recent story in Business Insider.
However, some notable outliers are significantly outperforming their peers. Companies that have embraced fast fashion, such as Inditex (the parent company of Zara), H&M, Primark, Uniqlo and others, are seeing great success. Inditex grew its sales more than 15% to 20.9 billion in 2016 and posted a net profit of 2.88 billion. New York-based Xcel Brands has transformed its business through a data-driven, fast-fashion model that gets products to retailers in a fraction of the time that was previously required.
These successful brands share several things in common – they’ve embraced the concepts of lead time optimization, the demand-driven supply chain and enterprise technology to react faster than ever to the latest data and trends.
Fashion companies have been discussing lead-time optimization for years. Why is it still such a huge challenge for the industry?
Today’s fashion industry is moving faster than ever. As Liz Rodbell, the president of Hudson’s Bay department-store group, told The Wall Street Journal, “With the world moving so fast, we need to get fashion here faster.”
To do this, data must flow in parallel communication between all departments. However, the supply chain data flow that characterizes much of the industry today resembles the assembly line of the automotive industry. Data and processes are very linear; data moves from Design to Production, then on to Distribution and Sales. This is slow and cumbersome. Moreover, companies are hampered by organizational silos that make it difficult for departments to share information, and ripple effects are felt throughout the organization.
To meet consumer demand quickly and accurately, companies must respond instantly to the latest sales data – and this can only be done by sharing real-time sales data throughout the enterprise, so that everyone in the global enterprise can react to the current consumer buying trends.
In order to succeed, brands and retailers must take advantage of real-time sales information to adjust plans in-season and immediately react. If products are selling rapidly, companies must accelerate production; if products aren’t selling, companies must stop or redirect production and cut their losses immediately.