Supply Chain Trends 2015: A Conversation with Mark Burstein and just-styleJune 15, 2015
Previously we looked at Mark Burstein’s responses in just-style’s Apparel Software Trends Management Briefing. This year it focused on four topics that affect apparel and fashion producers: Tools to Tackle the Issues, Future Investment Focus, What Else to Watch and Supply Chain Challenges.
In this second installment of a two-part blog series, Mark shares his thoughts on the final two topics from just-style.
just-style: What else is likely to be topping the apparel industry’s technology agenda this year? Tools that can introduce innovation into the product lifecycle - such as social connectivity, product personalization and 2D/3D CAD and 3D printing - are all coming to the fore. Cloud-enabled technology and PLM are also high on the agenda for many fashion and apparel companies, as are data security, visibility into factory and environmental issues, and the rise in reshoring.
Mark Burstein: We’re seeing a resurgence of interest in domestic manufacturing in the US with the ‘Made in USA’ movement. More than 97% of apparel sold in the US is manufactured overseas, and that’s not going to change. However, domestic production is gaining traction, especially in California, due to higher Chinese labor costs, long lead times for overseas production, the rise of fast fashion, and changes in consumer preferences.
In order to be successful in domestic production, though, companies must have visibility from design all the way through the manufacturing process. For example, styles and production needs can change at any time, so immediate visibility to raw material and production status are required to help companies make the right decisions. This information must be visible to everyone in the supply chain that is impacted by a change. After all, when a customer wants a change, you can’t afford to waste time getting answers – otherwise, the fabric may be cut, sewing is in progress, and it will be too late. [[more]]
The ability to manage changes further into the manufacturing process is one of the key benefits of local production, and in order to do this, companies must embrace the same technologies that are the cornerstones of sourced production – PLM, Supply Chain Management and ERP. In addition, we’ve seen renewed interest in apparel manufacturing software such as Shop Floor Control.
j-s: What are the biggest challenges facing the global apparel supply chain in 2015? Meeting consumer needs in an omnichannel world continues to stand out, as does the need for faster, flexible and more efficient apparel supply chains. The recent West Coast ports slowdown has also highlighted the risk of delay or disruption.
MB: Information is the lifeblood of the fashion business; but all too often, information is siloed, and companies can’t access the data they need, when and where they need it. The global apparel supply chain is extremely complex, and dozens of different departments and external trading partners need access to accurate data. However, in most organizations, information can’t easily be shared – leading to a proliferation of spreadsheets, emails, faxes and phone calls. By the time companies get the information they need, it can be too late.
For example, production planning and procurement may not have access to the latest sales data, so they don’t purchase enough raw materials to replenish best-selling items. In other cases, production volumes may not match in-store demand, resulting in out-of-stocks or markdowns.
The recent West Coast ports strike provides an excellent example of the need for timely information. During the strike, companies needed to understand exactly where each style stood in the production process, then switch manufacturing resources and logistics to their most critical items, so they could air freight those items and avoid late deliveries and chargebacks. In one case, an order that went by container in January was seven days late to a retailer; the retailer charged back 30% on a $1.5m order. So the apparel manufacturer decided to air freight the critical orders rather than risk more chargebacks and cancellations. The result: March’s air freight charges were 7x more than the total air freight charges for the entire year of 2014 – but the company at least avoided chargebacks and possibly losing a very large retail customer.