Fashionable Chain of Events: Understanding the Supply Chain

‘I want that!’ Getting customers to that moment of exclamation when they see your fashion apparel on the rack or in the window display is one labyrinthine process. This procedure, also known as the Supply chain, is basically the back end of the business which links together fashion suppliers, distributers, manufacturers, retailers and some logistic magic to make that moment of customer satisfaction occur.

[Image: LUPO BARCELONA]

However, for all this to work, the supply chain can’t be fashionably late. Ever. Running efficiently means that all steps in your operation cycle occur impeccably to meet market demand without a hitch or a bare shelf. Fashion 1.0 relied on the vertically aligned configuration which used ‘Push Supply Chains’. These rely on stable demand and all decisions are based on long-term forecasts. An outdated perspective in today’s instant gratification industry. To deal with this volatile market demands, many apparel organizations have gravitated to horizontal structures, which prioritize balancing demand and inventory.

[Image: The RPA Group]

Before we get into the different types of supply chains under the horizontal structure, you’d have to figure out where you lie in the Demand Pyramid. Consumer demands fall broadly falls into three categories:

  • Basic Apparel – Highest volume; Moderate demand uncertainty; priced relatively low.
  • Fashion Basic Apparel – Mass product; High demand uncertainty;
  • Fashion Apparel – Lowest volume; volatile demand uncertainty; most expensive
[Image: Flagship Photo]

Once that’s established, you can formulate an appropriate supply policy for your apparel organization. There’s the Pull Supply Chains, which merges the vertical and horizontal configurations in order to produce and distribute based on per-demand situations. By doing this, it eliminates unnecessary stock while providing the consumer with products they truly want. On the other hand, there’s the synchronous supply chain. This type of chain, also known as the Push-Pull Supply Chain, supports the horizontal alignment completely by taking the advantages of both Push and Pull supply chains. The Pull portion of the strategy looks at the service levels and responds to real demand while the Push portion focuses on cost and the aspects of the supply chain that have reduced capriciousness and ambiguity. Ultimately this reduces inventory and shortened the cycle-time but pre-manufacturing fragments of the supply.

[Image: ToolsGroup Blog]

While the fashion supply chain still strives to get the clothes to your store in the quickest way possible, to make the most out of the selling period, stores are also harnessing the garment’s data. According to an ‘The Secret Journey of A Fashion Piece’ on the Business of Fashion, “The truth is, a lot of people have chased Zara’s model and virtually nobody has been able to replicate it,” said Josh Green, CEO of Panjiva, a New York-based company that connects brands with overseas suppliers. “Zara is collecting data in stores that is immediately fed back to its system, which is what allows it to be so responsive.” An article by Kasra Ferdows, Michael A. Lewis, and Jose A.D. Machuca that was published in Harvard Business Review in 2004, highlights Zara’s “Rapid-Fire Fulfilment” and you can read about significant rules learnt from this here.

 

The implementation of tracking technology, such as RFID (Radio Frequency Identification) tags, can help get product data from the store to the brand to help them better understand their customers and what the next supply should look like. We should highlight that although department stores and established brands have tapped into RFID, emerging brands typically aren’t able to afford tracking tags. As you aspire to this, establish an effective communication system with your suppliers and stores so that any issues can be addressed swiftly.

[Image: Pinterest]

There are other brands in the fashion industry that are time-based and have stood out in the competition due to their specialized products. Supply Chain Opz looks at the supply chain strategy, operations and planning of six companies that you can see in the summary table below (but you can read it in detail here).

Your business may not be anywhere near Zara status, but even a small business can compete and ensure customer satisfaction. By having an organized, effective supply chain in place ensures you minimize on unnecessary inventory while maintaining a flexibility in responsiveness that responds to a volatile market.

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