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Posted December 7 2011
Written by Operational Performance

The importance of links in a supply chain in the apparel industry

A Continually Changing Market

No need to go further than the mall to see the explosive growth in the number of players in the apparel industry. The market further segments itself with the proliferation of specialty shops, the increasingly accessible online shopping and the entry of large U.S. companies (Walmart and soon Target). This consumes an already mature market, forcing traditional companies to reinvent themselves. The client, now faced with innumerable choices, becomes more and more demanding and makes these choices not only based on the beauty, COST and quality of the PRODUCT, but also on his shopping experience.

The implementation period… a competitive advantage

It’s common to hear that a company defines itself as a sequence of processes but the PRODUCT will always be the discernable factor in the garment industry. Thus, the current challenge for companies is to keep abreast of market trends and be able to respond quickly with well established design and marketing processes.

The item’s "Time to Market" is therefore crucial. The supply chain must play its role to ensure production, supply and stock deployment at the best possible price. This is an important issue since manufacturing products from Asia, with a typical 3 months lead time, is becoming increasingly unrealistic. Alternative supply sources thus emerge to balance marketing and control overall cost.

The availability of the goods… for a fulfilling customer experience

The second advantage that allows companies to remain competitive is to optimize consumer experience. The supply chain cycle must not only provide customers with constant access to the goods but in the right style, color, size and place. Achieving a maximum level of satisfaction is an almost impossible standard. To stand out, retailers have little choice but to offer an incomparable customer experience. It is therefore essential to validate the availability of stocks across the network, to find ways to allocate inventory and to ship the merchandise directly to the customer in order to provide the best possible experience.

The era of e-commerce plays an important role on the customer’s experience. Online shopping is fast becoming more attractive to the discerning customer who wishes to see stock availability and who requires fast delivery. New and convenient methods of secure online payment will only increase this market segment.

Many believe that it is difficult to shop without being disappointed. This reality is increasingly inaccurate as companies facilitate their return item processes and customer feedback through their network. As a result, the consumer experience is improved as retailers combine their e-commerce operations with those of their stores.

Cost control… the survival of your business depends on it

To remain competitive, COST is the most important aspect to overcome. Profit margins are not as significant as was once traditionally known in the garment industry. Therefore, the success, if not the survival of companies, predominantly depends on better cost control. Herein lies the strategic challenges of making the most of your supply chain.

The principles of Lean Management

The Lean approach, increasingly used in manufacturing context, extends its influence to the supply chain to reduce operational costs. Essentially, five (5) principles apply:

Eliminating waste

This concept is used to understand, see and eliminate non-value added activities. Elimination of non-essential processes is the first step in improving operations.

Achieving stability

Market fluctuations are a reality; companies need to achieve stability when it comes to the quality of their products, the reliability of their distribution services and in the accuracy of their inventory.

Implementation of a continuous flow

The continuous flow principle allows companies to cut down the size of production batches, manufacture products quickly and supply the customer at his rate of consumption. The implementation of a continuous flow principle provides significant opportunities to assist in streamlining operations.

Creating a levelled pull system

Now, thanks to the acquired visibility into the consumer’s consumption preferences, the supply chain can respond to clients "pull" signals, thus avoiding overproduction of stock and unnecessary operating activities. This is accomplished through the collaboration of partners (suppliers, manufacturers, agents, distributors, transporters and retailers) within the supply chain.

Continuous improvement

This notion is believably the most complex to exploit because of the large number of stakeholders involved in the garment industry. However, this principle is applied by world-class retailers.

In the context of this fascinating industry, a series of articles will be released in the coming months on various aspects of the supply chain. Through these columns, we wish to give you food for thought, bestow possible solutions to your industry’s difficulties and potentially arouse questioning about your supply chain operations with business partners.

 

Contact us for further information.

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