PLM tools help fashion firms sharpen up

16 February 2007 | Features & Interviews | Source: just-style.com

Delivering a fashion collection on time and to budget is an increasingly difficult challenge. Factor in a complex international environment, and sourcing the finished product has the potential to be a logistical nightmare. But help is at hand in the form of product lifecycle management (PLM) software which coordinates the flow of information about a product and makes it easier for retailers and brands to anticipate consumers’ demands.

What are the main challenges facing today’s fashion industry? How can firms control the product development cycle now that production is scattered all over the world? And what’s the best way for companies to communicate when they’re doing business across continents?

These were just some of the questions put to fashion retailers, manufacturers and branded apparel companies at a two-day meeting organised last week in the French city of Bordeaux by CAD/CAM specialist Lectra.

And although the over-riding consensus was that the world clothing industry is facing major changes, all of which will need to be addressed and overcome if manufacturers and retailers are to stay competitive, this is of course far easier said than done.

Delivering a collection, complete, and on time, while maintaining quality and working to budget, is increasingly difficult. Factor in a complex international environment where different sourcing models coexist both for products and for materials, and sourcing the finished product has the potential to be a logistical nightmare.

“Companies can no longer cover up the inefficiencies in product development with the efficiencies in production,” explained Dr Mike Fralix, president of US-based [TC]² (Textile/Clothing Technology Corporation).

He added that the role of technology in global sourcing a critical one: “We’re in the digital world and we need to be looking at helping designers create information in a digital format.”

Steven Hochman, research director at AMR Research, pointed out that “fashion risk” is characterised by new style proliferation, increasing global competition, pricing pressure, retailer consolidation, declining brand loyalty from fickle consumers and the gap between these trends and the fragmentation between information environments.

“The mindset of organisations, however, has been slow to change,” he notes, with buyers focusing their negotiations with suppliers on areas like cost reduction without looking at other options to reduce lead/cycle times “since they can’t be measured.”

Even China, widely regarded as “the factory of the world,” is facing new challenges since the abolition of quotas two years ago.

As Zhang Wei from the China Textile Information Centre (which provides ERP services to Chinese textile manufacturers and some textile development work) explained, not only are companies having to develop their design capabilities to provide consumers with trendy ideas, but they are also shoring up their quick response processes and building effective supply chains outside China in order to react to changing trends and consumer requirements.

“China is also subcontracting and developing its own brands for the domestic market,” she said, adding that: “The main challenge for Chinese brands is how to be a name and not just high-priced.”

Fashion market perspectives
At a company level, manufacturers today are facing strong pressure to produce more, faster, and more cheaply. They are fraught with demands for shorter lead times, faster product development and faster turnaround of merchandise.

There is also a power shift taking place as retailers are increasingly taking control of the industry. Not only are they driving the pace of fashion by insisting on faster turnaround of merchandise, but they’re also moving upstream and developing their own fashion brands.

Manufacturers, on the other hand, are progressively moving downstream and launching their own retail formats enabled by the internet.

Conflicting variables
One of the main problems is that the key drivers in today’s fashion industry – cycle time reduction, globalisation (an increasingly complex, fragmented global supply chain) and striving for profitability and higher margins – also happen to be conflicting variables.

And as AMR Research’s Steven Hochman explained: “One of the largest gaps for companies trying to shorten cycle times and increase shareholder value is the lack of underlying data.”

How does cycle time translate to shareholder value? Well, Steve Hochman pointed to Zara, whose designs take just three weeks from concept to store shelf delivery compared with an average of 11 months across the rest of the industry. The difference, he says, is shareholder value.

Quoting Robert Zane, chairman of USA-ITA and former Liz Claiborne sourcing executive, and Professor Warren Hausman from Stanford University, he said the most expensive elements of a slow time to market do not even appear on the cost sheets: the cost of markdowns…and stockouts.

Estimates of the cost of markdowns and stockouts range widely, with some commentators putting them as high as 30% of retail sales – but at Zara they’re just 15%.

A 1% improvement in markdowns leads to a 12% improvement in profit. But a 1% improvement in stockouts leads to a 17% improvement in profit – which is a pretty convincing argument in favour of reducing cycle times.

Perhaps not surprisingly there’s a software solution to coordinate the flow of information in a collection from design onwards, helping retailers and brands to create and anticipate consumers’ demands.

Product lifecycle management (PLM) software provides a single source of data information (‘the truth’), that links processes such as design, bills of materials, costing, workflows, and technology via selective access that gives security to all partners in the supply and development process. Users can manage a calendar of events, automate tasks and track the status of activities from design onwards.

This translates to a cycle time reduction with specific feedback loops in real time between design and development. Similarly, production personnel have the flexibility to select alternative suppliers, for example, so processes can happen at the same time compared with sequentially as in the past.

PLM not only enables rapid design and development, but also facilitates responsive global sourcing and enables multiple organisations to understand exactly where they are in a timeline.

And the closer the links across the supply chain, the easier it is for an organisation to make proper merchandise decisions, add value, cut lead times, decrease cycle time, and reduce stockouts and closeouts.

Fashion PLM
Lectra’s newest release is Lectra Fashion PLM V1R3, a 100% web-based solution that allows participants in the creation, development, sourcing, manufacturing, and marketing of fashion product lines to work together on the same virtual version of a design and its fabrics, from the initial idea to the completion of the final product.

Lectra Fashion PLM is already being used by Mango, Denim Authority and Please Mum and has now been enhanced with new Product Development and Workflow Management tools.

The Product Development application, for example, improves collaboration between those involved in the sourcing of fashion products and their fabrics. Multiple bids can be managed, prototypes reviewed, and cost simulations carried out. The different tests (colour-fastness, flammability) and checks (measurements, finishing) that each product must undergo can also be confirmed.

Lectra’s pattern design applications are also integrated with the Product Development application so that pattern designers, product managers, and manufacturers have access to the same pattern-related data. This helps minimise the risk of errors and ensure optimal product quality and fit.

The Workflow Management application monitors all activities in the development of an overall collection as well as controlling the development of each individual garment.

It ensures everyone involved in the development process has access to the latest updated information in order to minimise the risk of errors and misinterpretation.

By Leonie Barrie.