Supply chain software: Emerging markets
1 July 2014 | Features & Interviews | Source: Wang Fangqing
As more Chinese fashion companies are shifting their focus from export markets to domestic consumers, many are investing in powerful, sophisticated management software to meet the fast changing apparel market.
"Chinese textile companies are facing many new challenges, including efficiency, outsourcing and being flexible enough to cater to fast fashion-minded consumers. In this case, an integrated PLM solution is very important for us," says a spokesperson at Shanghai Garment Group, which exports and owns its own fashion brands.
Her comment is echoed by John Du Bois, of New York-based software company Infor, whose Chinese client is Changshu, Jiangsu province-based Bicaway Clothing and Accessories Ltd, a menswear manufacturer.
"Many Chinese fashion companies now follow the fast fashion business model, which requires the instant response to fashion trends in a short time span," says Du Bois.
Also, with more brands outsourcing production and retaining only marketing, design and retail as their core competence, requirements for supply chain collaboration will need to accommodate design and development phase, as well as mass production, he adds.
Infor's PLM software is tailored to the fashion industry and includes features such as sourcing management, fabrics and trims management and workflow management. Bicaway president Chen Zhigang adds that he expects the solution to help the company rationalise operations and provide better services.
Software adoption in India
A similar adoption of operational software has been happening in India. As manufacturers increase their presence in the global textile and clothing trade, the demands for tracking the development of products in real-time has become increasingly onerous.
This has compelled companies to look beyond traditional technologies and invest in PLM and ERP software. Indian apparel companies such as the Aditya Birla Group, Shahi Exports Private Limited, ITC Limited and Madura Fashion & Lifestyle have all started using ERP and PLM solutions.
Meanwhile, the India-based SEL Group, a leading vertically-integrated textile conglomerate in Punjab, uses NOW, an ERP system from international software supplier Datatex, specially designed for the textile industry.
"We can manage our manufacturing process even better now with the built-in textile industry best practices," ZS Chaudhari, information technology president of at SEL Group, told just-style. PLM solutions such as NOW help reduce products' time-to-market and lower costs, he says.
One rising trend in the apparel and garment industry is the demand for integrated ERP and PLM solutions, says Sunil Arora, vice president at US-based software provider World Fashion Exchange (WFX). He told just-style: "More [Asian] buyers are wanting to push the cost of product development to their suppliers; more manufacturers across Asia-Pacific are looking for PLM solutions that can be used in addition to ERP solutions."
WFX offers solutions focused on the apparel industry and is one of the biggest players in the cloud space, offering solutions that can be adopted on a small platform and scaled up.
Looking ahead, Chaudhari adds: "There is a need for [systems for] customer relationship management (CRM), pre-sales systems and workflow, which handle the complete cycle from enquiry to cash cycle including new product development."
Many Indian IT companies have started providing solutions for ERP and PLM: Ramco Systems and, Ecotech Software Pvt Ltd's 'Stage,' for instance.
Technology upgrades in Bangladesh
Meanwhile, even Bangladesh's garment industry - which has established itself by offering some of the lowest costs in the sector - is looking to use software technology such as ERP. Key industry players have noted how sophisticated software solutions can increase firms' competitive edge while meeting the demands of mature market retailers.
"Technology upgrades are paying off. From payroll management to bank transactions, everything is now integrated, thanks to ERP," Shaerul Haque Joarder, chief technology officer at textile and knitwear producer DBL Group, told just-style.
DBL Group, which employs nearly 16,000 workers, introduced ERP in 2012. This has decreased paperwork, allowed for faster business decision-making, and streamlined procurement, Joarder notes.
He adds that an operational software popular with Bangladesh fashion companies is FastReact, from UK's Fast React Systems Ltd.?He notes that each year, five to six large apparel manufacturers within Bangladesh install ERP, predicting 80% of all major garment producers in the country will be using this software in five years' time.
Likewise, David Hasanat, chairman of Bangladesh textile manufacturer the Viyellatex Group, told just-style that his company has integrated information technology with its business process by using a range of state-of-the-art software solutions such as ERP to improve productivity.
All this aside, emerging market clothing and textile companies still have a way to go before they fully exploit the best PLM and ERP systems, according to Giuseppe Ghisoni, channel manager of Italy-based Porini software.
He also argues that Asian manufacturers of these systems do not currently pose a threat to European developers.
"China and India in theory have many clients for these kinds of products, but the buyer culture for sophisticated solutions is lacking and there is not the same attention to European standards. It is also difficult to sell in India and China at European prices. Western countries are still a more mature and interesting market for us right now compared to emerging countries," he says.
Click on the following links to read other articles in this briefing:
- Supply chain software: ERP trends
- Supply chain software: PLM trends
- Supply chain software: The future of PLM and ERP
With additional reporting by Mini Pant Zachariah, Azm Anas and Lee Adendorff.