Digitalisation and data can enable speed, agility and innovation at retail and across the supply chain

Digitalisation and data can enable speed, agility and innovation at retail and across the supply chain

The apparel industry and its supply chain needs to start thinking differently if it is to deliver on demands for speed, customisation and transparency – with the biggest impact set to come from digitalisation of products and processes and analysis of the resulting data.

While not new, digitalisation is taking on greater importance thanks to developments in the cloud, mobility, augmented reality and artificial intelligence – and analysing and exploiting the data generated (Big Data) is a key part of the process.

Its impact is being seen in all areas from the digitalisation of product creation and sampling, to an improved flow of information between the end-user, the retailer, the brand and the manufacturer offering new ways to integrate consumer feedback into collections.

"For the last 30 years we as an industry have been chasing around the world trying to find the lowest labour costs. Today, innovation and automation gives us an opportunity to rethink that model," explains Colin Browne, president of global sourcing a US sportswear giant Under Armour.

"We believe there's an opportunity to really revolutionise our industry: to disrupt, to do things differently. By thinking through how we connect the front end of the business all the way back to consumers gives an opportunity to think through how we fulfil those consumer demands."

For Under Armour, this opportunity stems from its ongoing investments in both its Lighthouse design and manufacturing innovation hub in Baltimore in the US, which forms a blueprint for its local for local production vision that will see products built closer to consumers; and its UA Record app that tracks the workout data of over 200m individual subscribers around the world.

In essence, the company plans to combine the two by designing its future product and brand experiences around these individual consumers, and then making those products for each shopper as close to where they live as possible.

"We can use this 'single view of the consumer' to inform our decisions, to connect with consumers, to build retail that aligns with our consumers' needs," Browne told delegates at last week's Prime Source Forum conference in Hong Kong. "The level of information out there with regard to connected consumers is huge; one of the challenges is what's the data we want to look at, what's going to drive the business, as it's very easy to be drowning in a sea of data."

But of course digitalisation and data do not just enable speed, agility and innovation at the retail and consumer side end of the apparel and footwear industry; they are also key to ensuring supply chain visibility and helping manufacturers streamline costs, gain greater control over day-to-day production and capacity, and make operational adjustments, fast.

For example: "How many pieces of garments to you produce each day?" asks Andreas Kim, managing director for Greater China at technology specialist Lectra. "A lot of these processes produce data, potentially digitised data, but those are not captured and analysed because it has been very difficult to do that in the past.

"Today it is possible to go deeper and understand your businesses; you cannot create innovation or change if you do not understand the detail of your current business."

Digitalising the quality process

At surf and boardwear brand Quiksilver, digitalising the quality process using the Pivot88 app is providing metrics and analytics to help improve supply chain transparency, supplier collaboration and employee engagement.

The implementation is part of wider changes that have seen the business move away from final auditing inspections at suppliers to vendor quality management where suppliers fully certify their own shipments.

Excel spreadsheets that were previously filled out and uploaded into the company's SAP system have also been replaced. "With that there's no ability to analyse the true data; only when we have issues do we do a deep dive and print those out," explains Bart De Meirsman, MD of Quiksilver Asia Sourcing.

Digitalising the quality process means Quiksilver now has access to live information, with the resulting data aggregated to predict trends and put corrective action plans in place.

"The impact for suppliers was they became a lot more efficient at doing audits and did not have to refer to Excel spreadsheets, upload them, take pictures, import them into Excel...so there were cost and efficiency savings, as well as helping them manage internally how they're performing."

The reporting also helps with the compliance of booking inspections, "so we can connect that to our work in process management, which is what the vendor management team does, so we're looking at that to make sure the suppliers are following processes and doing the bookings so we know that they're getting to the stage where they have to start shipping goods.

"Not only that, we have measurements on what is failing, what are the trends within measurements within categories, how long audits take – because it gives us a start and finish time of an audit, so we can them compare that to peer factories – and it gives the vendor management and the vendor development group within those countries the opportunity to then deep dive with those factories to then build the corrective action plans."

He continues: "For Quiksilver, having transparency from a data point of view meant we had the data available to start managing our suppliers, their performance, and being transparent about it. For our team members as we moved from final auditing to vendor quality management with the suppliers, the engagement of our people increased significantly."

The key to success, De Meirsman says, has been the collaboration with suppliers, "because they own the quality, the process and the data, so what we're asking from them is to input the data into the tool and we get transparency and visibility into that. We can then provide this to our internal teams, such as design, product management and even DCs, to give a heads-up of what is coming without having to send a lot of Excel sheets, documents and emails."

There are cost savings too. "Prior to this we had about 40 people in quality doing final inspections, but we would only view about 50-60% of all the final inspections; now we have 18 people in quality and we cover 60-65% of all shipments, and we're planning on covering 90-100% of all inspections with the same team by the end of this year."

Future plans include "integrating the tool within our product lifecycle. We have SAP and PLM but there's very little digitalisation done at the back end from when the supplier receives the purchase order. So we're planning on starting with the final inspections what we're doing now, and then moving upstream to where we're going to start looking at linking in-line inspections as well as test reports within Pivot88 – so all of it is in the tool and we can immediately see if there's a red flag" to warn of potential compliance issues.

Data or automation?

Browne believes the digitalisation of information will deliver more of an impact than the automation of factories. Although the biggest impact, of course, will come from running the two in tandem.

"It's going to be driven by data, because at the end of the day we supply consumers with product, and the better we can do that, the more we can help consumers have the experience they want, and have the product they want in the way they want it. And the more successful we'll be.

"I think in some respects we're moving away from being a product-based business to being a service-based business. Automation will be one of the enablers of that, but it will be driven first and foremost by how we design the entire retail experience to delight, excite and inspire consumers."

Stuart Cranfield, global head of supplier working conditions at British-based shoe manufacturer and retailer C&J Clark International, agrees. "We can drive much greater value for the entire value chain and ultimately better service the consumer by understanding that data and transferring that data into actionable information.

"Automation is going to help improve efficiencies and support that, but we can drive much more benefit out of improving the efficiency of that supply web than we can from automating one operation."

Duncan Scott, vice president of external products at athletic footwear maker New Balance, concurs. "If you look at value and cost, the costs are going to come out by the information."

That said, he adds: If you look at our supply chain and the passing of information it's wildly inefficient compared to the benchmarks of electronics and cars.

"If you look at the actual manufacturing and robotics and think about the complexity of what we make in three-dimensions and multiple sizes and multiple colours, to do all those algorithms is going to take decades, not years. It's going to happen gradually."

As well as digitalisation and data, investment in automation and efficiencies are seen among the unlocks for the future fashion sourcing landscape:

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