The strategic impact of technology in the textile and apparel industries
As information technology (IT) has continued to fall in price and grow in functionality, it has become widespread throughout the textile and clothing industries, writes Peter Kilduff of the Textile Intelligence Centre. In an industry that’s sensitive to dynamic market forces, cost fluctuations and manufacturing responsiveness, there are many benefits to be gained from investing in IT.

Since the 1960s, IT applications have shifted from assisting after-the-fact monitoring to real-time analysis, control and forecasting; andfrom facilitating standardization, economies of scale and cost reduction in production, to enabling fast, flexible and accurate response and customization.

As the benefits of IT became clear, textile and apparel supply chains increasingly adopted computer-aided design/computer-aided manufacturing (CAD/CAM), computer-integrated manufacturing (CIM), electronic data interchange (EDI), electronic point-of-sale (EPOS) and decision support systems (DSS). In the process, supply chains are being reshaped, as IT brings about or facilitates changes in processes, management systems, products, company strategies, methods of organization and linkages between customers and suppliers.

Gaining an edge
IT provides enhanced competitive capabilities by enabling improvements in the following areas:

  • Productivity – lower costs and greater output are achieved through automation
  • Speed – IT facilitates a faster response through greater accuracy and improved co-ordination of activities in the supply chain, improving the level of service and lowering costs through time savings
  • Flexibility – IT facilitates greater variety and choice, and more frequent product innovation through improved flexibility in equipment and the co-ordination of supply chain activities
  • Reliability – IT improves product quality and service dependability through better process control and supply chain co-ordination
  • Knowledge – IT enables better planning and control through information capture and analysis, supporting a faster response, lower inventory levels, and fewer stock-outs and mark-downs; at the same time, improved analysis and forecasting of both customers and markets enables enhanced product offerings, level of service, and general marketing effectiveness
  • Customer access – IT overcomes time and geographical barriers to provide high quality, two-way access with customers 24 hours a day, 7 days a week at low cost

The downside is that IT is also helping to intensify international competition by reducing geographical barriers to competition and increasing access to customer and market information. Another notable by-product of the introductionof IT is that the position of large retailers has been reinforced through improvements in:

  • Customer and supplier knowledge, as a result of data capture and analysis
  • Supply chain management, as a result of the adoption of integrated systems
  • Customer satisfaction, as a result of better service, merchandising and marketing It is difficult for smaller retailers to derive these same benefits, purely because of the scale of their operations.

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Improving the supply chain
The widespread application of IT has encouraged reductions in the supplier base to large retailers. This has had two major effects: IT linkages intricately interconnect the organizational systems of suppliers and retailers, requiring high joint investment costs and commitment; and having fewer suppliers reduces the costs of managing the supply chain.

The use of IT has also helped to create new channels to market that would not otherwise have been possible. For example, the growth of homeshopping is being driven by mail order, teleshopping, the internet and now direct digital television.

IT is also changing the structure and nature ofrelationships between firms in the supply chain. Win/lose power relationships are givingway to partnerships and holistic approaches to supply chain management. Organizational boundaries are becoming blurred as a result of three main trends:

  • Disintermediation – IT is helping to cut out certain tasks and intermediaries
  • De-integration – companies are focusing on core competencies and demerging or closing non-core activities; they are taking more flexible approaches to manufacturing, sourcing and distribution; close co-ordination and control between companies, their suppliers and customers is facilitated by intimate inter-organizational linkages using IT
  • Virtual integration – permanent inter-company project teams are being established to secure optimum supply chain co-ordination and flexibility, and to accelerate product and process innovation and improvement

IT: a prerequisite for survival?
The profound effects IT is having on business as a whole are only just beginningto filter through to the textile and clothing industries. In future, the adoption of IT systems that integrate internal systems with those of suppliers and customers is likely tobecome a prerequisite for survival in a fiercely competitive and ever-changing globalmarketplace. E-commerce systems, linking trading communities across the globe, are likely to become the norm.

In the coming decade, IT will play a key role in re-shapingthe textile and clothing industries and their markets as we know them today. IT will continue to evolve, becoming even more powerful and less expensive. It will help companies identify market segments on a global basis through the greater ease and lower cost of reaching distant customers, capturing information about their specific needs and servicing their requirements.

Through improved knowledge of what customers actually want,and the introduction of ever more flexible manufacturing technologies as a result of IT, a growing number of products will be made to order (‘demand-activated manufacture’) and will include a customized element (‘mass customization’).For such approaches to succeed, as well as supporting the increased demand for new productdevelopments, intimate co-operation will be required between companies at every stage of the manufacturing supply chain.