More streamlined decision-making can help revolutionise supply chains

More streamlined decision-making can help revolutionise supply chains

Most fast fashion brands span multiple brands, channels and countries – and technology can help revolutionise supply chains at all stages from prototype design to packing and shipping.

Radio-frequency identification (RFID) technology continues to be a key tool for fast fashion companies. Indeed, Zara invested in RFID as part of a US$1.7bn spend on logistics platforms and technology in 2015, which saw the rollout expand to 1,542 stores across 64 countries – from a base of zero in early 2014. By the end of this year, it will have RFID in 2,000 stores.

Being able to track products with RFID and related logistics software is important as brands and manufacturers expand distribution and retail networks. For instance, Ireland-based Primark is opening up a new distribution centre in Roosendaal in the Netherlands in order to boost its European operations.

Last year, Spain-based Inditex opened 330 new stores in 56 countries, of which 77 were new Zara outlets. This year it plans to open branches in New Zealand, Vietnam, Nicaragua, Paraguay and Aruba, increasing the complexity of its supply networks. Inditex e-commerce sales reached Taiwan, Australia and Japan last year and Slovenia, Malta and the Baltic States this year – meaning that all 28 EU member states are covered.

Hennes & Mauritz (H&M) brought e-commerce to Ireland, Japan and Greece in the second quarter of 2016 (1 March to 31 May), and now has an online presence in 32 countries as well as its 4,000 physical stores in 62 countries, with plans to open a further 425.

Leela Rao-Kataria, retail marketing manager at American cloud-based supply chain network GT Nexus, strongly advocates companies utilise such new technologies, including e-commerce, to grow their brands.

"The retailers need to embrace new technologies in order to compete with companies like Amazon. The best way is to use that technology to focus on what you as a company are good at," she says.

Sophisticated logistics

Nick Banich, business development manager of operations for Miebach Consulting in the US, adds that e-commerce channels have provided fashion companies with greater customer access, as well as allowing brands an opportunity to sell their products and expand into regions where they may have a small physical presence.

However, the need for sophisticated logistics to help fast fashion brands and their suppliers to deliver in an increasingly fragmented market is underlined by knitwear consultant Sophie Steller, owner of a London, UK, studio that carries her name.

"Shorter lead times affect productivity and profit. With fewer units bought by each customer – as well as so much more choice – the same volume is being sold but [there is] so much more work to do to sell it because of all the different channels and markets," she explains.

Of course, the Inditex Group's Zara has been a trailblazer here. Its pledge to respond to orders within 48 hours has been long-standing – as made by owner Amancio Ortega when he first founded the brand in 1975.

This is made possible by the streamlined ordering technology the company uses, and the fact that all Zara stores receive twice-weekly shipments of goods, which allows the company to respond to demand quickly and accurately.

Other companies, notes Guido Schlossmann, president and chief executive officer of Thailand-based sourcing specialist Synergies Worldwide, fail to follow such standards, and can suffer as a result.

"Some companies outside fast fashion respond to emails in a week or three days and then purchase orders can take three weeks. There is a lack of discipline in communication. Discipline needs to become part of the DNA," he says.

Streamlined decision-making

A more streamlined decision-making structure needs to be adopted to delegate key decisions to small groups of managers so that quicker decisions can be made, he advises.

Such an approach can also help brands revolutionise their supply chains. Last year US-based sporting wear brand Under Armour scrapped an entire seasonal women's collection just weeks before it was due to appear.

Lisa Struble, the company's vice president of apparel development and quality, tells just-style: "We knew what we had wasn't good enough – but to deliver it on time, we also knew we had to change the way we operated."

As a result, Under Armour used 3D virtual prototyping software to slash the time it took to get prototypes to market. The retailer used the services of 3D virtual prototyping technology company Optitex to design its new collection quickly. Optitex says all Under Armour had to do was "present it with colours and prints," and it could produce a virtual prototype of a piece of apparel.

According to a note from the company:  "With 3D technology, in a few weeks Under Armour was able to replace physical samples with hundreds of virtual samples – resulting in significant savings, and a reduction of product development time by about 50%."

Struble notes: "We brought virtual samples to our sales meeting instead of physical samples for the first time ever."

Under Armour has now rolled out 3D technology to other clothing lines.

Struble adds the company was able to send designs back and forth within hours, instead of weeks to get the sample in from the factory.

Click on the following links to read other articles on the fast fashion supply chain:

Fast fashion – How to balance speed and innovation

Fast fashion – The choice to air freight or wait

Fast fashion – Why sustainability adds sourcing complexity

With additional reporting by Mandy Kovacs.