From last many years, industry has been looking at/talking about ‘disruption’ and during the peak of COVID-19, ‘New Normal’ was the buzz word. In fact, the central idea behind both these terms has been ‘change’. And now change is not only the need of the hour in the apparel industry, it is unavoidable also.
Anindya Ray, a seasoned apparel professional, EVP and Chief Sourcing Officer, Arvind Lifestyle Brands Limited has strongly seconded this thought of change. He believes that every stakeholder in the apparel sector needs to embrace many changes in order to survive and thrive in the future. While these changes may seem far-fetched, they are happening today, and one will see a monumental shift in the next 6-8 months. Recently addressing a Masterclass – ‘New Directions in Sourcing’ organised by ASW Marketplace, he shared many interesting insights into what the future looks like, what and where needs to change.
Consumer behaviour driving these changes
To understand future changes, it is must that stakeholders across the supply chain need to first look at what is driving these changes. And the answer lies in looking at the consumers.
In the past few years, we have witnessed a monumental change in consumer behaviour. There are many reasons and examples for the same. The consumers today give more importance to experiences as opposed to acquisitions. For example, they would rather choose travel over a high-end expensive bag.
At the same time, technology has enabled everything to be available at the click of a button, giving rise to a lazy economy.
Eco-consciousness has driven more and more consumers towards demanding sustainable products. Today all brands are under pressure to cater to these growing needs of sustainable products. Of the many changes, the most impactful has been the shift from offline retail to online retail.
No more liberty to forecast fashion and work in a push-based supply chain
As the consumer is sitting in the driver’s seat and forcing the brands to listen to them, the brands no longer have the liberty to forecast fashion and work in a push-based supply chain. Gone are the days when the brands forecasted what they want to sell. Now consumers demand what they want to buy. If the brand is unable to cater to these demands, it’s considered redundant.
It is pertinent to mention here that the experts have insisted across the globe that now seasons are not relevant in fashion.
In fact, it’s this change that has led to many big brands filing for bankruptcy. A demand-based supply chain model is the reality of today’s environment. Gauging what the consumer wants and delivering just that at the right time is of utmost importance.
This has forced the industry to look at product architecture differently. A conventional season-based approach is a thing of the past. Bucketing the products into various supply chain pipes like Replenishment Pipeline, Fast React Pipeline, Long Lead Pipeline, etc., has replaced the season-based approach. More and more brands are shifting to a model based on the supply chain pipes approach.
Sourcing needs to move from policing to consulting
Gone are the days when the primary role of a sourcing merchant was to follow up with various vendors and ensure they are delivering quality goods at the right time. The sourcing teams today have to work towards empowering the vendors to become innovation and design hubs, while they continue to deliver a quality product at the right time.
Many sourcing experts are questioning the low-cost legacy which is the primary objective of many sourcing teams in the industry. Anindya, therefore, suggests shifting the way companies look at these costs. Instead of isolating the product’s cost, one should take a holistic approach and look at EPLC (End of Product Lifecycle Cost) which includes the cost of promotions, liquidation, etc. This would give a realistic picture of what the actual cost of the product is.
Flexibility, digitisation and lean manufacturing to become future-ready
All vendors need to look at smaller lot sizes and lesser MOQs to be able to stay relevant going forward. While the garment vendors gear up for this shift, it’s imperative that the machinery vendors also look at making this feasible. A machine that can dye one tonne of fabric may not be relevant anymore. There has to be a homogeneous shift in how and what each stakeholder can do to make this shift happen.
The consumer today has become digital but the backend is fairly analogue. Is it possible for an analogue backend to meet the needs of a digital front-end?
Hand-written notes, emails, etc., are still the way we work. The sourcing team along with the vendors need to look at digitising and automating the supply chain. A virtual merchandiser is the New Normal. AI-driven costing, automated planning and replenishment, assisted cost negotiations are also the New Normal for a digital sourcing organisation.
Go digital, innovate and reimagine is the mantra for any organisation which wants to survive in the future.