What it takes to revive an industry like fashion, which is consumer-driven, after surviving a pandemic like COVID-19 that caused businesses to go on standstill mode? Can the industry go back to traditional methods to overcome the losses? Is it feasible for the business owners to rely on same old processes to achieve new goals in a new normal world? The answer to all these questions is well-known to the industry stakeholders but all it takes to accelerate growth is their sense of realisation that they need to increase speed of their products to the market, at a pace which was already required and the only change COVID-19 has brought is the acceptance of the use of technology.
How can less reaction time and digitisation help increase the speed to market?
In easy words, reaction time is the time taken by a fashion retailer to think about a garment to the time the garment is in the store shelves. One of the most critical issues the fashion industry is facing is high reaction time as more than 30 per cent of the time of a retailer gets wasted in waiting for the next step or process to take place.
“Retailers wait for vendors to create the samples and the vendors wait for the buyers or designers to approve the samples! Every stakeholder in the supply chain remains stuck in waiting period in some way or the other which hampers the overall lead time planning. Brands and manufacturers have to figure out how they can reduce waiting time…,” shared Gunish Jain, CEO, BlueKaktus – a leading software technology provider of fashion retail and manufacturing industry.
Quantifying waiting time and what it costs in terms of lead time is absolutely critical to figuring out how to integrate the supply chain. Since long the focus of the fashion retailers is on building global sourcing capabilities where they can get the garments made in different countries and therefore they keep chasing the lower costs. But till what extent? There has been saturation and the retailers can’t go for much lower prices than they are already getting in different sourcing places and the only solution remains is to build efficiencies and productivity. Here comes the crucial role of digitisation or technology.
According to Gunish, the front-end of the fashion industry is digitised (through e-commerce) but the backend still remains analogue. When it comes to garment manufacturers, more often than not, they largely get stuck while thinking that they have to make garments but how can digitisation help? The reality of low margins, where fashion companies are fighting for every cent which can be saved, can result in a reluctance to invest in new technology, but manufacturers really need to explore what additional value the latest technologies can deliver.
The era of digitisation is demanding new ways of thinking, in order to assume digital leadership because of – fragmented process chains; different times and production cycles; missing standards of communication interfaces; small profit margins and extended lead times. Having supply chain on a single platform is important and, first of all, the companies need to have Single Source of Truth (SSoT) so that they can know where and at what stage their orders are.
Being an SSoT-driven supply chain, the biggest advantage is the companies can track and monitor entire process that takes place on the digital platform. Transactions which have been happening offline start happening online, where data is not collated separately rather every stakeholder is working on the same data. This transition avoids confusion and time reduces consumption.
Giving an example, Gunish said that orders are usually given to vendors through email which is still a non-digitised manner. “Instead of receiving orders through email, use a platform or software where the orders are available from the buyer’s side. Vendors can download it and, if there is any change in the placed order, it automatically gets updated. The companies have a single repository where entire information is available,” informed Gunish.
Another advantage of using SSoT concept is that the vendor can ask for extension due to any sort of delay caused in the operations at factory level. If this transaction is reported in the system in a digitised manner where vendors request for an extension of certain number of days, the system keeps the record for future purpose and the same can be tracked later on if request was granted or not. Right now, this has been happening on phones or emails which can’t be tracked and creates chaos as well as delays in the planned lead time.
Once all the transactions are digitised, the next step for the companies is to start analysing the data. For example, the brands can analyse the data and know the average lead time the vendor needs to provide a sample! The data also tells the number of times a vendor was able to achieve right first time in sample making. Because of this analysis, the brands can always choose to skip a few steps while deciding for lead time such as asking for multiple prototypes and giving size sets again and again!
At the third stage, automation comes into the scenario and the companies start automatising the process and routine tasks. One of the most important outcomes of automation in this stage is reduced human follow-up as it becomes automated… “Why do you need a merchant calling up a vendor and saying where the shipment is? Rather than people spending expensive time on follow up, the system needs to be given the responsibility,” averred Gunish.
Once all these stages are achieved, manufacturing companies in collaborative efforts with brands can be termed as future-ready companies.
Why manufacturers need to understand the significance of digitisation road-map?
The garment manufacturers always need to understand what retailers are going through as they are the ones who are directly interacting with the market and the end-consumers. The manufacturers need to figure out how they can restructure their business processes to make operations more nimble and agile. A ‘quick delivery’ strategy can always help them overcome the current challenges they are facing; price battles can be solved; and they can become a preferred supplier to the brands. It’s also imperative for them to know that the apparel and fashion brands want to work with the vendors who understand their challenges and are willing to adapt in order to solve those challenges.