The fashion industry is well known for being a tough business. With big companies like Forever 21 having solvency problems, it becomes apparent that any weakness in supply chain or demand forecasting can seriously hurt a fashion company.
So what can be done about the fashion supply chain, and how can it be managed better? Here’s an overview of the issues, and how they can be helped.
Biggest Issues in Fashion Supply Chain Management
The first problem with fashion supply chain management starts with the textile supply chain. It’s a dangerous process, employing mostly people in impoverished countries. Any weakness in the textile supply chain can harm the stability of any fashion business.
The second problem is in the manufacture of these clothes. Just like in textiles, many of the people making the clothes live in impoverished countries. Catastrophes like the fire in a Bangladeshi factory that killed over 100 workers, or the factory collapse in 2013 that killed over 1100 workers, are not only awful for the people involved, but can seriously impact the supply chain.
The third problem is in consumer demand and usage. Fashion is highly seasonal, and not in the typical sense. Clothes go out of fashion just as quickly as they come into fashion, and it only takes one mistimed product release to create thousands of pounds of economic and environmental waste. But that’s not the only source of waste. Errors such as having too much of one size can create an insane amount of waste for a company.
Modernizing the Supply Chain
Given all of these issues, how can the fashion supply chain be managed effectively? Modernization will surely help, especially on the side of customer demand. What is a modernized supply chain? A modernized supply chain in the fashion industry utilizes as much technology as is available in order to maximize data analysis, improve automation, and lower overall waste.
A modernized supply chain is a three-fold approach, starting with the right ERP system, an industry-savvy technology partner, and a strong strategy to roll out the technology in order to make the supply chain much easier to manage.
Your ERP system needs to maximize inventory optimization, automate as much as possible, integrate with marketing and sales data, and make communication more seamless in order to reduce overall waste.
But that doesn’t fix much of the systemic risk of the fashion supply chain. How do you manage that?
Simple Fixes to the Supply Chain
Source sustainably. If possible, get your clothes made in a place that follows strict environmental and worker safety regulations. This will definitely cost more per unit, but it will likely allow for a more stable supply chain, much less waste, and an overall clearer conscience.
Spend more effort in customer demand forecasting. In this kind of business where customer tastes can change on a dime, this can seem impossible. However, by looking analytically and qualitatively at trends in the industry, starting from what the high status celebrities are wearing and what the big fashion houses are promoting on the runway, and by using historical and competitive data, you can potentially identify market opportunities.