Dive Brief:
- The apparel industry remains slow to embrace digital technologies, even as a majority of CPOs expect digital end-to-end process management will be necessary to reduce average lead times by two to eight weeks, according to McKinsey&Company CPO survey, Sourcing Journal reported.
- Sourcing executives expect that digitally enabled capacity planning will help target efficiencies and bottlenecking issues to enhance production.
- Leading innovators in the space are implementing 3-D design and virtual sampling, which has led to decreased lead times as well as cost.
Dive Insight:
As an operations and supply chain professional, the digitization and automation of the apparel supply chain is quite logical, and for all the right reasons. It will shorten lead times, increase manufacturing flexibility, reduce suppliers, streamline communications, provide a higher level of product quality and create more accurate inventories. This is an industry ripe for change, and it certainly seems to be coming on quickly.
There is no argument for those kinds of improvements from an operations and financial standpoint. In fact, we can already define success in the apparel supply chain with the pressures on the deep discounters and liquidators, those dealing in surplus inventories. They are disappearing as the supply chain tightens and inventory is better managed. What we once called factory outlets, places to sell damaged, out of date and excess stock, have for the most part become additional retail channels, often selling products manufactured just for them. Those stores are now just an exercise in brand management, not liquidation.
The apparel business is rapidly changing. Technology has allowed manufacturers to provide customized clothes to customers quickly and efficiently. In response to the concept of ‘showrooming,’ where customers touch and feel products in a brick and mortar store and then buy online, Nordstrom is starting a showroom where customers try on a sample and then place the online order for fulfillment. Perhaps this is the new method of shopping.
The “Amazoning” of sales and marketing is changing consumer behavior, creating a point and click culture of increasingly immediate fulfillment. With the success of Amazon, other retail companies are trying to emulate their digital footprint and processes in a race for their share of point and clicks. Not patient enough to wait for drone delivery of bread and milk? Walmart is now testing the delivery of groceries right to your refrigerator. Call it the ultimate vendor managed inventory ... if you like people traipsing through your house and poking their heads in the fridge.
But while the behemoths slug it out in the retail arena, there seems to be a renaissance along Main Street. Local clothing stores, catering to all ages and genders, seem to be doing quite well, basing their success on service, a reasonable selection, custom tailoring, and long-term customer relationships. Much like independent bookstores, they took a hard hit from the web but are now flourishing due to the ‘people-to-people’ buying factor.
Technology is a wonderful tool when used in the right applications and solves a problem. It creates a big tent which all kinds of amazing opportunities. Companies and industries should take advantage where appropriate, but they should also understand that customers sometimes like to touch and feel what they are buying and walk out of a store with their purchase in a shopping bag.
Paid for with Apple Pay, of course.
