Rapid changes in the fashion industry have transformed uncertainty and volatility into the new “normal” of the current state of the sector. They have created the need to rethink business models and redesign their processes. For this reason, the digitization of the supply chain is a recurring topic nowadays.

In essence, digitization draws the offer and the demand sides closer by combining normally different elements from the supply chain into seamless, digital supply networks. Certain tools such as social networks, mobile communication, cloud computing and data analysis –don’t miss our article on BIG DATA here—set the ground for this confluence, joining both the physical flow of materials, products and supplies, and also talent, information and financing.

What is the meaning of digitizing the textile supply chain?

The digitization of the supply chain may imply the use of new technologies such as RFID to improve transparency and, at the same time, responsiveness, innovation and increasingly faster implementation. Digitization can also be a wider digital transformation that aligns an organization’s strategy and IT to serve increasingly mobile customers with higher digital knowledge when they want it, where and how they want it.

For textile and industrial providers, the digitization of their processes will help them streamline their administrative expenses; it will give them increased control over the production process and their day-to-day capacity, and it will allow them to make quick operational adjustments.

Digital innovation is the key to supply chain efficiency and it translates into improved acquisition costs and better opportunities in sourcing.

McKinsey states that, “Sourcing professionals believe the fashion industry is still taking the first steps in this process of adoption. The shift in 2017 will be to detect alternatives to prepare for ‘the complete digitization of the supply chain’ while continuing to streamline traditional, non-digital sourcing”.

McKinsey’s Apparel Sourcing Roundtable – Hong Kong 2016.

Every year, McKinsey & Company holds the “Apparel Sourcing Roundtable” to offer sourcing executives the chance of an open exchange of perspectives on the difficulties they face and the opportunities they have. This past October, more than 25 apparel sourcing executives and McKinsey experts got together in the city of Hong Kong for the third annual meeting to analyze ways to respond to these challenges by digitizing their supply chain.

We will analyze the current “star topic” of the fashion sector in the next article. Meanwhile, do not forget to read this blog post titled “The digital client and the new fashion cycle” to understand clearly the relationship between them. A must-read!

Let’s meet again next week!